China Zenix Auto International Announces Operating Results for the Third Quarter and First Nine Months of 2012

   China Zenix Auto International Announces Operating Results for the Third
                    Quarter and First Nine Months of 2012

- Earnings Per ADS Were US$0.97 for the First Nine Months of 2012; Bank
Balances and Cash Were US$140.0 Million -

PR Newswire

ZHANGZHOU, China, Nov. 15, 2012

ZHANGZHOU, China, Nov. 15, 2012 /PRNewswire/ -- China Zenix Auto International
Limited (NYSE: ZX) ("Zenix Auto" or "the Company"), the largest commercial
vehicle wheel manufacturer in China in both the aftermarket and OEM market by
sales volume, today announced its unaudited financial results for the third
quarter and first nine months ended September 30, 2012.

Financial Highlights

Third Quarter 2012:

  oRevenue of RMB762.2 million (US$121.3 million) compared with RMB894.6
    million in the third quarter of 2011;
  oGross margin was 23.3% from 26.0% in the third quarter of 2011;
  oProfit and total comprehensive income for the period decreased to RMB56.5
    million (US$9.0 million) compared with RMB89.1 million in the third
    quarter last year;
  oEarnings per American Depositary Share ("ADS") in the third quarter of
    2012 were RMB1.09 (US$0.17).

First Nine Months of 2012:

  oRevenue was RMB2,937.9 million (US$467.5 million) compared with RMB3,061.7
    million in the first nine months of 2011;
  oGross margin was 25.8% compared with 26.5%;
  oProfit and total comprehensive income was RMB314.6 million (US$50.1
    million) compared with RMB341.9 million in first nine months of 2011;
  oEarnings per ADS were RMB6.10 (US$0.97);
  oBank balances and cash were RMB879.5 million (US$139.9 million) at
    September 30, 2012;
  oNet cash generated from operations was RMB 734.9 million (US$116.9
    million);

Mr.JianhuiLai, chairman and chief executive officer of Zenix Auto,
commented, "We are pleased to report that again we have outperformed the
market in a difficult environment. Heavy-duty truck and construction vehicle
sales continue to hinder the rebound in commercial vehicle sales. While OEM
market remains sluggish and lower commodity cost affected selling prices, we
leverage our robust aftermarket network to increase our market share, as our
sales volume in aftermarket continued to grow. Our exports continue to grow
especially into other Asian markets as our international customer base
expands. Our new facility to make light-weight aluminum wheels for commercial
vehicles is now conducting trial production and we expect commercial
production in the fourth quarter of 2012. As the first domestic producer of
aluminum wheels in China, we believe our aluminum wheels will replace many of
the aluminum wheels currently being imported for the bus market and create new
demand as customers continue to look for solutions that can provide better
life-cycle economic benefits in this challenging environment."

Yifan Li, chief financial officer of Zenix Auto, commented, "We continue to
manage our working capital to build our financial strength and add financial
flexibility. Even in today's challenging marketplace, we are profitable and we
are reducing our capital expenditures and exercising financial conservatism to
address the changing environment. As a result, we maintained our momentum of
strong free cash flows generation and strengthened our balance sheet. With
these financial resources, we are continuing our R&D program to introduce new
advanced products that meet or exceed our competitors' products and provide a
competitive advantage. Our goals are to capture additional market share in the
domestic market while we expand our international presence."

2012 Third Quarter Results

Revenue for the third quarter ended September 30, 2012 was RMB762.2 million
(US$ 121.3 million) from revenue of RMB894.6 million for the third quarter of
2011.

Aftermarket sales in China declined 11.9% to RMB400.8 million (US$63.8
million) in the third quarter. Increased unit sales of steel wheels was offset
by reduced wheel prices reflecting both lower steel prices and slower economic
growth that negatively affected transportation industry in China.

Sales to the Chinese OEM market decreased 26.4% to RMB233.3 million (US$37.1
million). Lower OEM sales in China in the third quarter were primarily due to
the overall weak commercial vehicle market with heavy-duty truck sales down
over 30% compared with the third quarter of 2011.

International sales increased by 4.4% to RMB128.1 million (US$20.4 million)
compared to the third quarter a year ago. The increase in export sales in the
third quarter was mainly due to the Company's superior quality steel wheels
further penetrating into a number of countries in Asia.

