China Keli Announces Q1 2017 Results With Quarterly Year-Over-Year Revenue Up by 6.7% With Loss Recorded

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 3, 2016) - China Keli Electric Co., Ltd. (TSX VENTURE:ZKL) ("Keli" or the "Company") today announced the financial and operating results for the three months ended July 31, 2016.

For the three months ended July 31, 2016 ("Q1 2017"), total revenue was $3,606,267, an increase of 6.7% over Q1 2016 of $3,381,208, caused by the increase in revenue from products sales. Gross profit in Q1 2017 was $689,201 representing 19.1% of revenue which decreased 48.7% over Q1 2016 of $1,344,840, which was 39.8% of revenue. Operating expenses were $1,233,216 in Q1 2017, a decrease from $1,320,744 in Q1 2016, caused by the decrease of sales related commission expenses. The decreased financing costs of $299,298 in Q1 2017 ($332,333 in Q1 2016) further decreased the total expenses. Although the total expenses decreased, the Company recorded a net loss of $696,414 in Q1 2017, compared with a net loss of $246,748 in Q1 2016 because of the significant decrease of gross profit. Basic and diluted loss per share ("EPS") were -$0.008 in Q1 2017, compared with -$0.003 in Q1 2016. EBITDA was negative $110,566 in Q1 2017, a decrease from $323,794 in Q1 2016. After accounting for an unrealized foreign exchange translation loss of $301,047, the Company reported total comprehensive deficit of $997,461 in Q1 2017, compared with total comprehensive income of $348,633 in Q1 2016. The Company's unrealized foreign exchange income on translation of the Company's functional currency to its reporting currency is subject to fluctuations in the exchange rate between the RMB and the Canadian dollar in each reporting period.

As of July 31, 2016, the Company had total cash and cash equivalents of $603,090 compared with $462,107 as of April 30, 2016. Accounts receivable was $16,980,333 as at July 31, 2016, an increase of 13.5% compared with $14,962,003 as at April 30, 2016, which was attributed to the slow cash collection from the customers during the period. The Company's working capital deficit increased to negative $9,378,788 as at July 31, 2016 from negative $8,439,892 as at April 30, 2016.

The functional currency of the Company and its subsidiaries is Chinese Yuan (also known as "Renminbi" or "RMB"). The financial and operating results of the relevant periods have been translated into Canadian dollars. Depending on the magnitude of changes in foreign currency exchange rates, the impact on the financial and operating results may or may not be material.

Full financial results of the Company for the three months ended July 31, 2016 are available on SEDAR at www.sedar.com.

About China Keli Electric Company Ltd.

China Keli Electric Company Ltd. specializes in the manufacturing and installation of electrical components and equipment, including pre-assembled mini substations, electrical controllers, pressurized and vacuumed switchgears and circuit breakers.

For further company information please access our website: www.zkl.cc

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

This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Keli's business are more fully discussed in the Company's disclosure materials filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars unless noted otherwise.