Lihua International Ships First Copper Anode Order

DANYANG, China, Sept. 14 /PRNewswire-Asia/ -- Lihua International, Inc. (Nasdaq: LIWA) ("Lihua" or the "Company"), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well as copper clad aluminum ("CCA") wire, today announced that it has shipped 2,000 metric tons of its new copper anode product to its recently announced domestic customer, one of the world's leading copper and metal conglomerates.

"Since launching our new product in July, we have ramped up production on our second smelter to full capacity, and we remain on track to meet our goal of shipping 8,000 to 10,000 tons of copper anode during 2010," said Jianhua Zhu, chairman and CEO of Lihua. "Our established business and diverse business segments uniquely position Lihua to benefit from continued demand in the large pure copper market in China. We expect that the sales volume of our refined copper products, including copper rod, copper wire and copper anode, will continue to grow as we increase our production capacity. In pursuing this strategy, we believe we can accelerate our return on invested capital as we can more readily process refined copper, address a substantially larger market segment and establish notably better payment terms than with our CCA wire products. We remain keenly focused on driving additional shareholder value by continuing to meet our strategic and financial objectives as we continue to grow our business."

Market Overview

Demand from the consumer white goods and household appliance markets has been particularly solid, driven by the Chinese government's "Home appliances to the countryside" program. This program has contributed to dramatic growth in this segment of the market. During the first eight months of 2010, appliance sales totaled over RMB 100 billion, an increase of 2.1 times industry sales for the comparable period in 2009, according to the Chinese Ministry of Commerce. In addition to the strength of the appliance market, China's automotive market, which surpassed the United States as the world's largest in 2009, continues to grow. According to the China Association of Automobile Manufacturers, auto sales for the first six months of 2010 totaled RMB 2.1 trillion, representing growth of nearly 49% over the first six months of 2009, with total volume exceeding 10 million units for the period.

Additionally, the Company noted that it has been and will continue to be unaffected by the recently instituted power restrictions implemented by the Jiangsu provincial government. The government has instituted rolling blackouts during the month of September for several enterprise zones in the province. Lihua's facilities receive power from a dedicated transmission line that is not affiliated with the local government and was installed in order to prevent manufacturing disruptions. As such, Lihua does not expect any slowdown in manufacturing and expects to meet all production targets for the year.

2010 Financial Guidance and Outlook

Lihua reaffirms its full year 2010 financial guidance based on its recent capacity expansion and positive market trends in which demand continues to outpace supply and end market uses for Lihua products remains strong. Lihua expects to increase its gross profit by 46-53% over 2009, to $52.9 to $55.7 million, and grow its non-GAAP net income by 48-57% to $38.1 million to $40.3 million.

As of June 30, 2010, Lihua had $87.0 million in cash and cash equivalents, or $2.99 per share, and $2.2 million, or $0.08 per share, in short-term debt, based on 29.3 million diluted shares outstanding.

In the fourth quarter of 2010, the Company plans to begin construction on a new copper recycling facility adjacent to its current facility. Lihua expects to complete construction of this new facility in the second half of 2011, increasing refined copper capacity to 100,000 tons per year.

About Lihua International, Inc.

Lihua, through its two wholly-owned subsidiaries, Lihua Electron and Lihua Copper, is a leading value-added manufacturer of copper replacement products for China's rapidly growing copper wire and copper replacement product market. Lihua is one of the first vertically integrated companies in China to develop, design and manufacture lower cost, high quality alternatives to pure copper magnet wire and pure copper alternative products. Lihua's products include CCA and pure copper products. Current product offerings include CCA and copper wire, copper rod and copper anode. Except for CCA wire, all other products are produced from recycled scrap copper. Lihua's products are sold in China either directly to manufacturers or through distributors in the wire and cable industries and manufacturers in a wide variety of industries including the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Lihua's corporate and manufacturing headquarters are located in the heart of China's copper industry in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com .

To be added to the Company's email distribution for future news releases, please send your request to [email protected] .

Safe Harbor Statement

This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about its business or growth strategy, general industry conditions including availability of copper or recycled scrap copper, future operating results of the Company, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.

Please note that information in this press release reflects management views as of the date of issuance.

    For more information, please contact:

    Lihua International, Inc.
     Daphne Huang
     EVP of Corporate Finance and Director of Investor Relations
     Tel:   +1-516-717-9939
     Email: [email protected]

    The Piacente Group, Inc.
     Investor Relations
     Brandi Floberg or Lee Roth
     Tel:   +1-212-481-2050
     Email: [email protected]

SOURCE Lihua International, Inc.