SEMI-ANNUAL REPORT I. Important Notes

Transcription

1 CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD. (Incorporated in the People s Republic of China) SEMI-ANNUAL REPORT 2012 I. Important Notes The Board of Directors, the Board of Supervisors, directors, supervisors and senior executives of China International Marine Containers (Group) Co., Ltd. (hereinafter referred to as the Company ) hereby undertake that the information and data contained in this report are free from false records, misleading statements or significant omissions, and we shall assume individual and joint liabilities for the authentication, accuracy and integrity of the contents of this report. All directors attended the board session for reviewing this report. The financial report for the first half of 2012 has not been audited by a CPAs firm. Mr. Li Jianhong, Principal of the Company, Mr. Jin Jianlong, Person-in-charge of the accounting work and Person-in-charge of the accounting organ (Principal of accounting), hereby declare that the financial report enclosed in this semi-annual report is true and complete. English Translation for Reference Only. Should there be any discrepancy between the two versions, the Chinese version shall prevail. II. Company Profile (I)Basic information A-share code B-share code A-share abbreviation ZJJT B-share abbreviation ZJB Stock exchange listed with Shenzhen Stock Exchange Legal Chinese name of the Company 中国国际海运集装箱 ( 集团 ) 股份有限公司 Abbr. of the legal Chinese name of the Company 中集集团 Legal English name of the Company CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD Abbr. of the legal English name of the Company CIMC Legal representative of the Company Li Jianhong Registered address R&D Center of CIMC, No. 2 Gangwan Avenue, Shekou, Nanshan District, Shenzhen, Guangdong Province, P.R.C Postal code for the registered address Office address R&D Center of CIMC, No. 2 Gangwan Avenue, Shekou, Nanshan District, Shenzhen, Guangdong Province, P.R.C Postal code for the office address Internet website of the Company address shareholder@cimc.com 1

2 (II)For contact Company Secretary Securities Affairs Representative Name Yu Yuqun Wang Xinjiu R&D Center of CIMC, No. 2 Gangwan R&D Center of CIMC, No. 2 Gangwan Contact address Avenue, Shekou, Nanshan District, Avenue, Shekou, Nanshan District, Shenzhen, Guangdong Province, P.R.C Shenzhen, Guangdong Province, P.R.C Tel. (86) (86) Fax (86) (86) shareholder@cimc.com shareholder@cimc.com (III)About information disclosure and where the semi-annual report is placed Newspapers designated by the Company for information disclosure Internet website designated by CSRC for disclosing the semi-annual report Where the semi-annual report is placed China Securities Journal, Securities Times, Shanghai Securities News and Hongkong Ta Kung Pao Company Secretary Office and Financial Management Dept. III. Financial and Business Highlights (I)Major accounting data and financial indexes Any retrospective adjustment in previous financial statements? Yes No Inapplicable Major accounting data Major accounting data Reporting period (Jan.-Jun.) Same period of last year Increase/decrease (%) Gross operating revenues (RMB 000) 27,364, ,478, % Operating profit (RMB 000) 1,439, ,729, % Total profit (RMB 000) 1,493, ,817, % Net profit attributable to shareholders of the Company (RMB 000) Net profit attributable to shareholders of the Company after deducting non-recurring gains and losses (RMB 000) Net cash flow from operating activities (RMB 000) As at the end of this reporting period 933, ,807, % 906, ,798, % -2,107, ,161, % As at the end of last year Increase/decrease (%) Total assets (RMB 000) 65,231, ,361, % Owners equity attributable to shareholders of the Company (RMB 000) 18,415, ,633, % Share capital (share) 2,662,396, ,662,396, % Major financial indexes Major financial indexes Reporting period (Jan.-Jun.) Same period of last year Increase/decrease (%) Basic EPS (RMB Yuan/share) % Diluted EPS (RMB Yuan/share) % Basic EPS after deducting non-recurring gains and losses (RMB Yuan/share) % Fully diluted ROE(%) 5.07% 15.07% -10% 2

3 Weighted average ROE(%) 4.93% 16.19% % Fully diluted ROE after deducting non-recurring gains and losses(%) Weighted average ROE after deducting non-recurring gains and losses(%) 4.92% 15.02% -10.1% 4.79% 16.14% % Net cash flow per share from operating activities (RMB Yuan/share) Net assets per share attributable to shareholders of the Company (RMB Yuan/share) As at the end of this reporting period % As at the end of last year Increase/decrease (%) % Liability/asset ratio(%) 68.2% 66.42% 1.78% (II)Accounting data differences under the domestic and overseas accounting standards 1. Net profit and net asset differences between financial reports disclosed according to the international and Chinese accounting standards respectively Applicable Inapplicable Unit: RMB 000 As per Chinese accounting standards Net profit attributable to shareholders of listed company Reporting period Same period of last year Items and amounts adjusted in accordance with international accounting standards: Owners equity attributable to shareholders of listed company As at the end of this reporting period As at the beginning of this reporting period 933, ,807, ,415, ,633, Other , , , As per international accounting standards 934, ,810, ,410, ,627, Net profit and net asset differences between financial reports disclosed according to the overseas and Chinese accounting standards respectively Applicable Inapplicable 3. Notes to accounting data differences under the domestic and overseas accounting standards Mainly amortization of the revaluation surplus of fixed assets and intangible assets in previous years (III)Items of non-recurring gains and losses Applicable Inapplicable Items Jan.-Jun (RMB 000) Gains and losses on disposal of non-current assets 4, Government grants recognized in the current year, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the country s unified standards Capital occupation fees received from non-financial enterprises that are included in current gains and losses Gains and losses on fair value changes of transactional financial assets and liabilities, and investment gains on disposal of transactional financial assets and liabilities and available-for-sale financial assets, except for the effective hedging business related to the Company s normal operation 36, , ,

