China Tire e-commerce.com Limited (Former Name: China Tire Holdings Limited)

Press Release



Consolidated Results for the Year Ended December 31, 2000



Apr 23, 2001, 01:00 ET from China Tire e-commerce.com Limited

    NEW YORK, April 23 /PRNewswire Interactive News Release/ --
 China Tire e-commerce.com Limited ("China Tire" or the "Company") (NYSE:   TIR)
 announced today its audited consolidated results for the year ended
 December 31, 2000:
 
     Financial Highlights
 
                           Year ended         Year ended         Change%
                           December 31,       December 31,
                             1999               2000
 
     Revenues              Rmb 2,622.4 M      Rmb 2,815.6 M       up  7.4%
     Net loss              Rmb (153.2 M)      Rmb (79.4 M)      down 48.2%
     Net loss per share    Rmb (16.83)        Rmb (8.75)        down 48.0%
 
     For details of the audited consolidated results of The Company and its
 subsidiaries for the year ended December 31, 2000, please refer to financial
 highlights.  In 2000 the subsidiaries under China Tire included five
 Sino-foreign equity joint ventures in the People's Republic of China ("PRC
 Subsidiaries"): Double Happiness, Hangzhou Zhongee, Yinchuan CSI, Yantai CSI
 and Shandong Synthetic, and four international corporations: Orion Tire, Orion
 B.V.I., Container Limited and CSI Rubber.
     For the year under review, the Chinese tire industry experienced a
 difficult operating environment, due to oversupply of tire products, high
 level of inventories, and an increase in oil price which translates to
 increase in raw material prices.  As a result, margins were eroded due to
 higher raw material prices for synthetic rubber, carbon black and an increase
 in distribution cost.  The situation is exacerbated by consumers taking
 advantage of present warranty system by claiming replacement of tires due to
 overloading of vehicles, especially trucks.  According to China Rubber
 Association of Tire division, 27 out of 58 tire manufacturers incurred losses
 in the year of 2000.
     Year 2000 was a record year of the Company and it achieved total revenues
 of Rmb2.8 billion representing a 7.4% increase over the 1999 revenues of
 Rmb2.6 billion.  This was mainly due to export sales increasing dramatically.
 Export sales constitute approximately 28% of the total turnover as compared
 with 23% of the total turnover, representing a growth of 27% over 1999 in
 monetary amount.  China Tire sold a total of 7.4 million units of tires in the
 year of 2000 representing a unit volume increase of approximately 7% over
 1999.
     The Company's gross profit margin fell slightly from 11.5% for the year
 1999 to 10.1% for the year 2000.  The lower gross margin was mainly due to
 lower margin in export sales, increase in warranty claims and raw material
 prices.
     Due to increase in revenues, the Company was able to generate
 Rmb285.3 million of gross profit versus Rmb300.7 million with a marginal
 decrease of approximately 5.1% when compared with 1999.
     Operating loss increase to Rmb50.9 million in 2000 as compared with a loss
 of Rmb30.5 million in 1999.  This is mainly due to decline in gross profit,
 increase in distribution cost due to the increase in sales volume and keen
 competition in the China tire market.
     China Tire's consolidated net loss was Rmb79.4 million for the year ended
 December 31, 2000 as compared to a net loss of Rmb153.2 million for 1999.  The
 loss for the year was partially due to the provision for long overdue of
 court-awarded compensation receivable from Chongqing Tire factory amounting to
 approximately Rmb15.0 million.  The loss in 1999 was mainly attributable to
 the provision of impairment loss of Rmb122.0 million for The Double Happiness
 radial tire project and a provision of Rmb34.9 million for investment in
 Chongqing.
     During 1995, the Company began to renegotiate the terms of its joint
 venture agreement for Chongqing CSI Tyre Co. Limited ("Chongqing CSI") with
 its joint venture partner, Chongqing Tire Chief Factory ("Chongqing Factory").
 In 1997, the Company proposed a termination of the joint venture agreement of
 Chongqing CSI (the "Termination") with Chongqing Factory which was agreed by
 the supervisory authority of Chongqing Factory.  Both parties also agrees that
 the capital injected by the Company amounting to Rmb57.0 million would be
 treated as an interest bearing loan from the date of contribution.  However,
 as recovery of the investment/loan was not forthcoming, the Company initiated
 arbitration proceedings (the "Proceedings") in the PRC against Chongqing
 Factory to enforce the Termination, and to recover the loan and accrued
 interest in the amount of Rmb89.3 million as well as the related legal
 expenses for the Proceedings.  The application for the arbitration was
 accepted by the China International Economic and Trade Arbitration Commission,
 Shenzhen Commission and the Commission issued a judgement in favour of China
 Tire on March 31, 2000 as follows:
 
      1) The joint venture agreement of Chongqing CSI with Chongqing Factory
         was terminated and the joint venture is to be liquidated according to
         the relevant rules and regulation.
 
      2) China Tire was entitled to damages of Rmb 15.8 million as compensation
         for financial losses suffered.  Such amount should be paid to China
         Tire by Chongqing Factory within 45 days from the date of judgment.
 
      3) All other claims by China Tire were dismissed.
 
