MY Reports Second Quarter 2012 Unaudited Results

ZHONGSHAN, China, Aug. 28, 2012 /PRNewswire-Asia/ -- China Ming Yang Wind Power Group Limited ("Ming Yang" or the "Company") (NYSE: MY), a leading wind turbine manufacturer in China, today announced its unaudited financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Financial Highlights:

• Total wind turbine generators ("WTGs") for which revenue was recognized amounted to an equivalent wind power project output of 198MW, or 99 units of 1.5MW WTGs and 17 units of 2.5-3.0MW SCD WTGs, a decrease of 46.1% compared to Q2 2011.
  
• Total revenue was RMB798.0 million (US$125.6 million), a decrease of 43.2% compared to Q2 2011.
  
• Gross profit was RMB115.9 million (US$18.2 million), a decrease of 56.6% compared to Q2 2011. Gross margin was 14.5%, compared to 19.0% in Q2 2011.
  
• Total comprehensive loss was RMB27.5 million (US$4.3 million), compared to a comprehensive income of RMB74.6 million in Q2 2011.
  
• Basic and diluted loss per share was RMB0.25 (US$0.04), compared to a basic and diluted earnings per share of RMB0.67 in Q2 2011.

Recent Developments

• Strategic Partnership with Reliance Group - On July 2, 2012, the Company formed a strategic partnership with Reliance Group, the largest private sector power company in India, to co-develop a large portfolio of clean energy projects. The strategic partnership is expected to help the Company expand into the Indian and Southeast Asian markets.
  
• Joint Venture with Huaneng Renewables Corporation Limited - On July 12, 2012, the Company announced that it plans to form a joint venture with Huaneng Renewables Corporation Limited (HKEx Stock Code: 0958) specializing in the development of wind and solar power projects in China and overseas markets. 
  
• Share Repurchase Program – During the second quarter of 2012, the Company did not make any repurchases under its share repurchase program. Since the inception of the program, approved by the board of directors of the Company on August 15, 2011, the Company has repurchased 3,153,897 ADSs, representing 3,153,897 ordinary shares, from the open market for an aggregate consideration of approximately US$8.6 million (excluding commissions).
  
• Chairman's Purchase - Mr. Chuanwei Zhang, the Chairman and Chief Executive Officer of Ming Yang, has purchased 2,456,206 ADSs, representing 2,456,206 ordinary shares from the open market for an aggregate consideration of approximately US$3.7 million (excluding commissions), as disclosed in Mr. Zhang's Schedule 13D filed with the Securities and Exchange Commission on August 16, 2012.

Mr. Zhang commented, "Our financial performance in the second quarter improved over the previous quarter, with gross margin improving by approximately 4.5% and operating margin turning from loss of RMB77.6 million into a profit of RMB6.4 million (US$1.0 million). As China's wind power industry continues to consolidate, Ming Yang is continuing to enhance its products and services in order to provide its customers with the best solutions in wind energy and strengthen its position in the market. We aim to deliver our products and services with higher power generation, higher efficiency and better reliability at lower cost of energy."

"Furthermore, we plan to continue executing our key strategic initiatives including broadening off-shore wind applications, pursuing overseas markets, utilizing innovative business models such as finance leasing, developing high technologies such as new material applications, and other research and development initiatives. We believe such initiatives will help us offer superior products and services to our customers."

Mr. Zhang concluded, "As the wind power industry in China continues to face challenges, we are investing for now and for the future. We believe that our advanced product and service offerings will continue help Ming Yang capitalize on market opportunities both in China and overseas markets and enhance its competitiveness during this market downturn."

Second Quarter 2012 Unaudited Financial Results

Revenue

Revenue in the second quarter of 2012 was RMB798.0 million (US$125.6 million), representing a decrease of 43.2% from RMB1,405.5 million in the corresponding period in 2011. WTGs for which revenue was recognized amounted to an equivalent wind power project output of 198MW, or 99 units of 1.5MW WTGs and 17 units of 2.5-3.0MW SCD WTGs, compared to 367.5MW, or 245 units of 1.5MW WTGs, for the corresponding period in 2011. The decrease in revenue in the second quarter was primarily due to a decrease in average selling price ("ASP") and overall decreased market demand for WTGs in China.

During the second quarter, the Company installed 66 units of WTGs which are commissioned and generating electricity through its EPC program.  Funding has been committed by local banks to the project developers, but is subject to final approval. As a result, the Company did not recognize expected revenue of RMB319.0 million for these WTGs during the quarter.

Gross Profit and Gross Margin

Gross profit in the second quarter of 2012 was RMB115.9 million (US$18.2 million), representing a decrease of 56.6% from RMB267.2 million for the corresponding period in 2011. Gross margin in the second quarter of 2012 was 14.5%, compared to 19.0% for the corresponding period in 2011. The decline was a result of lower ASP and higher average production cost. Compared with the first quarter of 2012, the gross margin, however, improved 4.5%, primarily due to the increase in ASP for WTGs recognized in the second quarter of 2012.

Selling and Distribution Expenses

Selling and distribution expenses were RMB24.5 million (US$3.9 million) for the second quarter of 2012, compared to RMB56.0 million for the corresponding period in 2011, representing a decrease of 56.2%, primarily due to a decrease in transportation expenses as a result of delivery of fewer number of WTGs during the period.

