Boer Power Announces 2019 Annual Results

Sales revenue grows, turning net loss into profit

Despite the intensifying Sino-US trade friction throughout 2019,Boer Power’sperformance successfullyrecovered in the second half of 2019, net profit saw a turnaround, amounting to RMB5.7 million due largely to implementing new business adjustment measures and optimizingits intelligent electrical management system.During the year, the Group’s revenue was RMB737.1 million, representing a year-on-year increase of 17.3%. With the increased revenue, the gross profit was RMB213.3 million, representing a year-on-year increase of 6.4%; gross profit margin maintained at 28.9% excellence.Operating profit and Net profit both saw a turnaround, amounting to RMB49.4 million and RMB5.7 million respectively.

Having benefitted from the refined management and the strict internal control system implemented by the Group on an ongoing basis, balances of trade receivables declined significantly, and borrowings and financial costs also continued to decrease. As at the end of the Year, the Group’s cash and cash equivalents both increased significantly year-on-year, resulting in positive operating cash flow for four consecutive years.

Capturing business opportunities driven by data centers and 5G commercialization, and continuously optimizing products and services in order to consolidateindustry status

As of 31 December 2019, the Boer Power’s business is divided into the following four segments: Energy Efficiency Solutions (“EE Solutions”); Intelligent Electrical Distribution System Solutions (“iEDS Solutions”); Electrical Distribution System Solutions (“EDS Solutions”); and Components and Spare Parts. The Group was able to capture development opportunities resulting from data centers and 5G commercialization. The Group also continuously optimized its “One-stop Data Center”solution, utilizing its years of technology experience and core R&D advantages to grow its market share and increase its revenue.

During the year, Boer Power collaborated with various leading companies from different industries, including Schneider, a global leading infrastructure enterprise engaged in energy management and automation, to joinlyprovide high-quality infrastructure projects worldwide, and maintain a good relations with each other. The Groupalso proactively optimized and invented its “Smart Cloud” Platform, which coupled with years of accumulation of different industries electricitydatabases, to create an intelligent electrical management system solution for the power needs of different industries. The Group’s services and solutions continue to ensure safe, reliable, and energy-efficient electricity generation, maximizingthe economic benefits of electricity for customers and consolidating Boer Power’s position in the industry.

Increasing long-term, quality customer loyalty, and growing quality customers at home and abroad to increase market share

Boer Power strives to providecustomized intelligent and highly efficient electrical management system solutions, as well as long-term maintenance and consultancy services and products for many of theworld’s Fortune Top 500 companies and customers of domestic and foreign large-scale, long-term telecommunications enterprises.During the year, the Group continued to expand and enhance its cooperation with its existing customers, and worked to improve long-term customer loyalty with high quality,customized products and services.The Group also explored opportunities for cooperation with large customers in new industries,to strengthen its customer base and increase contributors to revenue.

Boer Power also worked to capture the high demand resulting from “Belt and Road” energy construction driven by Industrialization and urbanization, and actively grew its long-term overseas customers, especially in South Asia and Africa. The Group maintains4 overseas branches including Spain, Australia, Indonesia and Mexico, and has served customers and projects in over 130 countries and regions worldwide.

Mr. Qian Yixiang, Chairman and CEO of Boer Power said, “Looking ahead to 2020, despite the temporary economic fluctuations caused by the COVID-19 pandemic, the Group remains optimistic for its growth recovery throughout the year. Meanwhile,theCOVID-19 pandemic has indirectly promoted the country's large-scale economic stimulus policies. The Standing Committee of the Communist Party of China recently cnvened a meeting to accelerate the construction progress of seven new infrastructure segments in 2020 includingthe country’s 5G network, data centers, industrial Internet,high-speed rail and rail transit, artificial intelligence, UHV, new energy vehicles, and charging piles.Leveraging on the Group's years of service and technology experiences in the related industries, the Group is confident that it can fully grasp this historic medium- and long-term business development opportunity.We will continue to maintain our strict internal control system, as well as reduce production costs and expensesthrough refined management. Furthermore, the Group will continuously maintain reasonable levels of trade receivables and trade payables, further reduce borrowing, and optimize our assets and liabilities. These measures will support the continuous positive development of cash flow, and improve the Group’s financial situation and profitability."