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XINGYE COPPER INTERNATIONAL GROUP LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 505)

PROFIT WARNING

This announcement is made by Xingye Copper International Group Limited (the "Company" together with its subsidiaries, the "Group") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Reference is made to the announcement of the Company dated 25 July 2012 and the interim report of the Company for the period ended 30 June 2012. The board of directors (the "Board") of the Company wishes to inform the shareholders of the Company and potential investors that it is expected the Group's production and sales volume for the year ended 31 December 2012 will be increased as compared with that for the year of 2011, however, continued global economy downturn has resulted in a drop in the price of the Group's copper products. Meanwhile, we had increased our cost for products research and development to boast up our products research and development ability. As such, although the Group's profit for the year ended 31 December 2012 was relatively higher than that of our peers in the industry, we have experienced a significant decline in our profit as compared to that for the year of 2011.
The management of the Company has taken certain measures to tackle the challenges of business environment and industry competition, including but not limited to:
(1) The Company has rapidly adjusted the pricing strategy in order to maintain the market share and profitability under the sluggish economic conditions;
(2) The Company has been developing new products to meet the needs of high-end customers.
These new products are positioned in the "high-grade" level. The Company has been granted
7 utility model patents while other 5 invention patents are in the process of substantive examination. As they are still in the development stage, no profit has been brought as at this year end. However, it is believed that they will contribute to the profit in the near future and provide better assurance on the Group's development; and

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(3) The Group has planned to invest over RMB600 million to introduce an international advanced production line to manufacture high value-added high-precision copper strips; and optimize the key and bottleneck equipments of the existing production lines to enhance the quality of products. The Group entered into several equipment agreements, of which the significant transactions were announced on 2 August 2012, 31 August 2012 and 1 November 2012 respectively.
This profit warning announcement is only based on the preliminary assessment by the management of the Company on the unaudited consolidated management accounts of the Group for the year ended 31 December 2012 and the current information available, which have not been reviewed or audited by the Company's auditors. The audited results of the Group for the year ended 31
December 2012 will be announced as soon as practicable and the related 2012 Annual Report will be published thereafter in accordance with the Listing Rules.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the securities of the Company.

By order of the Board

Xingye Copper International Group Limited Hu Changyuan

Chairman

Hong Kong, 22 January 2013

As at the date of this announcement, the executive directors of the Company are Mr. HU Changyuan, Mr. CHEN Jianhua, Mr. WANG Jianli and Mr. MA Wanjun and the independent non-executive directors of the Company are Mr. CUI Ming, Mr. XIE Shuisheng, Mr. CHAI Chaoming and Ms. LI Li.

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