     Up to the date of this report the Company has not yet received the
 compensation from Chongqing Factory except for Rmb0.2 million on April 2001.
 The Company reserves all rights to take further action against Chongqing
 Factory to recover its capital investment, economic losses and damages.  The
 Board took a prudent view and made a provision against the outstanding
 principal balance of the loan receivable amounting to Rmb41.8 million and
 Rmb15.0 million in the 1999 and 2000 accounts respectively.
     During the year of 2000, Orion Tire's major banker, Pacific Bank, N.A.,
 lodged a legal claim against China Tire in Hong Kong to enforce a corporate
 guarantee amounting to approximately US$2.1 million provided to Orion Tire for
 its banking facilities by China Tire.  On November 1, 2000, the Company paid
 an agreed sum of US$1.98 million to settle the amount drawn down under the
 facility and the accrued interest expenses.
     During 2000, China Tire paid total divides of US$724,932.80.  In 2001, the
 Board of Directors also declared and paid a quarterly dividend of US$0.02 per
 share of Supervoting Common Stock and Common Stock for the first quarter of
 2001.
     The Annual General Meeting for China Tire will be held in Hong Kong on
 May 31, 2001.  Based on the record date of April 4, 2001, the Company will
 send notice of the meeting and proxy statement to shareholders on May 5, 2001.
 
     ** For the convenience of readers, the translation of amounts from
 Renminbi (Rmb) into United States Dollar (US$) has been made at the unified
 exchange rate quoted by The People's Bank of China on December 31, 2000 of
 US$ 1.00 = Rmb8.28.  No representation is made that the Renminbi amounts could
 have been, or could be, converted into United States Dollar at that rate on
 December 31, 2000 or at any other rate.
 
      For more information, please contact:
 
      Hong Kong                               New York
      China Tire e-commerce.com Limited       Dewe Rogerson Inc.
      Mr. Lien Kait Long
      Tel. 852-2372-0130                      Tel: 212-688-6840
 
 
                           The Operating Subsidiaries
 
     Hangzhou Zhongee
 
     Hangzhou Zhongee - Summary Financial Information
 
                                   For the year ended     For the year ended
                                    December 31, 1999      December 31, 2000
                                            (amounts in thousands Rmb)
 
     Revenues                             1,337,513             1,605,842
     Gross Profit                           137,676               162,115
     Operating Income (1)                    51,797                49,115
     Net income (loss)                       11,163               (1,637)
 
     (1) Operating income means income before income taxes and net interest
         expenses.
 
     For the years ended December 31, 2000 and 1999
 
     Revenues soared 20.1% or Rmb268.3 million to Rmb1.6 billion in the year of
 2000 from 1999.  The increase was principally attributable to a 13% increase
 in sales volume in vehicle/truck tires and 24% increase in bicycle tires.  The
 increase in revenues was mainly due to the improved quality of tires and
 management's effort on rationalization of the product mix toward more
 marketable products.
     Gross profit amount increased 17.8% to Rmb162 million in the year of 2000
 from Rmb137.7 million in the year of 1999 and decreased slightly as percentage
 of revenues to 10.1% in the year of 2000 as compared with 10.3% in the year of
 1999.  The decrease in the gross margin is mainly due to additional provision
 for warranty claims, lower export sales margin as compared with the domestic
 sales and the impact of increase in oil price which resulted in increase in
 raw material prices.
     Operating income decreased 5.2% to Rmb49.1 million in the year of 2000
 from Rmb51.8 million in the year of 1999.  The decrease was mainly due to
 increase in distribution cost incurred as a result of increase in sales
 volume.
     Hangzhou Zhongee reported a net loss of Rmb1.6 million in the year of 2000
 and a net income of Rmb11.2 million in the year of 1999.  The decrease was
 mainly attributable to the lower operating income and increase in interest
 expenses for bank loans for working capital purposes.
 
     Double Happiness
 
     Double Happiness - Summary Financial Information
 
                                   For the year ended     For the year ended
                                    December 31, 1999      December 31, 2000
                                            (amounts in thousands Rmb)
 
     Revenues                                488,197            516,115
     Gross profit                             62,466             52,090
 
     Operating income (loss) (1)               4,591           (13,008)
 
     Provision for impairment loss
     of long-lived assets                  (122,000)                 --
 
     Net loss                              (132,100)           (26,637)
 
     (1) Operating income (loss) means income (loss) before income taxes
         and interest expenses and provision for impairment loss of
         long-lived assets.
 
      For the years ended December 31, 2000 and 1999
 
     Revenues of Double Happiness increased by 5.7% to Rmb516.1 million in the
 year of 2000 from Rmb488.2 million in the year of 1999.  This was primarily
 due to increase in sales volume.
     Gross profit decreased by 16.6% to RMb52.1 million in the year of 2000
 from Rmb62.5 million in the year of 1999, and also decreased to 10.1% as a
 percentage of revenues in the year of 2000 compared with 12.8% in the year of
 1999.  The decrease was mainly due to increase in major raw material costs,
 provision to write-down inventories to their net realizable values and
 provision for tire warranty claims.
     The Company suffered an operating loss of Rmb13.0 million compared
 Rmb4.6 million operating income achieved in 1999.  This loss was mainly due to
 the decrease in gross profit, increase in delivery charges and packaging
 expenses due to the increase in sales.
     Net loss decreased by Rmb105.5 million to Rmb26.6 million in the year of
 2000 from a net loss of Rmb132.1 million in the year of 1999.  This was mainly
 due to a provision for impairment loss of the assests of a radial tire project
 in the amount of Rmb122.0 million made in 1999.
 
