Golden Green Enterprises Limited Announces Third Quarter 2009 Results

ZHENGZHOU, China, Nov. 20, 2009 -- Golden Green Enterprises Limited (Nasdaq: CHOP) ("Golden Green" or the "Company"), a leading China-based specialty precision cold-rolled steel producer, today announced financial results for the third quarter ended September 30, 2009.

Third Quarter 2009 Highlights

• Revenue increased 6.0% to $59.3 million from $55.9 million in the third quarter of 2008
• Gross profit increased 23.8% to $18.2 million from $14.7 million
• Gross margin increased 440 basis points to 30.6% from 26.2%
• Operating income increased 18.9% to $16.2 million from $13.6 million
• Operating margin increased 300 basis points to 27.3% from 24.3%
• Net income attributable to common stockholders increased 115.9% to $11.5 million, or $0.29 per diluted share, from $5.3 million, or $0.18 per diluted share

"While the overall steel industry has recently experienced a period of excess supply, there is an increasing shortage in China of the high-end, high- value thin steel sheets and galvanized steel products that we produce," said Mr. Mingwang Lu, Chairman and Chief Executive Officer. "We were able to continue to leverage our position as the largest manufacturer of high precision, ultra-thin cold rolled narrow strip steel products in China to win additional market share. We were also able to increase our gross and operating margins thanks to a business model which we believe is cost efficient and scalable as well as our continuing focus on more profitable, higher value-added products."

Mr. Lu added, "Our sales growth reflects our ability to successfully align our business toward markets that are driven by the growth of China's middle class, who are the ultimate end-users of most of our products. Unlike the crude steel industry, whose demand is largely driven by the capital investment cycle, the use of our products is much more related to consumer spending and overall GDP growth in China. This is because the largest component of our revenues comes from food and industrial packaging manufacturers, with the balance coming from manufacturers of construction materials, electrical appliances and telecommunications equipment."

Third Quarter 2009 Results

Revenue for the three months ended September 30, 2009, was $59.3 million compared to $55.9 million for the same period in 2008, an increase of approximately 6.0%. The increase in revenue was due to an increase in domestic demand for the Company's high precision cold-rolled steel products. The Company benefited from a significant increase in total sales volume, partially offset by lower average selling prices for its products.

Gross profit was $18.2 million compared to $14.7 million for three months ended September 30, 2008, an increase of 23.8%. Gross margin was 30.6% compared to 26.2% for the same period last year. The increase in gross margin was mostly due to the introduction of higher-margin chromium-coated products, which the Company first began producing in 2009.

Total operating expenses were $2.0 million, or 3.4% of sales, compared to $1.1 million, or 1.9% of sales, in last year's third quarter, an increase of 87.2%. The increase in both dollar amount and margin was primarily due to added professional fees from maintaining the Company's U.S.-listed public company status. Operating income was $16.2 million, or 27.3% of sales, compared to $13.6 million, or 24.3% of sales, in the same period last year, an increase of 18.9%.

Net income attributable to common stockholders was $11.5 million, or $0.29 per diluted share, an increase of 115.9% from $5.3 million, or $0.18 per diluted share, in the same period last year.

Nine Month Results

Revenue for the nine months ended September 30, 2009, was $161.7 million compared to $156.9 million for the same period in 2008, an increase of 3.1%. Gross profit was $48.8 million compared to $43.9 million for the nine months ended September 30, 2008, an increase of 11.2%. Total operating expenses were $4.2 million, or 2.6% of sales, compared to $3.0 million, or 1.9% of sales, for the same period last year, an increase of 41.8%. Operating income increased 9.0% to $44.6 million from $40.9 million in the first nine months of 2008. Net income attributable to common stockholders was $32.0 million, or $0.82 per diluted share, compared to $16.2 million, or $0.54 per diluted share, for the same period last year.

