FFHL Fuwei Films Holdings Company Ltd

Fuwei Films (Holdings) Co., Ltd. (NASDAQ: FFHL) announced that revenues for the year ended December 31, 2006 increased 26.2% from 2005 and highlighted progress since the close of the initial public offering in December 2006. Year-End Results Revenues for full year 2006 were RMB 436.8 million (US$55.9 million) compared to RMB 346.2 million for 2005. The increase in revenues was largely attributable to an increase in the sales of heat-sealable films, high-gloss films, and other special films reflecting a shift in its customers� use of high-end special films for packaging, and continued growth in export sales to the United States, Canada and Korea. Net Income for the 2006 Fiscal Year was RMB 67.7 million (US$8.7 million) or US$7.88 per share compared to RMB 57.1 million for the comparable period in 2005. Progress in Construction of New Line Mr. Xianoan He, Chairman and CEO, stated, �Since our initial public offering in December 2006, we have progressed in the construction of our new thick BOPET film (film that is between 50 to 200 microns thick) production line located in Weifang Hi & New Technology Development Zone. Progress continues in the construction of the facility that will house the new equipment. We expect this new BOPET film production line to begin commercial production approximately one year from now.� Rental of Production Facility Mr. He also announced, �our subsidiary, Fuwei Films (Shandong) Co., Ltd (�Shandong Fuwei�) entered into a rental agreement with Shandong Weifang Legang Food Co., Ltd (�Legang�) for the use of a BOPET film production line. We estimate that this production facility could add up to 5,000 tons per year of new output for our business.� The production line from Legang is located, less than 100km from the Shandong Fuwei plant and is currently being used for BOPET film manufacturing. Fuwei plans to primarily use this equipment to produce a line of thick film products. Capitalizing on its name recognition and marketing network, Fuwei plans to enter segments of the thick film market by renting this production line. Fuwei commenced a trial operation of this rental line on April 1, 2007. Receipt of Government Granted Industrial Development Financing Mr. He also announced, �our subsidiary, Fuwei Films (Shandong) Co., Ltd. (�Shandong Fuwei�) obtained a low interest loan from the industrial development fund administered by the local government in Shandong.� Shandong Fuwei is located in the Weifang Hi & New Technology Development Zone of Shandong Province in China, an industrial area dedicated to technology enterprises. In 2006, the Weifang government established the Hi & New Technology Project Industrial Development Fund (�the Fund�) for the purpose of providing low cost financing to assist business with the promotion of independent innovation and technical R&D ability of local enterprises and to support the development of local high and new technology companies. The Fund provides a low interest rate loan from the government to enterprises - such discounted interest rate applied to loans from the Fund is 50% lower than the prevailing interest rate published by People�s Bank of China. Shandong Fuwei was paid an initial RMB 16.5 million (equivalent to US$2.1 million), and the payment of an additional RMB 3.5 million (equivalent to US$0.4 million) is pending upon the arrival of new equipment to the facility. This money will be used for the construction of the Fuwei technology center testing production line project. It is believed that this testing line will enhance the innovation and new product development of Shandong Fuwei, and improve the competitiveness of the company. The Company will host an investors� conference call Thursday April 5 at 9:00 am Eastern time. To listen in to the call please from USA 800-366-7449 and from outside the USA 303-262-2211 and ask for the call for Fuwei Films call. About Fuwei Films: Fuwei develops, manufactures and distributes high quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei�s BOPET film is widely used to package food, medicine, cosmetics, tobacco and alcohol, as well as in the imaging, electronics, and magnetic products industries. For more information about the Company, please visit the Company�s website at http://en.fuweifilms.com or www.fuweifilms.com or review the Company�s annual report and other documents for free at www.sec.gov. Statement of Operations (in thousands except per share) Year Ended Year Ended Year Ended Dec. 31, 2006 Dec. 31, 2006 Dec. 31, 2005 US$ RMB RMB Revenues 55,981� 436,884� 346,205� Gross Profit 13,140� 102,543� 87,115� Operations Income 9,997� 78,017� 65,999� Interest Expense (1,651) (12,884) (13,747) Income before taxes 8,767� 68,422� 57,069� Net Income 8,670� 67,665� 57,128� Net Income per share, basic 7.88� 61.46� 74,096� Net Income per share, diluted 7.86� 61.37� 74,096� Additional details regarding the statement of operations, balance sheet and cash flow can be found in the Company�s annual report on Form 20-F filed with the SEC. This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described by the forward-looking statements. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. The forward-looking statements included in this�press release are subject to risks, uncertainties and assumptions about our businesses and business environments. These statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which are include, among other things,�competition in the BOPET film industry; growth of, and risks inherent in, the BOPET film industry in China;�uncertainty as to future profitability and our ability to obtain adequate financing for our planned capital expenditure requirements;�uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years.