DANYANG, China, Oct. 19 /PRNewswire-Asia/ -- Lihua International, Inc. (Nasdaq: LIWA) ("Lihua" or the "Company"), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well as copper clad aluminum ("CCA") wire, today announced that it has signed a 2011 copper anode volume supply contract for 30,000 tons with its recently announced domestic customer, one of the world's leading copper and metal conglomerates. Additionally, Lihua has received 2011 copper anode volume demand indication from 3 other customers totaling 80,000 metric tons.
In order to meet this expected demand, Lihua plans to break ground in the near term on its second copper recycling facility, located on approximately 33 acres of land adjacent to its existing copper recycling facility in Danyang, China. The Company expects to complete construction of this new facility during the second half of 2011, bringing annual refined copper production capacity to 100,000 tons. The Company plans to allocate 75,000 tons to copper anode, with the remaining 25,000 tons allocated to copper rod.
"We have received 2011 customer demand indications for copper anode which already exceeded our full year estimated refinery capacity, reinforcing our belief in the sizeable market opportunity that exists for this product and supporting our decision to launch the anode product line during the second quarter of 2010," said Jianhua Zhu, chairman and CEO of Lihua. "Since launching copper anode in July, we have shipped over 4,000 tons and remain on track to meet our goal of shipping 8,000 to 10,000 tons of copper anode during 2010."
Mr. Zhu added, "In our brief history as a public company, we have consistently surpassed our strategic, operational and financial objectives, while taking important steps to secure Lihua's future success. We see tremendous demand for our products across all the end markets we serve, driven by strength from consumer white goods, household appliances and automobiles, as well as infrastructure projects, giving us confidence in our ability to meet our 2010 guidance, which calls for significant growth in both gross profit and non-GAAP net income. We look forward to beginning construction on our new copper recycling facility, which will provide Lihua with a much needed increase in capacity, allowing us to better address the tremendous demand that exists in the Chinese market for our pure copper alternative products."
2010 Financial Guidance and Outlook
Lihua reaffirms its full year 2010 financial guidance based on its recent capacity expansion, positive market trends and strong end market usage for Lihua products. Lihua expects to increase its gross profit by 46-53% over 2009 to $52.9 to $55.7 million, and grow its non-GAAP net income by 48-57% to $38.1 million to $40.3 million.
About Lihua International, Inc.
Lihua International, through its two wholly-owned subsidiaries, Lihua Electron and Lihua Copper, is a leading value-added manufacturer of copper replacement products for China's rapidly growing copper wire and copper replacement product market. Lihua is one of the first vertically integrated companies in China to develop, design, manufacture, market and distribute lower cost, high quality alternatives to pure copper magnet wire and pure copper alternative products. Lihua's products include copper-clad aluminum wire ("CCA") and pure copper products including copper wire and copper rod, which are produced from recycled scrap copper. Lihua's products are sold in China either directly to manufacturers or through distributors in the wire and cable industries and manufacturers in the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Lihua's corporate and manufacturing headquarters are located in the heart of China's copper industry in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com.
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Safe Harbor Statement
This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about its business or growth strategy, general industry conditions including availability of copper or recycled scrap copper, future operating results of the Company, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.
Please note that information in this press release reflects management views as of the date of issuance.
SOURCE Lihua International, Inc.