In the third quarter of 2012, domestic aftermarket sales, domestic OEM sales
and international sales contributed 52.6%, 30.6% and 16.8% of revenue,
respectively.

Tubed steel wheel sales comprised 57.2% of third quarter revenue compared to
56.8% in the same quarter in 2011. Tubeless steel wheel sales represented
38.1% of third quarter revenue compared to 39.5% in the same quarter in 2011.

Third quarter gross profit was RMB177.6 million (US$ 28.3 million), compared
to RMB232.9 million in the same quarter in 2011. Gross margin declined to
23.3% from 26.0% in the third quarter of 2011. The decline in gross margin
reflected slightly lower sales volume, and a product mix change as sales of
tubed wheels represented a higher percentage of sales combined with
weaker-than-usual demand for higher-priced tubeless wheels by vehicle
operators who chose lower-end wheels to save money in the short term.
Additionally, sales shifted toward more medium- and light-duty vehicles as
sales of heavy-duty OEM trucks remained sluggish in the third quarter of 2012.

Selling and distribution costs decreased by 11.3% to RMB51.9 million (US$8.3
million) compared with RMB58.5 million in the third quarter of 2011. Lower
selling and distribution costs were primarily generated by reduced
transportation expenses due to fewer units shipped, lower advertising, and
less business promotions during the quarter. As a percentage of revenue,
selling and distribution costs increased to 6.8% from 6.5% in the same quarter
of 2011.

Research and development (R&D) expenses declined by 15.6% to RMB20.6 million
(US$3.3 million) compared to the third quarter of 2011. R&D as a percent of
revenue was stable at 2.7% in the third quarter of 2012 and 2011. Lower R&D
expenses reflected the completion of certain projects and reduced other
expenses. Zenix Auto remains committed to new product development and
market-leading innovation.

Administrative expenses increased by 30.2% to RMB32.6 million (US$5.2 million)
compared with RMB25.0 million in the third quarter of 2011. Administrative
expenses increased primarily due to higher personnel costs and expenditures
related to being a public company. As a percentage of revenue, administrative
expenses increased to 4.3% compared with 2.8% of revenue in the third quarter
of 2011.

Profit and total comprehensive income for the third quarter were RMB56.5
million (US$9.0 million) from RMB89.1 million in the same quarter of 2011.

Earnings per ordinary share and earnings per ADS in the third quarter of 2012
were RMB0.27 (US$0.04) and RMB1.09 (US$0.17), respectively.

During the third quarter of 2012 and 2011, the weighted average number of
ordinary shares was 206.4 million and the weighted average number of ADSs was
51.6 million, respectively.

2012 First Nine-Month Results

Revenue for the first nine months ended September 30, 2012, declined to
RMB2,937.9 million (US$467.5 million) from RMB3,061.7 million in the first
nine months in 2011.

Aftermarket sales in China were RMB1,418.6 million in the first nine months of
2012 and represented 48.3% of total nine month revenue. Sales to the Chinese
OEM market decreased 12.9% to RMB1,039.9 million and represented 35.4% of
revenue. International sales rose by 16.6% to RMB479.4 million compared to
the same period last year, and represented 16.3% of revenue.

Tubed steel wheel sales for the first nine months ended September 30, 2012,
declined 5.8% compared with the same period in 2011 and comprised 56.6% of
revenue. Tubeless steel wheel sales rose by 0.2% from the same period a year
ago and were 39.3% of revenue compared to 37.6% for the same period in 2011.

Gross profit for the first nine months ended September 30, 2012, declined to
RMB757.8 million (US$120.6 million) from RMB812.4 million in the first nine
months of 2011. Gross margin was 25.8%. Profit before taxation declined to
RMB371.1 million (US$59.0 million) compared with RMB425.7 million in the same
period last year.

Profit and total comprehensive income for the first nine months ended
September 30, 2012, was RMB314.6 million (US$50.1 million) compared with
RBM341.9 million in the same period in 2011. Earnings per ordinary share and
earnings per ADS for the first nine months ended September 30, 2012, were
RMB1.52 (US$0.24) and RMB6.10 (US$0.97), respectively.

