Summary of Semi-Annual Report 2020 of Bengang Steel Plates Co., Ltd. Stock Code: 000761, 200761 Abbreviation: Bengang Bancai, Bengangban B Announcement No. : 2020-055 Summary of Semi-Annual Report 2020 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 carefully read 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. Other directors attending the Meeting for Semi-Annual Report deliberation except for the following Name of director absent Title for absent director Reasons for absence Attorney 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 Gao Desheng Chen Liwen No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District, Address Benxi City, Liaoning Province Benxi City, Liaoning Province Tel 024-47827003 024-47828980 Email bgbcdm@163.com bgbcclw@126.com 2. Main Accounting Data and Financial Index Retrospective adjustment to or restatement of the accounting data for prior years by the Company due to change of accounting policies and correction of accounting errors □ Yes √ No Unit: yuan Increase or decrease in this Same period in previous This reporting period reporting period over the year previous year 1 Summary of Semi-Annual Report 2020 of Bengang Steel Plates Co., Ltd. Operating income 22,184,537,260.05 24,102,595,167.14 -7.96% Net profit attributable to the shareholders 254,644,204.33 453,209,615.76 -43.81% of the listed company Net profit attributable to the shareholders of listed company after deducting 239,885,472.54 481,928,450.94 -50.22% non-recurring gain/loss Net cash flows generated by operating -151,475,707.08 984,787,005.67 -115.38% activities Basic earnings per share 0.07 0.12 -41.67% Diluted earnings per share 0.07 0.12 -41.67% ROE 1.30% 2.35% -1.05% Increase or decrease at the At the end of this reporting At the end of previous end of this reporting period period reporting period over the previous year Total assets 62,710,402,910.64 60,731,425,193.90 3.26% Net assets attributable to shareholders of 19,764,576,963.53 19,487,665,261.17 1.42% 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 54,074 voting rights restored at the 0 reporting period end of the reporting period (if any) Shareholding of shareholders holding more than 5% or top 10 shareholders Number of Number of pledged or frozen Name of the Nature of Holding shares shares held at Restricted shares held shareholder shareholder Percentage period-end Status Number Benxi Steel & Pledged 712,545,000 State-owned Iron (Group) 62.11% 2,407,002,394 0 legal person Frozen 102,100,000 Co., Ltd. CCB Principal Asset Management – ICBC – CR Trust – CR Others 4.77% 184,842,883 Trust Xing Sheng No. 5 Collective Fund Trust Plan Bei Xin Rui Feng Fund – China Merchants Bank – Bei Xin Rui Others 4.77% 184,842,883 Feng Fund Feng Qing No. 229 Asset Management Plan China Life AMP Fund– ICBC – Others 4.77% 184,842,883 China Life AMP 2 Summary of Semi-Annual Report 2020 of Bengang Steel Plates Co., Ltd. – Hua Xin Trust Targeted Additional Shares Issuance No. 10 Asset Management Plan Liaoning Provincial State-owned Transportation 4.74% 183,785,283 legal person Investment Group Co., Ltd. Domestic Fang Lei 0.36% 14,126,600 natural person Domestic Fang Huaiyue 0.24% 9,205,501 natural person Domestic Zhang Peng 0.21% 8,287,900 natural person VANGUARD EMERGING Overseas legal MARKETS 0.21% 8,157,311 person STOCK INDEX FUND Domestic Chen jinhong 0.18% 7,120,375 natural person Notes to relationship or ‘action in It is unknown to the Company whether there is any related connection or ‘Action in Concert’ as concert’ among the top 10 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 2,168,022,394 shares of the Company’s stock through ordinary account and holds 239,000,000 shares of the Company’s stock through credit Shareholders among the top 10 security account totaling 2,407,002,394 shares. Fang Lei holds 14,126,600 shares of the participating in securities margin Company’s stock through credit security account. Fang Huaiyue holds 9,205,501 shares of the trading (if any) Company’s stock through credit security account. Zhang Peng holds 8,287,900 through credit security account. 4. Changes of Controlling Shareholders and Substantial Controller Change of holding shareholder □ Applicable √ Not applicable There was no change of holding shareholder in the reporting period. Change of substantial controller □ Applicable √ Not applicable There was no change of substantial controller in the reporting 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. 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 3 Summary of Semi-Annual Report 2020 of Bengang Steel Plates Co., Ltd. 