     Yinchuan CSI
 
     Yinchuan CSI - Summary Financial Information
 
                                    For the year ended    For the year ended
                                     December 31, 1999     December 31, 2000
     (amounts in thousands Rmb)
 
     Revenues                               728,210             654,580
     Gross Profit                            87,408              61,729
     Operating loss (1)                    (18,062)            (40,220)
     Net loss                              (23,317)            (47,828)
 
     (1) Operating loss means loss before income taxes and net interest
         expenses.
 
     For the years ended December 31, 2000 and 1999
 
     Revenues decreased by 10.1% to Rmb654.6 million in the year of 2000 from
 Rmb728.2 million in the year of 1999.  The decrease in revenues amount was due
 to a decrease in the sales volume by approximately 9% and reducing in selling
 price about 10% of a major product due to keen competition in the northern
 part of China.
     Yinchuan CSI's gross profit decreased 29.4% to Rmb61.7 million in the year
 of 2000 from Rmb87.4 million in the year of 1999 and decreased as a percentage
 of revenues to 9.4% in the year of 2000 compared to 12.0% in the year of 1999.
 The slight decrease in gross profit was mainly attributable to the effect of
 decrease in selling prices, additional provision to write-down inventories to
 their net realizable values and provision for tire warranty claims.
     Yinchuan CSI had an operating loss of Rmb40.2 million in the year of 2000
 compared with an operating loss of Rmb18.1 million in the year of 1999.  The
 increase in loss was due to the lower gross profit margin and provision for
 doubtful debts.
     Net loss was Rmb47.8 million in the year of 2000 compared with a net loss
 of Rmb23.3 million in the year of 1999.  This increase in loss was primarily
 due to lower gross profit margin and increase in provision for doubtful debts.
 
     Yantai CSI, Shandong Synthetic, CSI Rubber, Container Limited, Orion Tire
                                and Orion B.V.I.
 
     No summary financial information has been provided for Yantai CSI,
 Shandong Synthetic, CSI Rubber, Container Limited, Orion Tire and Orion B.V.I.
 as their operations are insignificant when compared to the other subsidiaries.
 
 
           China Tire e-commerce.com Limited -- Financial Highlights
 
     Consolidated statements of Operations
 
                                     For the year ended December 31
                                      1999                   2000
                             Note      (1)                    (1)
                                    Rmb '000        Rmb '000    US$'000(3)
                                        (except for net loss per share)
 
 
     Revenues                      2,622,410       2,815,609       340,049
     Cost of revenues            (2,321,743)     (2,530,221)     (305,582)
     Selling and administrative
      expenses                     (331,131)       (336,244)      (40,609)
     Operating income (loss)  (5)   (30,464)        (50,856)       (6,142)
     Interest Expenses, net         (47,632)        (47,009)       (5,677)
     Other losses             (2)  (156,935)        (16,929)       (2,045)
     Loss before income taxes
      and minority interests       (235,031)       (114,794)      (13,864)
     Provision for income taxes      (5,289)         (5,348)         (646)
     Loss before minority interest (240,320)       (120,142)      (14,510)
     Minority interests               87,124          40,758         4,923
     Net loss                      (153,196)        (79,384)       (9,587)
     Net loss per share-Basic (4)    (16.83)          (8.75)        (1.06)
 
     Consolidated Balance Sheets Data:
 
                                           As of December 31
                                      1999                    2000
                              Note     (1)                     (1)
                                    Rmb '000        Rmb '000    US$'000(3)
 
     Working Capital                 557,824         453,999        54,831
     Property, plant
      and Equipment, net           1,089,324       1,052,142       127,070
     Total assets                  3,316,944       3,326,983       401,810
     Current Liabilities           1,492,226       1,673,725       202,141
     Non-current portion
      of long term bank loans         58,500          70,600         8,527
     Due to Chinese joint
      venture partners               122,625          70,451         8,508
     Minority interests              601,337         559,280        67,546
     Shareholders' equity          1,041,662         952,627       115,052
 
 
     Consolidated Statements of Cash Flow Data:
 
                                     For the year ended December 31
                                       1999                   2000
                              Note     (1)                     (1)
                                    Rmb '000        Rmb '000    US$'000(3)
 
     Depreciation and Amortization   104,036         109,985        13,283
     Capital expenditures on property,
      plant and equipment           (95,209)        (72,016)       (8,697)
     Sales proceeds from disposal of
     available-for-sales securities       --           8,554         1,033
     Investment in an affiliate           --        (11,855)       (1,432)
 
 
                  Hangzhou Zhongee - Summary Financial Information
 
                                                   Year ended     Year ended
                               Note               December 31,   December 31,
                                                         1999           2000
                                                             Rmb '000
 
     Revenues                                       1,337,513      1,605,842
     Gross profit                                     137,676        162,115
     Operating income           (5)                    51,797         49,115
     Net income (loss)                                 11,163        (1,637)
 
 
                  Double Happiness - Summary Financial Information
 
                                                   Year ended     Year ended
                               Note               December 31,   December 31,
                                                         1999           2000
                                                             Rmb '000
 
     Revenues                                         488,197        516,115
     Gross profit                                      62,466         52,090
     Operating income (loss)    (5)                     4,591       (13,008)
     Provision for impairment
      loss of long-lived assets                     (122,000)             --
     Net loss                                       (132,100)       (26,637)
 
