Summary on SRRY.OB

As a quick update on the blog — summary on SRRY.OB:

What they do

Sancon Resources Recovery, Inc. is an environmental service and waste management

company that operates recycling facilities in China and Australia. Sancon

specializes in the collection and recovery of industrial and commercial solid

wastes such as plastic, paper, cardboard, and glass. The recycled materials are

re-used by Sancon’s manufacturing customers in China to make a wide variety of

new products including outdoor furniture, construction materials, building

materials, road surface, and various new products. Sancon’s China operation is

licensed by the Chinese government for waste management services, and is

certified with ISO 9001 and ISO14001 standards. Sancon currently ships more than

25,000 tons of recycled industrial and commercial waste material annually to its

customers in China. Sancon’s main operations and services include industrial

waste management consulting, collection and reprocess of recyclable materials

such as plastic, glass, cardboard, and paper sourced from suppliers such as

Hella, Toyota, Full Views, Wastech Holdings, Supagas, and Priority etc, before

its re-entry into manufacture cycles as raw materials. Sancon also provides its

full waste management services to large consumer products maker such as Pernod

Ricard. The use of recycled material is both environmentally friendly and is a

key part of today’s competitive manufacturing process to lower costs. As China

gains global manufacturing dominance and oil price soars, Chinese manufacturers

are increasingly turning to recycled materials to lower its costs, resulting

tremendous demand for recycled materials import. The major customers for Sancon

are Chinese manufacturers and recycled material traders which are located mainly

in the Chinese provinces of Guangdong, Zhejiang, Fujian and Hong Kong.

Sales are generated by service charges and the sale of recyclable materials. The

sales in Q2 2008 were $2,940,268, representing a 251% increase compared to the

sales of $838,658 in same period of 2007. The sharp increases were mainly due to

the significant sales amount contributed from Sancon SH and CS, which started

their operation in Q3 2007 and Q1 2008. On August 15, 2007, the Company

completed the acquisition of 70% of the equity interest in Sancon Resources

total number of outstanding share of Crossover. Crossover did not have any

operations or assets/liability prior to 2008. The both companies are engaged in

recycling material trading business. And sales for six months ended on June 30

for the year 2008 and 2007 were $5,889,264 and $1,531,706 respectively.

- O/S = 21.7 mil

- Market cap roughly 12 mil

- 6 months sales = 5.8 mil

- Margins increased from 17.9% in 2Q 2007 to 46.2% in 2Q 2008

- Gross profit increased to $2.87 million in the 2008 six months compared to $0.31 million in the year-earlier period

- 2008 net income for the first six months was $1.03 million, or $0.05 per diluted share, compared to a loss of $(0.22) million, or a loss of $(0.01) per share in the year ago period

Business Outlook

The Company expects to generate 2008 revenue of between $11 million and $12 million and net income between $2 million and $2.1 million and $0.09 to $0.1 per share

We are pleased that we have achieved another profitable quarter, while positioning the Company for growth throughout 2008 and 2009, said Jack Chen, Sancons Chief Executive Officer. The recent announcement that we have been selected by the largest personal computer manufacturer in China to collect and process waste materials reflects the growing recognition in China of the importance of recycling. Companies are increasingly embracing these initiatives, endorsed by the Chinese government, to become more environmentally responsible. We have been positioning Sancon to benefit from these trends by investing in technology and recycling plants and depots to support growth in new Chinese cities.