BOE TECHNOLOGY GROUP CO., LTD — Interim / Quarterly Report 2005

Aug 26, 2005

BOE TECHNOLOGY GROUP CO., LTD. SUMMARY OF SEMI-ANNUAL REPORT 2005

§1. Important Notice

1.1 The Board of Directors and its members of BOE Technology Group Co., Ltd. (hereinafter referred to as the Company) individually and jointly accept the responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions or errors which would render any statement misleading.

The summary of semi-annual report 2005 is abstracted from the semi-annual report, and the full text of the semi-annual report is published on the Internet website http://www.cninfo.com.cn in the mean time. Investors are suggested to read the full text of semi-annual report formore details.

This report was prepared in both Chinese and English. Should there be any difference between the two versions, the Chinese version shall prevail.

1.2 No director stated that he/she could not ensure the correctness, accuracy and completeness of the contents of the Semi-annual Report or had objection for this report.

1.3 Independent Director of the Company, Mr. Zhang Baizhe entrusted Independent Director Mr. Li Zhaojie to vote on his behalf. Director Mr. Xuan Jiansheng didn’t attend the Board meeting due to being on business trip.

1.4 The 2005 semi-annual financial report of the Company has not been audited.

1.5 Chairman of the Board and concurrently CEO Mr. Wang Dongsheng, President and concurrently COO Mr. Liang Xinqing, Chief Financial Officer Mr. Wang Yanjun, and Secretary of Plan & Financial Dept. Ms. Sun Yun hereby confirm that the financial report enclosed in the semi-annual report is true and complete.

§2. Company Profile

2.1 Basic information

2.1 Basic information
Short form of the stock	BOE-A, BOE-B
Stock code	000725,200725
Listed stock exchange	Shenzhen Stock Exchange
	Secretary of the Board	Securities Affairs Representative
Name	Chen Yanshun	ZhongHuifeng
Contact address	No. 10, Jiuxianqiao Road, ChaoyangDistrict,Beijing	No. 10, Jiuxianqiao Road, ChaoyangDistrict,Beijing
Telephone	(86)10 – 64366264 64318888 ext.	(86)10 – 64366264 64318888 ext.
Fax	(86)10 – 64366264	(86) 10 – 64366264
E-mail	yschen@boe.com.cn	hfzhong@boe.com.cn

• 2.2 Financial highlights

• 2.2.1 Major accounting data and financial indexes

Unit: RMB ‘000

Items	At the end of this report period	At the end of last year	Increase/decrease at the end of this report period compared with the year-begin（％）
Current assets	8,896,661	5,347,942	66.36
Current liabilities	8,058,432	8,745,572	-7.86
Total assets	24,089,003	18,106,758	33.04
Shareholders’ equity (excluding minorityinterests)	4,304,616	5,154,384	-16.49
Net assetsper share(RMB)	2.94	3.52	-16.48
Items	In the report period (Jan. to Jun. 2005)	At the same period of last year	Increase/decrease in this report period compared with the same period of lastyear(%)
Netprofit	-965,736	520,519	-285.53
Earningsper share(RMB)	-0.66	0.36	-283.33
Earningsper share((RMB,note)	-0.44	-	-
Return on equity (%)	-22.43	9.98	-324.75
Net cash flow arising from operatingactivities	-414,864	218,020	-290.29

Notes: based on total share equity amounting to 295,695,800 shares as of the disclosure date of this report.

2.2.2 Differences between CAS and IAS:

√ Applicable □ Inapplicable

Unit: RMB ‘000

	CAS	IAS
Netprofit	-988,746		-965,736
	Balance of consolidated accounting statement under enterprise accounting
	system		-988,746
	Difference resulted from new goodwill amortization method under new
	code		15,831
Explanation on
difference	addingstaff bonus and welfare funds into G&A expenses		-910
	Capitalization of research and development expenses		12,555
	Capitalization of interest		-4,466
	Balance after adjustment under IAS		-965,736