 
                    Yinchuan CSI - Summary Financial Information
 
                                                   Year ended     Year ended
                               Note              December 31,    December 31,
                                                         1999           2000
                                                             Rmb '000
 
     Revenues                                         728,210        654,580
     Gross profit                                      87,408         61,729
     Operating loss             (5)                  (18,062)       (40,220)
     Net loss                                        (23,317)       (47,828)
 
      1. The Company was incorporated on January 28, 1993 and acquired from
         China Strategic Holdings Limited ("CSH"), formerly known as China
         Strategic Investment Limited, its interest in Hangzhou Zhongee on
         April 25, 1993 and in Double Happiness on April 16, 1993. CSH held its
         interests in Hangzhou Zhongee, and Double Happiness from the time of
         their establishment on June 12, 1992 and April 16, 1992,
         respectively. The Company later entered into agreements to form new
         Sino-foreign equity joint ventures: Yantai CSI on October 29, 1993;
         Yinchuan CSI on December 6, 1993; Shandong Synthetic on May 28, 1994.
         The two joint ventures, Yantai CSI, and Yinchuan CSI commenced
         operations effective from January 1, 1994. Shandong Synthetic
         commenced operations effective from January 1, 1995. The Company also
         acquired its 60% interests in Orion Tire and Orion BVI in March 1994
         and accounted for these investments from May 1 and August 1, 1994
         respectively.  Dalian CSI is 70% owned by CSI Rubber Industries
         Limited, Hong Kong incorporated company which was acquired by the
         Company from CSH on April 19, 1994, and was accounted for with effect
         from April 1, 1994.  Container Limited, a British Virgin Islands
         company, is a wholly-owned subsidiary of the Company set up in 1998.
         These enterprises are collectively known as the "Operating
         Subsidiaries".
 
         The Company acquired its interest in Chongqing CSI during the fourth
         quarter of 1993. Chongqing CSI commenced operations on January 1,
         1994.  During 1995, the Company began renegotiating the terms of the
         joint venture agreement of Chongqing CSI. Pending the outcome of the
         negotiations, the parties agreed that the capital injected by the
         Company of Rmb57.0 million (US$6.6 million) would be treated as an
         interest-bearing loan to Chongqing Tyre Chief Factory ("Chongqing
         Factory"), the Chinese joint venture partner, with effect from the
         date of contribution. Accordingly, the original capital contribution
         of Rmb57.0 million (US$6.6 million) was accounted for as a loan
         receivable from Chongqing Factory ("The Loan") since 1996 and the
         financial position and results of operations of Chongqing CSI have
         not been included in the consolidated financial statements since
         1996. The Company has also made full provisions against recorded
         interest income on the Loan of approximately Rmb14.0 million for the
         year ended December 31, 1999.
 
 
         In 1997, the Company proposed termination of the joint venture
         agreement of Chongqing CSI (the "Termination") with Chongqing
         Factory. Pursuant to an approval document issued by the supervisory
         authority (the "Supervisor") of Chongqing Factory an April 10, 1997,
         the Supervisor has agreed to the Termination as well as the transfer
         of the original investment by the Company in Chongqing CSI to other
         projects in the Chongqing region. However, as no potential project
         was identified for reinvestment, the Company initiated
         arbitration proceedings ("The Proceedings") in the PRC against
         Chongqing Factory to enforce the Termination, and to recover the Loan
         and in the amount of Rmb57.0 million as well as the related legal
         expenses for the Proceedings (estimated in the amount of
         Rmb3.0 million). The application for the arbitration was accepted by
         the China International Economic and Trade Arbitration Commission.
         Shenzhen Commission and the Commission finally issued a judgement in
         favour of China Tire on March 31, 2000 as follows:
 
          4) The joint venture agreement of Chongqing CSI with Chongqing
             Factory was terminated and the joint venture is to be liquidated
             according to the relevant rules and regulations
 
          5) China Tire was entitled to damages of Rmb15,162,125 for the
             compensation of financial losses suffered. Such amount should be
             paid to China Tire by Chongqing Factory within 45 days from the
             date of judgement.
 
          6) All other claims by China Tire were dismissed.
 
         Up to the date of this report, the Company has not yet received the
         compensation from Chongqing Factory except for Rmb200,000 in April
         2001. The Company reserves all its rights to take further action
         against the Chinese Party to recover its capital investment, economic
         losses and damages. The Board took a prudent view to make a provision
         against the outstanding principal balance of the Loan amounting to
         Rmb34.9 million and Rmb15.0 million in the 1999 and 2000 accounts
         respectively.
 
      2. Other losses included a provision for the compensation receivable from
         Chongqing Factory amounting to approximately Rmb15.0 million in 2000
         (1999:Rmb34.9 million). Included in 1999 also a provision for the
         potential impairment loss on the radial tire facilities under
         construction of an operating subsidiary amounting to Rmb122.0 million.
 
      3. The U.S. dollar translation amounts have been translated using the
         unified exchange rate quoted by the People's Bank of China in December
         31, 2000 of US$1.00 = Rmb8.28. No representation is made that the
         Renminbi amounts could have been, or could be, converted into U.S.
         Dollars at that rate on December 31, 2000 or at any other certain
         rate.
 
      4. The calculation of the basic net loss per share for the years ended
         December 31, 1999 and 2000 respectively is based on the weighted
         average number of common shares outstanding during the years ended
         December 31, 1999 which was 9,100,000 and 2000 which was 9,069,956.
 