As of September 30, 2012, Zenix Auto's bank balances and cash were RMB879.5
million (US$139.9 million) and its shareholders' equity was RMB2.2 billion
(US$355.2 million). As of December 31, 2011, bank balances and cash were
RMB729.6 million and shareholders' equity was RMB1.9 billion. In March 2012,
the Company declared an annual cash dividend of US$0.06 per ADS or
approximately RMB19 million (US$3.0 million).

For the first nine months ended September 30, 2012, net cash from operating
activities was RMB 734.9 million (US$116.9 million). Capital expenditures,
including the purchase of property, plant and equipment, acquisition of
leasehold land, and deposit paid for acquisition of property, plant and
equipment, were RMB333.6 million (US$53.1 million) during the first nine
months of 2012.

Business Outlook

Management has revised its revenue guidance for the year ending December 31,
2012 to be approximately RMB 3.7 billion. This target is based on the
Company's current views on operating and market conditions, which are subject
to change. 

Mr.JianhuiLai, chairman and chief executive officer of Zenix Auto,
concluded, "We are adapting our operations to the current weak environment,
but our focus will remain on increasing market share, generating net earnings
and producing positive cash flow to build shareholder value. The potential of
our new products, especially our aluminum wheels that are ready to enter the
market, creates optimism for the future. We will increase our campaign on
tubeless wheels and continue to optimize our product mix to meet the changing
demand from vehicle operators. We remain confident that our strategy to grow
market share in the slow economic environment will bear fruits for us in the
long run."

Conference Call Information

The Company will host a conference call, to be simultaneously web cast, on
Thursday, November 15, 2012 at 8:00 a.m. EST/ 9:00 p.m. Beijing Time.
Interested parties may participate in the conference call by dialing
+1-866-519-4004 (North America) or +65 6723 9381 (International) approximately
five to ten minutes before the call start time. A live web cast of the
conference call will be available on the Zenix Auto website at
http://zenixauto.com/en/.

A replay of the call will be available shortly after the conclusion of the
conference call through November 30, 2012 at 11:59 p.m. EST, or December 1,
2012 at 11:59 a.m. Beijing Time. An archived web cast of the conference call
will be available on the Zenix Auto corporate website at
http://zenixauto.com/en/ and under the investor relations section. Interested
parties may access the replay by dialing +1-866-214-5335 (North America),
800-901-596 (Hong Kong) or +61-2-8235-5000 (International) and entering
conference ID number 57240332.

Exchange Rate Information

The United States dollar (US$) amounts disclosed in this press release are
presented solely for the convenience of the reader. All translations from RMB
to U.S. dollars are made at a rate of RMB6.2848 to US$1.00, the effective noon
buying rate as of September 28, 2012 in The City of New York for cable
transfers of RMB as set forth in H.10 weekly statistical release of the
Federal Reserve Board. The percentages stated are calculated based on RMB
amounts.

About China Zenix Auto International Limited

China Zenix Auto International Limited is the largest commercial vehicle wheel
manufacturer in China in both the aftermarket and OEM market by sales volume.
With a large intellectual property portfolio, the Company offers more than 330
series of tubed steel wheels, tubeless steel wheels, and off-road steel wheels
in both the aftermarket and OEM market in China and internationally. Zenix
Auto's customers include group members of a number of large PRC commercial
vehicle manufacturers, and it also exports products to over 110 distributors
in more than 30 countries worldwide. With five large, strategically located
manufacturing facilities in multiple regions across China, the Company has an
aggregate annual production capacity of approximately 15.0 million units of
steel wheels as of December 31,2011. For more information, please visit:
http://zenixauto.com/en.

