Qiao Xing Universal Resources Announces Consolidated 2010 Financial Results

HUIZHOU, China, May 31, 2011 /PRNewswire-Asia-FirstCall/ -- Qiao Xing Universal Resources, Inc. (NASDAQ: XING) ("XING" or the "Company"), a leading company in the molybdenum mining business as well as a company with substantial assets in the resources industry, today announced its unaudited consolidated financial results for the fiscal year ended December 31, 2010.

"Our mining operations grew significantly in 2010 as our mining operations began to contribute significantly to our financial results. Furthermore, we completed two additional mine acquisitions at the end of 2010 and these two operational and producing mines will contribute substantially in 2011," stated Mr. Ruilin Wu, the Company's Chairman and Chief Executive Officer. "As seen by the impressive rise in revenue and net income in 2010, we are continuing to implement our strategy of becoming a pure-play resources company even as we work to finalize our options as relates to our remaining telecommunications business."

In fiscal 2010, the Company generated strong results from its mining business with revenues of RMB300.4 million (US$45.5 million), compared to RMB193.9 million in fiscal 2009, and net income in fiscal 2010 of RMB 90.6 million (US$13.7 million) compared to RMB64.2 million in fiscal 2009. This represents an increase in mining revenues and net income of 55% and 41%, respectively. Meanwhile, the Company's 56% owned subsidiary, Qiao Xing Mobile Communication Co., Ltd. ("QXM"), strategically contracted its mobile phone business due to an unfavorable competition environment so as to limit its operating losses as it assesses its corporate options.  Due to the operating losses attributable to its QXM subsidiary, the Company recorded a net loss of RMB 57.3 million (US$8.7 million) on a consolidated basis, compared to a consolidated net loss of RMB 259.9 million in 2009. As of December 31, 2010, the Company had cash and equivalents of RMB 3,178.1 million (US$481.5 million) on its consolidated balance sheet.

During the past year, the Company completed two acquisitions: (1) The acquisition of a 100% equity interest in Balinzuo Banner Xinyuan Mining Co., Ltd. ("Xinyuan"), which owns a mine with estimated ore reserves of 9,749,000 tons which primarily contains lead, zinc and copper, and; (2) the acquisition of a 34.53% equity interest in Chifeng Aolunhua Mining Co., Ltd. ("Aolunhua"). Aolunhua owns a copper-molybdenum mine with reserves of 372.9 million tons of ore that contains molybdenum metal, copper and silver. XING recently completed all of its financial purchase obligations for these two mining assets. The Company also owns the right to receive the expected residual returns from Chifeng Haozhou Mining Limited ("Haozhou") with estimated proven reserves of 30,985 tons of molybdenum metal (at an average grade of 0.40%) and reserves of other minerals.  With available current cash on hand and operating cash flow to be generated by its diversified mining assets, the Company believes that it is well positioned to optimize the operation of its mining business as well to increase its presence in the resources industry in 2011 and beyond.

XING is continuing to assess the various alternatives available to it in terms of divesting of its QXM subsidiary.  The Company will seek to announce its strategy as to QXM concurrent with its filing of its Form 20-F in June 2011. The Company's strategic plan is to optimize the operation of its mining assets, acquire future high potential mining assets and to become a pure resources company.  The Company believes that its state-of-the-art mining operations, its management expertise and its acquisitions strategy will enable it to generate a high return on its assets as it seeks to maximize value for shareholders.

Unaudited consolidated balance sheets as of December 31, 2010 and 2009, as well as unaudited statements of operations for the years ended December 31, 2010, 2009 and 2008 are as follows:

QIAO XING UNIVERSAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2009 AND 2010
			2009		2010
			RMB'000		RMB'000		US$'000
ASSETS
Current assets:
Cash and cash equivalents			3,709,503		3,178,156		481,539
Restricted cash			251,720		37,758		5,720
Accounts receivable, net			123,082		247,953		37,569
Inventories			98,012		61,848		9,371
Prepaid expenses			184,339		87,174		13,208
Other current assets			37,025		37,112		5,623
Due from related parties			25		24		4
Deferred income taxes-current			15,942		-		-
Assets held for sale			163,000		-		-
Due from discontinued operations			200,000		-		-
Total current assets			4,782,648		3,650,025		553,034
Property, machinery and equipment, net			170,485		269,895		40,893
Proven and probable reserves			712,121		672,610		101,911
Construction in progress			86,591		61,824		9,367
Investment at cost			5,000		184,860		28,009
Goodwill			82,058		-		-
Value beyond proven and probable reserves			67,295		67,295		10,196
Other acquired intangible assets, net			4,433		-		-
Acquisition deposit			-		352,800		53,455
Deferred income taxes-noncurrent			-		1,143		173
Total assets			5,910,631		5,260,452		797,038
LIABILITIES
Current liabilities:
Short-term bank borrowings			884,708		446,000		67,576
Accounts payable			60,750		40,349		6,114
Other payables			57,238		100,881		15,285
Accrued liabilities			40,472		25,237		3,824
Deposits received			1,310		1,310		198
Deferred revenues			16,370		3,902		591
Due to related parties			5,118		9,324		1,413
Taxation payable			15,016		15,912		2,411
Embedded derivative liability			63,096		20,113		3,047
Convertible notes			233,716		112,162		16,994
Assets retirement obligation			4,013		10,837		1,642
Deferred income taxes-current			-		1,421		215
Total current liabilities			1,381,807		787,448		119,310
Shareholders' loans			6,732		6,509		986
Warrants liabilities			148,921		69,831		10,580
Deferred income taxes-noncurrent			175,281		167,258		25,343
Total liabilities			1,712,741		1,031,046		156,219
Commitments and contingencies
SHAREHOLDERS' EQUITY
XING equity:
Common stock, par value RMB0.008      (equivalent of US$0.001); authorized      200,000,000 shares as of December      31, 2009 and 2010; outstanding and      fully paid –82,327,993 as of December      31, 2009 and 95,802,363 as of      December 31,2010			602		693		104
Additional paid-in capital			2,404,998		2,627,793		398,151
Retained earnings			796,736		728,646		110,401
Cumulative translation adjustments			(160,532)		(154,218)		(23,366)
Total XING equity			3,041,804		3,202,914		485,290
Noncontrolling interest			1,156,086		1,026,492		155,529
Total equity			4,197,890		4,229,406		640,819
Total liabilities and shareholders' equity			5,910,631		5,260,452		797,038
The accompanying notes are an integral part of these consolidated financial statements.

QIAO XING UNIVERSAL RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
			2008		2009		2010
			RMB'000		RMB'000		RMB'000		US$'000
Net sales			2,153,873		1,826,799		1,155,942		175,143
Cost of goods sold			(1,287,096)		(1,474,930)		(1,077,857)		(163,312)
Gross profit			866,777		351,869		78,085		11,831
Operating expenses:
Selling expenses			(146,551)		(110,444)		(112,832)		(17,096)
General and administrative expenses			(59,794)		(114,807)		(69,843)		(10,582)
Research and development			(29,242)		(36,404)		(18,943)		(2,870)
Amortization of acquired intangible assets			(11,727)		(4,733)		(4,433)		(672)
Impairment of assets held for sale			-		(5,957)		-		-
Impairment of goodwill			-		-		(82,058)		(12,433)
Impairment of acquired intangible assets			(26,235)		(13,600)		-		-
Income from operations			593,228		65,924		(210,024)		(31,822)
Interest income			54,821		28,641		24,357		3,690
Exchange (loss) gain, net			(16,971)		406		(4,090)		(620)
Interest expense			(311,710)		(222,804)		(46,894)		(7,105)
(Loss) gain on remeasurement of embedded derivatives			160,036		(8,258)		19,006		2,880
Gain on disposal of interests in subsidiaries			2,269		-		-		-
Gain (loss) on issue/repurchase of stocks by subsidiaries			4,351		-		-		-
Gain (loss) on extinguishment of convertible notes			(10,634)		(15,261)		10,025		1,519
Impairment of investment at cost			-		(2,802)		-		-
Unrealized gain (loss) on derivatives			-		(4,673)		48,745		7,386
Other income (loss), net			(3,700)		166		(1,468)		(222)
Income (loss)from continuing operations before income tax			471,690		(158,661)		(160,343)		(24,294)
Provision for income tax			(155,717)		(43,939)		(47,847)		(7,250)
Income (loss) from continuing operations, net of tax			315,973		(202,600)		(208,190)		(31,544)
Discontinued operations, net of tax			(290,953)		(139,782)		-		-
Net income (loss)for the year			25,020		(342,382)		(208,190)		(31,544)
Net (income) loss attributable to the noncontrolling interest			(161,814)		82,486		150,808		22,850
Net income (loss)			(136,794)		(259,896)		(57,382)		(8,694)
Other comprehensive income (loss) - Translation adjustments			(33,815)		(85,883)		6,314		957
Comprehensive income (loss)			(170,609)		(345,779)		(51,068)		(7,737)
Basic earnings (loss) per common share:
Continuing operations			4.98		(1.91)		(0.63)		(0.10)
Discontinued operations			(9.40)		(2.22)
Extraordinary gain
Total			(4.42)		(4.13)		(0.63)		(0.10)
Diluted earnings (loss) per common share:
Continuing operations			3.51		(1.91)		(0.63)		(0.10)
Discontinued operations			(9.40)		(2.22)
Extraordinary gain
Total			(5.89)		(4.13)		(0.63)		(0.10)
Weighted average number of shares outstanding
Basic			30,949,000		62,837,000		91,179,000		91,179,000
Diluted			30,949,000		62,837,000		91,179,000		91,179,000
Amounts attributable to shareholders			RMB'000		RMB'000		RMB'000		US$'000
Income (loss) from continuing operations, net of taxes			154,159		(120,114)		(57,382)		(8,694)
Discontinued operations, net of taxes			(290,953)		(139,782)		-		-
Net income (loss)			(136,794)		(259,896)		(57,382)		(8,694)