      5. Operating income (loss) means income (loss) before income taxes, net
         interest expenses and other losses.
 
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SOURCE China Tire e-commerce.com Limited
    NEW YORK, April 23 /PRNewswire Interactive News Release/ --
 China Tire e-commerce.com Limited ("China Tire" or the "Company") (NYSE:   TIR)
 announced today its audited consolidated results for the year ended
 December 31, 2000:
 
     Financial Highlights
 
                           Year ended         Year ended         Change%
                           December 31,       December 31,
                             1999               2000
 
     Revenues              Rmb 2,622.4 M      Rmb 2,815.6 M       up  7.4%
     Net loss              Rmb (153.2 M)      Rmb (79.4 M)      down 48.2%
     Net loss per share    Rmb (16.83)        Rmb (8.75)        down 48.0%
 
     For details of the audited consolidated results of The Company and its
 subsidiaries for the year ended December 31, 2000, please refer to financial
 highlights.  In 2000 the subsidiaries under China Tire included five
 Sino-foreign equity joint ventures in the People's Republic of China ("PRC
 Subsidiaries"): Double Happiness, Hangzhou Zhongee, Yinchuan CSI, Yantai CSI
 and Shandong Synthetic, and four international corporations: Orion Tire, Orion
 B.V.I., Container Limited and CSI Rubber.
     For the year under review, the Chinese tire industry experienced a
 difficult operating environment, due to oversupply of tire products, high
 level of inventories, and an increase in oil price which translates to
 increase in raw material prices.  As a result, margins were eroded due to
 higher raw material prices for synthetic rubber, carbon black and an increase
 in distribution cost.  The situation is exacerbated by consumers taking
 advantage of present warranty system by claiming replacement of tires due to
 overloading of vehicles, especially trucks.  According to China Rubber
 Association of Tire division, 27 out of 58 tire manufacturers incurred losses
 in the year of 2000.
     Year 2000 was a record year of the Company and it achieved total revenues
 of Rmb2.8 billion representing a 7.4% increase over the 1999 revenues of
 Rmb2.6 billion.  This was mainly due to export sales increasing dramatically.
 Export sales constitute approximately 28% of the total turnover as compared
 with 23% of the total turnover, representing a growth of 27% over 1999 in
 monetary amount.  China Tire sold a total of 7.4 million units of tires in the
 year of 2000 representing a unit volume increase of approximately 7% over
 1999.
     The Company's gross profit margin fell slightly from 11.5% for the year
 1999 to 10.1% for the year 2000.  The lower gross margin was mainly due to
 lower margin in export sales, increase in warranty claims and raw material
 prices.
     Due to increase in revenues, the Company was able to generate
 Rmb285.3 million of gross profit versus Rmb300.7 million with a marginal
 decrease of approximately 5.1% when compared with 1999.
     Operating loss increase to Rmb50.9 million in 2000 as compared with a loss
 of Rmb30.5 million in 1999.  This is mainly due to decline in gross profit,
 increase in distribution cost due to the increase in sales volume and keen
 competition in the China tire market.
     China Tire's consolidated net loss was Rmb79.4 million for the year ended
 December 31, 2000 as compared to a net loss of Rmb153.2 million for 1999.  The
 loss for the year was partially due to the provision for long overdue of
 court-awarded compensation receivable from Chongqing Tire factory amounting to
 approximately Rmb15.0 million.  The loss in 1999 was mainly attributable to
 the provision of impairment loss of Rmb122.0 million for The Double Happiness
 radial tire project and a provision of Rmb34.9 million for investment in
 Chongqing.
     During 1995, the Company began to renegotiate the terms of its joint
 venture agreement for Chongqing CSI Tyre Co. Limited ("Chongqing CSI") with
 its joint venture partner, Chongqing Tire Chief Factory ("Chongqing Factory").
 In 1997, the Company proposed a termination of the joint venture agreement of
 Chongqing CSI (the "Termination") with Chongqing Factory which was agreed by
 the supervisory authority of Chongqing Factory.  Both parties also agrees that
 the capital injected by the Company amounting to Rmb57.0 million would be
 treated as an interest bearing loan from the date of contribution.  However,
 as recovery of the investment/loan was not forthcoming, the Company initiated
 arbitration proceedings (the "Proceedings") in the PRC against Chongqing
 Factory to enforce the Termination, and to recover the loan and accrued
 interest in the amount of Rmb89.3 million as well as the related legal
 expenses for the Proceedings.  The application for the arbitration was
 accepted by the China International Economic and Trade Arbitration Commission,
 Shenzhen Commission and the Commission issued a judgement in favour of China
 Tire on March 31, 2000 as follows:
 
      1) The joint venture agreement of Chongqing CSI with Chongqing Factory
         was terminated and the joint venture is to be liquidated according to
         the relevant rules and regulation.
 
      2) China Tire was entitled to damages of Rmb 15.8 million as compensation
         for financial losses suffered.  Such amount should be paid to China
         Tire by Chongqing Factory within 45 days from the date of judgment.
 
      3) All other claims by China Tire were dismissed.
 
