BOE TECHNOLOGY GROUP CO., LTD — Interim / Quarterly Report 2001

Aug 20, 2001

BOE TECHNOLOGY GROUP CO., LTD. 2001 Interim Report Summary (International)

Important Notice: The Board of Directors of BOE Technology Group Co., Ltd. (hereinafter referred to as the Company) individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions nor errors which would render any statement misleading. The 2001 interim financial report of the Company has not been audited. The Report is compiled in Chinese and English languages should there be difference in interpretation of the two languages, the Chinese version shall prevail.

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. Company profile

1. Legal Name of the Company:

In Chinese: 京东方科技集团股份有限公司 Short Form of the Stock (A-share): JINGDONGFANG – A Short Form of the Stock (B-share): JINGDONGFANG – B Stock Code (A-share): 0725 Stock Code (B-share): 2725 In English: BOE TECHNOLOGY GROUP CO., LTD. Short Form in English: BOE

1. Registered Address: No. 10, Jiuxianqiao Road, Chaoyang District, Beijing Office Address: No. 10, Jiuxianqiao Road, Chaoyang District, Beijing Post Code: 100016 The Company ’ s Internet Web Site: http://www.boe.com.cn E-mail: web.master@boe.com.cn

3. Legal Representative: Wang Dongsheng

1. Secretary of the Board of Directors: Chen Yanshun Tel.: (86) 10 – 64370756 Fax: (86) 10 - 64366264 E-mail: yschen@boe.com.cn Liaison Address: No. 10, Jiuxianqiao Road, Chaoyang District, Beijing Authorized Representative in Charge of Securities Affairs: Zhong Huifeng Tel.: (86) 10 – 64366264 Fax: (86) 10 - 64366264 E-mail: hfzhong@boe.com.cn

2. Place Where the Annual Report is Prepared and Placed: Capital and Securities Department of the Company

3. Stock Exchange Listed with: Shenzhen Stock Exchange

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1. Media for Disclosing the Information of the Company: Internet Web Site: http://www.cninfo.com.cn Newspapers: Securities Times and Ta Kung Pao

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. Financial Highlights and Business Highlights

(Unit: In RMB)

		(Unit: In RM
Items	Amounts at the period	Amounts at the previous period
Net profit	55102499.71	49799065.44
Total assets	3952075174.83	2781096203.28
Assets liabilities ratio (%)	40.28	53.38
Shareholders’equity (Excluding minority shareholders’equity)	2147210937.73	1123299085.42
Earnings per share	0.100	0.102
Earnings per share after change of shares from the end of the report period to date of disclose	0.100	0.102
Net return on equity ratio (%)	2.566	4.430
Net assets per share	3.907	2.290
Net assets per share after change of share capital from the end of the report period to date of disclose	3.907	2.290
Net cash flows per share arising from operating activities	0.521	-0.115

Explanation of discrepancy between the domestic and international statement The income from main business lines as audited according to Chinese Accounting Standards (domestic report) was RMB 1276.28 million. The discrepancy between the domestic and international auditor ’ s reports was because that Beijing Asahi Glass Electronics Co., Ltd., a subsidiary joint venture of the Company, adopted different consolidation method: the consolidation method was used in the domestic report while allocation method was used in the international report. There was no significant difference in net profit between the domestic and international auditing results.

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. Change in Share Capital and Particulars about Shareholders

(I) Change in share capital

Share capital of the Company remained unchanged in the report period.

(II) Particulars about the shares held by top ten shareholders

1. Particulars about the shares held by top ten shareholders Status of shareholding of the top ten shareholders registered prior to June 30, 2001:

Not e	Name of shareholder	Share held at end of the report period (share)	Proportion in total share (%)	Type
1	Beijing Electron Tube Plant	325,429,000	59.22	State-owned juristic person’s

2

				share
2	SOUTH CAPITAL NOMINEES LIMITED	4,523,414	0.82	B-Share
3	STARBURST ASSETS LIMITED	3,641,250	0.66	B-share
4	Beijing Huayin Industrial Development Company	3,575,000	0.65	Juristic person’s share
5	CHINA SOUTHERN CORPORATE FINANCE LIMITED	2,606,100	0.47	B-share
6	Beijing Picture Tube General Plant	2,600,000	0.47	State-owned juristic person’s share
7	NORMAL WIN ASSETS LIMITED	2,000,085	0.36	B-share
8	BEAUJOLAIS INVESTMENTS LIMITED	1,904,800	0.35	B-share
9	CHINA SOUTHERN CAPITAL LIMITED	1,865,100	0.34	B-share
10	Lin Binquan	1,710,001	0.31	B-share

1. Explanation on shareholding of major ten shareholders

(1) There was no associated relationship among the aforesaid shareholders.

(2) The largest shareholder of the Company, Beijing Electron Tube Plant (Electron Tube) carried out reorganization of transferable bond; and 325.429 million state-owned juristic person ’ s shares held by Electron Tube were changed. The said thing is being subjected to State Ministry of Finance.

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. Business Review and Plan

( ) Business Highlights

Business Scope and Operation

The Company is engaged in information industry. The major businesses include the categories, namely network information display terminal and system; intelligent cards and electronic currency exchange system; new precision electronic apparatus and devices and materials. The Company has successively developed and launched Beijing Orient Brand LED large screen display system, networking computers, notebook computer, flatpanel computer, “[All-in-one Card] ”[, digital camera, etc. The Company has been taking a leading position in] market shares of many products and technology development in China and ranking No. 41 among the “ 2001 Top 100 Powers of Electronics and IT in China ” .

