Summary of Semi-Annual Report 2018 of Bengang Steel Plates Co., Ltd. Stock Code: 000761, 200761 Abbreviation: Bengang Bancai, Bengangban B Announcement No.: 2018-038 Summary of Semi-Annual Report 2018 of Bengang Steel Plates Co., Ltd. I. Important Notice This Semi-Annual Report Summary is taken from the full text of the Semi-Annual Report. Investors are advised to read carefully the full text of the Semi-Annual Report published on the media designated by China Securities Regulatory Commission in order to fully understand the Company’s operation results, financial position and future development plan. Objection statement of directors, supervisors and senior executives Name Office title Objection & reason Statement Other directors attending the Meeting for Semi-Annual Report deliberation except for the following Name of director absent Title of director absent Reasons for absence Attorney Shu Wang Chairman On official business Xinghua Huang Aimin Cao Director On official business Xinghua Huang Non-standard auditor’s opinion □ Applicable √Not applicable Plans for profit distribution on ordinary shares or conversion of capital reserves into share capital proposed to the Board during the reporting period □Applicable √Not applicable The Company plans not to distribute cash dividend or bonus shares, and not to convert capital reserve into share capital. Plans for profit distribution on preference shares for the reporting period approved by the Board □ Applicable √ Not applicable II. Company Profile and Main Financial Index 1. Company profile Bengang Bancai, Bengangban Stock abbreviation Stock Code 000761, 200761 B Stock exchange for listing Shenzhen Stock Exchange Contact person and manner Board secretary Securities affairs Representative Name Zhonghua Zhao No.16, Renmin Road, Pingshan District, Address Benxi City, Liaoning Province Tel 024-47828860 Email BGBC2018@163.com 2. Main Accounting Data and Financial Index Whether the Company needs retrospective adjustment or restatement of previous years’ accounting data due to changes of accounting policies and correction of accounting errors □ Yes √ No Unit: Yuan Increase or decrease in this Same period in the previous This reporting period reporting period over the year previous year 1 Summary of Semi-Annual Report 2018 of Bengang Steel Plates Co., Ltd. Operating income 23,441,247,377.14 20,736,486,903.74 13.04% Net profit attributable to the shareholders 756,951,987.59 523,635,653.57 44.56% of the listed company Net profit after deducting non-recurring gain/loss attributable to the shareholders of 724,922,955.98 508,873,423.83 42.46% listed company Net cash flows generated by operating 730,519,741.47 -4,047,305,684.72 118.05% activities Basic earnings per share 0.195 0.167 16.77% Diluted earnings per share 0.195 0.167 16.77% ROE 4.56% 4.04% 0.52% Increase or decrease at the At the end of current At the end of previous end of this reporting period reporting period reporting period over the previous year Total assets 64,033,117,289.87 62,998,143,513.02 1.64% Net assets attributable to shareholders of 18,861,998,055.40 14,315,588,729.00 31.76% the listed company 3. Number of shareholders and shareholding Unit: Share The total number of Total number of common preferred shareholders shareholders at the end of the 66,016 voting rights restored at the 0 reporting period end of the reporting period (See Notes 8) Shareholding of shareholders holding more than 5% or top 10 shareholders Quantity of pledged or frozen Name of the Nature of Holding Number of shares Number of restricted shares held shareholder shareholder Percentage shares held Status Quantity Benxi Steel & Pledged 1,523,095,133 State-owned Iron (Group) 59.91% 2,321,689,670 legal person Frozen 45,000,000 Co., Ltd. Liaoning Transportation State-owned 4.77% 184,842,883 184,842,883 Investment Co., legal person Ltd. CCB Fund-ICBC- China Resources SZI-China Resources Others 4.77% 184,842,883 184,842,883 TrustXingshen g No. 5 Collective Fund Trust Scheme 2 Summary of Semi-Annual Report 2018 of Bengang Steel Plates Co., Ltd. Beixin Ruifeng Fund-China Merchants Bank-Beixin Ruifeng Fund Others 4.77% 184,842,883 184,842,883 Fengqing 229 Asset Management Plan China Life AMP Asset - ICBC - China Life AMP - Huaxin Trust Others 4.77% 184,842,883 184,842,883 Increase No.10 Asset Management Plan VANGUARD EMERGING Overseas legal MARKETS 0.21% 8,157,311 person STOCK INDEX FUND Domestic natural Jinghong Chen 0.19% 7,360,500 person Domestic natural Ruijun LYU 0.13% 5,119,800 person VANGUARD TOTAL Overseas legal INTERNATIO 0.12% 4,606,141 person NAL STOCK INDEX FUND Domestic natural Xiaofan Yu 0.10% 4,002,707 person Explanation on associated It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as relationship among the aforesaid described by Rules of Information Disclosing Regarding Changing of Shareholding Status of shareholders Listed Companies existing among the above shareholders. Benxi Steel & Iron (Group) Co., Ltd. holds 2,071,689,670 shares of the company through Explanation on shareholders ordinary securities account and 250,000,000 shares of the company through investors' credit participating in the margin trading securities accounts, totally 2,321,689,670 shares. Xiaoling Liu holds 3,200,000 shares of the business (if any) company through investors' credit securities accounts. 4. Changes of Controlling Shareholders and Substantial Controller Change of holding shareholder □ Applicable √ Not applicable There was no change of holding shareholder in the report period. Change of substantial controller □ Applicable √ Not applicable There was no change of substantial controller in the report period. 5. Total preferred shareholders of the Company and shares held by top ten shareholders □ Applicable √ Not applicable There was no Preferred Shares during the reporting period. 