DALIAN, China, April 14, 2011 /PRNewswire-Asia-FirstCall/ -- China Sun Group High-Tech Co. (OTC Bulletin Board: CSGH.OB - News) ("China Sun Group" or the "Company"), a vertically-integrated supplier of anode materials for rechargeable Lithium–ion (Li-ion) batteries in China, today announced their fiscal year 2011 Q3 financial results.

Third Quarter Ended February 28, 2011 Financial Results Highlights

• Q3 revenue increased by 24% to $13.4 million compared to $10.8 million for the comparable period in 2010
• Q3 gross profit increased by 36% to $4.60 million compared to $3.38 million for the comparable period in 2010
• Q3 net income increased by 21% to $2.66 million compared to $2.20 million for the comparable period in 2010
• Q3 diluted net income per share was $0.05 compared to $0.04 for the comparable period in 2010

"Our financial results continue to be positively driven by the increasing demand for our products. China Sun Group's sales and earnings continue to benefit from the increasing demand for our new higher margin product, lithium iron phosphate ("LIP product") and the continued surge in demand for lithium batteries. We are confident with our capability to develop high quality product to meet our customer's needs. We ended the third quarter with three production lines for our LIP product, and seven for producing our cobaltosic and lithium oxide products," commented Chief Executive Officer, Mr. Guosheng Fu.

Third Quarter Ended February 28, 2011 Financial Results

Net Revenue

Net revenue for the three months ended February 28, 2011 was $13.4 million, an increase of $2.55 million or 24% from net revenue of $10.8 million for the comparable period in 2010. 88 % of the increase in net revenue resulted from an increase in sales of our new product, lithium iron phosphate. Sales of lithium iron phosphate increased by 177% for the three months ended February 28, 2011, which was 205 tons compared to 74 tons for the comparable period in 2010.

Summarized financial information concerning the Company's major products is shown in the following table for the three months ended February 28, 2011 and 2010.

Gross Profit

Gross profit for the three months ended February 28, 2011 was $4.60 million, an increase of $1.22 million or 36% from $3.38 million for the comparable period in 2010. The increase in gross profit was primarily attributable to increased sales of our new higher margin product, lithium iron phosphate. Gross margin for the quarter ended February 28, 2011 was 34.5% compared to 31.3% for the same quarter in 2010.

Sales and Marketing Expenses

Sales and marketing expenses for the three months ended February 28, 2011 were $47,493, compared to $30,057 for the three months ended February 28, 2010, an increase of 58% compared to the same period in 2010. The increase was primarily attributable to increased sales as a result of increased customer demand.

Research and Development Expenses

Research and development expenses for the three months ended February 28, 2011 were $33,838, an increase of 28% compared to $26,328 for the comparable period in 2010.

Income from Operations

Income from operations for the three months ended February 28, 2011 was $3.66 million, compared to $2.95 million for the same period in 2010, an increase of 24% from the comparable period in 2010. The increase primarily resulted from an increase in sales of our new product, lithium iron phosphate.

Net Income

Net income for the three months ended February 28, 2011 was $2.66 million, an increase of 21% as compared to the net income of $2.20 million for the same period in 2010. The increase was attributable to the revenue growth from the ascending sales of lithium iron phosphate.

Business Update

Earnings were driven by the sharp growth in sales of lithium iron phosphate in the third quarter, primarily as a result of the new supply agreement entered into between the Company's PRC operating subsidiary, Dalian Xinyang High-Tech Development co., Ltd. (DLXY), and Henan Huanyu Sai Er New Energy Technology Co., Ltd ("Huanyu").  Pursuant to the terms of this Supply Agreement, the Company agreed to supply a minimum of 470 tons of lithium iron phosphate to Huanyu during the 2011 calendar year. As of February 28, 2011, the Company has supplied 146.96 tons of lithium iron phosphate to Huanyu. During the quarter, the Company also increased sales of lithium iron phosphate to clients based in Shandong and Beijing. The purchase price of lithium iron phosphate and other relevant commercial terms and conditions are determined by the parties on a monthly basis. Sales of lithium iron phosphate for the nine months ended February 28, 2011 was 517 tons, an increase of 366% from 111 tons for the same period in 2010.

CEO Comments

"During this quarter, we see steady growth in sales of our existing product and strong growth in sales of our new product lithium iron phosphate," commented by Mr. Guosheng Fu, Chief Executive Officer of China Sun Group. "Management will focus on accelerating the execution of the Company's expansion strategy and upgrading our manufacturing system to leverage production capabilities and efficiencies. The Company participated in different international financial conferences and interviewed by several media groups including Bloomberg, which provided the Company with increased investor visibility. The Company will continue to strengthen its investor relations program to make it a more crucial component of our everyday corporate operation and we look forward to more opportunities to communicate with our existing and potential investors, and keep them informed of China Sun Group's operation and business development strategy," added Mr. Fu.

About China Sun Group High-Tech Co.

China Sun Group High-Tech Co. ("China Sun Group") produces anode materials used in lithium ion batteries. Through its wholly-owned operating subsidiary, Dalian Xinyang High-Tech Development Co. Ltd ("DLX"), the Company primarily produces cobaltosic oxide and lithium cobalt oxide. According to the China Battery Industry Association, DLX has the second largest cobalt series production capacity in the People's Republic of China. Through its research and development division, DLX owns a proprietary series of nanometer technologies that supply state-of-the-art components for advanced lithium ion batteries ("LIP"). Leveraging its state-of-the-art technology, high-quality product line and scalable production capacity, the Company has recently diversified into the manufacture of LIP and plans to further integrate to manufacture power Li-ion batteries. For more information, visit http://www.china-sun.cn.

Safe Harbor Statement

The statements contained herein that are not historical facts are considered "forward-looking statements." Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, statements regarding the Company's ability to become a leading anode material supplier for Li-ion batteries used in the new energy automobile industry are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the effect of political, economic, and market conditions and geopolitical events; legislative and regulatory changes that affect our business; the availability of funds and working capital; the actions and initiatives of current and potential competitors; investor sentiment; and our reputation. We do not undertake any responsibility to publicly release any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events, which may cause actual results to differ from those expressed or implied by any forward-looking statements. The factors discussed herein are expressed from time to time in our filings with the Securities and Exchange Commission available at http://www.sec.gov.

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SOURCE China Sun Group High-Tech Co., Ltd.