(1) In the report period, the Company realized a turnover amounting to RMB 1.26 billion, a 29.69% growth over the same period of the previous year, net profit amounting to RMB 55.1 million, a 10.65% growth over the same period of the previous year. The growth in the turnover and profit from the principal business lines is mainly due to the big margin growth in production output and sales volume of Beijing Orient Top Victory Electronics Co., Ltd., Zhejiang Beijing Orient Vacuum Electronics Co., Ltd. and the Company ’ s IT subsidiaries over the same period of the previous year. In the profit composition, the profit from the complete machines, system and software takes 33.3% of the total, a 265% growth over the same period of the previous year, becoming a new profit growing channel of the Company. It shows that the strategy of industrial transfer implemented by the Company in the past two years has been proved successful.

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(2) Successful Progress in Brand and Passage Undertaking with IT Terminal Products as the Key:

The product framework of the Company ’ s brand and passage undertaking has been preliminarily determined.

“[Beijing Orient] ”[ Brand has been created based on the seven categories of the products,] namely LED big screen display system, networking computer, notebook computer, flatpanel computer, “ All-in-one card ” , digital camera and Beijing Orient software. On this basis, a corresponding marketing and service system has been established.

The sales platform has been much improved in construction. The Company has basically finished construction of the platform in the area of the group, having established eight principal representative offices in North China, East China, South China, Northeast China, Central China, Southwest China, Northwest China, and Chongqing; the distribution network of the brand products is being gradually formed. Thirty agencies have been determined for the specialized computers; eighteen distributors of notebook computers have signed distribution contracts throughout the country.

Brand products have been launched in the market and their notability has been improving. LED big screen display system ranks in the front row in sales volume in the domestic market, enjoying a good reputation in the sector. The market share of the specialized computers and notebook computers has been continually growing and the market identity has been further improved. The traffic “ all-in-one card ” has been in application in Beijing starting from June 28, 2001. The product is now in trial use in public buses. It is predicted that the card may be applied in the taxi market at the end of the year. The R & D work of flatpanel computer, digital camera and software products has been basically completed. The products which have been launched in the market are enjoying a good reputation in the market.

Reinforce the work of brand promotion. In the report period, the Company has successively participated in professional and comprehensive product fairs and exhibitions, such as the World Computer Fair, Beijing Hi-tech Industry International Week, West China Trade Fair, successfully hosted the specialized products promotion fairs of Beijing Orient New Flatpanel Computer Products and Notebook Computers. Through a series of brand promotion activities, the identity of Beijing Orient Brand has been established in the market.

(3) Significant profit growth from the key products. In the report period, the Company produced 1.23 million monitors, a 17% growth over the same period of the previous year, ranking the fifth in the domestic sales volume, 4.57 million pieces of VFD. At the same time, the Company has actively developed the international market, resulting in 2.6 times growth over the same of the previous year. Vacuum switch tubes have passed the type tests for four categories covering 15 varieties of the products and established good identity in the market.

(4) The basic operation framework of the Company ’ s option and future stock plan has been

formed. Through approval by the shareholders ’ general meeting and the Board of Directors, the Company has established the Salaries and Remuneration Committee and has provided a reward fund based on10% of the after-tax profit of the year 2000.

(5) The construction of the Beijing Orient “ Digital Rose Park ” and “ Yizhuang

Technology Park ” has been carried out smoothly. Such international well-known companies as Nestle, ABB have moved into the park. The identity of the park is being upgraded.

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( ) Investments

1. Application and result of the proceeds raised from share offering

In RMB 000 ’

				In	RMB’000
Way of raising theproceeds	Projects committed for investment	Total investment	Predicted earnings	Projects actually invested	Actual investment
Issuing additional A shares	Technical innovation of special computer line	41,300	49,880	Technical innovation of special computer line	14,260
Issuing additional A shares	Technical innovation of portable computer line	54,000	65,540	Technical innovation of portable computer line	1,000
Issuing additional A shares	Technical innovation of industrialization of the digital TV receivers	57,880	40,510	Technical innovation of industrialization of the digital TV receivers	900
Issuing additional A shares	“all-in-one card” project	100,000	24,000	“all-in-one card”project	15,000
Issuing additional A shares	E-commerce harbor	190,000	60,990	E-commerce harbor	13,246
Issuing additional A shares	Flat back light source for digital terminal equipment	25,500	20,460	Flat back light source for digital terminal equipment	25,330
Issuing additional A shares	Digital camera	63,000	48,690	Digital camera	12,420
Remarks: (1) The actual investment amounts are all the amounts incurred in the report period; (2) The projects of digital camera and the project of flat back light source for digital terminals are the newly added projects invested with the proceeds raised from issuing additional A shares as approved by 2000 Shareholders’General Meeting; (3) Since the Company was preparing the TFT-LCD project, the investment progress was adjusted; (4) The predicted earnings from the project refers to the predicted annual profit newly added after the project has reached the designed production capacity.

2. Status of the Unused Proceeds Raised from Share Offering

The net amount of the proceeds raised from offering A-shares totaling RMB 974.9 million had been available by December, 2000. The unused proceeds have been deposited in the Company ’ s bank account.

3. Progress and Earnings of the Projects

(1) Project of Beijing Orient Top Victory Electronics Co., Ltd. with Increased Capital The project of Beijing Orient Top Victory Electronics Co., Ltd. with increased capital was completed in 2000. In the report period, the project produced and sold has increased 39.14% to 1.23 million CRT monitors comparing with the same period last year.

(2) “ All-in-one Card ” Project

The traffic “ all-in-one card ” has been in application in Beijing starting from June 28, 2001. The product is now in trial use in public buses. In the first half year, 100 millions out of the total contract has been achieved.