Foreign Exchange Rate Used

The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of the amounts from Renminbi (RMB) into United States dollars for the convenience of readers were calculated at the noon purchase rate of US$1.00 = RMB6.60 on December 31, 2010 in New York City for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into U.S. Dollars at that rate on December 31, 2010, or on any other specific date. The percentages stated are calculated based on RMB.

About Qiao Xing Universal Resources, Inc.

Qiao Xing Universal Resources, Inc. is a leading player in the molybdenum mining industry with substantial assets in the resources industry. XING focuses on mining and processing rare metal ores and several strategically important base-metal ores, including molybdenum, copper lead and zinc. XING currently owns a 100% equity interest in Balinzuo Banner Xinyuan Mining Co., Ltd. and a 34.53% equity interest in Chifeng Aolunhua Mining Co., Ltd, as well as the right to receive 100% of the expected economic residual returns from Chifeng Haozhou Mining Co., Ltd.

XING was one of the first Chinese companies to be listed on NASDAQ (in 1999) as one of the leading players in the telecommunication-terminal product business in China. In 2007, XING made the strategic decision to diversify into the resources industry. Since then, XING has made several acquisitions in the resources industry and divested its fixed-line and budget mobile phone businesses.  To reflect this change, XING changed its corporate name to Qiao Xing Universal Resources, Inc., effective January 28, 2010.

XING is well positioned to optimize the operation of its mining business as well to increase its presence in the resources industry in 2011 and beyond. XING will continue to seek opportunities to acquire future high potential mining assets. At the same time, XING is also working to divest its remaining mobile-phone business to become a pure-play resources company.

Cautionary Note Regarding Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These include statements about our expectations, plans, objectives, assumptions, performance or future events. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plans," "potential," "projects," "continuing," "ongoing," "expects," "management believes," "we believe," "we intend" and similar expressions. These statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed. You should not place undue reliance on these forward-looking statements.  Forward-looking statements include all statements other than statements of historical facts, such as statements regarding the Company's plans to improve efficiencies in the day-to-day operations of its mines, the Company's plans to enhance production processes and management efficiencies, the Company's plans to develop more efficient production processes for molybdenum exploration and extraction and the Company's transition to a pure resources company and bigger player within the resources industry. Readers are cautioned that forward-looking statements are not guarantees of future performance and actual results may differ materially from those projected, anticipated or assumed in the 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. Information regarding these factors is included in our filings with the SEC. The Company does not undertake any obligation to update any forward-looking statements. All information provided in this press release is as of May 31, 2011.

Company Contact:
Qiao Xing Universal Resources
Rick Xiao, Vice President
Phone: [phone]
Email: [e-mail]
USA IR Agency Contacts:
CCG Investor Relations Inc.
Mabel Zhang, Associate Partner
[phone]
Email: [e-mail]
David Rudnick, Account Manager
[phone]
Email: [e-mail]

SOURCE Qiao Xing Universal Resources, Inc.

Copyright 2011 PR Newswire