Xiwang Special Steel : POSITIVE PROFIT ALERT AND CERTAIN KEY OPERATING DATA

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XIWANG SPECIAL STEEL COMPANY LIMITED

Гˮत፻Ϟࠢʮ̡

(Incorporated in Hong Kong with limited liability)

(Stock Code: 1266)

POSITIVE PROFIT ALERT

AND

CERTAIN KEY OPERATING DATA

This announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong).

The Board wishes to inform 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 year ended 31 December 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 year ended 31 December 2017 is expected to increase by more than 150% as compared with that for the year ended 31 December 2016 (RMB332.6 million).

The Board also wishes to inform the shareholders of the Company and potential investors about certain unaudited operating data of the Group for the year ended 31 December 2017.

Shareholders and potential investors are advised to exercise caution in dealing in the securities of the Company.

This announcement is made by Xiwang Special Steel Company Limited (the "Company", and together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong).

Positive Profit Alert

The board (the "Board") of directors ("Directors") of the Company wishes to inform the shareholders of the Company (the "Shareholders") and potential investors that based on the preliminary assessment of the unaudited consolidated management accounts of the Group for the year ended 31 December 2017, which have not been reviewed or audited by the independent auditors and/or the audit committee of the Company, the consolidated net profit attributable to the shareholders of the Company for the year ended 31 December 2017 is expected to increase by more than 150% as compared with that for the year ended 31 December 2016 (RMB332.6 million).

The increase in the consolidated net profit attributable to the shareholders of the Company for the year ended 31 December 2017 was mainly due to the following factors:

• (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;

• (2) 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

• (3) factors, such as, persistent rise in steel price, growth in revenue and moderate increase in raw material price, lead to an increase in our profit margin along with an increase in gross profit of steel.

Key Operating Data

The Board is also pleased to announce the unaudited key operating data of the Group for the year ended 31 December 2017 as follows:

Year ended
31 December 2017
(Unaudited)
Sales volume of self-manufactured steel products
(tonnes)	Approximately 3.0 million
Gross profit per tonne of self-manufactured
steel products (RMB)	Approximately 630 per tonne
Consolidated net profit attributable to the shareholders of
the Company (RMB)	Approximately 840 million

The Company is in the course of finalising the annual results of the Group for the year ended 31 December 2017. The information contained in this announcement is only a preliminary assessment by the management of the Company based on the unaudited consolidated financial statements of the Group, which have not been reviewed or audited by the Company's auditors and the actual results for the Group may be different from those disclosed in this announcement.

Details of the annual results of the Group for the year ended 31 December 2017 are expected to be announced in March 2018. Shareholders and potential investors should read the Group's annual results carefully.

Shareholders and potential investors are advised to exercise caution in dealing in the shares of the Company.

By order of the Board of

Xiwang Special Steel Company Limited

Mr. WANG Di

Chairman

Hong Kong, 9 January 2018

As at the date of this announcement, the Board comprises the following Directors:

Executive Directors	Independent non-executive Directors
Mr. ZHANG Jian	Mr. LEUNG Shu Sun Sunny
Mr. SUN Xinhu	Mr. LI Bangguang
Ms. LI Hai Xia	Mr. YU Kou
Non-executive Directors
Mr. WANG Di
Mr. WANG Yong
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