(3) Other projects are still in process of preparation and the products from some projects have been launched in the market.

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1. Projects invested with the funds not raised from share offering, the progress and earnings:

(1) Through examination and approval by 1999 Shareholders ’ General Meeting, the Company acquired 95% equity in Beijing Hengtong Park Phase-2 held by Jiahua Investment Co., Ltd. at the price of RMB 60 million through the agreement. Ended the report period, the Company had paid RMB 30 million.

(2) Through examination and approval by the 14[th] meeting of the 2[nd] Board of Directors, the Company invested Beijing Orient Portable Technology Co., Ltd., a Sino-foreign joint venture. The registered capital of the joint venture is RMB 38.78 million (the Company is holding 51% equity). In the report period, the Company had invested RMB 3.7 million for the registered capital.

(3) Through examination and approval by the 15[th] meeting of the 2[nd] Board of Directors, the Company invested Beijing Orient Software Co., Ltd., a Sino-foreign joint venture. The registered capital of the joint venture is RMB 10 million (the Company is holding 30% equity). In the report period, the Company had invested RMB 1.5 million for the registered capital.

( ) Analysis on Impact from the Significant Change in Operation Environment China is surely going to join WTO. It is predicted that China shall greatly reduce her tariff over IT products, such as semiconductors, computers and communication equipment, which shall certainly result in severe competition in both domestic and foreign electronic information industry. However, the Company has complied with the practice of the international market for its most products for a long time, possesses the essential technology of the relevant products, and most of the products have passed international certifications such as VL, FCC and CF. Thus the Company has every powerful market competitiveness. Meanwhile, the Company has established market orientation in developing the international market. Therefore, China ’ s joint in WTO shall bring about positive effect on the Company ’ s production and operation.

Beijing ’ s successful application for hosting 2008 Olympic Games shall greatly promote the development of the electronic information industry in Beijing. In the coming five years, Beijing shall invest RMB 180 billion in the construction of urban infrastructure, including RMB 30 billion for the urban information construction. This shall create more opportunities for the Company in its industrial development. It is predicted that the Company shall enjoy more opportunities in the market in LET big screen display system, network information display terminal and intelligence IC card tolling system.

During the 10[th] Five-year Plan, Beijing has placed the development of electronic information industry to an important position. Information industry has been listed as a key sector in hitech industrialization with priority for development. In addition, in compliance with the implementation of the Several Policies of the State Council for Encouraging Development of Software Industry and Integrated Circuit Industry, Beijing Municipal Government promulgated the Circular on the Official Opinions of Beijing Municipal Government on Implementation of the Policy of Encouraging the Development of Software and Integrated Circuit Industries (Beijing-Government-Document [2001] No. 4), and has thus prepared in detail the concerned preferential policies for developing software and integrated circuit industries. This is very favorable for the Company to produce and develop the concerned products.

( ) Plan of the Second Half Year

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1. To cope with the changes in the macro economic environment and the requirements of the concerned policies of the state, the Company is going to focus on the following work:

The Company shall positively make deep study on the affects from Beijing ’ s successful

application for hosting 2008 Olympic Games and China ’ s joint in WTO upon the

Company ’ s production and operation. The Company has established “ Special Office in

Charge of Projects of Olympic Games ” specialized in studying the urban information

market after Beijing ’ s successful application for hosting 2008 Olympic Games. It is expected that in the coming several years the Company shall enjoy more market share in urban information construction in Beijing. Meanwhile, through further implementation of the international alliance strategy, the Company shall enjoy expanded space of survival in both domestic and international market competition.

1. Measures to be taken against the problems existing in the production and operation in the first half year.

(1) Try to over-fulfill the operation objectives of the whole year;

(2) In the process of implementing the brand and passage undertaking, lay a solid foundation in products, technology, management and market channels, and construct custom-oriented service system;

• (3) Do a good job in planning and development of Beijing Orient “ Digital Rose Park ” and

• “[Yizhuang Technology Park] ”[ and improve the construction of the park area.]

(4) Further implement the working policy of “ learning, improvement and creation ” , reinforce internal management, increase income and reduce costs, and improve the management level on overall basis;

(5) Speed up the work concerning options and future shares and improve the personnel management system for staff encouragement;

(6) Carry out the work of restructuring the enterprise process flow and establish a management head office featuring simplified administration, standardization and high efficiency.

V. Significant Events

(I) The Company shall conduct neither interim profit distribution nor the capital public reserve transferring to share capital in the year 2001.

( ) Profit Distribution Plan and the Plan for Converting Public Reserve into Capital of the Previous Year and the Implementation; Implementation of the Share Allotment Plan in the Report Period:

1. The Company ’ s profit distribution plan of the previous year is as follows: based on total share capital of the Company as at Dec. 31, 2001, 549.554 million shares, profit is distributed to all shareholders at the rate of RMB 1.00 bonus cash for every 10 shares (including tax). Dividend for B share is converted into HKD at the interim HKD to RMB rate (1:1.0621)

quoted by the People ’ s Bank of China on the first business date after the resolution date of

2000 Shareholders ’ General Meeting (July 2, 2001). The distribution plan was examined

and approved in 2000 Shareholders ’ General Meeting held on June 29, 2001.

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1. Implementation: the Company has published Notice on Profit Distribution on Aug. 3, 2001. Equity record date for A shares and last trading date for B share was Aug. 10, 2001, exdividend date was Aug. 13, 2001.

