BEIJING, CHINA--(Marketwire - May 2, 2011) - Mountain China Resorts (Holding) Limited (TSX VENTURE:MCG) ("MCR" or the "Company"), today reported its financial results for the fiscal year ended December 31, 2010. MCR reports its results in Canadian Dollars.

The 2010 fiscal year was a challenging year for MCR as the Company faced severe constraints and numerous challenges. The management and operating teams endured through the past year with their support and commitment to the Company. With several major corporate developments underway we anticipate positive results in 2011.

Financial Results

Total revenue and net results from continuing operations were from resort operations only for the year ended December 31st, 2010 and 2009. No real estate sales activities were undertaken during these periods. Revenue from continuing operations totaled $4.37 million (RMB28.76 million) for the 2010 year versus $2.76 million (RMB16.03 million) in the 2009 year. Operating EBITDA from continuing operations for the 2010 year were negative $5.73 million (negative RMB37.73 million) compared to negative23.8 million (negative RMB143.6 million) in the 2009 year.

Resort operation expenses from continuing operations totaled $6.24 million (RMB41.03 million) for the 2010 year compared to $9.17 million (RMB53.68 million) in the 2009 year.

Corporate general and administrative expenses ("G&A expenses") from continuing operations totaled $4.59 million (RMB30.21 million) for the 2010 year compared to $17.75 million (RMB108.10 million) in the 2009 year. This amount mainly comprised executive employee costs, public company costs, and corporate information technology costs. The above mentioned figures have not included the data from Changchun Resort, which discontinued its operation in 2010.

Depreciation and amortization expense from continuing operations totaled $6.91 million (RMB 45.47 million) for the 2010 year compared to $7.87 million (RMB 46.50 million) in the 2009 year. The depreciation and amortization charges are provided using the straight-line method over the estimated useful lives of each asset category and the term of land use rights under the Group's accounting policies.

The Group incurred financial costs of $4.05 million (RMB26.63 million) for the 2010 year from continuing operations compared to $7.58 million (RMB 43.07 million) for the 2009 year. Financial cost mainly includes loan interest, bank administrative fees, and service charges.

Cash and cash equivalents totaled $2.4 million and working capital was $5.6 million as at December 31, 2010. Working capital included amounts due from related parties, accounts receivable, other receivables and prepayments, prepaid lease payment (current potion).

Operations and Real Estate Development

Sun Mountain Yabuli

Revenue in Yabuli Resort for the fiscal 2010 year was $2.38 million with operations EBITDA of negative $1.86 million. Operations expenses for the year consisted primarily of the resort's staff costs and related benefits of $2.31 million, cost of goods for food and beverage and retail products of $0.18million and utility related expenses of $1.27 million.

The Sun Mountain Yabuli Resort was closed after winter operations on April 4, 2010 and re-opened for its winter 2010/11 operations on November 27th, 2010. Winter operations for the 10/11 season closed on March 20th, 2011.

Sun Mountain Yabuli – Real Estate

Since May 2010, the Company has been working on the exterior decoration of the 55 homes out of a total of 75 homes of which three were completed with all finishing. As of the date hereof, 55 homes are ready for sale with final internal decoration subject to the request of buyers. The sales team is developing in order to market the homes extensively across China. Buyers, who are members of the China Entrepreneurs Forum and other prominent businessmen in China, have indicated their intention to buy 10 homes and have provided refundable deposits. However, no formal sale and purchase agreements have yet been signed with any of the potential buyers. Further actions are still in process to finalize these sales.

Financial Highlights

2010 YEAR2009 YEAR
Continuing Operations
Resort Operations Revenue4,37228,7632,75816,027
Resort Operations Expenses(6,237)(41,033)(9,167)(53,680)
Resort Operations EBITDA(1,865)(12,270)(6,409)(37,653)
Add: Other Income7224,7503332,125
Less: Corporate General and Administrative Expenses(4,592)(30,211)(17,753)(108,100)
Total Operating EBITDA from Continuing Operations(5,735)(37,731)(23,829)(143,628)
Add: Interest Income171125833,426
Less: Arretion expense of convertible debenture(403)(2,651)--
Add/(Less): Exchange Gain/(Loss), net(1,274)(8,382)3802,294
Less: Depreciation and Amortization(6,912)(45,474))(7,870)(46,500)
Less: Finance Costs(4,064)(26,625)(7,581)(43,068)
Less: Impairment of Property and Equipment(328)(2,158)(3,290)(21,000)
Less: Impairment of investments--(22,700)(165,881)
Add: Recovery of Future Income Taxes(10)(66)50261
Loss from continuing operations(18,709)(123,085)(64,257)(393,096)

Balance Sheet Key Indicators

(in thousands of Canadian dollars except for ratios)December 31, 2010December 31,2009
Current Ratio(1)1.23:10.23:1
Free Cash2,4041,636
Working Capital(2)5,648(57,773)
Total Assets189,626193,308
Total Debt(3)117,760121,852
Total Equity(4)71,86571,456
Total Debt to Total Equity Ratio1.64:11.71:1
(1)Current ratio is defined as total current assets divided by total current liabilities
(2)Working capital is defined as total current assets less total current liabilities
(3) Total debt is defined as total current liabilities plus total non-current liabilities
(4)Total equity is equal to the total shareholders' equity

Major Corporate Developments Subsequent to December 31, 2010

Subsequent to the December 31, 2010 fiscal year end, MCR announced a number of significant financial and operational developments, which are expected to enable the Company to resume positive operations at Sun Mountain Yabuli Resort and potentially expand its operations to complimentary resort properties when appropriate.