     Up to the date of this report the Company has not yet received the
 compensation from Chongqing Factory except for Rmb0.2 million on April 2001.
 The Company reserves all rights to take further action against Chongqing
 Factory to recover its capital investment, economic losses and damages.  The
 Board took a prudent view and made a provision against the outstanding
 principal balance of the loan receivable amounting to Rmb41.8 million and
 Rmb15.0 million in the 1999 and 2000 accounts respectively.
     During the year of 2000, Orion Tire's major banker, Pacific Bank, N.A.,
 lodged a legal claim against China Tire in Hong Kong to enforce a corporate
 guarantee amounting to approximately US$2.1 million provided to Orion Tire for
 its banking facilities by China Tire.  On November 1, 2000, the Company paid
 an agreed sum of US$1.98 million to settle the amount drawn down under the
 facility and the accrued interest expenses.
     During 2000, China Tire paid total divides of US$724,932.80.  In 2001, the
 Board of Directors also declared and paid a quarterly dividend of US$0.02 per
 share of Supervoting Common Stock and Common Stock for the first quarter of
 2001.
     The Annual General Meeting for China Tire will be held in Hong Kong on
 May 31, 2001.  Based on the record date of April 4, 2001, the Company will
 send notice of the meeting and proxy statement to shareholders on May 5, 2001.
 
     ** For the convenience of readers, the translation of amounts from
 Renminbi (Rmb) into United States Dollar (US$) has been made at the unified
 exchange rate quoted by The People's Bank of China on December 31, 2000 of
 US$ 1.00 = Rmb8.28.  No representation is made that the Renminbi amounts could
 have been, or could be, converted into United States Dollar at that rate on
 December 31, 2000 or at any other rate.
 
      For more information, please contact:
 
      Hong Kong                               New York
      China Tire e-commerce.com Limited       Dewe Rogerson Inc.
      Mr. Lien Kait Long
      Tel. 852-2372-0130                      Tel: 212-688-6840
 
 
                           The Operating Subsidiaries
 
     Hangzhou Zhongee
 
     Hangzhou Zhongee - Summary Financial Information
 
                                   For the year ended     For the year ended
                                    December 31, 1999      December 31, 2000
                                            (amounts in thousands Rmb)
 
     Revenues                             1,337,513             1,605,842
     Gross Profit                           137,676               162,115
     Operating Income (1)                    51,797                49,115
     Net income (loss)                       11,163               (1,637)
 
     (1) Operating income means income before income taxes and net interest
         expenses.
 
     For the years ended December 31, 2000 and 1999
 
     Revenues soared 20.1% or Rmb268.3 million to Rmb1.6 billion in the year of
 2000 from 1999.  The increase was principally attributable to a 13% increase
 in sales volume in vehicle/truck tires and 24% increase in bicycle tires.  The
 increase in revenues was mainly due to the improved quality of tires and
 management's effort on rationalization of the product mix toward more
 marketable products.
     Gross profit amount increased 17.8% to Rmb162 million in the year of 2000
 from Rmb137.7 million in the year of 1999 and decreased slightly as percentage
 of revenues to 10.1% in the year of 2000 as compared with 10.3% in the year of
 1999.  The decrease in the gross margin is mainly due to additional provision
 for warranty claims, lower export sales margin as compared with the domestic
 sales and the impact of increase in oil price which resulted in increase in
 raw material prices.
     Operating income decreased 5.2% to Rmb49.1 million in the year of 2000
 from Rmb51.8 million in the year of 1999.  The decrease was mainly due to
 increase in distribution cost incurred as a result of increase in sales
 volume.
     Hangzhou Zhongee reported a net loss of Rmb1.6 million in the year of 2000
 and a net income of Rmb11.2 million in the year of 1999.  The decrease was
 mainly attributable to the lower operating income and increase in interest
 expenses for bank loans for working capital purposes.
 
     Double Happiness
 
     Double Happiness - Summary Financial Information
 
                                   For the year ended     For the year ended
                                    December 31, 1999      December 31, 2000
                                            (amounts in thousands Rmb)
 
     Revenues                                488,197            516,115
     Gross profit                             62,466             52,090
 
     Operating income (loss) (1)               4,591           (13,008)
 
     Provision for impairment loss
     of long-lived assets                  (122,000)                 --
 
     Net loss                              (132,100)           (26,637)
 
     (1) Operating income (loss) means income (loss) before income taxes
         and interest expenses and provision for impairment loss of
         long-lived assets.
 
      For the years ended December 31, 2000 and 1999
 
     Revenues of Double Happiness increased by 5.7% to Rmb516.1 million in the
 year of 2000 from Rmb488.2 million in the year of 1999.  This was primarily
 due to increase in sales volume.
     Gross profit decreased by 16.6% to RMb52.1 million in the year of 2000
 from Rmb62.5 million in the year of 1999, and also decreased to 10.1% as a
 percentage of revenues in the year of 2000 compared with 12.8% in the year of
 1999.  The decrease was mainly due to increase in major raw material costs,
 provision to write-down inventories to their net realizable values and
 provision for tire warranty claims.
     The Company suffered an operating loss of Rmb13.0 million compared
 Rmb4.6 million operating income achieved in 1999.  This loss was mainly due to
 the decrease in gross profit, increase in delivery charges and packaging
 expenses due to the increase in sales.
     Net loss decreased by Rmb105.5 million to Rmb26.6 million in the year of
 2000 from a net loss of Rmb132.1 million in the year of 1999.  This was mainly
 due to a provision for impairment loss of the assests of a radial tire project
 in the amount of Rmb122.0 million made in 1999.
 
