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Nanshan Aluminum Achieved Operating Income Of RMB 20.222 billion In 2018

On the night of April, 16, Nanshan Aluminum released its annual report of 2018. In spite of a price reduction of primary aluminum, the Company not only started new production but also keeps making new breakthroughs in high-end market. As a result, the Company achieved progress both in sales volume and operating income. However, due to the increase in cost, its net profit presented slight decline. In 2018, the Company achieved operating income of RMB 20.222 billion, up by 18.48% over the same period the previous year; operating cost was RMB 16.707 billion, up by 26.44% over the same period the previous year; net profit attributable to the shareholders of listed company was RMB 1.428 billion, down by 10.76% over the same period the previous year. Earnings per share was RMB 0.15.

Continuous increase in operating income is attributed to the efforts made by the Company to vigorously develop new products, expand application scope and improve and optimize product mix. Among the products, capacities of aluminum foil production line and mid-thick plate production line were continuously strengthened during report period and existing production lines were updated to improve yield, thus leading to the increase in sales volume.

The slight reduction in net profit was caused by significant increase in operating cost, i.e. YOY up by 26.44%. The increase in operating cost resulted from the increase in raw material price and the decrease in primary aluminum product price. Under unfavorable circumstances, in 2018, the Company strictly adhered to the strategy of “Innovation driving, High-endmanufacturing, Deep processing” and tried to develop its products into high-tech and high value-added products. After so many years of market expansion and technology accumulation, the Company has now performed it transformation from civilian goods manufacturing to high-end industrial goods manufacturing. It has developed into an aluminum producing and processing company that boasts the most advanced equipment, technologies and processing capacity. During the report period, with the gradual capacity increase of its new products, the Company has been making huge breakthroughs in high-end manufacturing: It has made steady progress in the supply quantity of aluminum material for aviation and auto industry and supply scope. It also enters into long-term supply contract with leading main engine factories in the world. The Company aims to actively promote and implement deep processing strategy while well accomplishing the development, certifying and production of high-end aluminum material, for the purpose of continuously extending industry chain to aerospace part industry that requires higher added-value service.

On July, 16 to July, 22, 2018, during Farnborough International Airshow, the Company officially entered into cooperation with FigeacAero, indicating official comprehensive strategic cooperation between the both parties. The next step for the both parties is to co-invest and co-construct deep processing production line of aerospace parts in the Company’s aircraft material industrial park to manufacture parts for international aircraft manufacturer and domestic giant aircraft. Currently, the Company is the first domestic aluminum processing company that officially supplies aircraft manufacturing and parts processing companies including Boeing, Airbus, Rolls-Royce, Safran and Aviation Industry Corporation of China. The Company also supplies in bulk international and domestic famous auto factories including BMW, GM and Chery and world renowned NEV factories. Orders are in steady rise.