Zhengzhou Coal Mining Machinery Group Company Limited provided earnings guidance for the full year ended December 31, 2018. The board of directors of the company inform the shareholders and potential investors of the company that it is expected that the net profit attributable to owners of the company for the year ended 31 December 2018 would be ranging from RMB 700 million to RMB 840 million, representing an increase ranging from RMB 415.75 million to RMB 555.75 million or a year-on-year increase between 146.26% and 195.51% as compared with the corresponding period of the previous year; the net profit attributable to owners of the company after extraordinary gains and losses would be ranging from RMB 500 million to RMB 600 million, representing an increase ranging from RMB 112.92 million to RMB 212.92 million or a year-on-year increase between 29.17% and 55.01% as compared with the corresponding period of the previous year based on the company's preliminary assessment and the unaudited management accounts of the group for the year ended 31 December 2018. The Board believes that the increase in the results for the year ended 31 December 2018 was mainly attributable to the reasons stated below: In 2018, for coal industry, the supply-side structural reforms and the policies of decapacity continued to deepen. Coal industry remained healthy and achieved a supply- demand balance as a whole. Coal price fluctuated within a reasonable range. The stable profit of coal enterprises, coupled with the industry's de-capacity and the continuous promotion of the "mechanization and automation substitute manual labor" policy, the demand for coal machinery equipment has been effectively boosted. The orders received for the Company's coal machinery segment was full and the profit increased significantly year-on-year. In addition, the overall operation of the automobile industry was stable. Under the influence of policy factors and macroeconomic, international and domestic production and sales were lower than that expected at the beginning of the year. Domestic passenger vehicle production and sales decreased year-on-year but commercial vehicle production and sales continued to grow. Under such context, the Company's automative auto parts business continued to push forward the research and development of new products, new technologies and new processes, improving the level of automation, reducing cost while enhancing efficiency, and accelerating globalization, which effectively maintained the steady growth of the automotive auto parts business. The acquisition of SEG Automotive Germany GmbH ("SEG") by the Company increased interest expense of bank borrowings, accrued interest in connection with other financial liabilities (Zhongan Zhaoshang and CRCI) and an amortization of appreciation pursuant to the evaluation of merger and acquisition, all of which reduced the profit of the listed company. The extraordinary gains and losses for 2018 of the company would be ranging from approximately RMB 200 million to RMB 240 million, mainly due to reversal of impairment allowance of receivables as a result of an independent impairment test and other related impacts. According to a development trend of the auto industry, based on the principle of prudence, the Company intends to provide impairment allowance of goodwill arising from merger and acquisition of the auto part business segment amounting to approximately RMB 120 million.