     Yinchuan CSI
 
     Yinchuan CSI - Summary Financial Information
 
                                    For the year ended    For the year ended
                                     December 31, 1999     December 31, 2000
     (amounts in thousands Rmb)
 
     Revenues                               728,210             654,580
     Gross Profit                            87,408              61,729
     Operating loss (1)                    (18,062)            (40,220)
     Net loss                              (23,317)            (47,828)
 
     (1) Operating loss means loss before income taxes and net interest
         expenses.
 
     For the years ended December 31, 2000 and 1999
 
     Revenues decreased by 10.1% to Rmb654.6 million in the year of 2000 from
 Rmb728.2 million in the year of 1999.  The decrease in revenues amount was due
 to a decrease in the sales volume by approximately 9% and reducing in selling
 price about 10% of a major product due to keen competition in the northern
 part of China.
     Yinchuan CSI's gross profit decreased 29.4% to Rmb61.7 million in the year
 of 2000 from Rmb87.4 million in the year of 1999 and decreased as a percentage
 of revenues to 9.4% in the year of 2000 compared to 12.0% in the year of 1999.
 The slight decrease in gross profit was mainly attributable to the effect of
 decrease in selling prices, additional provision to write-down inventories to
 their net realizable values and provision for tire warranty claims.
     Yinchuan CSI had an operating loss of Rmb40.2 million in the year of 2000
 compared with an operating loss of Rmb18.1 million in the year of 1999.  The
 increase in loss was due to the lower gross profit margin and provision for
 doubtful debts.
     Net loss was Rmb47.8 million in the year of 2000 compared with a net loss
 of Rmb23.3 million in the year of 1999.  This increase in loss was primarily
 due to lower gross profit margin and increase in provision for doubtful debts.
 
     Yantai CSI, Shandong Synthetic, CSI Rubber, Container Limited, Orion Tire
                                and Orion B.V.I.
 
     No summary financial information has been provided for Yantai CSI,
 Shandong Synthetic, CSI Rubber, Container Limited, Orion Tire and Orion B.V.I.
 as their operations are insignificant when compared to the other subsidiaries.
 
 
           China Tire e-commerce.com Limited -- Financial Highlights
 
     Consolidated statements of Operations
 
                                     For the year ended December 31
                                      1999                   2000
                             Note      (1)                    (1)
                                    Rmb '000        Rmb '000    US$'000(3)
                                        (except for net loss per share)
 
 
     Revenues                      2,622,410       2,815,609       340,049
     Cost of revenues            (2,321,743)     (2,530,221)     (305,582)
     Selling and administrative
      expenses                     (331,131)       (336,244)      (40,609)
     Operating income (loss)  (5)   (30,464)        (50,856)       (6,142)
     Interest Expenses, net         (47,632)        (47,009)       (5,677)
     Other losses             (2)  (156,935)        (16,929)       (2,045)
     Loss before income taxes
      and minority interests       (235,031)       (114,794)      (13,864)
     Provision for income taxes      (5,289)         (5,348)         (646)
     Loss before minority interest (240,320)       (120,142)      (14,510)
     Minority interests               87,124          40,758         4,923
     Net loss                      (153,196)        (79,384)       (9,587)
     Net loss per share-Basic (4)    (16.83)          (8.75)        (1.06)
 
     Consolidated Balance Sheets Data:
 
                                           As of December 31
                                      1999                    2000
                              Note     (1)                     (1)
                                    Rmb '000        Rmb '000    US$'000(3)
 
     Working Capital                 557,824         453,999        54,831
     Property, plant
      and Equipment, net           1,089,324       1,052,142       127,070
     Total assets                  3,316,944       3,326,983       401,810
     Current Liabilities           1,492,226       1,673,725       202,141
     Non-current portion
      of long term bank loans         58,500          70,600         8,527
     Due to Chinese joint
      venture partners               122,625          70,451         8,508
     Minority interests              601,337         559,280        67,546
     Shareholders' equity          1,041,662         952,627       115,052
 
 
     Consolidated Statements of Cash Flow Data:
 
                                     For the year ended December 31
                                       1999                   2000
                              Note     (1)                     (1)
                                    Rmb '000        Rmb '000    US$'000(3)
 
     Depreciation and Amortization   104,036         109,985        13,283
     Capital expenditures on property,
      plant and equipment           (95,209)        (72,016)       (8,697)
     Sales proceeds from disposal of
     available-for-sales securities       --           8,554         1,033
     Investment in an affiliate           --        (11,855)       (1,432)
 
 
                  Hangzhou Zhongee - Summary Financial Information
 
                                                   Year ended     Year ended
                               Note               December 31,   December 31,
                                                         1999           2000
                                                             Rmb '000
 
     Revenues                                       1,337,513      1,605,842
     Gross profit                                     137,676        162,115
     Operating income           (5)                    51,797         49,115
     Net income (loss)                                 11,163        (1,637)
 
 
                  Double Happiness - Summary Financial Information
 
                                                   Year ended     Year ended
                               Note               December 31,   December 31,
                                                         1999           2000
                                                             Rmb '000
 
     Revenues                                         488,197        516,115
     Gross profit                                      62,466         52,090
     Operating income (loss)    (5)                     4,591       (13,008)
     Provision for impairment
      loss of long-lived assets                     (122,000)             --
     Net loss                                       (132,100)       (26,637)
 
 
                    Yinchuan CSI - Summary Financial Information
 
                                                   Year ended     Year ended
                               Note              December 31,    December 31,
                                                         1999           2000
                                                             Rmb '000
 