4 Other non-operating incomes and expenses besides the items above 13, Minority interests effects -2, Income tax effects -4, Total 27, IV. Changes in Share Capital and Particulars about Shareholders (I)Changes in share capital 1. Statement of changes of shares Applicable Inapplicable I. Shares subject to trading moratorium Before the change Increase/decrease (+, -) After the change Number Proportion (%) Issuan ce of new shares Bonus shares Capitaliz ation of public reserve fund Others Subtot al Number Proportio n (%) 372, % , % 1. State-owned shares % % 2. State-owned legal person shares % % 3. Other domestic shares % % Including: Shares held by domestic non-state-owned legal persons Shares held by domestic individuals 4. Shares held by overseas shareholders Including: Shares held by overseas legal persons Shares held by overseas individuals 5. Shares held by senior management staff II. Shares not subject to trading moratorium 1. Ordinary shares denominated in RMB 2. Domestically listed foreign shares 3. Overseas listed foreign shares % % % % % % % % % % 372, % , % 2,662,023, % ,662,023, % 1,231,544, % ,231,544, % 1,430,478, % ,430,478, % % % 4. Others % % III. Total shares 2,662,396, % ,662,396, % 2. Changes of shares subject to trading moratorium Applicable Inapplicable (II)Issuance and listing of securities 4

5 1. Securities issues in the previous three years Applicable Inapplicable 2. Changes of the Company s share number and structure, as well as the corresponding changes in its asset-liability structure Applicable Inapplicable 3. Existing employee shares Applicable Inapplicable (III)Shareholders and actual controller 1. Total number of shareholders at the end of the reporting period The Company had 193, shareholders in total at the end of the reporting period, including 158,887 shareholders in A shares, and 35,111 shareholders in B shares. 2. Shareholding of the top ten shareholders Name of shareholder (full name) CHINA (CIMC) LIMITED Particulars about shares held by the top ten shareholders Nature of shareholder Shareholding percentage (%) Total shares held at the period-end 5 Number of shares held subject to trading moratorium Pledged or frozen shares Status of shares Number of shares MERCHANTS Foreign INVESTMENT corporation 25.54% 679,927, COSCO CONTAINER INDUSTRIES LIMITED COSCO CONTAINER INDUSTRIES LIMITED CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI 5496 LONG HONOUR INVESTMENTS LIMITED GUOTAI JUNAN SECURITIES(HONGKON G) LIMITED Foreign corporation Foreign corporation 16.23% 432,171, % 148,320, Foreign corporation 3.42% 91,120, Foreign corporation NEW CHINA LIFE INSURANCE CO., LTD DIVIDEND Domestic DISTRIBUTION INDIVID state-owned UAL corporation DIVIDEND-018L-FH002 SHEN CHINA CONSTRUCTION BANK-CHINA ADVANTAGE GROWTH STOCK FUND 0.95% 25,322, Foreign corporation 0.91% 24,329, non Domestic non-state-owned corporation BANK OF CHINA E FUND SHENZHEN Domestic STOCK EXCHANGE 100 non-state-owned EXCHANGE TRADED corporation FUND 0.9% 23,916, % 18,769, % 14,734, TEMPLETON EMERGING Foreign MARKETS INVESTMENT corporation 0.48% 12,801, TRUST BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND Foreign corporation 0.44% 11,839, Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium

