ZhongDe Waste Technology AG

Earnings Release • Sep 30, 2008

News Details

Corporate | 30 September 2008 11:44

ZhongDe Waste Technology AG expects continuous growth and confirms initial estimation for financial year 2008

ZhongDe Waste Technology AG / Miscellaneous

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Press Release

ZhongDe Waste Technology AG expects continuous growth and confirms initial
estimation for financial year 2008

• Sound revenue and profit development in Q3 2008 in line with
  expectations

• Order intake set to be positively impacted by resumption of the
  negotiation process following end of the Olympic Games

• Updated regulation by Chinese Ministry of environmental protection to
  drive demand for municipal waste incinerators

• Signing of two BOT projects expected for Q4 2008

• Several senior engineers to join in Q4 2008 to further improve R&D
  capability

Hamburg, 30 September 2008 – ZhongDe Waste Technology AG (‘the Company’)
expects continuous growth for the rest of the financial year 2008 and
beyond and the financial results in 2008 to be in line with estimates made
at the beginning of the year.

Company revenues, operating results and order development in Q3 2008 have
been fully in line with expectations. Order intake is expected to be
positively impacted by the rapid resumption of the negotiation process
after the Olympics: order intake in Q2 2008 was affected by delays of
government involvement in the negotiating process of new orders in the run
up to the Olympic Games. The audited results for Q3 2008 will be published
by 28 November 2008.

The upward trend in the municipal solid waste incinerator segment is likely
to be further enhanced by recently updated regulation by Chinese Ministry
of environmental protection regarding the environmental impact assessment
of biomass power generation projects including waste incineration power
generation projects. According to the new regulation, the environmental
impact assessment of waste incineration power generation projects can be
approved by provincial environmental protection authorities instead of the
central government. This move is likely to accelerate the process of
building new waste to power plants in China. As a result, Shandong province
intends to invest RMB 6.6 billion in setting up 88 new waste disposal
plants from 2009 to 2011. ZhongDe has a good market reputation in Shandong
as a result of the Feicheng BOT project under construction and thus should
benefit from this expansion plan.

Furthermore, ZhongDe is making excellent progress in implementing its key
strategy to expand the value chain into the operation of waste incineration
plants, which generates recurring revenues and manifests its market
position in this segment. Out of the six BOT projects subject to a letter
of intent at the time of the IPO, four have already been confirmed. The
remaining two projects are at an advanced stage of negotiation. Signing of
both projects is expected for Q4 2008.

The construction of the second production plant at Beijing and the
infrastructure development for the waste disposal and electricity
generation project in Datong (total contract volume of approx. € 30
million) are well underway. The Datong project is expected to be completed
in 2009 and will already contribute to 2008 revenues and earnings on a
'percentage of completion' basis.

Several senior engineers in waste incineration technology development – one
expert from Germany among them – will join the Company in Q4 2008 to
further improve its capability in research & development and thus maintain
its technological leadership.

CEO Zefeng Chen comments: 'Our business is successfully developing along
our long-term growth strategy untouched by the general turbulences on the
financial markets. We are confident that we can continue to take advantage
of the huge potential offered by the Chinese waste incineration market and
deliver the results our shareholders expect from us. All our projects are
well on track and we reiterate our initial estimates that revenues for the
full financial year 2008 are expected to amount to € 50 million with a net
profit margin above 45%.'

Amounts in k¤ Q1 2008 Q1 2007 Change %

About ZhongDe Group:

ZhongDe Group designs, manufactures and installs pyrolytic, grate and
rotary kiln waste incinerators for the disposal of solid medical, municipal
and industrial (including hazardous) waste. Since 1996, ZhongDe Group has
installed approximately 180 waste incinerators in about 13 provinces, and
more than 120 waste incinerators in the last three financial years alone.
Its waste incinerators are principally constructed for operators of medical
disposal centres in the hospital and healthcare industry, as well as for
small and midsized Chinese cities in developed areas of the People’s
Republic of China. ZhongDe Group is one of the leading suppliers of small
and midsized solid waste incinerators in China, supplying state-of-the-art
products.

Contact

Matthias Link
Managing Director
Citigate Dewe Rogerson GmbH
Goethestraße 26-28
60313 Frankfurt am Main
Tel: 0049-69 90 500-150
Fax: 0049-69 90 500-102
E-Mail: matthias.link@citigatedr.de
Internet: www.citigatedr.de

30.09.2008 Financial News transmitted by DGAP

Language: English
Issuer: ZhongDe Waste Technology AG
Stadthausbrücke 1-3
20355 Hamburg
Deutschland
Phone: +49 40 37644 745
Fax: +49 40 37644 500
E-mail: cornelia.dieker@zhongdetech.de
Internet: www.zhongdetech.de
ISIN: DE000ZDWT018
WKN: ZDWT01
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, München, Stuttgart

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