Based on the preliminary estimation by China Rongsheng Heavy Industries Group Holdings Limited, the unaudited net profit of the company and its subsidiaries (collectively the 'group') for the first half of the year 2012 prepared in accordance with International Financial Reporting Standards is expected to decrease significantly as compared with the published net profit for the same period in 2011. During the first half of the year 2012, as affected by the decline of the shipbuilding market, the orders and prices of ships dropped sharply as compared with last year, which resulted in the decrease in profits of the group.