6 Applicable Inapplicable Name of shareholder CHINA MERCHANTS (CIMC) INVESTMENT LIMITED Number of shares held not subject to trading moratorium at the period-end Type Type and number of shares Number 679,927, B-share 679,927, COSCO CONTAINER INDUSTRIES LIMITED 432,171, A-share 432,171, COSCO CONTAINER INDUSTRIES LIMITED 148,320, B-share 148,320, CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI ,120, B-share 91,120, LONG HONOUR INVESTMENTS LIMITED 25,322, B-share 25,322, GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED NEW CHINA LIFE INSURANCE CO., LTD DIVIDEND DISTRIBUTION INDIVIDUAL DIVIDEND-018L-FH002 SHEN CHINA CONSTRUCTION BANK-CHINA ADVANTAGE GROWTH STOCK FUND BANK OF CHINA E FUND SHENZHEN STOCK EXCHANGE 100 EXCHANGE TRADED FUND TEMPLETON EMERGING MARKETS INVESTMENT TRUST BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND 24,329, B-share 24,329, ,916, A-share 23,916, ,769, A-share 18,769, ,734, A-share 14,734, ,801, B-share 12,801, ,839, B-share 11,839, Explanation on associated relationship among the top ten shareholders or/and acting-in-concert: Note 1: Association relationship and acting-in-concert person relation exist between COSCO Container Industries Limited and Long Honour Investments Limited, where COSCO Container Industries Limited is subordinate wholly-owned subsidiary of COSCO Pacific Limited under COSCO Group; Long Honour Investments Limited is subordinate wholly-owned subsidiary of COSCO Hong Kong (hereinafter refer to as COSCO Hong Kong )under COSCO Group; These two and other shareholders are not acting-in-concert person specified in Regulatory Provisions on Disclosure of Information on Shareholding Change of Shareholders for Listed Companies. Note 2: The Company is not aware of whether association relationship exists between other shareholders and whether they are acting-in-concert person as specified in Regulatory Provisions on Disclosure of Information on Shareholding Change of Shareholders for Listed Companies. 3. Controlling shareholder and actual controller (1)Change of the controlling shareholder and actual controller Applicable Inapplicable (2)Particulars about the controlling shareholder and actual controller The Company has no shareholder (controlling shareholder) with a shareholding over 30%. Is there a new actual controller? Yes No Inapplicable Particulars: (1) China Merchants (CIMC) Investment Limited is the wholly-owned subsidiary of China Merchants Holdings (International) Limited. China Merchants Group Limited holds 55.14% equity of China Merchants Holdings (International) Limited. China Merchants (CIMC) Investment Limited holds 25.54% equity of CIMC. Therefore China Merchants (CIMC) Holdings Limited actually holds 25.54% equity of CIMC. (2) As a liability limited company incorporated in British Virgin Islands, COSCO Container Industries Limited is a wholly-owned subsidiary under COSCO Pacific Limited. COSCO Pacific Investment Holdings Limited holds 42.71% equity of COSCO Pacific Limited. COSCO Pacific Investment Holdings Limited is a subordinate wholly-owned subsidiary under China COSCO Holdings Limited and COSCO Group holds 52.80% equity of China COSCO Holdings Limited. COSCO Container Industries Limited held 21.80% equity of CIMC through COSCO Containers Industries Limited; Long Honour Investments Limited is a subordinate wholly-owned subsidiary under COSCO Hong Kong and holds 0.95% equity of CIMC. 6

7 (3) Property and controlling relation between actual controller and CIMC (4)The actual controller controls the Company via trust or other ways of asset management. Applicable Inapplicable 4. Other corporate shareholders with a shareholding over 10% Applicable Inapplicable Name of corporate shareholder Legal representative Incorporated date Main operating business or management activities Registere d capital (RMB Ten thousand) Currency China Merchants (CIMC) Investment Limited COSCO Container Industries Limited Huang Qianru, Zhang Rizhong, Lin Wuliu Chen Keng, Zhang Jie, Xu Jian (IV)Convertible corporate bonds Applicable Inapplicable 17 Jan Investment and holding 1 HKD 26 Apr Investment and holding USD V. Directors, Supervisors and Senior Management 7

8 (I)Shareholding changes of directors, supervisors and senior management Name Office title Gender Age Beginning date of office term Ending date of office term Number of share held at the period-begin (share) Number of share added during the period (share) Number of share sold during the period (share) Number of share held at the period-end (share) Including: Number of restricted shares granted (share) Number of share options granted in the reporting period Reason of moveme nt Receives payment from the shareholder unit or other related organizations Mai Boliang Liu Xuebin Director and president Vice president Male Apr Apr , , , ,800, No Male Apr Apr , , , ,500, No 合计 Equity incentives granted to directors, supervisors and senior management during the reporting period Applicable Inapplicable Name Office title Number of share options held at the period-begin Number of share options granted in the reporting period Exercisable Number of number of share options share options in exercised in the the reporting reporting period period Exercise price (RMB Yuan/share) Number of share options held at the period-end Number of restricted shares held at the period-begin Number of restricted shares granted in the reporting period Granting price of the restricted shares (RMB Yuan/share) Number of restricted shares held at the period-end Mai Boliang Director and president 3,800, ,800, Zhao Qingsheng Vice president 1,500, ,500, Liu Xuebin Vice president 1,500, ,500,

9 Wu Fapei Vice president 1,000, ,000, Li Yinhui Vice president 1,000, ,000, Yu Ya Vice president 1,000, ,000, Zhang Baoqing Vice president 1,000, ,000, Yu Yuqun Jin Jianlong Zeng Beihua Company Secretary GM of the Financial Management Dept. GM of the Capital Management Dept. 1,000, ,000, ,000, ,000, ,000, ,000, Total -- 13,800, ,800,

10 (II)Post-holding particulars Post-holding in shareholders units Applicable Inapplicable Name of the person holding any post in any shareholde r unit Li Jianhong Name of the shareholder unit China Merchants Group Limited China Merchants Holdings (International) Limited Position in the shareholder unit Directing President Executive Director and Vice Chairman Beginning date of office term Ending date of office term 23 Aug Yes 14 Oct No Receives payment from the shareholder unit? Sun COSCO Vice GM and Party member 17 Feb Yes Jiakang China COSCO Holdings Co., Ltd. Executive Director 17 May No Xu Minjie COSCO China COSCO Holdings Co., Ltd. Vice GM and Party member Executive Director 17 Feb Yes 17 May No Wang Xingru COSCO Pacific Limited Vice Chairman and Managing Director 11 Jul Yes GM of the Wang China Merchants Group Limited Enterprise Planning Dept. 1 Feb Yes Hong Chief Economist 1 Feb China Merchants Holdings (International) Limited Director 1 May No Lu Shijie COSCO Pacific Limited CFO 14 Jan Yes Huang Qianru China Merchants Holdings (International) Limited Vice GM 01Nov Yes Post-holding in other units Applicable Inapplicable Name of the person holding any post in Name of other unit Position in other unit Beginning date of office term Ending date of office term Receives payment from other unit? other units 10