3 Summary of Semi-Annual Report 2018 of Bengang Steel Plates Co., Ltd. 6. Information about the corporate bonds Whether there exists any un-matured corporate bonds public issued and listed on the Stock Exchange or any matured corporate bonds which the listed company failed to pay in full at the approval date of the Semi-Annual Report No III. Management Discussion and Analysis 1. General Whether the Company needs to comply with the disclosure requirements for special industry No In the first half of 2018, the Company's overall production was organized steadily and smoothly. However, steel production was decreased compared with the same period last year affected by the reform of two blast furnaces. Production of pig iron and crude steels reduced by 930,000 and 770,000 tons respectively compared with the same period last year. In order to reduce the impact of the decreased production of pig iron on the performance, the Company seized the opportunity of high-level operation in the steel market, comprehensively strengthened enterprise management, and thoroughly implemented potential tapping, costs reduction and efficiency improvement, continuously improving the quality and efficiency of economic operations, and achieved remarkable results. Revenue increased 13.04% and profits increased 44.56% compared to same period in previous year. The main work done in production operation during the first half year is as followings: First, the market development and variety adjustment to increase the benefits gained fruitful results. Through the expansion of varieties, optimization of structure, improvement of the proportion of high value-added products, improvement of the efficiency of steel ton, optimization of the regional market structure and other effective measures, the Company continuously realized the increase of benefits. Second, referring to the advanced domestic iron and steel enterprise's control mode, the Company fully implemented the "fixed position, fixed staffing, fixed responsibility, fixed compensation" work, smoothly implemented the design and reform of compensation system. At the same time, the Company implemented departmental work-style assessment, enterprise accountability system, leading group and leading cadre comprehensive assessment methods. Through the four internal reform measures, the Company improved the level of enterprise management in all aspects. Third, the Company effectively implemented innovation-driven strategy. In the first half year, the Company developed a total of 24 new products, among which QP980 steel product completed the first industrial test, all its performance indicators met the requirements of the national standard, filling the gap in the research field of Bengang in quenching and distribution steel. Low-iron- loss 50BW470 product realized batch supply, its physical quality achieved the domestic advanced level. The first time of development and production of cars (passenger cars) gears steel 20CrMnTiH2 product realized a new breakthrough in the development of gear steel for cars (passenger cars). The high-speed tool steel DS120 product broke the foreign steel's monopoly in saw steel market. Fourth, the safety production situation was overall stable. The Company carried out key-point special rectification work and production safety month activities, detailed the implementation of security responsibilities at all levels, increased security education and training, in-depth implemented various types of special hidden trouble, strengthened the implementation of joint maintenance construction safety measures. Thus, none responsible production death accidents occurred, and the Company achieved the “three zero goal”, which means no larger personal accident, no larger equipment accident, no major fire accident. Five, the green development strategy achieved remarkable results. In strict accordance with national standards and policy requirements, the Company solidly carried out a second census and inventory of pollution sources and the application for steel industry pollutant discharge permit. Through strengthening the stable operation of environmental protection facilities, implementing the pollutant stability standard discharge, perfecting the automatic on-line monitoring facility and so on, the Company realized controllable discharge in the pollution-producing link, and accountable foundation basis for discharge quantity. Six, the strategy of strengthening talents was implemented continuously and thoroughly. The Company carried out the open competition for leading cadres in accordance with the principles of paying attention to personal character, grass-roots units, achievements and academic qualifications. Based on the MBA training course of Bengang, the Company deepened the training of leading cadres to improve their quality and ability, strived to use 3-5 years to complete the training rotation of all leading cadres, so as to refine their thinking, sublimate their realm, open up their ideas and strengthen their confidence, and to promote the quality of leading cadres comprehensively. Seven, the Company continuously strengthened and improved the Party building, strengthened the Party's leadership, implemented the "Party Building Leadership and Revitalization Project", incorporated the requirements of Party building into the articles of association, and clarified the legal status of Party organizations in the corporate governance structure. The Company strengthened the construction of Party branches at the grass-roots level and implemented the "Solid Foundation Project". The Company strengthened the building of Party members and implemented the "Pioneer Project of Communist Party members". The Company improved the Party's organizational living system, organized leading groups of Party committees at all levels to hold special meetings on democratic life of political warning education, and organized Party members to carry out special discussions on the theme of "Stressing Practical Work, Strengthening Implementation, Grasping Implementation", so as to carry forward the style of seeking truth and pragmatism and doing practical work. 4 Summary of Semi-Annual Report 2018 of Bengang Steel Plates Co., Ltd. 2. Issues related to the financial report (1) Changes in the accounting policy, accounting estimation and measurement methods √ Applicable □ Not applicable There was no change in accounting policy, accounting estimation and measurement methods during the reporting period. (2) Illustrations of retrospective restatement due to correction of significant accounting errors in the report period □ Applicable √ Not applicable No major accounting errors within reporting period that needs retrospective restatement for the Company in the period. (3) Illustrations of changes of the consolidation scope as compared with the financial report of previous year □Applicable √ Not applicable There was no change in the scope of consolidated statements during the reporting period. 5