Baosteel Published the Results for First Half of Year 2008

Yesterday evening, Baosteel Co., Ltd. published the operational results for the 1st half year of 2008: The operating revenue reached RMB 103.642 billion yuan, representing a y-o-y growth of 10.1%; the net profit reached RMB 10.109 billion yuan, representing a y-o-y growth of 18.2%, the earning per share was RMB 0.55 yuan and the net rate of return on assets was 10.10%.

Baosteel Co., Ltd. overcame the negative impacts of soaring cost, depressed stainless steel market, snow disaster, earthquake, tight supply of outsourced billets, etc., explored the market actively, enhanced the system operation capability, and promoted the integrated synergy , so that each unit was running smoothly and main technical and economic indices improved steadily; the output was rising and the product mix was further optimized.

The key projects were progressing as expected and the overall operation was fine. In the first half of 2008, Baosteel Co., Ltd. sold 12.39 million tons of commodity billets, made achievements in opening up proprietary and leading product markets and optimizing the product mix, reached the sales target of high strength cold-rolled steel, hot-rolled proprietary and leading product, steel for battery, welded tube and wire, high brand and high efficiency electrical steel.

The sale of advantageous products amounted to 4.6 million ton, accounting for 55.1% of the annual plan.

Taking advantage of the operation of new production lines, Baosteel Co., Ltd. stressed on opening new market and developing new product, in the first half of 2008, the new product sales accounted for 19.9%. The silicon steel line of No.5 Cold Rolling Project produced the first coil of qualified oriented silicon steel on May 15 which was a major breakthrough in the independent R&D for new silicon steel products.

The product had been sent to 6 clients for trial use and 3 of them had used such steel for transformers which were sold to the market; Baosteel Co., Ltd. passed the review of first batch of National Innovative Enterprise and completed the initial process validation of 1470MPa cold-rolled martensitic steel of highest strength grade; became the first enterprise to pass the appraisal of X80 pipeline steel for the second line of west-east natural gas transmission project; the stainless steel SUS444 for water treatment was qualified for the material for all the water tanks in the world expo; Baosteel Co., Ltd. also completed the test of 300M multiple batches of new airplane undercarriage.

While achieving good operational results, Baosteel Co., Ltd. made progress in key projects. In the first half year, the No.5 cold rolling project, the cold-rolled stainless steel strip project etc, were under control in schedule, quality and investment. The big diameter longitudinal welded pipe product, No. 4 power generator set and other projects that were put into production recently had good performance in "reach the targets in 4 aspects" and the benefits of these project gradually emerge. Besides, Baosteel Co., Ltd. adheres to the concept of "green operation" and "sustainable development", and promotes energy saving and environmental protection projects in an orderly way. By now, 19 key environmental protection projects, such as the addition of desulfurizing device for No. 1 set of power plant of Baosteel Branch, and 22 key energy saving projects such as the combined use of blast furnace gas have been advancing as scheduled.