11 Li Jianhong China Merchants Energy Shipping Co., Ltd. Chairman 01 Nov No Xu Minjie COSCO Container Lines Company Limited Chairman 9 Jan No COSCO Logistics Co., Ltd Chairman 9 Jan No COSCO Korea Co., Ltd. Chairman 17 Jan No COSCO Pacific Investment Holdings Limited Director 12 Aug No COSCO H.K. Investment Co., Ltd Director 12 Aug No Wang Xingru Concurrent positions in 34 subordinates of COSCO Pacific Limited Director/Chairman 11 Jul No Concurrent positions in 8 joint control Director/Chairman entities and affiliated companies 11 Jul No /Vice Chairman under COSCO Pacific Limited Wang Hong China Merchants Energy Shipping Co., Ltd China Merchants Property Development Co., Ltd. Director 11 Apr No Director 14 Oct No Beijing Jiaotong University Professor and doctor tutor of School of Economics and Director of Ding Huiping Chinese Enterprise 01 Jun Yes Competitive Power Research Center in Beijing Jiaotong University King & Wood Law Firm Senior partner 01 Jul Yes Invesco Great Wall Fund Management Company Limited Independent Director 01 Jun Yes Jin Qingjun Gemdale (Group) Co., Ltd. Independent Director 01 Oct Yes Shenzhen Arbitration Committee Arbitrator 01 Oct Yes China International Economic and Trade Arbitration Commission Arbitrator 01 Jul Yes 11

12 Shenzhen Jing an Culture Xu Jing an Communication Co., Ltd. Chairman 16 Apr Yes Antwerp Gateway NV 08 Sep No Director Suez Canal Container Terminal S.A.E. 10 Oct No COSCO Ports (Antwerp) NV 10 Jun No COSCO Ports (Greece) S.à r.l. 17 Dec No COSCO Ports (Panama) Limited 15 May No Lu Shijie COSCO Ports (Services) Limited 01 Feb No COSCO Ports Services (Guangzhou) Limited Director/Chairman 12 Feb No Florens Container Holdings Limited 19 Dec No Piraeus Container Terminal S.A. 10 Nov No Xiamen Ocean Gate Container Terminal Co., Ltd. 16 Dec No (III)Remuneration for directors, supervisors and senior management Decision-making procedure for the remuneration of directors, supervisors and senior management Basis for determining the remuneration of directors, supervisors and senior management Actual payment of the remuneration of directors, supervisors and senior management As stipulated in the Articles of Association, the remuneration for directors and supervisors is determined by shareholders meetings and that for senior management is determined by the Board of Directors. In the reporting period, CIMC senior management get paid in CIMC or subsidiaries. CIMC has established a complete remuneration system and incentive mechanism. First, we implement annual-salary system for directors, supervisors and senior management who work for and get paid from CIMC. Secondly, CIMC board of directors formulates CIMC Leading Group Measurement and Management Regulations at the beginning of each year to implement performance measurement for relevant personnel and determine performance-based incentive amount at the end of each year. Shareholders meeting authorizes the Board of Directors to determine the remuneration of chairman and President Mai Boliang in compliance with CIMC Leading Group Measurement and Management Regulations and president formulates proposals for performance-based bonus for other senior management subject to approval by Remuneration Council under the Board of Directors. Of the 8 directors, Mr. Mai Boliang holds the position as president and gets paid in CIMC and CIMC paid no remuneration to any other directors in the reporting period. Based on approval by the shareholders meeting and board of directors, independent directors Ding Huiping, Jin Qingjun and Xu Jing an received RMB 120,000 as subsidy for independent directors in reporting period, while CIMC paid no remuneration to any other independent directors in the reporting period. As staff supervisor, Mr. Feng Wanguang gets paid in CIMC and no remuneration was paid to other supervisors in the reporting period. Senior executives get paid by the Company on a monthly basis. 12

13 (IV)Change of directors, supervisors and senior management Name Position Way of change Date of change Reason for change Due to his personal career plan, he resigned as director Sun Jiakang Vice Chairman Resignation 2 Feb and vice chairman of the Company. Xu Minjie Vice Chairman Re-election 6 Mar The Board of Directors nominated him at the re-election and the relevant proposal was reviewed and approved at a special general meeting. (V)Employees Number of on-job employees 64,323 Number of retired employees for whom the Company shall bear expenses Type of function Function structure Number of personnel Management Production 40, Sale 2, Technical 2, Financial Administration 18, Level of education Level of education Number of personnel Doctors Masters Bachelors 6, Junior college graduates 7, High school graduates and below 49, VI. Report of the Board of Directors (I)Discussion and analysis by the management Analysis to operating results and financial data: Unit: RMB 000 Item Jan.-Jun Jan.-Jun Increase/decrease ratio Operating revenues 27,364,446 36,478, % (%) 13

