The board of directors of Xiwang Special Steel Company Limited informed the shareholders of the company and potential investors that based on the preliminary assessment of the unaudited consolidated management accounts of the Group for the nine months ended 30 September 2017, which have not been reviewed or audited by the independent auditors and/or the audit committee of the company, the consolidated profit attributable to the shareholders of the company for the nine months ended 30 September 2017 is expected to increase by more than 140% as compared to the corresponding period of last year (nine months ended 30 September 2016: approximately RMB 225 million (unaudited)). The increase in the net profit attributable to the shareholders of the company for the nine months ended 30 September 2017 was due to: (1) on the supply side, the favourable government policies on prohibiting the use of intermediate frequency furnace and on alleviating overcapacities of the steel industry have resulted in a significant decrease in production capacities of certain steel enterprises. Meanwhile, the national supervision on environmental inspection has been strengthened and certain enterprises which failed to meet the environmental standards were ordered to close down, leading to a decrease in steel supply; on the demand side, the approval by the government on numerous infrastructure projects, frequent construction activities and steady demand from the property development industry have caused the demand on steel to increase further and the steel price to rise persistently; and factors, such as, persistent rise in steel price, growth in revenue and moderate increase in raw material price, lead to an increase in the company's profit margin along with an increase in gross profit of steel.