Completion of $7.6 million Convertible Bond with Century Zone Limited

On February 18th, 2011, the Company completed its convertible bond financing (the "Offering") with Century Zone Limited for aggregate gross proceeds of $7.6 million. The convertible bond is due on February 17, 2013, has an interest rate of LIBOR + 3% and a conversion price of $0.15. As mentioned in a previous press release, the Company will extend an offer to existing shareholders who are "accredited investors", to participate in the Offering on the same terms as those entered into with Century Zone Limited up to an aggregate amount of $2,000,000 and any such additional subscriptions was originally expected to complete on or prior to about May 31, 2011. However, as of the date hereof, the Company has not yet launched the said offering of convertible bond to other shareholders. The Company will issue another press release reporting the update to shareholders and investors in due course.

Club Med Resorts management has improved the revenue from Sun Mountain Yabuli Resort first Quarter 2011

The number of guests, which includes lodging guests and non-lodging guests, reached 41,212 for the period from January 1, 2011 to March 31, 2011 whereas the number of guests only reached 33,491 during the same period in 2010, which represents an increase of 23.05%. The income from hotels and the ski resort has reached RMB27,205,959 for the period from January 1, 2011 to March 31, 2011 whereas the revenue only reached RMB11,718,599 for the same period during the same period in 2010, which represents an increase of approximately 132.16% compared to the same period last year.

Appointment of new directors

As announced on April 24, 2011, the board has approved the appointment of Mr. Hongfei Zhang and Mr. Li Wing Kuen, Philip to the board of directors (the "Board") subject to TSXV approval. The appointment date for Mr. Li and Mr. Zhang is April 1, 2011.

Change of auditor

Deloitte Touché Tohmatsu ("Deloitte") tendered its resignation at its own initiative as auditor of the Company effective February 14, 2011.

As announced on April 27, 2011, the Board has approved the appointment of DNTW Chartered Accountants LLP as the successor auditor of the Company, with such appointment being effective as of April 8, 2011. The appointment of DNTW is subject to the approval of the Company's shareholders at the next annual general meeting.

DNTW Chartered Accountants, LLP is Canadian firm of Chartered Accountants with local offices in seven major Canadian cities, namely, Calgary, Edmonton, Markham, Montreal, Ottawa, Saskatoon and Toronto. The website of DNTW is

About MCR

MCR is the premier developer of four season destination ski resorts in China. MCR is transforming existing China ski properties into world-class, four seasons luxury mountain resorts with excellent real estate investment opportunities for discerning buyers. In February 2009, the Company's Sun Mountain Yabuli Resort was awarded Best Resort Makeover in Asia by TIME Magazine. Yabuli is also the permanent home of the China Entrepreneur's Forum the leading and most influential community of China's most distinguished and successful entrepreneurs and business leaders with over 5,000 members from across a variety of key industries.


Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, and actual results may vary from the forward-looking information. Implicit in this information are assumptions regarding future operations, plans, expectations, anticipations, estimates and intentions, such as the plans to develop the ski resorts in China. These assumptions, although considered reasonable by MCR at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of MCR are subject to a number of risks and uncertainties, including general economic, market and business conditions, uncertainty relating to land use rights, adverse industry events for the ski and real estate industries, MCR's ability to make and integrate acquisitions, the requirements of recent Chinese regulations relating to cross-border mergers and acquisitions, the inability to obtain required approvals or approvals may be subject to conditions that are unacceptable to the parties, changing industry and government regulation, as well as MCR's ability to implement its business strategies, dispose of assets or raise sufficient capital, seasonality, weather conditions, competition, currency fluctuations and other risks, and could differ materially from what is currently expected as set out above.

Forward-looking information contained in this press release is based on current estimates, expectations and projections, which MCR believes are reasonable as of the date of this press release. MCR uses forward-looking statements because it believes such statements provide useful information with respect to the operation and financial performance of MCR, and cautions readers that the information may not be appropriate for other purposes. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While MCR may elect to, it does not undertake to update this information at any particular time except as required by applicable law.


Throughout this news release we use certain non-GAAP measures such as the term "EBIDTA" to analyze operating performance. We define EBITDA as operating revenues less operating expenses from continuing operations and therefore reflects earnings before interest, income tax, depreciation and amortization, non-controlling interest and any non-operating and non-recurring items. These non-GAAP measures do not have a standardized meaning prescribed by GAAP and may not be comparable to similarly titled measures presented by other companies. We refer you to MCR's Management's Discussion & Analysis where we have included reconciliations between any non-GAAP measures mentioned in this news release and the closest GAAP measure, if applicable. These non-GAAP measures are referred to in this news release because we believe they are indicative measures of a company's performance and are generally used by investors to evaluate companies in the resort operations and resort development industries.

The TSX Venture Exchange nor its Regulation Services Provider does not accept responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange nor its Regulation Services Provider has neither approved nor disapproved the contents of this press release.

Contact Information:

Mountain China Resorts
Mr. Wang Lian
Director of Corporate Finance & Investor Relations