China XD Plastics Announces Record First Quarter 2009 Results

    First Quarter 2009 Highlights
    -- Revenue was $26.4 million, an increase of 154.2% from the first quarter
       of 2008
    -- Gross profit was $5.8 million, an increase of 144.0% from the first
       quarter of 2008
    -- Gross profit margin was 21.8%, compared to 22.7% in the first quarter
       of 2008
    -- Income from operations was $4.4 million, up 114.2% from the first
       quarter of 2008
    -- Net income was $4.0 million, up 91.8% from $2.1 million in the first
       quarter of 2008
    -- Diluted earnings per share was $0.10

''We are extremely pleased to report our strong financial performance in
the first quarter as a public company. We have achieved record revenue and
during the quarter despite the global economic slowdown, a testament to the
strength of China's economy and our leadership position within the modified
plastics industry for automotive applications,'' said Mr. Jie Han, Chairman
and Chief Executive Officer of China XD Plastics. ''During the first quarter
we have continued to execute our strategy of leveraging our research and
development capabilities to launch new products and gradually expanding our
capacity to meet the increasing demand from the domestic market. We remain
optimistic on the outlook of our business and look forward to reporting
positive results in the quarters ahead.''

First Quarter 2009 Results

Revenues for the first quarter of 2009 were $26.4 million, up 154.2%
compared to $10.4 million for the same period of 2008. The increase in revenue
is primarily attributable to the increase in sales volume to 17,899 tons
compared to 6,328 tons during first quarter of 2008 driven by increasing
domestic demand for modified plastics for automotive applications and
strengthened by the stimulus initiatives for automobile consumption
implemented by the government in China.

Gross profit for the first quarter 2009 was $5.8 million, up 144.0% from
$2.4 million in the first quarter 2008. Gross margin is 21.8% compared to
22.7% in the same period last year due to the slight increase in sales of
lower margin products as a percentage of total revenue in response to
increasing demand for modified plastics use by economy vehicle models in China
which benefited from the economic stimulus plan by the Chinese government.
The average selling price for the first quarter of 2009 was $1,407 per ton
compared to $1,747 per ton in the same period of last year.

Selling expenses for the first quarter of 2009 were $0.05 million or 0.2%
of revenue, up from $0.02 million, or 0.02% of revenue in the same period last
year due to the Company's increased efforts to grow its customer base. General
and administrative (G&A) expenses were $1.0 million, or 4.0% of revenue, up
from $0.2 million, or 2.2% of revenue for the same period of last year. The
increase in G&A expenses reflects increased salary expense, depreciation
expense and other expenses associated with the reverse merger and listing in
the U.S. Research and Development (''R&D'') expenses increased 323.8% to $0.3
million, or 1.1% of revenue compared to $0.07 million, or 0.7% of revenue in
the same period last year. The increase in R&D expenses was primarily due to
efforts in new product development as the Company hired more researchers and
increased raw material usage.

Operating income for the first quarter of 2009 was $4.4 million, up 114.2%
from $2.0 million in the same period a year ago. Operating margin was 16.6%
compared to 19.7% in the first quarter of 2008 due to the increase in
operating expenses.

First quarter interest expense of $0.4 million was directly associated
with the Company's short term debts. An interest income of $0.03 million was
recorded in the first quarter of 2008.

Net income in the first quarter of 2009 was $4.0 million, up 91.8% from
$2.1 million in the same period last year. Fully diluted earnings per share
for the first quarter of 2009 were $0.10.

Financial Condition

As of March 31, 2009, China XD plastics had $1.9 million in cash and cash
equivalents, $8.5 million in working capital and a current ratio of 1.3.
Shareholder's equity as of March 31, 2009 stood at $28.0 million compared to
$24.1 million at the end of 2008.

Recent Events

On April 14, 2009, China XD Plastics announced it was recertified for the
ISO/TS16949:2002 certification of quality management system.

On April 17, 2009, China XD Plastics announced the Company's wholly owned
subsidiary, Harbin Xinda Macromolecule Material Research Institute (''Xinda
Research Institute''), is collaborating with Harbin Institute of Technology on
the pre-research of pre-foamed modified polypropylene ("PP") and has
successfully completed a small trial testing.

On April 23, 2009, China XD Plastics announced that the Company expects to
increase its annual production capacity to 70,000 tons with the addition of 7
production lines acquired at the end of 2008.

On May 1, 2009, China XD Plastics announced the appointment of Taylor
Zhang as Chief Financial Officer effective immediately.

Business Outlook

The Company plans to increase its annual production capacity to 70,000
tons during 2009, up from 40,000 tons in 2008 and 25,000 tons in 2007. The
automotive industry environment in China remains healthy, despite the overall
economic slowdown worldwide. During the first quarter of 2009, total number of
automobiles sold in China reached 2.7 million according to the statistics data
provided by the China Association of Automobile Manufacturers. The Company
expects to see continued growth of the auto industry in China, which is
expected to contribute to a further increase in the demand for the Company's
products.

