PINGDINGSHAN, China,
Aug. 3, 2016 /PRNewswire/ --
Highlights:
- Yulong is now one of the leading Construction Waste
Management (CWM) companies in Henan
Province with exclusive CWM licenses in Pingdingshan and
Shangqiu
- CWM, catalyst of top and bottom line growth, has overall
gross margin of over 58%
- 25-year exclusive CWM contract with a potential $7 million annual revenue or over $170 million over life of contract
- A 4-year and a 5-year contract with the potential to
generate revenue of up to $35 million
and $55 million, respectively, over
the life of the contract
- Approximately $32 million in
cash and cash equivalents, as of March 31,
2016 sufficient to support short- to mid-term expansion
efforts
Yulong Eco-Materials Limited (NasdaqCM: YECO), an
eco-friendly building products and construction waste management
(CWM) company, announced a corporate and business update by
recapping milestones since its listing on Nasdaq one year
earlier.
Yulong Zhu, the company's CEO
noted, "Building upon and leveraging our technical experience we
gained over the years from operating our profitable, cash flow
generating fly-ash brick and concrete businesses - within a very
short period we have been able to expand our breadth of
eco-friendly offering into a new, highly profitable business -
the construction waste management segment, which provides
integrated solutions to solve China's construction waste problem. We
are extremely proud of our achievements. Yulong today is a
vertically integrated, eco-friendly and well-structured business,
well positioned to take advantage of the tremendous opportunities
in the Henan Province and
beyond."
Since mid-2015, supported by its fly-ash brick and concrete
business segments, Yulong has achieved many milestones and is now
one of the leading CWM companies in Henan
Province, offering local and provincial governments a
cost-effective and technically advanced solution to manage and
reduce construction waste and related pollution. The
company's CWM operations were featured in a video news-story on
Bloomberg TV:
http://www.bloomberg.com/news/videos/2015-10-22/turning-china-s-demolition-trash-to-treasure.
Since April 2015, when its new
waste processing plant in Pingdingshan first became operational,
Yulong's CWM business has taken off. For the first nine
months of fiscal 2016, this segment generated a total $5.5 million in revenue, and is expected to
contribute over 15% of total revenue for fiscal 2016.
Management is confident that the CWM business has a strong
potential to significantly improve Yulong's future financial
performance and is expected to be a continued catalyst for future
growth.
The company has secured several long-term, multi-million-dollar
CWM contracts which should provide substantial revenues for several
years to come. Milestones for the last 12-months
include:
- A 20-year exclusive CWM license in Pingdingshan
- A 25-year exclusive waste hauling and recycling contract, with
potential revenue of $7 million
annually or $170 million over the
life of the contract, for the city of Shangqiu
- An 18-month contract potentially worth up to $3.9 million to clean and process construction
waste at a section of a new high-speed railway in the Lingyuan
District of the City of Shangqiu
- Sole provider of CWM services in Zhengzhou
- A contract potentially worth up to $35
million, over the next four years, to recycle construction
waste for the Zheng Dong New District of Zhengzhou City
- A contract potentially worth up to $55
million for a period of five years to provide recycling
services to the Zhengzhou City Airport Zone
The CWM business segment is providing Yulong with four new
substantial revenue sources, as follows:
- Hauling: several government contracts to haul waste from
construction sites.
- Recycling: several government contracts to recycle construction
waste at our state-of-the-art plant in Pingdingshan or by using our
portable recycling stations near construction sites.
- Recycled aggregates: publication of Henan provincial technical code allows the
company to begin selling its processed construction waste, or
recycled aggregates, as roadbed materials for highways in
Henan Province.
- Recycled brick: part of the recycled aggregates (fine sorted)
is used as raw material, at Yulong's plant to manufacture a wide
range of brick products.
To date, the company has stored over 5 million cubic meters of
recycled aggregates from its ongoing projects in the cities of
Zhengzhou and Shangqiu. The
sale of these recycled aggregates could generate over $5 million in revenue over the next 12
months. Over the next five years, the company expects to
generate $4 million in annual
revenues from the sale of recycled aggregates as roadbed materials
in Henan. Our CWM segment has an overall gross margin of over
58% currently, and is projected to generate approximately
$10 million in annual revenue going
forward.
Mr. Zhu also noted, "We will continue to execute our business
plan to:
- Maintain our leading market position for our concrete and
fly-ash brick businesses to continue generating cash flow to
support our growth initiatives;
- Expand our CWM business to other cities in Henan and beyond; and
- Seek consolidation opportunities to take advantage of
opportunities arising from a fragmented market – we are in process
of evaluating a request from local government to consolidate local
unlicensed construction waste hauling businesses in Shangqiu
City.
"Our business plan is supported by our strong financial position
– as of March 31, 2016 we had
approximately $32 million in cash and
cash equivalents, which is sufficient to support our short- to
mid-term expansion efforts. Due to a high demand for our unique
services and solid business plan, our CWM business continues to
expand at a rapid pace. As a result, and as previously
announced, our total revenue and net income for fiscal 2016, vs.
fiscal 2015, are expected to increase between 7% and 12% and
between 27% and 38%, respectively, and we expect this trend to
continue in fiscal 2017. We believe that we have positioned
the company well to further grow our business and maintain and
reinforce our market positions, with the ultimate goal to increase
shareholder value. We look forward to reporting our progress
in the coming weeks and months."
About Yulong Eco-Materials
Yulong is a vertically integrated manufacturer of eco-friendly
building products and a construction waste management company
located in the city of Pingdingshan in Henan Province, China. The company is currently Pingdingshan's
leading producer of fly-ash bricks and concrete as well as the
exclusive provider of construction waste management services in
parts of Pingdingshan and Shangqiu.
Forward-Looking Statements
This press release contains forward-looking statements,
particularly as related to, among other things, the business plans
of the Company, statements relating to goals, plans and projections
regarding the Company's financial position and business strategy.
The words or phrases "plans," "would be," "will allow," "intends
to," "may result," "are expected to," "will continue,"
"anticipates," "expects," "estimate," "project," "indicate,"
"could," "potentially," "should," "believe," "think," "considers"
or similar expressions are intended to identify "forward-looking
statements." These forward-looking statements fall within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Act of 1934 and are subject to the safe
harbor created by these sections. Actual results could differ
materially from those projected in the forward-looking statements
as a result of a number of risks and uncertainties. Such
forward-looking statements are based on current expectations,
involve known and unknown risks, a reliance on third parties for
information, transactions or orders that may be cancelled, and
other factors that may cause our actual results, performance or
achievements, or developments in our industry, to differ materially
from the anticipated results, performance or achievements expressed
or implied by such forward-looking statements. Factors that could
cause actual results to differ materially from anticipated results
include risks and uncertainties related to the fluctuation of
local, regional, and global economic conditions, the performance of
management and our employees, our ability to obtain financing,
competition, general economic conditions and other factors that are
detailed in our periodic reports and on documents we file from time
to time with the Securities and Exchange Commission. Statements
made herein are as of the date of this press release and should not
be relied upon as of any subsequent date, and the Company
specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments,
unanticipated events or circumstances after the date of such
statement.
Contact:
Investor Relations Counsel:
The Equity Group Inc.
Lena Cati
Vice President
212-836-9611 / lcati@equityny.com
www.theequitygroup.com
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SOURCE Yulong Eco-Materials Limited