14 Operating profit 1,439,124 3,729, % Net profit attributable to shareholders of the Company 933,710 2,807, % Net cash flows from operating activities -2,107,043-4,161, % Net increase in cash and cash equivalents -2,658,816 1,306, % For the first half of the year, the Company achieved operating revenues of RMB 27,364,446,000, down 24.98% over the same period of last year; and net profit attributable to shareholders of the Company of RMB 933,710,000, down 66.74% from a year earlier. This is mainly because the first quarter in a year was usually a slack season for container demand and the first quarter of 2012 saw a demand weaker than normal years; the relatively peak season for demand kicked off in the second quarter, but the business figures for the same period of last year were higher than normal, so a considerable year-on-year drop was caused in the business performance. When compared with the same period of last year, in the first half of 2012, the Group s container production scale was smaller, with accounts receivable and expense on raw material procurement decreasing accordingly, as well as decreased operating capital. However, when compared with the end of 2011, the operating capital utilization rate increased while net cash flows from operating activities decreased. Affected by rising capital expenses, the liability ratio of the Company increased over the end of As at 30 Jun. 2012, the overall liability ratio of the Company stood at 68.20%, with the liability/equity ratio being %. Discussion and analysis of significant events Macro-economy, prosperity degree of the industry, as well as its influence In the first half year, the global economy remained weak, main economy entities grew lower than expected; the euro-zone s debt crisis continuously extended, financial risk raised, demands kept dropping down, and the pressure of global economy recovery further increased. There s still much uncertainty faced by the economy. According to the World Economic Outlook issued by IMF in Jul. 2012, it s anticipated that global economy growth rate in 2012 would be 3.5%, the growth rate of advanced economies would be 1.4% growth, and the growth rate of emerging and developing economies would decrease to 5.6%. In the first half year, domestic economy growth slowed down, with YoY growth of GDP in Jan-Jun recording 7.8%. The export volume of China increased by 9.2% YoY, representing large expansion of trade deficit. Cargo throughput of ports in national scale or larger scale increased by 7.2% YoY. In line with custom statistics, in the first half year of 2012, an accumulation of 1.27 million containers were exported from China, representing a YoY decrease of 26.5%. Dragged down by euro-zone debt crisis and influenced by the downturn of shipping industry, shipping credit squeezed, revenue of main shipping companies decreased, and their operating cost increased. The way of container demands from main shipping companies were still in rental. Main customers purchasing containers were mainly companies renting containers, which took 70% proportion of the total demand volume of purchase orders. In 2012 to 2013, a great number of shipping capacity were still input, resulting in a remaining status where supply exceeded demand. In consideration of absorbing surplus capacity, saving fuel cost, and reducing carbon emission, shipping companies still kept low-speed policy. In the first half year, the container rate of shipping industry reached low level, leading to low possibility of continuous low container rate in future. In Jul. 2012, CLARKSON, a Britain institution analyzing trends of shipbuilding and ocean shipping updated its forecast, anticipating that the growth rate of container trade for this year would decrease to 5.9% as affected by the sustainable euro-zone debt crisis and the recovery slowdown of main economies in the world, and that the global trade volume of containers 14

15 in this year would reach 160 million TEU. In this year, the overall capacity of the industry increased much, and the competition landscape in container industry remained stable. Capacity of dry van containers and refrigeration containers increased by different degrees, and capacity of special containers kept stable. In the first half year, affected by the weakness of overall industrial demand, the factor of Spring Festival, as well as the structural shortage in domestic labor market, main manufacturers could only realize partial double-class production, the capacity utilization rate of standard dry van containers recorded obvious YoY decrease, the capacity utilization rate of refrigeration containers glided down, and the capacity utilization rate of special containers was relatively stable. In the first half year, production volume of containers of the total industry reached about 1.42 million TEU, of which the production volume of standard dry van containers was about 1.21 million TEU, the production volume of registered containers was about 70 thousand units, and the production volume of special containers was 38 thousand units. In the first half year of 2012, Chinese economy growth continued to decelerate, industrial production decreased, and the growth infrastructure construction and property investment slowed down, leading to continuous decreasing trend in market demand for special vehicles in China as in Thereinto, the demand for logistic special vehicles dropped by around 20%, and the demand for engineering special vehicles dropped by 40%. Facing the severe market trend, enterprises in the industry successively chose volume over profit, bringing about more competitive industrial competitions. The oversea market kept overall restorative growth trend, and the north Americas market particularly achieved strong recovery. In the first half year, the demand in global ocean engineering market kept high prosperity. According to incomplete statistics, in the first half year, orders in global ocean engineering market reached USD 28 billion, taking 55% proportion of the total trade volume for the whole last year. New oil service companies acted actively. In view of order structure, orders for drilling platforms decreased, and orders for production platforms obviously increased. In the first half year, 27 drilling platforms, which accounted for 30% of the total volume of last year, were traded; 12 units of production platforms were newly built and refitted, exceeding the whole volume of last year and recording record-high; and the market of ocean engineering ships kept at the normal level of recent years, with 150 ships traded, maintaining the same as compared with same period of last year. In the first half year, as investors held excessively pessimistic expectation for the prospect of market demand, the price of crude oil, the wind vane for development of ocean oil and gas, fell largely. However, at present, the international oil price still keeps at a high level of USD 100, showing that the development of deep-sea oil and gas will still be highly active. In the second half year, although some uncertainty in politics and economy will exist, the external environment of ocean engineering industry will keep stable. The international oil price is expected to remain high, which will give remaining high enthusiasm for petroleum companies to invest the upstream industry of oil and gas. After the oil leakage in the Gulf of Mexico, the regulatory and standard requirements for deep-sea exploration of countries like the USA and Brazil becomes more and more strict. Current drilling equipment may not meet the new standards, and as a result, the update speed of old equipment in the world will further accelerate. Changes in industry policies, laws and regulation of the Government and the influence thereof In Jul. 212, the Ministry of Industry and Information Technology issued the Notice on Establishing Exit Mechanism in Vehicle Industry, which firstly established the exit mechanism for behindhand enterprises in Chinese vehicle industry, and would remit the loose, chaotic, and inferior competition landscape in the industry of special vehicles. The government has planned to raise the consumption proportion of natural gas to primary energy from 4% at 15