For 2009, the Company expects annual revenues between the range of $110.0
million to $130.0 million, and annual net income in the range of $17.0 million
to $20.0 million.

''We continue to see tremendous opportunity for the profitable growth of
our business in the quarters and years ahead, driven by the growth in the
Chinese economy in general as well as by our ability to leverage our
capabilities to grab market share from imports,'' said Mr. Jie Han, Chairman
and Chief Executive Officer of China XD Plastics. ''In fiscal year 2009, we
will continue to drive growth through the launch of new product offerings and
by gradual expansion of our capacity in line with the expected growth of the
Chinese automotive industry.''

About China XD Plastics Company Ltd.

China XD Plastics Company Ltd., through its wholly owned subsidiary Harbin
Xinda Macromolecule Material (''Xinda''), develops, manufactures, and
distributes modified plastics, primarily for automotive applications. The
Company's specialized plastics are used in the exterior and interior trim and
in the functional components of more than 30 automobile brands manufactured in
China including Audi, Red Flag, Volkswagen and Mazda. The Company's wholly
owned research institute is dedicated to the research and development of
modified plastics and benefits from technology collaboration with well-known
scientists from leading Universities in China. At present, Xinda manufactures
approximately 145 types of automobile-specific modified plastic products, 117
of which have been certified for use by one or more of the automobile
manufacturers in China. For more information please visit
http://www.chinaxd.net .

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact in this
announcement are forward-looking statements, including but not limited to, the
Company's ability to raise additional capital to finance the company's
activities; the effectiveness, profitability, and the marketability of its
products; legal and regulatory risks associated with the share exchange; the
Company's ability to successfully expand its production capacity; the future
trading of the common stock of the company; the Company's ability to operate
as a public company; the period of time for which its current liquidity will
enable the company to fund its operations; the company's ability to protect
its proprietary information; general economic and business conditions; the
volatility of the company's operating results and financial condition; the
company's ability to attract or retain qualified senior management personnel
and research and development staff; and other risks detailed in the company's
filings with the Securities and Exchange Commission and available on its
website at http://www.sec.gov. These forward-looking statements involve known
and unknown risks and uncertainties and are based on current expectations,
assumptions, estimates and projections about the companies and the industry.
The company undertakes no obligation to update forward-looking statements to
reflect subsequent occurring events or circumstances, or to changes in its
expectations, except as may be required by law. Although the company believes
that the expectations expressed in these forward looking statements are
reasonable, they cannot assure you that their expectations will turn out to be
correct, and investors are cautioned that actual results may differ materially
from the anticipated results.

                            -Financial Tables Follow-



                        CHINA XD PLASTICS COMPANY LIMITED
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
                                   (UNAUDITED)

                                         For the Three Months Ended March 31,
                                              2009                 2008

    Sales                                 $26,391,889          $10,382,422

    Cost of sales                         (20,635,575)          (8,023,576)

    Gross profit                            5,756,314            2,358,846

    Operating Expenses
             Research and
              development expenses            289,155               68,224
             Selling expenses                  45,651               17,822
             General and
              Administrative expenses       1,045,929              230,278
    Total Operating Expenses                1,380,735              316,324

    Operating Income                        4,375,579            2,042,522

    Other Income (expenses)
             Interest Income (expenses)      (355,606)              26,816
             Other Income                        (111)              25,168
             Other expense                       (533)                  --
    Total Other expense                      (356,250)              51,985

    Income before income taxes              4,019,329            2,094,507

    Provision for income taxes                  2,685                   --

    Net Income                             $4,016,644           $2,094,507

    Other Comprehensive Income
             Foreign Currency
              Translation Adjustment          (37,617)             396,156

    Comprehensive Income                   $3,979,027           $2,490,663

    Basic and Diluted Income
     per common share
             Basic                              $4.98                $5.16
             Diluted                            $0.10                $5.16

    Weighted average common share
     outstanding
             Basic                            805,802              405,802
             Diluted                       38,999,874              405,802



                        CHINA XD PLASTICS COMPANY LIMITED
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                   March 31,     December 31,
                                                      2009           2008
                                                  (Unaudited)     (audited)
                               ASSETS
    Current assets:
          Cash and cash equivalents               $1,852,532     $3,869,035
          Restricted Cash                          4,360,805      3,664,346
          Notes Receivable                            51,696        303,437
          Accounts receivable - net of
           allowance for bad debts of
           $99,508 and $99,669, respectively       5,854,990     11,234,507
          Other receivables                           28,171         21,917
          Inventories                             15,550,381     12,438,782
          Due from related parties                     1,702             --
          Advance to employees                       218,089         92,329
          Advances to suppliers                   10,365,041     13,131,074