Administrative Expenses

Administrative expenses were RMB77.1 million (US$12.1 million) for the second quarter of 2012, compared to RMB58.4 million for the corresponding period in 2011, representing an increase of 32.0%, primarily due to a provision of trade receivables of RMB22.4 million.

Research and Development Expenses

Research and development expenses were RMB22.7 million (US$3.6 million) for the second quarter of 2012, compared to RMB27.0 million for the corresponding period in 2011, representing a decrease of 15.8%. This decrease was primarily due to the cost of materials used in a benchmark test relating to our 2.5-3.0MW SCD WTG research and development incurred in the second quarter of 2011.

Net Finance Expense

Net finance expense was RMB17.6 million (US$2.8 million) for the second quarter of 2012, compared to a net finance expense of RMB25.0 million in the corresponding period of 2011.

Profit/Loss Before Income Tax Expense

Loss before income tax expense was RMB19.8 million (US$3.1 million) for the second quarter of 2012, compared to a profit before income tax expense of RMB107.8 million in the corresponding period of 2011.

Income Tax Expense

Income tax expense was RMB11.2 million (US$1.8 million) for the second quarter of 2012, compared to an income tax expense of RMB22.9 million in the corresponding period of 2011, representing a decrease of 51.1%.

Total Comprehensive Income/Loss and Earnings/Loss Per Share

Total comprehensive loss for the second quarter of 2012 was RMB27.5 million (US$4.3 million), compared to a total comprehensive income of RMB74.6 million in the corresponding period of 2011.

For the second quarter of 2012, basic and diluted loss per share was RMB0.25 (US$0.04), compared to basic and diluted earnings per share of RMB0.67 for the corresponding period in 2011.

Cash and Cash Equivalents

Cash and cash equivalents as of June 30, 2012 were RMB1,044.6 million (US$164.4 million), compared to RMB2,282.4 million as of  March 31, 2012. The decrease was primarily due to the payment for trade and other payables of RMB861.6 million, investments in EPC projects of RMB170.0 million, and the investment in Huadian Energy Corporation Limited of RMB189.8 million in its initial public offering and listing on the Hong Kong Stock Exchange.

Business Update

Order Book Update

New Sales Contracts – During the second quarter of 2012, Ming Yang entered into sales contracts for wind power projects with a total output of 99MW, representing 66 units of 1.5MW WTGs.

Order Backlog – As of June 30, 2012, the Company's order backlog amounted to 2.1GW representing 1,251 units of 1.5MW WTGs, 67 units of 2.5-3.0MW SCD WTGs and 1 unit of 6.0 MW SCD WTG. Cumulative signed orders since its inception amounted to 5.3GW, representing 3,380 units of 1.5MW WTGs, 84 units of 2.5-3.0MW SCD WTGs and 1 unit of 6.0MW SCD WTG.

Note to the Financial Information

The preliminary unaudited consolidated statements of comprehensive income and consolidated statements of financial position accompanying this press release have been prepared by management using International Financial Reporting Standards, or IFRSs. This preliminary unaudited financial information is not intended to fully comply with IFRSs because it does not present all of the financial information and disclosures required by IFRSs.

Currency Conversion

Solely for the convenience of readers, certain Renminbi amounts have been translated into U.S. dollar amounts at the rate of RMB6.3530 to US$1.00, the noon buying rate in New York for cable transfers of Renminbi for U.S. dollars on June 29, 2012 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such a rate or at any other rate.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "goal," "strategy" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Ming Yang's control, which may cause Ming Yang's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in Ming Yang's filings with the U.S. Securities and Exchange Commission. Ming Yang does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Conference Call

Ming Yang will host an earnings conference call on Tuesday, August 28, at 8:00 am Eastern Time (5:00 am Pacific Time / 8:00 pm Beijing Time). The management team will be on the call to discuss the Company's results, operating performance and business outlook and to answer questions.

To access the conference call, please dial:

Please ask to be connected to Q2 2012 China Ming Yang Wind Power Group Earnings Conference Call and provide the following passcode: Ming Yang

Ming Yang will also broadcast a live audio webcast of the conference call. The broadcast will be available by visiting the "Investor Relations" section of the Company's web site at http://ir.mywind.com.cn.

Following the earnings conference call, an archive of the call will be available by dialing:

The replay will be archived for seven days following the earnings announcement until September 4, 2012.

About China Ming Yang Wind Power Group Limited

China Ming Yang Wind Power Group Limited (NYSE: MY) is a leading and fast-growing wind turbine manufacturer in China, focusing on designing, manufacturing, selling and servicing megawatt-class wind turbines. Ming Yang produces advanced, highly adaptable wind turbines with high energy output and provides customers with comprehensive post-sales services. Ming Yang cooperates with aerodyne Energiesysteme, one of the world's leading wind turbine design firms based in Germany, to co-develop wind turbines. In terms of newly installed capacity, Ming Yang was a top 10 wind turbine manufacturer worldwide and the largest non-state owned wind turbine manufacturer in China in 2011.

For further information, please visit the Company's website: ir.mywind.com.cn

For investor and media inquiries, please contact:

China Ming Yang Wind Power Group Limited

Beatrice Li
T: +86-760-28138898
Email: [email protected]
http://ir.mywind.com.cn

Fleishman-Hillard

Pamela Leung
T: +852-2530-0228
Email: [email protected]

SOURCE China Ming Yang Wind Power Group Limited