Safe Harbor

This announcement contains forward-looking statements. These statements are
made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates," "confident" and similar
statements. Among other things, the revenue guidance and quotations from
management in this announcement, as well as Zenix Auto's strategic and
operational plans, contain forward-looking statements. Zenix Auto may also
make written or oral forward-looking statements in its periodic reports to the
SEC, in its annual report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or employees.
Statements that are not historical facts, including statements about Zenix
Auto's beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties. A number
of factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not limited to the
following: our growth strategies; our future business development, including
our ability to successfully develop new tubeless steel wheel products and the
planned introduction of aluminum wheels; our ability to expand our
distribution network; overall growth in the aftermarket and OEM market in
China and elsewhere, which depends on a number of factors beyond our control
including economic growth rates and vehicle sales; and changes in our revenues
and certain cost or expense items as a percentage of our revenues. Further
information regarding these and other risks is included in our filings with
the SEC. Zenix Auto does not undertake any obligation to update any
forward-looking statement, except as required under applicable law. All
information provided in this press release and in the attachments is as of the
date of the press release, and Zenix Auto undertakes no duty to update such
information, except as required under applicable law. 

For more information, please contact

Investor Contact:
Kevin Theiss / Dixon Chen
Grayling
Tel: +1-646-284-9409
Email: kevin.theiss@grayling.com
 dixon.chen@grayling.com

Media Contact:
Ivette Almeida
Grayling
Tel: +1 917-302-9946
Email: Ivette.almeida@grayling.com



--tables follow --

China Zenix Auto International Limited
Unaudited Condensed Consolidated Statements of Comprehensive Income
For the three months ended September 30, 2012 and 2011



(RMB and US$ amounts expressed in thousands, except per share data)


                                              Three Months Ended September 30,
                                              2011         2012       2012
                                              RMB' 000     RMB' 000   US$' 000
Revenue                                       894,623      762,244    121,284
Cost of sales                                 (661,711)    (584,641)  (93,025)
Gross profit                                  232,912      177,603    28,259
Other operating income                       3,810        5,997      954
Net exchange (loss)/gain                      (1,554)      1,466      233
Selling and distribution costs                (58,519)     (51,883)   (8,255)

                                              (24,375)     (20,572)   (3,273)
Research and development expenses
Administrative expenses                       (25,022)     (32,591)   (5,186)
Finance costs                                 (15,325)     (12,739)   (2,027)
Profit before taxation                       111,927      67,281     10,705
Income tax expense                            (22,780)     (10,801)   (1,719)
Profit and total comprehensive income for     89,147       56,480     8,986
the period
Earnings per share
Basic                                         0.43         0.27       0.04
Diluted                                       0.43         0.27       0.04
Earnings per ADS
Basic                                         1.73         1.09       0.17
Diluted                                       1.73         1.09       0.17





China Zenix Auto International Limited
Unaudited Condensed Consolidated Statements of Comprehensive Income
For the nine months ended September 30, 2012 and 2011



(RMB and US$ amounts expressed in thousands, except per share data)


                                           Nine Months Ended September 30,
                                           2011         2012         2012
                                           RMB' 000     RMB' 000     US$' 000
Revenue                                    3,061,688    2,937,896    467,461
Cost of sales                              (2,249,243)  (2,180,142)  (346,891)
Gross profit                               812,445      757,754      120,570
Other operating income                    11,028       12,887       2,051
Net exchange (loss)/gain                   (5,225)      3,026        481
Selling and distribution costs             (192,230)    (194,667)    (30,974)

                                           (65,942)     (70,063)     (11,148)
Research and development expenses
Administrative expenses                    (89,531)     (98,847)     (15,728)
Finance costs                              (44,803)     (39,012)     (6,207)
Profit before taxation                    425,742      371,078      59,045
Income tax expense                         (83,862)     (56,467)     (8,985)
Profit and total comprehensive income for  341,880      314,611      50,060
the period
Earnings per share
Basic                                      1.86         1.52         0.24
Diluted                                    1.86         1.52         0.24
Earnings per ADS
Basic                                      7.43         6.10         0.97
Diluted                                    7.43         6.10         0.97





China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Financial Position



(RMB and US$ amounts are expressed in thousands)


                                       December31  September30  September30
                                       2011        2012         2012
                                       RMB'000      RMB'000       US$' 000
ASSETS
Current Assets
Inventories                            552,104      546,605       86,973

                                       1,108,182    704,447       112,087
Trade and other receivables and
prepayments
Prepaid lease payments                 8,332        9,425         1,500
Pledged bank deposits                  96,211       81,055        12,897