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 2020, the company's overall performance was generally outstanding, production and management had a new improvement, and the reform tasks were solidly promoted. The main indicators achieved steady growth, including: 5.11 million tons of pig iron, an increase of 352.8 thousand tons, an increase of 7.41%; crude steel of 5.13 million tons, an increase of 259.8 thousand tons, an increase of 5.33%; hot rolled sheet of 5.87 million tons, a decrease of 232.1 thousand tons, a decrease of 3.8%; cold rolled sheet of 2.78 million tons, a decrease of 120.1 thousand tons, a decrease of 4.14%; special steel of 0.36 million tons, an increase of 130 thousand tons, an increase of 57.62%. During the reporting period, the company took "Overall Every Control and Clear" as the starting point, carefully organized special research, and took multiple measures to reduce costs. The output of some varieties and the records of daily and monthly production were continuously refreshed. A series of indicators have reached the best level in history. The quality of development has been significantly improved. Through the establishment of an all-round benchmarking management system, the coke ratio of plates into the furnace was 381kg in the first half of the year, which is the best level in history. The No. 7 caster of the plate steelmaking plant has realized the online narrowing function and the online width adjustment of the chamfering mold, reaching the domestic advanced level. The 2# pickling mill and silicon steel pickling mill set the best operating record in history. The plate scrap mill matched the material type reasonably, and the number of straight batching hoppers created the highest records in a single day and a single month, respectively. 2. Issues related to the financial report (1) Changes in the accounting policy, accounting estimation and measurement methods 1. Change of major accounting policy during the current reporting period Implementation of the "Accounting Standards for Business Enterprises No. 14 - Revenue" (revised in 2017) (hereinafter referred to as the "New Revenue Standards") The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14 - Revenue" in 2017. The revised standard stipulates that the initial implementation of the standard should adjust the amount of retained earnings and other related items in the financial statements at the beginning of the year based on the cumulative impact, and no adjustments should be made to comparable period information. The company implements the new revenue standard from January 1, 2020. According to the standard, the company only adjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for the cumulative impact of contracts that have not been completed on the date of first implementation, and the comparative financial statements do not adjust. The major impact of the implementation of the regulation are as follows: 4 Summary of Semi-Annual Report 2020 of Bengang Steel Plates Co., Ltd. January 1, 2020 Change of accounting policy Affected items Consolidated Financial Parent company content and reason statement financial statement Reclassify advance from customers Advance from customers -4,429,821,526.79 -5,597,707,687.22 to contract liabilities. Contract liabilities 4,429,821,526.79 5,597,707,687.22 Compared with the previous revenue standards, the impact of the implementation of the new revenue standards on the relevant items for the period from January to June in 2020 is as follows: June 30, 2020 Affected items Parent company financial Consolidated Financial statement statement Contract liabilities 4,658,022,515.99 5,736,618,018.47 Advance from customers -4,658,022,515.99 -5,736,618,018.47 There is no impact to the items in the comprehensive income statement. 2. Change of accounting estimation (1) The company’s principle for determining the applicable point of time for changes in accounting estimates: According to Article 19 of the "Accounting Standards for Business Enterprises No. 4 - Fixed Assets", the enterprise should review the useful life, estimated net residual value and depreciation method of fixed assets at least at the end of each year. If the estimated useful life is different from the original estimate, the useful life of the fixed asset shall be adjusted. (2) Major change of accounting estimate during the current reporting period Change of accounting estimation Date of Approval procedure Affected items and amount content and reason application Content: The company adjusted On January 31, 2020, the the useful life of some of the eighth meeting of the Accumulative depreciation: fixed assets since January 1, company's eighth board of January 1, RMB -206,452,050.12; 2020. directors reviewed and 2020 Operating cost : RMB Reason: At the end of 2019, the approved the "Proposal on -206,452,050.12. company evaluated the actual Adjusting the Useful Life of 5 Summary of Semi-Annual Report 2020 of Bengang Steel Plates Co., Ltd. Change of accounting estimation Date of Approval procedure Affected items and amount content and reason application condition and depreciation period Certain Fixed Assets" of fixed assets, and believed that the company’s production equipment had a relatively high level of equipment and technical content, and maintained good conditions. The company’s cumulative investment in equipment maintenance costs from 2010 to 2019 was RMB 11.959 billion. To make the depreciation period of fixed assets closer to the actual service life, it is necessary to adjust the useful life of some fixed assets. (2) Illustrations of retrospective restatement due to correction of significant accounting errors in the reporting period □ Applicable √ Not applicable No major accounting errors within the reporting period that needs retrospective restatement for the Company. (3) Illustrations of changes of the consolidation scope as compared with the financial report of previous year □ Applicable √ Not applicable There was no change of the consolidation scope during the reporting period. 6