( ) Material Lawsuits and Arbitration in the report period

In the report period, the Company has never been involved in material lawsuits or arbitration

( ) Significant Related Transactions

Please refer to Note 19 to Financial Statement, related transaction

( ) The Company is independent from the control shareholder in terms of personnel, assets and finance.

(VI) Changes in the Company ’ s name and short form of stock Approved by National Administrative Bureau of Industry and Commerce, the Company

changed its name from “ Beijing Orient Electronics Group Co., Ltd. ” to “ BOE

Technology Group Co., Ltd. ” .

Short form of the stock of the Company remained unchanged.

(VII) In the report period, neither the Company nor its shareholder with 5% of the total shares published commitment on the designated newspapers or websites.

(VIII) Miscellaneous

Beijing Orient Guanjie Electronics Company, a subsidiary of the Company, has completed its reform into joint stock limited company (renamed as Beijing Orient Guanjie Electronics Company), relevant procedures for changes with industrial and commercial authorities has been carried out. Investment and shareholding of the Company in the company remained unchanged.

VI. Financial Report

(I) Accounting Statements (Attached hereinafter)

• (1) Balance Sheet

• (2) Profit and Profit Distribution Statement

• (3) Statement of Cash Flows

(II) Notes to Accounting Statements

(i) Accounting policies basis of Comparatives for preparing the consolidated accounting statements:

Comparative figures have been adjusted to conform with changes in presentation in the current year.

(ii) Taxation

The main taxes the Company has to pay are listed as follows:

Taxes Tax rate VAT 17% Business tax 5% Income tax 33%

Remarks

17% of the product sales income 5% of the service income 33% of the taxable income

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Through approval of Beijing Chaoyang District Local Tax Bureau with the document 2000 (IT) No. 194, commencing from July, 2000, the income tax rate for the Company is 15%.

Meanwhile, two of the Company ’ s subsidiaries are Sino-foreign joint ventures that enjoy the preferential treatments of exemption from income tax in the 1[st] and 2[nd] years after they start to make profit and exemption by half from the 3[rd] to 5[th] years. Of them Beijing Asahi Glass Electronics Co., Ltd. enjoys preferential tax rate of 24%. In 1999, the company was further recognized as an enterprise of the advanced technology and enjoys half tax payment at the rate of 12% from 1999 to 2001. Beijing Orient Top Victory Electronics Co., Ltd. was granted the certificate of hi-tech enterprise in 1998. Through approval by Beijing Municipal National Revenue Bureau Foreign Related Branch with the document BNRBFRB Official Reply 92000) No. 4999, the company enjoys the tax rate of 15%, from 1999 to 2000, is exempted from enterprise income tax, from 2001 to 2003, exempted from enterprise income tax by half. In addition, Shenzhen Beijing Orient Intelligent Display Technology Co., Ltd.,

the Company ’ s subsidiary newly invested in 2000 enjoys the tax rate of 15%. Through approval by Shenzhen Local Tax Bureau with the document SLTB Official Reply (1999) No.119, the company shall be exempted from enterprise income tax in the 1[st] and 2[nd] years commencing from the year when it starts to earn profit and by half from the 3[rd] to the 5[th] years. The income tax rate applicable to other subsidiaries is 33%.

(iii) Controlled Subsidiaries and Joint Ventures

The Company ’ s controlled subsidiaries are listed as follows:

The Company’s	The Company’s	The Company’s	controlled	subsidiaries are listed as	follows:
Name of Companies			Registered	Business lines	Amount of	Proportion to the	Notes
			capital		Investment	registered capital of
					In RMB	company invested
Beijing Dongdian		Jinxin	RMB 773,000	Manufacturing and marketing	387273	50.1%	Consolidated
Building Materials Co., Ltd.				mould board and materials used
				for buildings
Beijing Weisong Electronics			RMB 1,000,000	Producing and marketing CPT	510000	51%	Consolidated
Co., Ltd.				metal parts
Beijing Chaoyang		District	RMB 579,000	Producing and marketing	341610	59%	Consolidated
Electronic Glass Products				electronic vacuum glass devices
Associated Plant
Beijing Asahi		Glass	USD 8,626,000	Producing and marketing	30788420	50%	Consolidated
Electronics Co., Ltd.				support glass rods and low-
				melting-point welding powder
Beijing Orient Top		Victory	RMB	Producing and marketing color	126,880,000	52%	Consolidated
Electronics Co., Ltd.			244,000,000	monitors and multi-media
				products
Zhejiang Beijing		Orient	RMB	R & D, production and	59,520,000	60%	Consolidated
Vacuum Electronics Co.,			992,000,000	marketing of electronic display
Ltd.				devices and spares and parts
China Economic		Trading	RMB 30100000	Marketing computer software,	24080000	80%	Consolidated
Networking Co., Ltd.				hardware and external devices
Beijing Orient	Vacuum		RMB 35000000	Producing and marketing	19,250,000	55%	Not consolidated
Electrical Appliances Co.,				vacuum electrical appliances
Ltd.
Shenzhen Taidongdian			RMB 1000000	Initiating businesses, domestic	510000	51%	Not consolidated
Industrial Co., Ltd.				trading, materials supply and
				sales
Shaoxing Beijing		Orient	RMB 13500000	Producing and marketing	13500000	79.6%	Consolidated
Electrical Appliances Co.,				electronic monitor parts and
Ltd.				materials
Shenzhen Beijing		Orient	RMB 10000000	Development of electronic	5980000	59.8%	Consolidated
Intelligent		Display		intelligent system
Technology Co., Ltd.
Beijing Orient Technology			USD 200,000	R&D, production and sales of	1,656,000	100%	Not consolidated
Co., Ltd.				IT products
Beijing Orient		Digital	USD 10,000,000	R&D, production and sales of	12,416,550	75%	Not consolidated
Technology Co., Ltd.				digital camera and other digital
				products
Beijing Orient		Fangda	USD 6,000,000	Production and sales of	25,326,702	51%	Not consolidated
Heguang Electronics Co.,				electrical glass products for
Ltd.				plane display
Beijing Orient		Mobile	RMB	Production and sales portable	3,700,000	51%	Not consolidated
Technology Co., Ltd.			38,780,000	electronic information
				processor telecommunication
				terminals

