China Keli Announces Q1 2018 Results

Vancouver, British Columbia--(Newsfile Corp. - October 31, 2017) - China Keli Electric Co., Ltd. (TSXV: ZKL) ("Keli" or the "Company") today announced the financial and operating results for the three months ended July 31, 2017.

For the three months ended July 31, 2017 ("Q1 2018"), total revenue was $5,489,677, an increase of 52.2% over Q1 2017 of $3,606,267, caused by the increase in revenue from products sales. Gross profit in Q1 2018 was $1,208,070 representing 22.0% of revenue which increased 75.3% over Q1 2017 of $689,201, which was 19.1% of revenue. Operating expenses were $1,149,350 in Q1 2018, a decrease from $1,233,216 in Q1 2017, caused by the decrease of salary and benefit, entertainment, travelling expenses, office expenses, and research and development expenses. The decreased financing costs of $276,690 in Q1 2018 ($299,298 in Q1 2017) further decreased the total expenses. Although the total expenses decreased, the Company still recorded a net loss of $43,746 in Q1 2018, compared with a net loss of $696,414 in Q1 2017. The significantly reduced loss resulted from the increased revenue and gross profit along with the effective cost control of operating expenses which are expected to be continued. Basic and diluted loss per share ("EPS") were -0.05 cents in Q1 2018, compared with -0.8 cents in Q1 2017. EBITDA was $507,012 in Q1 2018, a turn around increase from negative $110,566 in Q1 2017. After accounting for an unrealized foreign exchange translation gain of $247,531, the Company reported total comprehensive income of $203,785 in Q1 2018, compared with total comprehensive loss of -$997,461 in Q1 2017. 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, 2017, the Company had total cash and cash equivalents of $395,288 compared with $737,145 as of April 30, 2017. Accounts receivable was $12,890,390 as at July 31, 2017, an increase of 11.5% compared with $11,559,177 as at April 30, 2017, which was attributed to the increase in sales of product revenue during the period. The Company's working capital deficit improved to negative $13,063,412 as at July 31, 2017 from negative $14,171,173 as at April 30, 2017.

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, 2017 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 information, please contact:

CHINA KELI ELECTRIC COMPANY LTD.

Philip Lo, Chief Financial Officer
Tel. No.: (86) 13632 173732
Email: philip@zkl.cc

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.