SOURCE: Sancon Resources Recovery Inc.

May 21, 2007 08:00 ET

Sancon Reports First Quarter Results for 2007 and Records Strong Growth

SHANGHAI, CHINA -- (MARKET WIRE) -- May 21, 2007 -- Sancon Resources Recovery Inc. (OTCBB: SRRY) a growing industrial waste recycling company with operations in China and Australia, today announced it reported operating results for the quarter ending March 31, 2007.

2007 Q1 Highlights are:

--  2007 Q1 revenues grew 896% to $1.21 million from $0.11 million in 2006
--  Gross profit increased to $0.19 million in 2007 Q1 from $0.04 million
    in 2006 Q1.
--  Net loss was $157,268 in 2007 Q1 compared with $17,223 in 2006 Q1.
--  Numerous customer wins in Australia and Asia in both public and
    industrial sectors.
Sancon reported an increase of revenue by $1,096,942 or 986% from $111,237 in 2006 Q1 to $1,208,179 in 2007 Q1. The sharp increases were mainly due to the significant sales amount contributed from two newly launched subsidiaries in Hong Kong in 2006 engaging in plastic waste material business.

The gross profit for the quarter ended March 31, 2007 was $192,028, representing 337% increase compared to $43,897 for the same period in 2006. The increase of the gross profit was a direct result of increase in revenue. However the gross margin dropped from 39% in 2006 to 16% in 2007 mainly due to lower gross margin business from its newly launched plastic waste material businesses. The waste collection, reprocessing and recovery business operated in Australia continue to enjoy higher margins. The new business is highly complementary to the reprocessing business gaining a bigger footprint in the market place and winning more end customers.

Sancon Continues to Grow

"We are pleased with the company's continued strong growth," stated CEO of Sancon, Mr. Jack Chen. "With the celebration of Chinese New Year in the first quarter we endlessly stayed the course and execute continuously on track towards our $8 million annual revenue target.

We see a constant strong demand for plastic production and for our recycled material business in China. To meet this strong demand, Sancon is underway to open additional operations in China. With an experienced, hands-on management team we are positioning ourselves in the market to implement integrated services for many of our customers."

Mr. Chen added, "We are also expanding our horizons towards e-waste recycling (electronic and electrical waste). There is an ever increasing problem with electronics ending up in landfills everyday. With new technology growing and the trend to always have the new, latest and greatest equipment many people don't quite understand the effects of dumping their e-waste can cause our environment and future. With E-Waste accounting for three times the amount of regular waste, Sancon is well positioned in this market to continue its growth. Many fortune 500 companies have a plant in China who needs a reputable company such as Sancon to service them through out China."

About Sancon Resources Recovery

Sancon collects and processes industrial and commercial waste plastics and sells them to manufacturing customers in China. Sancon also trades in recycled plastics originating from developed countries such as the US, Japan, and Australia. Its operations are located in Guangdong Province of China, Australia, and Hong Kong. The total annual turnover of the global recycling market exceeds $160 billion according to the Bureau of International Recycling (BIR), and is dominated by major multi-nationals such as Allied Waste, Waste Management, Inc., Veolia Environment, Republic Services, and Covanta Holding. The Chinese market for high quality waste management solutions is still in its infancy of development, yet it is fast growing and is wide open for young, innovative companies like Sancon. For more information:

Forward-looking statements:

The statements made in this press release, which are not historical facts, may contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the company's operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The company disclaims any obligation to update information contained in any forward-looking statement.

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