Huaxing Machinery Corp. Reports Consolidated Financial Results for the Year and Quarter Ended December 31, 2011

Huaxing Machinery Corp. (TSX VENTURE:HUA) ("Huaxing" or the "Company") reports
its audited consolidated financial results as at and for the year ended December
31, 2011 and unaudited consolidated financial results as at and for the quarter
ended December 31, 2011 in accordance with International Financial Reporting
Standards ("IFRS"). All dollar amounts are expressed in Canadian dollars.


The Company's audited financial results for the year ended December 31, 2011 in
comparison to those of the year ended December 31, 2010 are as follows: 




---------------------------------------------------------------------------
                   Year Ended     Year Ended                               
                  December 31,   December 31,            Changes from       
                         2011           2010             2010 to 2011       
(Audited)                   $              $              $               %
---------------------------------------------------------------------------
Sales              26,342,834     22,993,251      3,349,583          14.57%
Cost of sales     (20,885,916)   (17,462,316)    (3,423,600)         19.61%
Gross profit        5,456,918      5,530,935        (74,017)         -1.34%
Income from                                                                
 operations         1,592,883      2,131,962       (539,079)        -25.29%
Net income            433,368      1,277,509       (844,141)        -66.08%
Net income                                                                 
 attributable                                                              
 to equity                                                                 
 holders of the                                                            
 Company               72,166        910,592       (838,426)        -92.07%
Earnings per                                                               
 share - basic                                                             
 and diluted             0.01           0.03          (0.02)        -66.67%
---------------------------------------------------------------------------



For the year ended December 31, 2011, audited consolidated income from
operations and net income were $1,592,883 (2010 - $2,131,962) and $433,368 (2010
- $1,277,509), respectively. 


During the year ended December 31, 2011 we recorded listing costs of $769,308
for completing the Qualifying Transaction (the "QT") with Samurai Capital Corp.
("Samurai") during the first quarter of 2011. The listing costs had a
substantial impact on the Company's reported net income for 2011. However, these
costs were non-cash transactions and did not affect the Company's cash flows or
the Company's actual operations. It is a one-time cost incurred specifically to
take the Company public. 


The breakdown of the listing costs is as follows: 



Fair value assigned to the common shares, options and                       
 warrants previously issued and granted by Samurai and                      
 outstanding at the closing of the QT                       $        694,804
Fair value assigned to the common shares issued to the                      
 sponsors of the QT                                                   20,000
Identifiable net obligation assumed from Samurai                      54,504
                                                           -----------------
                                                                            
Total listing expense                                       $        769,308
                                                           -----------------
                                                           -----------------



In 2011, our research and development of large scale Robotic Welding System for
fabrication of corrugated web beams was successfully commercialized. Our first
set of Robotic Welding System was manufactured and sold for RMB12 million ($1.8
million) during the last quarter of 2011. 


"We are pleased," said Mr. Xianhua Sun, Chairman of Huaxing, "that the
successful commercialization and sale of the first Robotic Welding System is
expected to enhance Huaxing's revenue and profit in the coming years. This is
part of our corporate strategy of product diversification into higher margin
machinery products. The Robotic Welding System is specially designed for
fabrication of corrugated web beam for the target market of steel structure
fabrication companies. There are approximately 4,300 steel structure companies
in China, where Huaxing is currently the only manufacturer of Robotic Welding
System which can substantially increase the welding efficiency thus achieving
cost savings for its users."


Our gross profit margin decreased by 1.34% from the year ended December 31, 2010
to the year ended December 31, 2011, because our sales prices in 2011 were
largely based on the contracts signed and quotes given during 2010. As a result,
our sales prices did not increase directly in relation with the increase in our
raw material purchase prices.


The Board of Directors did not declare dividend for the year ended December 31,
2011.


The Company's unaudited financial results for the quarter ended December 31,
2011 in comparison to those of the quarter ended December 31, 2010 are as
follows:




---------------------------------------------------------------------------
                Quarter Ended  Quarter Ended                               
                  December 31,   December 31,              Changes from    
                         2011           2010               2010 to 2011    
(Unaudited)                 $              $              $               %
---------------------------------------------------------------------------
Sales               6,708,255      4,870,480      1,837,775          37.73%
Cost of sales      (4,880,581)    (3,841,243)    (1,039,338)         27.06%
Gross profit        1,827,674      1,029,237        798,437          77.58%
Income from                                                                
 operations           171,465       (108,501)       279,966         258.03%
Net income            195,811       (199,717)       395,528         198.04%
Earnings per                                                               
 share - basic                                                             
 and diluted             0.00          (0.00)          0.00                
---------------------------------------------------------------------------



The financial results as at and for the periods ended December 31, 2010
represent the financial results of Gold Rhino Limited as a private company for
such period prior to the completion of the QT. The financial results as at and
for the periods ended December 31, 2011 represent the financial results of
Huaxing Machinery Corp. as a public company for such period after the completion
of the QT, therefore include the costs in relation to professional, filing,
regulatory fees and other office and administrative costs incurred for
maintaining Huaxing's public company status. 


The foregoing reflects a selected extract of the Company's financial performance
only, and must be viewed with the Company's full audited consolidated financial
statements and management's discussion and analysis on SEDAR for further details
at www.sedar.com under the Company's profile. 


About Huaxing Machinery Corp.

Huaxing is engaged in the business of machinery manufacturing, and became listed
on TSX.V on January 21, 2011 upon completing the Qualifying Transaction with
Samurai Capital Corp., a CPC. Through its wholly owned subsidiary Gold Rhino
Limited, Huaxing holds an 80% controlling equity interest in Shandong Gold Rhino
Huaxing Machinery Corp., the operating entity that holds the manufacturing
facilities located in Boxing County, Shandong province, China. Its main products
are stone cutting, polishing and processing machinery and equipment for the
building and construction industry, and Robotic Welding System for the steel
structure industry. 


Forward-Looking Statements 

Certain information regarding Huaxing Machinery Corp. contains herein may
constitute forward-looking statements within the meaning of applicable
securities laws. Forward-looking statements may include estimates, plans,
expectations, opinions, forecasts, projections, guidance or other statements
that are not statements of fact. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct. The
Company cautions that actual performance will be affected by a number of
factors, many of which are beyond the Company's control, and that future events
and results may vary substantially from what the Company currently foresees. The
Company assumes no obligation to update such forward-looking statements, except
as required by applicable securities laws or exchange regulations. The Company's
forward-looking statements are expressly qualified in their entirety by this
cautionary statement. The Company seeks safe harbour.