XI'AN, China, Dec. 28 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. (Nasdaq: CBEH; the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that it has reached separate agreements to acquire three gas stations located near the city of Xi'an, Shaanxi Province, PRC: Andong gas station, Jindou gas station and Xianyang Jinzheng gas station, which are all located close to the city of Xi'an, Shaanxi Province, PRC.
SUMMARY OF RECENT ACQUISITIONS
Gas Station Purchase Sales Sales Revenues Revenues
Price Volume Volume TTM FY 2010E
TTM FY 2010E
Andong $6.4 6,000 tons 7,200 tons $4.4 $6.3
million million million
Jindou $2.6 4,800 tons 5,500 tons $3.5 $4.8
million million million
Xianyang $10.0 N/A 10,000 tons N/A $8.8
Jinzheng million million
TOTAL $19.0 N/A 22,700 tons N/A $19.9
million million
Andong Gas Station
The Company acquired all of the assets of Andong gas station for a total consideration of $6.4 million and will be operated under a 20-year lease. The gas station distributes both gasoline and diesel, which includes blended biodiesel. During the past twelve months, the gas station sold approximately 6,000 tons of fuel and generated revenues of $4.4 million. For the next twelve months, the Company estimates it will sell approximately 7,200 tons and generate approximately $6.3 million in revenues.
Jindou Gas Station
The Company acquired all of the assets of Jindou gas station for a total consideration of $2.6 million and will be operated under a 10-year lease. The gas station distributes both gasoline and diesel, which includes blended biodiesel. During the past twelve months, the gas station sold approximately 4,800 tons of fuel and generated revenues of $3.5 million. For the next twelve months, the Company estimates it will sell approximately 5,500 tons and generate approximately $4.8 million in revenues.
Xianyang Jinzheng Gas Station
The Company acquired all of the assets and 40-year land use rights of Xianyang Jinzheng gas station for a total consideration of $10 million. The gas station distributes both gasoline and diesel, which includes blended biodiesel. Xianyang Jinzheng gas station is newly built and does not have previous operation history. For the next twelve months, the Company estimates it will sell approximately 10,000 tons and generate approximately $8.8 million in revenues.
Operating as both a biodiesel producer and distributor, China Integrated Energy, Inc. has the ability to provide stable supply for each of its ten gas stations. Customers pay cash with an average inventory turn of 3 days. As of September 30, 2009, average gross margins for its retail gas stations were 13.3%, which is higher than traditional distribution. The Company anticipates a significant increase in sales volume from its retail gas stations while continuing to expand both gross and operating margins over the next 12 months.
"We are pleased to complete these acquisitions, which brings our total number of operating gas stations to ten in Shaanxi province," stated Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "We are also pleased to have achieved our year-end 2009 retail acquisition target as we build on being one of the leading vertically integrated energy companies in China. As part of our growth strategy, we plan to lease an additional five to seven gas stations in the next 12 months, which will provide incremental revenues and profitability."
About China Integrated Energy, Inc.
The Company is a leading non-state-owned integrated energy company in the PRC and has engaged in three business segments: the wholesale distribution of finished oil and heavy oil products, the production and sale of biodiesel, and the operation of retail gas stations. The Company's primary business segment is the wholesale distribution of finished oil and heavy oil products. The Company also operates a 100,000-ton biodiesel production plant and ten retail gas stations in China.
Safe Harbor Statement
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the 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" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward- looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For more information, please contact:
China Integrated Energy, Inc.
Alex Gong, VP of Capital Market
Tel: +86-136-0127-9912
Email: alexgong08@gmail.com
Web: http://www.cbeh.net.cn
OR
HC International, Inc.
Ted Haberfield, Executive VP
Tel: +1-760-755-2716
Email: thaberfield@hcinternational.net
Web: http://www.hcinternational.net
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