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The Company invested RMB 6,620,000 on Shaoxing Beijing Orient Electronic Appliances Co., Ltd. and RMB 6,880,000 on Zhejiang Vacuum Electronics Co., Ltd. (which has been changed into Zhejiang Beijing Orient Vacuum Electronics Co., Ltd.). Therefore, the Company directly holds 49% and indirectly holds 30.6% of the shares of Shaoxing Beijing Orient Electronic Appliances Co., Ltd., totalling 79.6%.

Since Shenzhen Taidongdian Industrial Co., Ltd. Beijing Orient Technology Co., Ltd. Beijing Orient Digital Technology Co., Ltd. Beijing Orient Fangda Heguang Electronics Co., Ltd. and Beijing Orient Mobile Technology Co., Ltd. are still in preparation for incorporation, they have not been listed in the scope of consolidation.

(iv) Notes to Main Items of Accounting Statements

1. Fixed assets and accumulated deprecation

Cost Jan. 1, 2001 Increase as of this period Decrease as of this period June 30, 2001 Accumulated depreciation Jan. 1, 2001 Depreciation as of this period Decrease as of this period June 30, 2001 Net value June 30, 2001 Provisions for devaluation Jan. 1, 2001 June 30, 2001 June 30, 2001	Housing & Building 310017000.00 1708870.00 - 311725870.00 20208000.00 3756581.77 - 23964581.77 287761288.23 - - 287761288.23	Equipment Motor vehicles Land use right 426702000.00 11110000.00 27068000.00 19475940.51 0.00 4680289.00 (1116887.84) (415959.00) - 445061052.67 10694041.00 31748289.00 136844000.00 4067000.00 1282000.00 26259481.95 599397.04 279198.30 (3033258.47) (403480.23) - 160070223.48 4262916.81 1561198.30 284990829.19 6431124.19 30187090.70 2743971.00 – - 2743971.00 – - 282246858.19 6431124.19 30187090.70	Total amount 774897000.00 25865099.51 (1532846.84)
			799229252.67
			162401000.00 30894659.06 (3436738.70)
			189858920.36
			609370332.31 2743971.00 2743971.00 606626361.31

2. Related Companies

2. Related Companies
	Jan. to June, 2001	Dec., 2000
Net value at beginning of the period	762803000.00	719015000.00
Purchases	0.00	4743000.00
Profit after tax due from the associated	2464864.88	59667000.00
companies
Dividends receivable	-	-
Dividends received	(34484800.10)	(21811000.00)
Others	54451535.93	1189000.00
Net assets due from the associated companies	–––––––––	–––––––––
Negative goodwill	785234600.71	762803000.00
	(1884026.25)	(3179000.00)
Net value at end of the period	–––––––––	–––––––––
	783350574.46	759624000.00
Cost of negative goodwill	–––––––––	–––––––––
Accumulated amortization	(12947522.64)	(12948000.00)
	11063496.39	9769000.00

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3. Intangible Assets ual amortization value of technology transfer at beginning of the period se ization ual amortization value at end of the period 4. Inventories Materials and supplies (cost) Products in process (cost) Finished products (cost) Provision for losses on realization of inventories 5. Accounts receivable and advance payment Accounts receivable Less: Provision for bad debts Notes receivable Payment in advance Accounts receivable from associated companies Accounts receivable from related companies Others accounts receivable	––––––––– (1884026.25) ––––––––– June 30, 2001 12340000.00 0.00 (944550.74) ––––––––– 11395449.26 ––––––––– June 30, 2001 231326293.97 28854163.28 89440468 (5709687.88) 343911238.26 ––––––––– June 30, 2001 495869089.85 (20863528.64) 475005561.21 27467908.00 18940415.75 12703812.00 62264676.00 202838521.50 799220894.46 –––––––––		––––––––– (3179000.00) ––––––––– Dec. 31, 2000 11311000.00 2801000.00 (1772000.00) ––––––––– 12340000.00 ––––––––– Dec. 31, 2000 216643000.00 20592000.00 93055000 (5832000.00) 324458000.00 ––––––––– Dec. 31, 2000 561562000.00 (20947000.00) 540615000.00 12385000.00 12541000.00 16633000.00 62078000.00 147708000.00 791960000.00 –––––––––

Residual amortization value of technology transfer charge at beginning of the period Increase Amortization

Residual amortization value at end of the period

There are no mortgage, interest nor contractual term of repayment in the receivables from the associated companies as well as the related companies.

