Mr. Alan Chan reports

GRAND POWER LOGISTICS REPORTS FINANCIAL RESULTS FOR THE YEAR OF 2015

Grand Power Logistics Group Inc. has released its consolidated financial results for the year ended Dec. 31, 2015. (All amounts are expressed in the U.S. dollar except where noted.)

                    SELECTED 2015 FINANCIAL HIGHLIGHTS
                (in thousands except per share or % data)

                                                      FY 2015        FY 2014

Revenue                                               $51,063        $72,737
Gross profits                                          $4,459         $6,046
Gross margins                                            8.73%          8.31%
Income (loss) from operations                           ($787)           $37
Income for the year                                   ($1,105)          $581
Income (owners of the corporation)                    ($1,051)          $616
Earnings per share                                    ($0.013)        $0.008

"The company experienced lower sales revenue for the year primarily due to weaker demand and a decrease in fuel costs. In addition, the lower sales revenue was also partially due to the company's desire to select higher-quality and higher-margin customers. The company had a loss of $1,104,650 for the year largely due to some non-cash items, including an amortization charge of $380,362 and an impairment charge of $609,421. As well, the company had additional start-up expenses in setting up a number of new subsidiaries or branch offices in the year to pursue new businesses, including the new e-commerce business, as a part of the company's diversification strategy," said Ricky Chiu, president and chief executive officer of Grand Power.

Financial results for 2015

Sales revenue for the year ended Dec. 31, 2015, decreased by $21,673,908 (29.80 per cent) to $51,062,664 from $72,736,572 in 2014. The decrease in sales revenue is primarily due to weaker demand, a decrease in the fuel costs, and the company's decision to select higher-quality and higher-margin customers.

Gross profit for the year ended Dec. 31, 2015, decreased by 26.25 per cent to $4,458,517 from $6,045,769 in 2014 primarily due to lower sales revenue. Nevertheless, the gross profit margin increased to 8.73 per cent for 2015 compared with 8.31 per cent for 2014.

The loss from operations for the year ended Dec. 31, 2015, was $786,567 compared with an income of $36,795 for 2014. The loss for 2015 included an amortization charge of $380,369. As well, during 2015, the corporation incurred additional expenses in setting a number of new subsidiaries or branch offices to pursue new businesses, including the new e-commerce business.

General operating expenses for the year ended Dec. 31, 2015, decreased by 12.71 per cent to $5,245,084 from $6,008,974 in 2014 primarily due to lower sales.

The loss for the year ended Dec. 31, 2015, was $1,104,650 compared with an income of $581,019 in 2014. The decrease in income for the year was primarily due to the amortization charge of $380,362 and the impairment charge of available-for-sale investment of $609,421. The loss attributable to the owners of the corporation for the year ended Dec. 31, 2015, was $1,051,345 compared with an income of $616,405 in 2014.

For the year ended Dec. 31, 2015, the corporation generated $42,786,006 (83.79 per cent) of its revenue from its traditional co-loading air freight business, $1,640,802 (3.21 per cent) of revenue from its direct sales air freight business and $6,635,856 (13.00 per cent) of revenue from its ocean freight business. During the corresponding period of 2014, the corporation generated $65,054,273 (89.44 per cent) of its revenue from its traditional co-loading air freight business, $1,906,238 (2.62 per cent) of revenue from its direct sales air freight business and $5,776,061 (7.94 per cent) of revenue from its ocean freight business.

Hong Kong is still the corporation's largest operating centre in 2015, generating $43,144,223 (84.49 per cent) of the corporation's total revenue whereas China and other regions accounted for $7,133,961 (13.97 per cent) and $784,480 (1.54 per cent), respectively. For the corresponding period in 2014, Hong Kong generated $62,951,571 (86.55 per cent) of the corporation's total revenue whereas China and other regions accounted for $8,260,153 (11.36 per cent) and $1,524,848 (2.09 per cent), respectively.

Tonnage shipped decreased by 10,888 tonnes (35.35 per cent) to 19,911 tonnes for the year ended Dec. 31, 2015, compared with 30,799 tonnes in 2014.

Outlook

"In 2014, the corporation received approval from its shareholders to diversify its business by making acquisitions and investments in various industrial sectors in addition to the corporation's core logistics business. In pursuit of this diversification, the company made an investment in a commercial property in Macau in the fourth quarter of 2014 and has initiated the development of an e-commerce business in China in 2015. The company has also been working with other shareholders of the Yangshan deep seaport project with a desire of reactivating and developing the Yangshan project. In 2016, the company will continue to look for more investment opportunities in pursuit of its diversification strategy," said Mr. Chiu, president and chief executive officer of Grand Power.

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