                                       105,000      70,000        11,138
Fixed bank deposits with maturity
period over three months
Bank balances and cash                 729,621      879,543       139,948
Total current assets                   2,599,450    2,291,075     364,543
Non-Current Assets
Property, plant and equipment          1,184,756    1,322,979     210,505
Prepaid lease payments                 371,142      416,506       66,272

                                       40,849       102,934       16,378
Deposits paid for acquisition of
 property, plant and equipment
Deferred tax assets                    5,208        5,010         797
Intangible assets                      17,000       17,000        2,705
Total non-current assets               1,618,955    1,864,429     296,657
Total assets                           4,218,405    4,155,504     661,200
EQUITY AND LIABILITIES
Current Liabilities
Trade and other payables and accruals  1,168,319    1,065,254     169,497
Taxation payable                       21,810       10,809        1,720
Bank borrowings                        998,500      755,500       120,211
Total current liabilities              2,188,629    1,831,563     291,428
Non-current liabilities
Deferred income                        12,479       11,881        1,890
                                                    
Deferred tax liabilities               81,672                     12,728
                                                    79,995
Total non-current liabilities          94,151       91,876        14,618
Total liabilities                      2,282,780    1,923,439     306,046
EQUITY
Share capital                          136          136           22
Paid in capital                        411,225      411,225       65,432
Reserves                               1,524,264    1,820,704     289,700

                                       1,935,625    2,232,065     355,154
Total equity attributable to owners
of the company
Total equity and liabilities           4,218,405    4,155,504     661,200







China Zenix Auto International Limited

Unaudited Condensed Consolidated Statements of Cash Flows

For the Nine Months September 30, 2012



(RMB and US$ amounts are expressed in thousands)


                                                           Nine Months Ended
OPERATING ACTIVITIES                                       September 30, 2012
                                                           RMB' 000   US$' 000
Profit before taxation                                     371,078    59,045
Adjustments for:
       Amortization of prepaid lease payments              8,183      1,302
       Depreciation of property plant and equipment        88,988     14,159
       Release of deferred income                          (598)      (95)
       Finance costs                                       39,012     6,207
       Interest income                                     (8,422)    (1,340)
       Loss on disposal of property, plant and equipment   312        50
       Share-based payment expense                         1,343      214
Operating cash flows before movements in working capital   499,896    79,542
Decrease in inventories                                    5,499      875

                                                           404,205    64,315
Decrease in trade and other receivables and prepayments
Decrease in trade and other payables and accruals          (113,727)  (18,098)
Cash generated from operations                             795,873    126,634
Interest received                                          7,993      1,272
PRC income tax paid                                        (68,947)   (10,970)
NET CASH FROM OPERATING ACTIVITIES                         734,919    116,936
INVESTING ACTIVITIES
Purchase of property, plant and equipment                  (166,515)  (26,495)
Acquisition of leasehold land                              (54,640)   (8,694)
Withdrawal of pledged bank deposits                        18,160     2,890
Placement of pledged bank deposits                         (3,004)    (478)
Proceeds on disposal of property, plant and equipment      488        78

                                                           (112,434)  (17,890)
Deposits paid for acquisition of property, plant and
equipment

                                                           (138,883)  (22,098)
Placement of fixed bank deposits with maturity periods
over three months
Withdrawal of fixed bank deposits with maturity periods    173,883    27,667
over three months
Placement of financial assets at fair value through        (20,000)   (3,182)
profit or loss
Withdrawal of financial assets at fair value through       20,429     3,251
profit or loss
NET CASH USED IN INVESTING ACTIVITIES                      (282,516)  (44,951)


FINANCING ACTIVITIES
New bank borrowings raised                                 380,000    60,463
Repayment of bank borrowings                               (623,000)  (99,128)
Interest paid                                              (39,520)   (6,289)
Dividend paid                                              (19,491)   (3,101)
NET CASH USED IN FINANCING ACTIVITIES                      (302,011)  (48,055)
NET INCREASE IN CASH AND CASH EQUIVALENTS                  150,392    23,930
Cash and cash equivalents at beginning of the year         729,621    116,093
Effect of foreign exchange rate changes                    (470)      (75)
Cash and cash equivalents at end of the year               879,543    139,948



SOURCE China Zenix Auto International Limited

Website: http://zenixauto.com/en
 
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