1. Cash and cash equivalents

6. Cash and cash equivalents
	June 30, 2001	Dec. 31, 2000
	RMB	RMB
Cash and bank deposits	408394582.52	230394000.00
Fixed deposits --- in banks	855745912.19	1200636000.00
Fixed deposits --- in non-financial	0.00	0.00
institutions

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	------------------- ------------------	------------------- ------------------	------------------- ------------------
Total	1264140494.71 1431030000.00
	––––––––– –––––––––
7. Share Capital
		June 30, 2001	Dec. 31, 2000
Unlisted domestic shares with par value of RMB 1		340054000.00	340054000.00
A-shares with par value of RMB 1.		60000000.00	60000000.00
B-shares with par value of RMB 1.		149500000.00	149500000.00
		--------------	--------------------
		549554000.00	549554000.00
		–––––––––	–––––––––
The domestic shares and B-shares enjoy the equal equity.
8. Long-term Accounts Payable
	June 30,	2001 Dec.	31, 2000
Payables to related companies	26516268.00 26516000.00
Others	2217387.01 1391000.00
	------------------- -------------------
	28733655.01 27907000.00
	––––––––– –––––––––
9. Long-term Loans
		June 30, 2001	Dec. 31, 2000
Bank loans without mortgage with the term from 1 to 2 years		22000000.00	70900000.00
Bank loans without mortgage with the term from 2 to 5 years		43800000.00	56000000.00
Bank loans without mortgage with the term over 5 years		0.00	0.00
Bank loans with mortgage with the term from 1to 2 years		16740000.00	0.00
Bank loans with mortgage with the term from 2 to 5 years		33300000.00	51100000.00
		------------	------------
		115840000.00	178000000.00
		==========	=========

10. Accounts payable and other payables

10. Accounts payable and other payables
	June 30, 2001	Dec. 31, 2000
Accounts payable	516799014.34	365900000.00
Accrued expenses	65823309.21	38355000.00
Accounts in advance	9856441.85	11057000.00
Wages and welfare funds payable	30436941.92	26186000.00
Payables due to associated companies	2328843.00	15645000.00
Dividends payable	94315187.92	51060000.00
Other payables	137377658.73	121115000.00
	-----------------	-----------------
	856937396.97	629318000.00
	==========	=========
11. Short-term loans
	June 30, 2001	Dec. 31, 2000
Bank loans – with mortgage	7500000.00	52258000.00
Bank loans – without mortgage	574201715.00	741484000.00
	-----------------	-----------------

Bank loans – with mortgage Bank loans – without mortgage

12

581701715.00 793742000.00 ========== =========

12. Sales income

The main business lines of the Company and the Group are to manufacture and market electronic products.

Consolidated:

	Jan. to June, 2001	Jan. to June, 2001		Jan. to June, 2000
Type of goods	Income from main	Cost on main	Income from Cost on main
	business lines	business lines	main business business lines
				lines
Color monitor	1069199420.65	(983513134.65)	794692051.00 (758326186.00)
Electronic display appliances and accessories	130556202.24	(80750107.40)	95933261.74 (55450079.98)
Color kinescope	24572119.82	(18239647.94)	25583417.00 (19150699.00)
Electron tube	20189953.29	(15570265.35)	18861522.00 (14237673.00)
Semiconductor device	3717987.89	(2999259.46)	4487015.00 (3791096.00)
Others	12341819.51	(2102573.46)	32442876.00 (16811454.00)
	___________	___________	___________ ___________
Total	1260577503.40	(1103174988.26)	972000142.74 (867767187.98)
	==========	==========	========== ==========
13. Financial expenses
		Jan. to June, 2001		Jan. to June, 2000
Interest expenses		(26245483.85)		(14106886.31)
Less: interest income		17512166.93		4613721.45
Exchange losses		(218738.02)		(69601.75)
Less: exchange income		656474.34		5549.93
Others		(29171.30)		(44907.52)
		----------------		----------------
Total		(8324751.90)		(9602124.20)
		==========		==========
14. Non-operating income
		Jan. to June,	2001	Jan. to June, 2000
Moving subsidy income		5000000.00		0.00
Financial subsidy income		1470000.00		1459194.00
Others		(258932.82)		(15902.37)
		---------------		---------------
Total		6211067.18		1443291.63
		==========		---------------
15. Income taxes
		Jan. to June, 2001		Jan. to June, 2000
Expenses of income taxes in	the year	7115870.61		8670905.61
Income tax rate			15%	15%
16. Contingent liabilities
		June 30, 2001		Dec. 31, 2000
Related party		187900000.00		0.00
The third party		180950000.00		124000000.00
		-----------------		-----------------

13

17. Capital commitments

Ended June 30, 2001, assets expenses with contract signed and excluded in the balance sheet:

June 30, 2001 Dec. 31, 2000 Fixed assets 55967350.00 62418000.00 Equity investment 67260000.00 132227000.00 ------------------------------Total 123227350.00 194645000.00 ========= =========

• (1) Total price of the Tech. Building Contract is RMB 27.29 million, and RMB 12.71 has been paid; total price of the A3 Standard Workshop Contract is RMB 34.27 million, and RMB 10.67 has been paid; total price of the C1C2 Workshop Contract is RMB 9.48 million, and RMB 2 has been paid; total price of the Yizhuang Plant is RMB 15.45 million, and RMB 5.14 has been paid.

• (2) According to the Agreement on Establishing Beijing Orient Mobile Tech. Co., Ltd. signed between the Company and individuals represented by Jiang Yingcun, the Company should invest RMB 19.78 million to hold 51% of total equity, actually RMB 3.7 has been invested.

• (3) According to Agreement on Establishing Beijing Orient Digital Tech. Co., Ltd. signed between the Company and Taijing Company and Qiancai Co., Ltd., the Company should invest USD 7.5 million to hold 75% of total equity, actually USD 1.5 million has been invested.

• (4) According to Agreement on Establishing Beijing Orient Software Co., Ltd. signed between the Company and Taiwan Lingwang Tech. Co., Ltd., the Company should invest RMB 3 million to hold 30% of total equity, actually RMB 1.5 million has been invested.