16 present to 9% in 2015 and 15% in The growth prospect in energy field, especially natural gas field, is clear. As planned by National Development and Reform Committee, by 2015, China will have basically built transportation network of national natural gas pipelines with diversified resources, flexible control, and stable supply, effectively ensuring the huge future demand for natural gas in China in terms of delivery link. In the first half year, significant middle-to-long term policies in national ocean engineering industry were successively promulgated, creating a fine policy environment for healthy development of Chinese ocean engineering industry and business of ocean engineering equipment of the Group. In Feb. 2012, the national Middle-to-long Term Development Plan for Manufacture of Ocean Engineering Equipment (planning period is 2011~2020) was issued. The Plan put forward development targets the first, the industry scale shall be among the world s largest, with annual sales revenue achieving over RMB 200 billion and market share of development equipment of ocean oil and gas in the world reaching 20% in The Development Plan for High-end Equipment Manufacture in the Twelfth Five-year Period issued in May clearly defined the focus of ocean engineering equipment in the twelfth five-year period is the breakthrough in key technologies of 3,000-meter deep-water equipment. The CIMC ocean engineering not only equips with the construction capability for 3,000-meter water-depth semi-submersible drilling platforms, but also has regarded deep-water semi-submersible platforms as one of the key developing and strategic directions of the Company. In Jul, the State Council officially promulgated the Development Plan for National Strategic Emerging Industries in the Twelfth Five-year Period, and clearly described the path for future development of the industry of ocean engineering equipment in 2015, the capability of independently designing and establishing deep-water ocean engineering equipment and the supporting capacity for key equipment shall be preliminarily possessed, and the products shall own international competitiveness. In 2020, the capability of independently designing and establishing deep-water ocean engineering equipment and the supporting capacity for key equipment shall be comprehensively possessed. Whether the Company s actual business performance is 20% lower or higher than any earning forecast or business plan for the reporting period which has been publicly disclosed earlier: Yes No Inapplicable Analysis for operating status and business performance of the Company s main businesses In the reporting period, the operating status of the Group s main businesses is summarized as below: The Company and its subsidiaries (jointly referred to as the Group hereinafter) is mainly engaged in manufacture and services in relation of modern traffic transportation equipment, energy, chemical, liquid food equipment and ocean engineering equipment. In particular, these equipments are mainly involved in design, manufacture and service for dry van containers meeting international standards, refrigeration containers, regional special containers, tank containers, container wood floor, road tank transportation vehicles, gas equipment and static storage tank, road transportation vehicles, jack up drilling platforms, semi-submersible drilling platforms, special ships, and airport equipment. Other than the above, the Group is also engaged in manufacture and service of logistic equipment, manufacture of freight train, real estate development, financing and leasing, etc. At present, the production and sales volume of standard dry van containers, refrigeration containers, and tank containers of the Group keeps ranking No.1 in the world. The Group is also the largest manufacturer of road transportation vehicles in China, and one of the major enterprises manufacturing ocean engineering equipment in China. 16

17 Products contributing over 10% operating revenue or operating profit of the Group are containers, road transportation vehicles, as well as equipment of energy, chemical, and liquid food. Container business Besides container manufacture, the Group engages in container service, including service like stockpiling, maintenance, refurbishment, and new service like old-for-new trade and retrofitting of old containers. In the first half year, sales volume of normal dry van containers of the Group accumulated to thousand TEU, representing a YoY decrease of 42.92%. Sales volume of refrigeration containers accumulated to 81.5 thousand TEU, representing a YoY decrease of 7.91%. Sales volume of special containers (excluding tank containers and pallet containers) accumulated to 33 thousand units, representing a YoY decrease of 22.54%. In the first half year, container business achieved operating revenue of RMB 13,671,291,000, representing a YoY decrease of 37.65%. Net profit reached RMB 800,076,000, representing a YoY decrease of 72.57%. In the first half year, the demand in container market in the first quarter shows weakness, and obviously rose again in the second quarter, entering the relative peak season. The price gradually rose as the demand entered into the peak season, and the price of dry van containers in the second quarter started to bottom out, approaching USD 2,600/standard container in the end of Jun. Due to the low price of steels, the expansion of production scale, as well as its price appreciation, the gross profit of containers rose rapidly. In the first half year, in terms of container business, the Company implemented strategy upgrade, transformed traditional production craft process, improved automation level, lowered down labor intensity, adhered to the concept of safety, green, intelligence, and lightweight, focused on promoting new environment-friendly technologies, such as water paint and bamboo floor, realized energy-saving and emission reduction; and continued to propel forms like lean production and ONE management with the purpose of improving production efficiency. On the other hand, the Group positively enlarged new businesses, and put efforts on developing modular architecture. Respecting to product development in modular architecture, the Group realized the transformation from overseas design to independent design, developed many core technologies, gained totally independent intellectual property, and gradually established its unique competitiveness. As for modular architecture business, the Group will depend on its globalized operation system to combine the brands, design, marketing resources in mainstream markets in Europe and America with the advantages of Chinese manufacturing, and rely on the operating mode of integrated design, factory manufacture, and field installation to show the concepts of new environment protection and represent the new trends of industry development. The developing space would be large. The business of modular architecture could synchronically develop with other businesses of the Group, and has become a key part in strategic business combinations of the Group. Business of road transportation vehicles In terms of business of road transportation vehicles, the Company has established 29 production bases extending from North Americas, Europe, Australia, and Southeast Asia to central China, east China, south China, north China, northwest China, and northeast China, and founded a marketing system covering 530 distributors and 4S stores, as well as over 580 service stations. The Group now possesses annual capacity scale exceeding 230 thousand units of all kinds of vehicles, and has ranked No.1 in production and sales volume since In the first half year, as affected by the slowdown of growth in domestic economy, vehicle business of the Group descended largely in product sales and operating revenue. In the first half year, sales volume of road 17