Financial Condition

As of September 30, 2009, the Company had $44.4 million in cash and an additional $41.3 million in restricted cash, as compared to $42.6 million and $24.7 million, respectively, as of December 31, 2008. Working capital was $27.1 million versus a working capital deficit of $8.8 million at the end of 2008. Shareholder's equity was $50.9 million, as compared to $12.5 million at the end of 2008. The Company has no long-term debt. For the nine months ended September 30, 2009, net cash provided by operating activities was $10.6 million.

Recent Developments

On November 10, 2009, the Company's ordinary shares, warrants, and units began trading on the NASDAQ Global Market under the symbols "CHOP", "CHOPW", and "CHOPU", respectively. The Company's ordinary shares, warrants, and units were previously quoted on the Over-the-Counter Bulletin Board under the symbols "GGEEF", "GGENF", and "GGETF", respectively.

Mr. Lu commented, "Listing our shares on the NASDAQ was a significant milestone for Golden Green and serves as a validation of our commitment to sound corporate governance practices and integrity as a public company. We believe that our NASDAQ listing helps build credibility with our customers, partners, and investors, and will help us attain higher visibility within the investment community and media. We anticipate this will help increase our liquidity and further enlarge our investor base."

On November 16, 2009, the Company's previously announced public offering closed, resulting in approximately $21.6 million in net proceeds, after deducting the underwriting discount, commissions, and expenses. The Company sold 4,800,000 ordinary shares at $5.00 per share.

Business Outlook

Mr. Lu added, "We expect demand for high precision steel in China to continue to grow at a healthy pace due to the continuing improvement of the standard of living and the growth of the middle class population. Our business is also benefiting from an increasing movement toward import replacement, as our customers turn to our high-end precision steel products, which are more competitively priced but of the same quality as the premium priced imported products that they have historically relied on.

"We are excited about our future prospects. Our growth strategy is to further broaden our favorable product portfolio and mix by expanding into coated steel production, increasing market penetration, strengthening research and development capabilities, and improving operating efficiencies and cost controls."

The Company currently has six cold-rolled steel production lines assisted by two acid pickling lines with an annual production capacity of approximately 250,000 tons, and one chromium production line with an annual production capacity of approximately 50,000 tons. The Company expects to use most of the proceeds received from its recent public equity offering to construct a new production facility, including two 75,000 ton chromium-coated production lines to be commissioned in the second half of 2010 and one 100,000 ton zinc-coated production line to be commissioned in 2011. This expansion is expected to increase the Company's annual production capacity to 500,000 tons by 2011.

For the fourth quarter of 2009, the Company expects to achieve revenues of between $40 million and $50 million and net income of between $8 million and $10 million, before accounting for one-time expenses of approximately $2.5 million associated with the Company's recent public equity offering.

Conference Call Information

The Company will host a conference call at 8:00 a.m. ET on Friday, November 20, 2009, to discuss results for the third quarter of 2009. Listeners may access the call by dialing (888) 419-5570 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (617) 896-9871. The conference participant pass code is 13034050.

A replay of the conference call will be available for 14 days starting from 10:00 am ET on Friday, November 20, 2009. To access the replay, dial (888) 286-8010. International callers should dial +1 (617) 801-6888. The passcode is 70547673.

About Golden Green Enterprises Limited

Golden Green, a British Virgin Islands holding company, through its operating subsidiary, Henan Green Complex Materials Co., Ltd ("Henan Green"), is a leading China-based specialty precision cold-rolled steel producer. The Company manufactures high-end, high precision, ultra thin, high strength, cold-rolled, narrow strip steel products that are characterized by stringent performance and specification requirements that mandate a high degree of manufacturing and engineering expertise. Golden Green's products are not standardized commodity products, but are tailored to customers' requirements and then incorporated into products they and end-users make for various applications. The Company sells its products to domestic Chinese customers in a diverse range of industries, including the food packaging, telecommunication, electrical appliance, and construction materials industries. Golden Green is located in the Henan Province of China.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward- looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 20-F for the year ended December 31, 2008 and otherwise in our SEC reports and filings, including the final prospectus for our offering. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

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