18. Joint venture company

The Company has a joint venture holding 50% of its equity. Its name is Beijing Asahi Glass Electronics Co., Ltd. which is mainly engaged in producing electronic products. The following data represent its assets, liabilities, income and costs, etc. as consolidated on the accounting statement of the Group.

	June 30, 2001	Dec. 31,2000
Fixed assets	20642413.04	22079000.00
Intangible assets	2126168.40	2353000.00
Current assets	27971632.11	27720000.00
Current liabilities	(10772809.64)	(10586000.00)
Net assets	39967403.91	41566000.00
Turnover – net	15704001.18	43076000.00
Pre-taxes profit	2625162.78	9420000.00
Income taxes	(299852.73)	(1208000.00)
After-taxes profit	2325310.05	8212000.00
The joint venture company has not contingent events, which impact the Group’s interests.

19. Related transactions

The Company ’ s control shareholder is Beijing Electron Tube Plant. Ended June 30, 2001, the balance of the related transactions has been disclosed as follows:

Jan. to June, 2001 Jan. to June, 2000

• 2746595.00

Related companies of control shareholder Sales income

14

Rent income	527868.00	1525644.00
Income from energy motive power	334277.00	364255.00
Rent for using land and motive power fee	58834.00	2214143.00
Purchase	13580205.00	279644378.00
Purchase of land use right	-	26857846.00
Associated companies
Income from sales of products	32817416.00	31623851.00
Rent income	1524754.00	1116120.00
Income from energy motive power	7632893.00	759500.00

Ended by June 30, 2001, the balance of receivables / payables involved in the related transactions was basically from the operating activities ended June 30, 2001 or in prior years.

The Company ’ s management considers that in the prior years ended June 30, 2001, all the related transactions have been carried out under the same conditions as with third parties.

1. Subsidiaries, joint venture companies and associated companies The following subsidiaries, joint ventures and associated companies are all incorporated in China.

China.
Companies	Proportion of capital		Main business lines
Control subsidiaries	2000	1999
Beijing Dongdian Jinxin Building Materials	50.1%	50.1%	Manufacturing and marketing mould board
Co., Ltd.			and materials used for buildings
Beijing Orient Top Victory Electronics Co.,	52%	52%	Manufacturing and marketing color monitors
Ltd.
Beijing Weisong Electronic Co., Ltd.	51%	51%	Manufacturing and marketing color CPT
			metal parts
Beijing Chaoyang District Electronic Glass	59%	59%	Manufacturing and marketing vacuum glass
Products Associated Plant			appliance
Zhejiang Beijing Orient Vacuum Electronics	60%	60%	Research, development, manufacture and
Co., Ltd.			marketing of electronic display devices and
			accessories
China Economic Trading Networking Co.,	80%	80%	Marketing software and hardware of electrical
Ltd.			computer and external equipment and
			providing technical service
Beijing Orient Vacuum electrical Appliances	55%	60%	Manufacturing and marketing vacuum
Co., Ltd.			electronic products
China Economic Trading Information	51%	51%	Initiating business, domestic trading and
Network Co., Ltd.			supplying and selling materials
Shenzhen Beijing Orient Intelligent Display	59.8%	0%	Technology development of electrical
Technology Co., Ltd.			intelligent system
Shaoxing Beijing Orient Electrical	79.6%	0%	Manufacturing and operating electronic
Appliances Co., Ltd.			display accessories and materials
Beijing Orient Technology Co., Ltd.	100%	100%	R&D, production and sales of IT products
Beijing Orient Digital Technology Co., Ltd.	75%	0%	R&D, production and sales of digital camera
			and other digital products
Beijing Orient Fangda Heguang Electronics	51%	0%	Production and sales of electrical glass
Co., Ltd.			products for plane display
Beijing Orient Mobile Technology Co., Ltd.	51%	0%	Production and sales portable electronic
			information processor telecommunication
			terminals
Joint venture company
Bejing Asahi Glass Electronics Co., Ltd.	50%	50%	Manufacturing and marketing support glass
			rods and low-melting-point welding powder
Associated companies
Beijing Matsushita Color CTP Co., Ltd.	30%	30%	Manufacturing and marketing color CPT,
			display tube and lighting products
Shenzhen Zhongda Industrial Co., Ltd.	40%	25%	Developing and manufacturing machinery
			parts, telecom satellite equipment, computer
			software and automatic equipment.
Beijing Huanyu Building Co., Ltd.	50%	50%	Leasing, food and beverage, entertainment
			and business center
Beijing Star City Property Co., Ltd.	25%	25%	Developing and constructing commerce
			/residence buildings and conducting property
			management
Beijing Hengtong Logistics Center	95%	50%	Developing and constructing commerce
			/residence buildings and conducting property
			management
Beijing Riduan Electronics Co., Ltd.	40%	40%	Manufacturing and marketing terminals,
			connectors and presser.
Bejing Nissin Electronics Precision	40%	40%	Manufacturing and marketing electron guns
Component Co., Ltd.			and related spares and parts

15

Bejing Huaxu Golden Card Co., Lt.	24.35%	24.35%	Manufacturing and marketing IC cards,
			magnetic cards, optical card and related read-
			write equipment
Beijing Orient Mosler Securities Technology	35%	35%	Manufacturing and marketing safety and
System Co., Ltd.			security system and products.
Beijing Orient Software Co., Ltd.	30%	0	R&D, production and sales of soft and hard
			ware of computer and relevant peripheral
			equipment

VII. Documents for Reference

1. Interim Report with signature of the Chairman of the Board;

2. Financial Statements with signatures and seals of the legal representative, Chief Accountant person in charge of accounting affairs.