    Total current assets                          38,283,407     44,755,427

    Property, plant and equipment, net            18,885,891     19,332,712

    Other assets:
          Deferred charges                           446,359        378,073
          Intangible assets, net                     245,887        247,681

    Total other assets                               692,246        625,754

    Total Assets                                 $57,861,544    $64,713,893

                LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
          Short term loans                       $18,291,969    $20,520,337
          Bank acceptance notes payable            9,804,495      8,061,561
          Accounts payable                           232,239        113,232
          Other payable                              264,576        106,232
          Accrued expenses                           395,650        820,625
          Taxes payable                              132,005         17,777
          Due to related party                       420,846      7,542,950
          Deferred revenue                           279,354      3,469,796

        Total current liabilities                 29,821,134     40,652,510

    Stockholders' equity
          Common Stock, $0.0001 par value,
           100,000,000 shares authorized,
           805,802 and 405,402 shares issued
           and outstanding as of March 31,
           2009 & December 31, 2008, respectively         81             81
          Series A Preferred Stock, $0.0001
           par value, 10,000,000 shares authorized,
           1,000,000 and nil shares issued
           and outstanding as of March 31,
           2009 and December 31, 2008, respectively      100            100
          Series B Preferred Stock, $0.0001
           par value, 10,000,000 shares authorized,
           1,000,000 and nil shares issued
           and outstanding as of March 31, 2009
           and December 31, 2008, respectively           100            100
          Additional Paid-in-Capital               2,482,786      2,482,786
          Retained earnings                       24,067,785     20,051,141
          Accumulated other comprehensive income   1,489,558      1,527,175

    Total Stockholders' equity                    28,040,410     24,061,383

    Total Liabilities and Stockholders' Equity   $57,861,544    $64,713,893



                        CHINA XD PLASTICS COMPANY LIMITED
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                 For the Three Months ended
                                                           March 31,
                                                   2009               2008
    Cash flows from operating activities
    Net income                                 $4,016,644         $2,136,711
    Adjustments to reconcile net income
     to net cash provided
     by Operating activities:
      Depreciation & amortization                 445,890            168,382
    Changes in assets and liabilities:
    (Increase) decrease in -
      Restricted cash                            (702,135)         1,619,610
      Accounts receivable and
       other receivables                        5,352,875          1,370,040
      Inventories                              (3,130,573)          (639,503)
      Prepaid expenses                                 --             21,789
      Notes receivables                           251,150            (19,966)
      Advance to employees                       (125,875)                --
      Advances to suppliers                     2,743,624         (1,397,849)
      Deferred charge                             (68,873)                --
    Increase (decrease) in -
      Accounts payable and other payable          277,662          1,890,051
      Accrued expenses                           (423,476)            19,287
      Tax payable                                 114,212         (1,388,948)
      Deferred revenue                         (3,183,553)           502,720

        Net cash provided by operating
         activities                             5,567,572          4,282,324

    Cash flows from investing activities
     Purchase of fixed assets                     (29,175)        (4,452,986)
     Collection on due from related party         (10,616)           107,488

    Net cash used in investing activities         (39,791)        (4,345,498)

    Cash flows from financing activities
    Proceeds from (Repayment to)
     Short Term Loan                           (2,194,173)         4,607,512
    Proceeds from bank acceptance
     notes payable                              1,755,338                 --
    Repayment of bank acceptance
     notes payable                                     --         (3,350,918)
    Proceeds from (Repayment to) related
     party Loan                                (7,098,504)            69,811

    Net cash provided by (used in)
     financing activities                      (7,537,339)         1,326,405

    Effect of exchange rate changes on
     cash and cash equivalents                     (6,945)            30,587

    Net increase(decrease) in cash and
     cash equivalents                          (2,016,503)         1,293,817

    Cash and cash equivalents, beginning
     of period                                  3,869,035             87,455

    Cash and cash equivalents,
     end of period                             $1,852,532         $1,381,272

    Supplemental disclosures of cash
     flow information:

    Interest paid                              $  389,638         $   83,079

    Income taxes paid                          $    8,864         $       --


    For more information, please contact:

    China XD Plastics Company Ltd.
     Mr. Taylor Zhang, Chief Financial Officer
     Tel:   +1-212-747-1118 (New York)

     Mr. Allan Lao, IR Director
     Tel:   +86-451-84346600 (China)
     Email: cxdc@chinaxd.net
     Web:   http://www.chinaxd.net/

    CCG Investor Relations
     Mr. Crocker Coulson, President
     Tel:   +1-646-213-1915 (New York)

     Mr. Ed Job, CFA
     Tel:   +1-646-213-1914 (New York)
     Email: ed.job@ccgir.com
     Web:   http://www.ccgirasia.com

SOURCE China XD Plastics Company Ltd.

http://www.chinaxd.net/

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