Chu Kong Ptrlm&Ntrl Gs Stl Pipe Hldg : Steel Pipe Announces 2015 Interim Results

【FOR IMMEDIATE RELEASE】

 Saudi Arabia production plant's trial production has been commenced

 Overseas sales accounted for 60% of the total sales

 Successfully tapped into the offshore equipment engineering manufacturing industry by supplying steel structure pipes to offshore drilling platform constructers

 Commencement of the commercial property development, involving the first phase development of 82,500 square metres for an integrated commercial complex of offices, shops, serviced apartments and villas

(August 28, 2015 - Hong Kong) Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited (the "Company", together with its subsidiaries hereinafter referred to as the "Group" or "Chu Kong Steel Pipe", stock code: 1938), the largest manufacturer and exporter of large longitudinal welded steel pipes in China, is pleased to announce the audited interim results for the six months ended 30 June 2015.
For the year ended 30 June 2015, the Group has a turnover of approximately RMB 1,128 million, decreased by approximately 23.9% as compared with the same period in 2014 (1H2014: RMB1,484 million). Loss attributable to equity holders of the Company was approximately RMB206.1 million (1H2014: profit RMB70.6 million). Loss per share was approximately RMB0.20, (1H2014: earnings per share RMB0.07). The Board did not recommend the payment of interim dividend for the six months ended 30 June 2015.
In the reviewing period, the Group has delivered approximately 218,000 tonnes of welded steel pipes, of which domestic sales has been accounted for 40.1%, while the overseas sales were approximately 59.9%. The profit margin was around 16.1%.
In the first half of 2015, the Group received new orders of approximately 220,000 tonnes for the period under review and approximately 68% were received from overseas customers. These included sizeable orders for the Odebrecht gas project in Peru and the CNOOC's offshore drilling platforms in Thailand.
Mr. Chen Chang, Chairman of the Group, comments, "Although the domestic market for steel pipes is less than vibrant, there are silver linings in the industry. China's "One Belt One Road" ("OBOR") strategy and the establishment of the Asian Infrastructure Investment Bank

("AIIB") are expected to fuel the infrastructure constructions and hardware developments in Asia and boost the economic growth in the regions. As a world-recognized pipe manufacturer, the Company is poised to capture the precious opportunities created by the implementation of the OBOR and AIIB. The demand for pipes used in infrastructure projects and oil and gas pipeline installations is expected to increase substantially.
Looking forward, the anti-corruption campaign in China draws to a close, the momentum of China's gas resources development, in particular the transportation related infrastructure constructions, is expected to be restored as the Chinese government is determined to push it forward. All necessary pipelines and auxiliaries will have to be ready to support the increasing supply of natural gas, especially from Central Asia, Xinjiang and Russia. As a leading oil and gas transmission pipes manufacturer in China, the Company shall contribute to the nation's development in pipeline constructions.
Furthermore, our production plant in Saudi Arabia has commenced a trial operation. The Group will continue to enhance its international competitiveness and pursue its aspiration to become a multinational corporation in the market.
The demand of steel pipes will grow progressively throughout the next few years alongside with the growing demand of gas and other renewable energy resources worldwide. The Group has laid a solid foundation, formulated definite development strategies and improved its competitive strengths for its sustainable growth. The Group will adhere to its product diversification and "Integration of Steel Plates and Pipes" strategies and aspire to be a leading world class LSAW steel pipe manufacturer."
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Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited is the largest manufacturer and

exporter of longitudinal submerged arc welded steel pipes in China. Our steel pipes are mainly used

for energy transmission including oil and gas transmission pipelines, deep sea pipelines, city gas

networks, and petrochemicals, mining, infrastructure construction, offshore engineering, steel

structures and water utilities industries.

The Group's production bases and offices are located in Panyu, Zhuhai, Lianyungang, Jiangyin, Ningbo

of China, Indonesia, Saudi Arabia, Dubai, Singapore and Hong Kong, with 9 longitudinal submerged

arc-welded ("LSAW"), 4 spiral submerged arc-welded ("SSAW") , 1 clad pipe and 1 electric resistance

welded ("ERW") production lines and other lines with a combined annual production capacity of

3,380,000 tonnes

Chu Kong Steel Pipe is the industry pioneer of LSAW steel pipes, strong in research and development with more than 100 registered utility patents including 7 registered invention patents, and has a long standing international and nationwide track record. The Group is the first and only steel pipe manufacturer in China to produce deep sea welded steel pipes for using under 1,500m water depth. Chu Kong Steel Pipe is the only welded pipe manufacturer in China that has achieved five national honors and awards, including "Gold Cup Prize for Actual Quality of Metallurgical Products", "Key New Products", "National-recognized Enterprise Technology Centre", "High Technology Enterprise" and "Academician Workstation", we are also the main drafter of the national standard for longitudinal welded steel pipes for transmission.

Shelldy Cheung

Phone: (852) 2626 1833

Email: shelldycheung@zhujiang.co m .hk

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