Huazhang Technology Transfer of Listing from GEM to the Main Board to Become the First Main Board Listing Company in 2015

HONG KONG, Jan. 5, 2015 /PRNewswire/ — Huazhang Technology Holding Limited ("Huazhang" or the "Group", stock code: 8276) transferred listing from the Growth Enterprise Market ("GEM") to the Main Board of the Stock Exchange of Hong Kong Limited ("SEHK") today, with the new stock code 1673. Huazhang is the first company to be listed on the Main Board of SEHK in 2015.

Mr. Zhu Gen Rong, Chairman of the Group, says, "We believe the transfer of listing will enhance the profile of the Group and improve the trading liquidity of shares, and that we could gain a wide recognition among larger institutional and retail investors."

Guotai Junan Capital Limited is Huazhang’s financial adviser.

Business Review

The Group is principally engaged in research and development, manufacture and sale of industry automation systems, sludge treatment products and corresponding services. The Group’s industrial automation systems and sludge treatment products are custom-built in accordance with the specifications and requirements provided by the Group’s customers. The Group is also engaged in the provision of after-sales and other services Group’s existing customers. Huazhang has long been focusing on research and development activities with the aim to improve the technologies of the existing products. During the year ended 30 June 2014, the Group had 13 new patents and 2 new software copyrights. To date, the Group has registered 117 patents, including 37 invention patents, 75 utility model patents and 5 software copyrights. On December 2013, the enforced belt filter press manufactured by the Group, in the 2013 fourth revision of the industry standard prepared by the General Office of Ministry of Industry and Information Technology of the PRC, was recognized as an industry standard. The continuous research and development results of the Group will enhance the economic efficiencies.

Year ended 30 June 2014, the Group has recorded revenue of HK$308.9 million, which represents a year-on-year increase of 22.9%. Profit attributable to the owners of the Company has increased 61.2% year-on-year to HK$28.5 million.  In the same time, for the 3 months ended 30 September 2014, the Group has entered into HK$111 million worth of contracts, including industrial automation systems, sludge treatment product and after-sales service, representing a year-on-year increase of 109.6%. Within the 3 months, the Group has recorded revenue of HK$83 million, representing a year-on-year increase of 34.4%. Profit attributable to the owners of the Company has increased 48.3% year-on-year to HK$7.2 million. Despite the sluggish economic condition of the PRC the Group’s products and services in the industry prompted continuous increase in the revenue.

Prospects

The construction of the fourth phase of the Group’s production plant was completed in September 2014 and is expected to commence production before the end of the year. The new plant will increase the Group’s production capacity. The production capacities of the Industrial Automation Business and sludge treatment products will increase by 2,500 to 5,000; and by 50 units to 92 units respectively.

The Group will use its design experience in the industrial automation systems and sludge treatment products to further expand the Group’s products to different markets and industries. There are four main target in the next year, (i) effort to expand the share of the industrial automation systems in non-paper market; (ii) promotion of "design" "production" "service" business model; (iii) investments in new capacity and cost-effectiveness; and (iv) use of existing customer resources to explore the after-sales service business.

About Huazhang Technology Holding Limited
The Group is principally engaged in research and development, manufacture and sale of industry automation systems, sludge treatment products and corresponding services. The Group’s industrial automation systems and sludge treatment products are custom-built in accordance with the specifications and requirements provided by the Group’s customers. The Group is also engaged in the provision of after-sales and other services Group’s existing customers.