3. Original of all documents and announcements publicly declared in the newspapers designated by CSRC Committee within the period of the Report.

4. Articles of Association of the Company.

BOE Technology Group Co., Ltd.

Aug. 17, 2001

16

BOE TECHNOLOGY CROUP CO., LTD. CONSOLIDATED BANLANCE SHEET

(From Jan. 1, 2001 to June 30, 2001)

Notes June 30, 2001 ASSETS Non-current assets Fixed assets 1 606626361.31 Associated companies 2 783350574.46 Other investment 54428752.38 Intangible assets 3 11395449.26 Other assets89001409.99 1544802547.40 Current assets Inventories 4 343911238.26 Accounts receivables and accounts in advance 5 799220894.46 Cash and cash equivalent 61264140494.71 2407272627.43 Total assets 395207 5174.83 LIABILITIES AND SHAREHOLDERS’ EQUITY Shareholders’equity Share capital 7 549554000.00 Shares premium 1155276002.78 Public reserve 229474662.24 Undistributed profit212906272.71 2147210937.73 Minority shareholders’equity 213029241.83 Non-current liabilities Long-term payables 8 28733655.01 Long-term Loan 9115840000.00 144573655.01 Current liabilities Accounts payables and other payables 10 856937396.97 Tax paid 8622228.29 Short-form loan 11581701715.00 1447261340.26 Total liabilities 1591834995.27 Total liabilities and shareholders’ equity3952075174.83

In RMB Dec. 31, 2000 608186583.00 759624000.00 36743000.00 12340000.00 9073 000.00 1425966583.00 324458000.00 91960000.00 1431030000.00 2547448000.00 3973414583.00 549554000.00 1150895000.00 230041000.00 219723583.00 2150213583.00 179393000.00 27907000.00 178000000.00 205907000.00 629318000.00 14841000.00 793742000.00 1437901000.00 1643808000.00 3973414583.00

17

BOE TECHNOLOGY CROUP CO., LTD. CONSOLIDATED INCOME AND LOSS STATEMENT

(From Jan. 1, 2001 to June 30, 2001)

In RMB

Note Jan.-June, 2001 Jan.-June, 2000 Income of sale 12 1260577503.40 972000142.74 Costs of sales (1103174988.26) (867767187.98) Gross profit 157402515.14 104232954.76 Other operating (expenses)/income, net 593429.34 550581.00 Sales expenses (42714001.90) (27191248.98) Administrative expenses (41993881.34) (31308562.77) Operating profit 73288061.24 46283724.01 Finance expenses 13 (8324751.90) (9602124.20) Shares of profit of associated companies 10466286.75 31267188.30 Income from non-operating 14 6211067.18 1443291.63 Profit before taxation 81640663.27 69392079.74 Income tax 15 (7115870.61) (8670905.61) Profit after taxation 74524792.66 60721174.13 Minority shareholders ’ equity (19422292.95) (10922108.69) Net profit 55102499.71 49799065.44 Earnings per share RMB 0.100 RMB 0.102

18

BOE TECHNOLOGY CROUP CO., LTD. CONSOLIDATED STATEMENT PROFIT DISTRIBUTION

(From Jan. 1, 2001 to June 30, 2001) In RMB Jan.-June, 2001 Jan.-June, 2000 Net profit 55102499.71 49799065.44 Profit undistributed at beginning of the period 157803773.00 151602964.00 Transferring into Surplus public reserve Profit available for distribution 212906272.71 201402029.44 Allot statutory surplus public reserve Allot statutory public welfare fund Profit available for distribution to shareholders 212906272.71 201402029.44 Dividend of preference share payable Allot arbitrary surplus public reserve Dividend of ordinary share payable Dividend of ordinary share transferred as share capital Profit undistributed 212906272.71 201402029.44

19

BOE TECHNOLOGY CROUP CO., LTD. CASH FLOW STATMENT

BOE TECHNOLOGY CROUP CO., LTD. CASH FLOW STATMENT
	In RMB
	Jan. to June 2001
CASH FLOWS ARISING FROM OPERATING ACTIVITIES
Profit before tax	81640663.27
Adjustment:
Depreciation and expenses to be apportioned	59701720.66
Interest	8653034.01
Share of profits of associated companies	(10466286.75)
Accounts receivable and Provision of inventory	535905.79
Lose on disposal fixed assets	203034.57
Change in working capital:
Receivable	17086499.03
Inventories	(19330666.28)
Payable	155620755.65
Net cash (expenditure)/income before tax	293644659.95
Income tax	(7115870.61)
Net cash (outflows)/inflows arising from operating	286528789.34
CASH FLOWS ARISING FROM INVESTING ACTIVITIES:
Recovery of investment
Acquisitions of associates companies	35266322.10
Cash inflows due to disposal of fixed assets	6000.00
Purchasing of fixed assets	(75016767.71)
Invested associated companies	(86189252.00)
Cash outflows from other investment activity
Net cash (inflow)/outflow arising from investing activity	(125933697.61)
CASH FLOWS ARISING FROM FINANCING ACTIVITIES
Increase on short-term loan	172016570.00
Repayment short-term loan	(461216570.00)
Increase on long-term loan	15000000.00
Dividends paid	(5700000.00)
Interest paid	(26911478.83)
Other cash received in connection with financing activity	8801966.94
Net cash inflow/ (outflow) from financing activity	(298009511.89)
Influences on cash and cash equivalent in exchange rate	(4407846.88)
Increase / decrease of cash and cash equivalent	141822267.04
Balance of cash and cash equivalent at beginning of period	1264140494.71
Balance of cash and cash equivalents at end of period	1405962761.75

20