     Revenues                                         728,210        654,580
     Gross profit                                      87,408         61,729
     Operating loss             (5)                  (18,062)       (40,220)
     Net loss                                        (23,317)       (47,828)
 
      1. The Company was incorporated on January 28, 1993 and acquired from
         China Strategic Holdings Limited ("CSH"), formerly known as China
         Strategic Investment Limited, its interest in Hangzhou Zhongee on
         April 25, 1993 and in Double Happiness on April 16, 1993. CSH held its
         interests in Hangzhou Zhongee, and Double Happiness from the time of
         their establishment on June 12, 1992 and April 16, 1992,
         respectively. The Company later entered into agreements to form new
         Sino-foreign equity joint ventures: Yantai CSI on October 29, 1993;
         Yinchuan CSI on December 6, 1993; Shandong Synthetic on May 28, 1994.
         The two joint ventures, Yantai CSI, and Yinchuan CSI commenced
         operations effective from January 1, 1994. Shandong Synthetic
         commenced operations effective from January 1, 1995. The Company also
         acquired its 60% interests in Orion Tire and Orion BVI in March 1994
         and accounted for these investments from May 1 and August 1, 1994
         respectively.  Dalian CSI is 70% owned by CSI Rubber Industries
         Limited, Hong Kong incorporated company which was acquired by the
         Company from CSH on April 19, 1994, and was accounted for with effect
         from April 1, 1994.  Container Limited, a British Virgin Islands
         company, is a wholly-owned subsidiary of the Company set up in 1998.
         These enterprises are collectively known as the "Operating
         Subsidiaries".
 
         The Company acquired its interest in Chongqing CSI during the fourth
         quarter of 1993. Chongqing CSI commenced operations on January 1,
         1994.  During 1995, the Company began renegotiating the terms of the
         joint venture agreement of Chongqing CSI. Pending the outcome of the
         negotiations, the parties agreed that the capital injected by the
         Company of Rmb57.0 million (US$6.6 million) would be treated as an
         interest-bearing loan to Chongqing Tyre Chief Factory ("Chongqing
         Factory"), the Chinese joint venture partner, with effect from the
         date of contribution. Accordingly, the original capital contribution
         of Rmb57.0 million (US$6.6 million) was accounted for as a loan
         receivable from Chongqing Factory ("The Loan") since 1996 and the
         financial position and results of operations of Chongqing CSI have
         not been included in the consolidated financial statements since
         1996. The Company has also made full provisions against recorded
         interest income on the Loan of approximately Rmb14.0 million for the
         year ended December 31, 1999.
 
 
         In 1997, the Company proposed termination of the joint venture
         agreement of Chongqing CSI (the "Termination") with Chongqing
         Factory. Pursuant to an approval document issued by the supervisory
         authority (the "Supervisor") of Chongqing Factory an April 10, 1997,
         the Supervisor has agreed to the Termination as well as the transfer
         of the original investment by the Company in Chongqing CSI to other
         projects in the Chongqing region. However, as no potential project
         was identified for reinvestment, the Company initiated
         arbitration proceedings ("The Proceedings") in the PRC against
         Chongqing Factory to enforce the Termination, and to recover the Loan
         and in the amount of Rmb57.0 million as well as the related legal
         expenses for the Proceedings (estimated in the amount of
         Rmb3.0 million). The application for the arbitration was accepted by
         the China International Economic and Trade Arbitration Commission.
         Shenzhen Commission and the Commission finally issued a judgement in
         favour of China Tire on March 31, 2000 as follows:
 
          4) The joint venture agreement of Chongqing CSI with Chongqing
             Factory was terminated and the joint venture is to be liquidated
             according to the relevant rules and regulations
 
          5) China Tire was entitled to damages of Rmb15,162,125 for the
             compensation of financial losses suffered. Such amount should be
             paid to China Tire by Chongqing Factory within 45 days from the
             date of judgement.
 
          6) All other claims by China Tire were dismissed.
 
         Up to the date of this report, the Company has not yet received the
         compensation from Chongqing Factory except for Rmb200,000 in April
         2001. The Company reserves all its rights to take further action
         against the Chinese Party to recover its capital investment, economic
         losses and damages. The Board took a prudent view to make a provision
         against the outstanding principal balance of the Loan amounting to
         Rmb34.9 million and Rmb15.0 million in the 1999 and 2000 accounts
         respectively.
 
      2. Other losses included a provision for the compensation receivable from
         Chongqing Factory amounting to approximately Rmb15.0 million in 2000
         (1999:Rmb34.9 million). Included in 1999 also a provision for the
         potential impairment loss on the radial tire facilities under
         construction of an operating subsidiary amounting to Rmb122.0 million.
 
      3. The U.S. dollar translation amounts have been translated using the
         unified exchange rate quoted by the People's Bank of China in December
         31, 2000 of US$1.00 = Rmb8.28. No representation is made that the
         Renminbi amounts could have been, or could be, converted into U.S.
         Dollars at that rate on December 31, 2000 or at any other certain
         rate.
 
      4. The calculation of the basic net loss per share for the years ended
         December 31, 1999 and 2000 respectively is based on the weighted
         average number of common shares outstanding during the years ended
         December 31, 1999 which was 9,100,000 and 2000 which was 9,069,956.
 
      5. Operating income (loss) means income (loss) before income taxes, net
         interest expenses and other losses.
 
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 SOURCE  China Tire e-commerce.com Limited