Sancon Announces 2010 First Quarter Results

Sancon Resources Recovery, Inc. (OTCBB:SRRY - News) (or "Sancon”), a growing environmental services and waste recycling company with operations in both China and Australia, announced today results for its 2010 first quarter ended March 31, 2010.

Financial highlights of 2010 first quarter:

• Revenue of $3.07 million, an increase of 18% compare to the same period in 2009.
• Gross profit of $1.53 million, an increase of 17% compare to the same period in 2009.
• Gross margin stayed at around 50%.
• EBITDA of $0.63 million, an increase of 0.02% compared to the same period in 2009.

Results of Operations - Comparison between the three months ended March 31, 2010 and the same periods in 2009

The Company generated revenue of $3.07 million in the 2010 first quarter, representing $474,014 or 18% increase compared to $2.59 million in the 2009 first quarter. Revenue from China operation increased $194,048 or 9% from $2.21 million in 2009 first quarter to $2.41 million in 2010 first quarter. Revenue from Australia operation has increased by $279,966 or 73% from $382,382 in 2009 first quarter to $662,348 in 2010 first quarter. The Australia operation has begun to recover from the global economic crisis. Sancon expects China and Australian operation will continue to improve in the coming quarters.

Gross profit increased $217,840 or 17% to $1.53 million in the first quarter 2010 from $1.31 million in the first quarter 2009. Gross profit of China operation increased $70,445 or 7% from $1.07 million in 2009 first quarter to $1.14 million in 2010 first quarter. In Australia, gross profit also increased by $147,395 or 62% from $239,192 in 2009 first quarter to $386,587 in 2010 first quarter. Gross margin dropped slightly from 51% in the 2009 first quarter to 50% in the 2010 first quarter.

Net income for 2010 first quarter was $0.567 million, or $0.03 basic earnings per share and $0.02 diluted earnings per share, compared to $0.573 million, or $0.03 basic and diluted earnings per share one year ago. Although the sales and gross profit increased in the first quarter 2010, the raise in options expenses and new business developing expenses lead to the slight decrease in net income. The company continues to strengthen its balance sheet position with $4.2 million cash balance.

"In spite of the continuous challenging and uncertain economic environment in 2010 first quarter, our revenue and gross profit continues to increase. We begin to spend more in new marketing and business development efforts in 2010. We have started to expand into other recycled waste management areas and begun aggressively seeking and selecting consolidation opportunities,” said Jack Chen, Sancon’s Chief Executive Officer. "Our new waste paper and cardboards collection business will be starting in June 2010. We expect it provides additional $4 million in revenue in on an annualized basis in the first year. We will be updating our shareholders on our expansion progress throughout the year.”

About Sancon Resources Recovery Inc

Sancon Resources Recovery, Inc. is an environmental service company specializes in the collection, processing, and selling of the reprocessed waste material such as plastic, metal, paper, cardboard, glass etc. The recycled materials are re-used by Sancon's manufacturing clients to make a wide variety of new products that include outdoor furniture, construction materials, building materials, packaging materials, and various other products. The use of recycled raw materials is both environmentally friendly and an important method to lower production costs for manufacturers to stay competitive. Sancon also invests in the renewable energy area by sponsoring the development of biofuel production technique that thrives on the supplies of carbon dioxide. Sancon currently has recycling plants based in Melbourne Australia and China. For more information please visit: www.sanconinc.com

Forward-looking statements:

The statements made in this press release, which are not historical facts, may contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the company's operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The company disclaims any obligation to update information contained in any forward-looking statement.