Honghua Entered into Strategic Cooperation Agreement with Volant Industry

Tuesday, 20 June 2017, 07:30 HKT/SGT

Jointly Expand International Market and Realize the Maximum Synergistic Effect

HONG KONG, June 20, 2017 - (ACN Newswire) - Honghua Group Limited (Stock Code: 196.HK), a leading global land drilling rig manufacturer and the largest land drilling equipment exporter in PRC, announced that Hinghua has entered into a Strategic Cooperation Agreement with China Volant Industry Co., Ltd. ("Volant Industry"), the main international operation platform of China Aerospace Science and Industry Corporation ("CASIC"), on 16 June 2017. The two parties will jointly expand the production capacity in the field of oil and gas equipment manufacturing and the oil and gas international engineering business, in order to tap into the global market.

Pursant to the Strategic Cooperation Agreement between Honghua and CASIC, both parties will jointly develop international trade in the overseas oil and gas field, explore opportunities for cooperation with overseas capital, international trade and international engineering services, to enlarge the scale of international operation, further improve the operation network and realize the rapid development of business. The two parties will also collaborate in overseas business centre integration through the information and resource sharing mechanisms to exert a positive synergistic effect.

CASIC has been operating in international market for many years. It has also ebstablished 11 overseas representative offices, built a mature international sales network and accumulated a wealth of international business experience. According to Honghua's Strategic Cooperation Agreement with CASIC, the two parties will possess priority to make investment in certain markets, such as Middle East, North Africa, Russian Area, South America, South Asia and Southeast Asia, to expand the export volume of oil and gas equipment, production cooperation, international engineering and other business segments. Both parties will serve each other as strategic partner in the oil and gas field.

In addition to the above Strategic Cooperation Agreement, Honghua signed two Memorandums of Understanding with Uzbekistan National Holding Company and Eriell Group respectively, in order to promote bilateral cooperation in the field of oil and gas exploration.

Mr. Chen Yajun, Chairman of Honghua commented, "By introducing CASIC as the strategic shareholder of Honghua, both parties built a closer relationship of cooperation. The positive synergistic effect can be exercised in market expansion and other aspects. The Strategic Agreement between Honghua and Volant Industry, the subordinate units of CASIC, will lead Honghua to next development milestone, usher in new international opportunities and create more tremendous business value. We believe, by leveraging on the resources of CASIC, this agreement will promote Honghua to further extend overseas oil and gas equipment business and international oil and gas engineering business, especially to explore the business opportunities from the oil-rich countries along "One Belt One Road", on the basis of existing customers and marketing network, to realize the business expansion of Honghua and achieve the operational objective of being a world-class oil and gas equipment manufacturing entreprise."

About Honghua Group Limited (Stock Code: 196.HK)
Honghua is the only overseas listed platform controlled by China Aerospace Science and Industry Corporation (CASIC), and positioned as the energy equipment business platform of CASIC. As one of the leading land drilling equipment manufacturers in the world and the largest land drilling rig exporter in PRC, Honghua is primarily engaged in manufacturing conventional land drilling rigs, digital drilling rigs, accessories of drilling rigs, as well as the parts and components for the drilling rigs or for the maintenance of the drilling rigs in operation. Leveraging on the strong R&D strength, high-quality production facilities and mature international sales network, the Group's 80% products have been sold to a large number of famous enterprises all over the world, including major oil-production regions such as North America, Middle East, and emerging markets including South America, India, Russia, China and Africa. Based on the existing solid foundation of the land drilling rigs equipment, Honghua implements diverse development strategies, and expand to become the integrated enterprise which is involved in the interaction development of onshore and offshore areas and three major sectors, including equipment manufacturing and oil and gas resources development (especially the unconventional oil and gas area), as well as engineering services. In the future, Honghua and CASIC will have in-depth cooperation in advanced energy equipment manufacturing and oil & gas field services field and achieve synergy in R&D, project execution and market expansion, to become an international leading integrated solution service provider combining equipment manufacturing and services in oil & gas industry.

Uzbekistan National Holding Company
Uzbekistan National Holding Company is a large state-owned enterprise which specialize in oil and gas exploration, mining, processing and marketing in Uzbekistan. Uzbekistan is rich in oil, natural gas, coal resources, of which is listed as the world's top ten mining countries of natural gas.

Eriell Group
Eriell Group is an international drilling service company with operations in Russia, Central Asia, South Asia and the Middle East.

Topic: Press release summary Sectors: Daily Finance, Energy, Alternatives, Daily News
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