18 transportation vehicles accumulated to 53.5 thousand units (sets), decreasing 39.68% YoY; the sales revenue reached RMB 6,821,294,000, decreasing 29.62% YoY; and the net profit reached RMB 86,026,000, decreasing 75.03% YoY. Despite the severe trends of decreasing market demand and more competitive industrial competitions, the Group maintained its No.1 market position in China. Thereinto, the market share of main products, including flat-bed trucks, bulk lorries, self-discharging wagons, powder tank vehicles, refrigeration vehicles, liquid tank vehicles, topped the list in the industry. The oversea market kept overall restorative growth trend, and the north Americas market particularly achieved strong recovery. As for vehicle business of the Group, the market share of skeleton vehicle products kept No.1 in the market of Americas, and the production and sales volume of refrigeration vehicles in the market of Americas exceeded 1,000 units. In the first half year, in terms of vehicle business of the Group, the Group kept concentrating on resource integration, improved asset operation efficiency and profitability of the Company; continued to advance construction of marketing network, enriched distribution channels; expanded capacity of refrigeration vehicles in Ji nan and Qingdao in Shandong province; steadily progressed investment on and construction of the vehicle logistic park, established markets of commercial vehicles in cities which are logistics centers, such as Chengdu, Xi an, Shanghai, and Shenzhen; and reinforced investment on new products, including snow removal trucks and cleaning tankers. The Group has finished the development, manufacture, and preparation for product launch in the market of the 3 rd -generation semi-trailers, which represents the technology development direction of special vehicles in the world, and is scheduled to be shown in the auto show in Hanover, Germany in Sept. The 3 rd generation semi-trailers will also be launched in China and Europe. It is expected that the overall operating environment of the enterprise in the second half year of 2012 would be similar with that in the first half year. Domestic infrastructure construction and real estates, the two core upstream industries, will maintain stable growth and continue to pull the demand for special vehicles. In overseas market, especially in traditional market of Europe and America, the restorative growth trend will maintain. In emerging markets, such as Southeast Asia, the Middle East, Africa, and South America, the growth trend will keep having high prosperity. In the background of ease economy growth, it is expected that the price of bulk materials, for example, steel, will fluctuate around low level, which will be good for the Group to keep low purchase cost. In the first half year, domestic economy growth further slowed down, and the domestic market of heavy trucks encountered downturn. Business of heavy trucks of C&C Trucks Co., Ltd., of which 45% equity is held by the Company, also faced great pressure. In the first half year, the sales revenue exceeded RMB 300 million, but the Company still faced losses. However, the Company adjusted operation strategies in time, and still made some progress. The Company adjusted market positioning of products, lowering down product weight and pulling up vehicle sales by developing middle-to-large weight products and lightweight products. The Company positively took advantage of resources from shareholders, aimed at big clients in the industry to actively promote LNG heavy truck, the strategic product, put efforts on cutting down cost of purchase and production, expanded high-quality clients, and enhanced the product brand value. In the second half year, the Company will strive to develop LNG heavy trucks, and launch a series of competitive products of middle-to-large weight trucks. Business of equipment of energy, chemical, and liquid food, as well as the service In spite of the sustainable weakness of American and European economy, domestic demands for storage and transportation equipment and engineering for natural gas, low-temperature equipment, and tank containers were strong, mainly due to the downstream demand in energy field, especially the rapid growth in supply of gas 18

