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Message: First Quarter 2009 Financial Results

First Quarter 2009 Financial Results

posted on May 14, 2009 05:59PM

ZPP lost $0.04 yesterday while the Hang Seng & HSCC Red Chip did that :

Hong Kong Hang Seng -517.93 -3.04% 16,541.69 5/14 12:00am
Hong Kong HSCC Red Chip -86.32 -2.38% 3,533.65 5/14 4:42pm


Attention Business/Financial Editors

Zongshen PEM Power Systems Inc. Announces First Quarter 2009 Financial Results



- Revenues increase 19 percent to $7.7 million

- Net income amounts to $142,632 despite weak economy

- Balance sheet remains robust with $41.6 million in cash and no debt


VANCOUVER, May 14 /CNW/ - Zongshen PEM Power Systems Inc. ("ZPP" or "the

Company") (TSX:ZPP), today announced its financial results for the three-month

period ended March 31, 2009. All currency amounts referred to in this news

release are in Canadian dollars unless stated otherwise.

For the three-month period ended March 31, 2009 the Company reported

revenues of $7.7 million versus $6.5 million in the corresponding quarter last

year. Volume sales during the first quarter of 2009 totalled 21,120 units,

compared with 23,413 units in the first quarter of 2008. Net income during the

quarter amounted to $142,632 or $0.00 per share, versus a net loss of $124,378

or $(0.00) per share for the first quarter of 2008. Net income during the

three-month period was inclusive of $113,489 costs associated with stock-based

compensation, and $227,497 in interest income generated on the Company's

strong cash balance. The first quarter represents the seasonally weakest

quarter due to the effect of the Chinese New Year and consumer purchasing


At March 31, 2009, the Company was debt free with cash and cash

equivalents amounting to $41.6 million, compared to $33.3 million at December

31, 2008. The Company's strong balance sheet enables ZPP to weather the

current economic downturn while having the ability to explore and complete

select partnerships and acquisitions.

"As anticipated, we continued to see overall weakness, particularly in

export markets, due to the global economic environment during the first

quarter," noted Zongshen Zuo, Chairman and CEO of Zongshen PEM Power Systems

Inc. "We are seeing demand beginning to stabilize and could see a return in

consumer spending habits in the second half of 2009. The management team and

Board of Directors are assessing a number of investment opportunities with a

focus on accretive, complementary business in the two wheel and three wheel

gas and electric vehicle business."

ZPP continues to expect 2009 to be a challenging year for the organic

growth of its e-bike and small gas bike businesses. However, the Company is

well positioned to advance its growth strategy with a solid foundation in

e-bikes and small gas bikes, a strong balance sheet, a large market for its

products and a major shareholder and partner with assets and resources that

can be leveraged to gain competitive advantages. The Company is reviewing

strategic growth opportunities through partnerships and acquisitions, which

would complement its existing business.

The Company will host a conference call on Friday, May 15, 2009 at 11:00

a.m., Eastern Standard Time (EST) to further discuss the first quarter 2009

financial and operational results.


Dial in information is as follows:

Dial in number: 1-888-710-4011 (North America) or 1-913-312-0639


Taped Replay: 1-888-203-1112 (North America) or 1-719-457-0820


Taped Replay Pass Code: 5042919 (Available till May 29, 11:59 p.m.


Live Webcast Link: www.zongshenpem.com


About Zongshen PEM Power Systems Inc.

Zongshen PEM Power Systems Inc. is a public company trading under the

symbol ZPP on the Toronto Stock Exchange. The Company is engaged in the

commercialization of alternative power systems including batteries, fuel cells

and solar power, for a variety of consumer and industrial applications. The

Company manufactures low-cost, high quality, environmentally friendly small

gas motorbikes, electric motorcycles, electric bicycles and other e-vehicles

in China for the Chinese domestic and international markets. Zongshen PEM

Power System's largest shareholder is Zongshen Industrial Group, one of

China's largest manufacturers and distributors of motorcycles, engines, and

power equipment.

Forward Looking Information

This release contains forward-looking statements, which may be identified

by statements containing the words "will", "anticipate", "expect", "intend"

and other similar expressions. These statements are based on certain factors

and assumptions including foreign exchange rates, expected growth and sales,

results of operations, performance, and business prospects and opportunities

and effective income tax rates. While the company considers these factors and

assumptions to be reasonable based on information currently available, they

may prove to be incorrect. Several factors could cause actual results to

differ materially from those in the forward-looking statements, including, but

not limited to: our relationship with Zongshen Industrial Group; fluctuations

in market demand for small gas motorbikes and e-bikes; changes in competitive

pressures, including pricing pressures; timing and amount of capital

expenditures; changes in financial and capital markets and corresponding

effects on the company's investments; changes in currency and exchange rates;

and the effects of government policy and regulations;. Additional risks and

uncertainties can be found in our MD&A for the interim period ended March 31,

2009 and in our other filings with the Canadian securities commissions.

Forward-looking statements are given only as at the date of this release and

the company disclaims any obligation to update or revise the forward-looking

statements, whether as a result of new information, future events or

otherwise, except as required by law.


/For further information: Ali Mahdavi, Zongshen PEM Power Systems Inc.,

Vice President, Corporate Finance & Investor Relations, (416) 962-3300,

1-877-775-8734, [email protected]/

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