The board of directors of Changmao Biochemical Engineering Company Limited that having assessed the currently available information, although there is an estimated increase in the Group's revenue for the year ended 31 December 2017, the Group is likely to record a significant decline in the consolidated net profits for the year ended 31 December 2017 as compared with the consolidated net profits for the year ended 31 December 2016. As mentioned in the Previous Announcements, the Board believes that the Group's financial performance for the year ended 31 December 2017 has been affected mainly by: the drop of profit margin of its products resulted from the significant increase in raw material price during the year ended 31 December 2017 as compared to that in the corresponding period in 2016; and the transformation of its maleic anhydride production lines with an annual production capacity of 20,000 tons in its Changzhou plant which was commenced in March 2017. Upon completion of the Transformation, butane instead of benzene will be used as a raw material to manufacture maleic anhydride. During the period of the Transformation, the production of maleic anhydridea major raw material for the production of other major products of the Grouphad to be temporarily suspended and the Group had to source maleic anhydride from external suppliers and incurred extra energy costs such as steam cost and other manufacturing costs. Steam was a side product of the maleic anhydride production lines which was previously recycled for production of other products before the suspension. The Board considers that despite the adverse financial impact resulted from the temporary increase in production costs in the short-run, the Transformation is expected to have a cost saving advantage in the long run. The construction work of the Transformation has been completed in the fourth quarter of 2017 and is currently under trial run. It is expected that the production will be in full operation in the first half of 2018.