19 resources of natural gas and its consumption. In 2012, business of equipment of energy, chemical, and liquid food kept favorable growth trend. In the first half year, operating revenue achieved RMB 4,520,949,000, representing a YoY increase of 21.14%. Net profit reached RMB 256,696,000, increasing by 3.73% YoY. Thereinto, the business of energy (natural gas) equipment reached operating revenue of RMB 2,435,595, increasing by21.05% YoY. The business of chemical equipment achieved operating revenue of RMB 1,550,368, rising by 14.32% YoY. The business of liquid food equipment achieved operating revenue of RMB534,987, growing by 47.08% YoY. Among them, caused by changes in product structure and sales structure, the gross margin in business of energy equipment dropped; and benefited from scale effect brought by the uptrend of sales volume, the gross margin in chemical equipment business achieved obvious growth. The gross margin in business of liquid food equipment remained stable. In the first half year, in order to enhance the strength of service and R&D of project engineering, in Jan. 2012, CIMC Enric Holdings Limited acquired Nanjing Anza Petrochemical Design & Engineering Co., Ltd., further realizing the overall planning and coordination in aspects of project engineering service, integration solution plans, and product design and R&D, and boosting business expansion for upstream clients. In terms of energy equipment, the Company strengthened R&D force in LNG refueling stations and LNG ship storage tanks, and successfully developed brand-new manufacturing technologies of winding bottles and low-temperature gas cylinders, which all attracted much market attention. In terms of chemical equipment business, the Company focused on development of special tank containers and lightweight tank containers. Besides, the Company had close and strategic cooperation with external research institutes and steel manufacturers. In order to meet the continuing growth in supply of natural gas and demand for corresponding application equipment, in the first half year, CIMC Enric Holdings Limited further expanded the capacity of energy equipment, and has been establishing the production line of lightweight winding bottles in Shijiazhuang, expanding LNG production equipment in Zhangjiagang, and enhancing production capability of LPG in Jingmen. In the second half year, new plants and production lines in Shijiazhuang, Langfang and Bengbu in Aihua province will be gradually put into operation. While seizing the opportunity of rapid growth in domestic market, CIMC Enric Holdings Limited expanded overseas market, focusing on developing emerging markets, such as Southeast Asia, Central Asia, and South America, so as to enlarge overseas commercial chances and increase income resources. In the reporting period, CIMC Enric Holdings Limited continuously executed projects of cost control and lean management. As internal resources were more effectively distributed and shared among all operating units, the operation efficiency and quality were advanced. In aspect of supply chain, centralized and synchronized purchase strategies were adopted, and the purchase cost was cut down by optimization of product design and production procedures. Looking into the second half year and future, in spite of much uncertainty in global economy, the Company still will still be optimistic about the prospect of business of energy and chemical. In future, the Company will put more force on expanding project engineering business, especially on developing low-temperature storage tanks, gas refueling station projects, projects of middle-to-small size liquidation, petrifaction storage of gas, and gas disposal, chemical spheres, as well as nuclear special containers. Business of ocean engineering As one of the world-leading manufacturers of ocean engineering equipment, the Group has been always participating in global competitions in the market of international ocean engineering. Main products of the 19

20 Company include jack up drilling platforms, semi-submersible drilling platforms, and auxiliary ships in ocean engineering. The Group has established integrated establishment base and business system of R&D and design centers YCRO is the base for establishment, general assembling, debugging, and delivery of semi-submersible drilling platforms, LCRO is the production and establishment base for jack up platforms, and HCRO is the modular establishment base. As branded by the National Bureau of Energy, the Group also has the National Energy Marine Petroleum Drill Platform R&D (Experiment) Center, including CIMC Ocean Engineering Research Institute Co., Ltd. in Yantai and CIMC Shipping and Ocean Engineering Design Research Institute in Shanghai. At present, the establishment capability of ocean engineering business bases in the Group is 3 jacks up drilling platforms and 3 semi-submersible drilling platforms per year, which is planned to be upgrade to 6 jack up platforms and 4 semi-submersible platforms per year in In the first half year, the sales revenue reached RMB billion, increasing largely by % as compared with RMB 230 million in the same period of last year. Losses reached RMB 147 million, decreasing largely by 74.75% YoY. Main reason for large increase of operating revenue and decrease of losses: the Company realized sales of SUPREME DRILLER, the self-built jack up platform, and finished the delivery of COSL PROMOTER, the deep-water semi-submersible drilling platform. In the first half year of 2012, delivery of main products of the Group recorded favorable progress. In Apr. 2012, COSL PROMOTER, the 3rd deep-water semi-submersible drilling platform built for the European drilling company of China Oilfield Services Limited was smoothly delivered. In Mar. 2012, SUPREME DRILLER, the jack up drilling platform of CIMC Raffles was delivered. Regarding the expansion of new orders, Raffles now has orders in hand of over USD 1.68 billion, which cover 2 semi-submersible drilling platforms, 3 Super M2 jack up platforms, 2 JU2000E jack up platforms, and 2 semi-submersible transportation ships. Besides, there re also some intentional orders. In Feb. 2012, CIMC Raffles got the turn-key contract from Norway North Sea Rigs As Company for establishing North Dragon, the deep-water semi-submersible drilling platform, marking the recognition for semi-submersible products of CIMC Raffles from the North Sea, a mainstream international market, the capability improvement of turn-key projects, as well as the realization of mass production. In future, the Group shall continue to participate in competitions in overseas regional markets and strive for new orders in domestic market by short delivery term, favorable payment terms, financing support, and low construction cost. In respect of R&D and design of platforms, the Group has owned the proprietary intellectual property rights for detail design and establishment of legs of jack up drilling platform. In future, the Group will follow up R&D trends of new products in home and abroad, accelerate the learning for design concepts and methods, and develop new products, such as semi-submersible drilling platforms in the North Sea and polar seas, and 400-feet jack up platforms. The Group will also conduct research on deep-water semi-submersible drilling platforms suitable for the state of the South China Sea, such as super-deep-water double-rig semi-submersible platforms and middle-depth water semi-submersible drilling platforms, so as to meet the demand of national strategic development. Business of airport equipment In the first half year of 2012, Tianda Airport Support Co., Ltd., of which 70% equity is held by the Company, achieved sales revenue of RMB million, decreasing by 51% as compared with RMB 141 million in the same period of last year. Losses reached RMB million, increasing by RMB million as compared with RMB million in the same period of last year. In the first half year of 2012, 20 boarding bridges were sold, 20