HE Hanwei Energy Services Corp

Hanwei Energy Services Corp. (TSX:HE) ("Hanwei" or the "Company"), today
reported its financial results for the quarter ended December 31, 2013 (the
"Reporting Period"). All amounts are in Canadian Dollars unless otherwise noted.



Financial Summary  

For the three months ended December 31, 2013:



--  Revenues were $3.4 million, representing a decrease of 61% as compared
    to revenues of $8.6 million for the same period of the prior year. This
    decrease was primarily due to a reduction in demand from the Company's
    major Chinese and Kazakhstan customers and increased competition from
    other suppliers. 
    
--  EBITDA from continuing operations for the three months ended December
    31, 2013 was negative $367,000 as compared to EBITDA from continuing
    operations of $654,000 for the same period of the prior year,
    representing a decline of 156%. The decline in EBITDA was primarily
    driven by the decline in revenues.  



For the nine months ended December 31, 2013:



--  Revenues were $11.0 million, representing a decline of 50% as compared
    to revenues of $21.8 million for the same period of the prior year. This
    decrease was primarily due to a reduction in demand from the Company's
    major Chinese and Kazakhstan customers and increased competition from
    other suppliers. 
    
--  EBITDA from continuing operations for the nine months ended December 31,
    2013 was negative $659,000 as compared to EBITDA from continuing
    operations of $2.7 million for the same period of the prior year. The
    decline in EBITDA was primarily driven by the decline in sales.  



The Company had basic and diluted loss per share of $0.01 and nil for the three
and nine months ended December 31, 2013 as compared to basic and diluted
earnings per share of nil for the three months ended December 31, 2012 and $0.01
for the nine months ended December 31, 2012.  


As of January 31, 2014, FRP pipe sales orders yet to be completed and shipped
were approximately $6.2 million (the majority of which are expected to be
completed within the fiscal year ended March 31, 2014). 


Cash balance was $4.7 million as at December 31, 2013, representing an increase
of $2.3 million from a cash balance of $2.4 million as of September 30, 2013. 


Update on Corporate Strategy

Hanwei's core business remains in its FRP pipe manufacturing. The Company holds
longstanding relationships with the leading Chinese oil & gas producers that
include CNPC, PetroChina and Sinopec (and which have yielded repeat orders over
the last ten years). The Company has also been previously successful in its
sales efforts in Kazakhstan, a market in which it entered in 2009.
Internationally the Company has undertaken a number of initiatives to expand out
its sales in other markets and while initial orders have been received
principally in the Middle East the sales results of entering new international
markets have not yet materialized. 


While the Company continues its efforts to drive sales it has seen a softening
in its two principal markets of China and Kazakhstan with year over year sales
reducing. This has primarily been due to less FRP products being ordered by end
users in these markets as well as increased competition from other
manufacturers. The Company will continue its sales and marketing efforts in the
international markets but it is yet unknown if future sales results in these
markets will be achieved and can restore or grow revenue.


Due to the downturn in the China and Kazakhstan FRP markets the Company is
therefore actively investigating other corporate development opportunities
focussed on restoring revenue including licensing of Hanwei's FRP manufacturing
technologies, new sales and distribution arrangements, and other initiatives.


Update on Major Cash Receivables



--  Outstanding Wind Receivable: During the three-month period ended
    December 31, 2013, the Company received a payment of $0.9 million (RMB5
    million) as part of the outstanding accounts receivable due from its
    wind farm customers. The full amount of these receivables was previously
    allowed for and the Company's wind power business has been discontinued.
    As of the date of this MD&A approximately $32.7 million (RMB194.2
    million) has been collected with a balance of $5.1 million (RMB29.0
    million) outstanding. The Company is continuing its efforts to collect
    the balance of this outstanding amount. 
    
--  Tianjin Plant Divestment: As previously reported the Company reached an
    agreement on May 27, 2013, to sell all of the equity interest in its
    wholly owned subsidiary Hanwei Green to a private Chinese company for an
    amount of $11.4 million (RMB65 million). The major asset of Hanwei Green
    is a manufacturing plant located in Tianjin, China which was constructed
    for wind blade production. The majority of the regulatory documentation
    and jurisdictional approvals required for the ownership transfer were
    completed as of (February 10, 2014). Under the current Agreement the
    Company is due to receive payments of $1.9 million (RMB11.0 million)
    upon completion of the ownership transfer documents and $3.3 million
    (RMB19.0 million) (due before December 31, 2013 under the current
    Agreement terms). Contemporaneously with the receipt of this payment the
    ownership transfer shall take effect and subject to a final payment of
    $6.1 million (RMB35.0 million) due May 27, 2014 (within twelve months
    after the agreement was signed on May 27, 2013). With the delay in
    receiving the necessary jurisdictional approvals the Company is in
    discussions with the buyer as to revisions to the timing of these
    payments that may result in a delayed payment schedule. 
    
--  Wind Inventory Sale: During the year ended March 31, 2012, the Company
    executed a contract for sale of the majority of its wind power equipment
    inventory to a Chinese customer for agreed items totaling $15.7 million
    (RMB93.6 million). To date $12.6 million (RMB75.3 million) of this
    amount has been received by the Company. The balance to be paid is
    approximately $3.3 million (RMB18.3 million) which is expected to be
    received by the end of the Company's fiscal year ending March 31, 2014. 



Graham Kwan, Executive Vice President and Rick Huang, Chief Financial Officer of
Hanwei will host a conference call to discuss its operational and financial
results for the quarter ended December 31, 2013. Management invites analysts and
investors to participate on the conference call: 




                                                                            
Date:               Wednesday, February 12, 2014                            
                                                                            
Time:               1:00 a.m., Eastern Time (10:00 am Pacific Time)         
                                                                            
Dial in number:     1-888-539-3612 or 1-719-325-2464                        



A replay of the conference call will be available on the Company's website
www.hanweienergy.com. 


About Hanwei Energy Services Corp. 

Hanwei Energy Services Corp. is a leading manufacturer of high pressure,
fiberglass reinforced plastic ("FRP") pipe products and associated technologies
and services for the international oil and gas infrastructure industries. Hanwei
serves major energy customers in the Chinese and global energy markets. 


www.hanweienergy.com

Neither the TSX nor its Regulation Services Provider (as that term is defined in
the policies of the TSX) accepts responsibility for the adequacy or accuracy of
this release. 


FORWARD-LOOKING INFORMATION 

Certain information in this press release is forward-looking within the meaning
of certain securities laws, and is subject to important risks, uncertainties and
assumptions a description of which is set out in the risk factors section of the
Company's Annual Information Form dated June 18, 2013 and Management Discussion
and Analysis for the year ended March 31, 2013 both of which are filed with
Canadian securities regulators and available on SEDAR at www.sedar.com. The
forward-looking information in this press release describes the Company's
expectations as of the date of this press release.


THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE
EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND,
ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE
UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS
INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY
DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS
REQUIRED BY APPLICABLE SECURITIES LEGISLATION.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Hanwei Energy Services Corp.
Graham Kwan
Executive Vice President,
Strategic Development and Corporate Affairs
604-685-2239
gkwan@hanweienergy.com


Hanwei Energy Services Corp.
Yucai (Rick) Huang
Chief Financial Officer
604-685-2239
yhuang@hanweienergy.com
www.hanweienergy.com

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