§3. Changes in Share Capital and Particulars about Shareholders

3.1 Statement of change in shares □ Applicable √ Inapplicable

• 3.2 Particulars about shares held by the top ten shareholders and the top ten

shareholders holding shares in circulation

Unit: share

shareholders holding shares in	shareholders holding shares in	circulation Unit: share	circulation Unit: share	circulation Unit: share	circulation Unit: share	circulation Unit: share	circulation Unit: share	circulation Unit: share
Total shareholders at the end of reportperiod		67,052
Particulars about shares held bythe topten shareholders
Full name of shareholders	Increase / decrease in this report period		Shares held at the end of the report period	Propor- tion (%)	Type of shares ( listed or unlisted)		Number of share pledged or frozen	Nature of shareholders (state-owned shareholder or foreign shareholder)
BEIJING BOE INVESTMENT & DEVELOPMENT CO., LTD.	0.00		525,706,200.00	35.91%	unlisted		0.00	State-owned legal person’s shareholder
FIELDS PACIFIC LIMITED	0.00		90,000,000.00	6.15%	listed		unknow n	Foreign shareholder
BEIJING DONGDIAN INDUSTRIAL DEVELOPMENT COMPANY	0.00		60,066,000.00	4.10%	unlisted		0.00	State-owned legal person’s shareholder
BOCI SECURITIES LIMITED	Unknown		24,213,945.00	1.65%	listed		Unknow n	Foreign shareholder
EMERGING MARKETS GROWTH FUND INC	Unknown		22,369,968.00	1.53%	listed		Unknow n	Foreign shareholder
SHANGHAI (HONG KONG) WANGUO SECURITIES	Unknown		21,743,000.00	1.49%	listed		Unknow n	Foreign shareholder
TOP RESPECT GROUP LIMITED	Unknown		13,500,000.00	0.92%	listed		Unknow n	Foreign shareholder
GUOTAI JUNAN SECURITIES HONG KONG LIMITED	Unknown		12,538,527.00	0.86%	listed		Unknow n	Foreign shareholder
BONY-DREYFUS PIFI-DREYFUS PREMIER GREATER CHINA	Unknown		11,038,831.00	0.75%	listed		Unknow n	Foreign shareholder
CAPITAL INTERNATIONAL EMERGING MARKETS FUND	Unknown		9,099,950.00	0.62%	listed		Unknow n	Foreign shareholder
Particulars about shares held bythe topten shareholders of circulation share
Full name of Shareholders	Number of listed shares held at the period-end					Type (A-share, B-share, H-share and other)
FIELDS PACIFIC LIMITED	90,000,000.00					B shares
BOCI SECURITIES LIMITED	24,213,945.00					B shares
EMERGING MARKETS GROWTH FUND INC	22,369,968.00					B shares
SHANGHAI (HONG KONG) WANGUO SECURITIES	21,743,000.00					B shares
TOP RESPECT GROUP LIMITED	13,500,000.00					B shares
GUOTAI JUNAN SECURITIES HONG KONG LIMITED	12,538,527.00					B shares
BONY-DREYFUS PIFI-DREYFUS PREMIER GREATER CHINA	11,038,831.00					B shares

CAPITAL INTERNATIONAL EMERGING MARKETS FUND	9,099,950.00	B shares
SUN HUNG KAI INVESTMENT SERVICES LTD-CUSTOMERS A/C	6,972,863.00	B shares
ZHONGXIN CAPITAL SECURITIES CO., LTD.	6,959,499.00	B shares
connected parties or parties acting in concert	The Company is unknown whether there are connected parties or parties acting in concert amongthe aforesaid shareholders.

3.3 Particulars about change in controlling shareholder and benefitial controller of the Company □ Applicable √ Inapplicable

§4. Particulars about Directors, Supervisors and Senior Executives

• 4.1 Particulars about changes in shares held by directors, supervisors and senior executives

□ Applicable √ Inapplicable

§5. Management Discussion and Analysis

• 5.1 Statement of major operations by industries and products

Unit: RMB’000

	Unit: RMB’000	Unit: RMB’000	Unit: RMB’000	Unit: RMB’000	Unit: RMB’000	Unit: RMB’000
	Particulars about main business accordingtoproducts
Classified according to industries or products	Income from main operations (RMB)	Cost of main operations (RMB)	Gross profit ratio (%)	Increase/decrease in income from main operations over the last year (%)	Increase/decrease in cost of main operations over the last year (%)	Increase/decrease in gross profit ratio over the last year (%)
Business of monitor terminalproducts	1,922,554	1,839,447	4.32	-3.01	-1.97	-19.10
Business ofTFT-LCD	2,420,205	2,911,717	-20.31	-31.61	3.92	-197.50
Business of small-sized display devices	321,297	263,029	18.14	-80.87	-82.76	98.03
Other businesses	418,763	333,424	20.38	23.76	45.37	-36.75
inter-company elimination	-761,108	-750,851	-	-	-	-
Total	4,321,711	4,596,766	-6.36	-30.68	-11.04	-137.17
related party transactions	1,794,968	1,337,801	-	-	-	-
Pricing rules for related party transactions	Related party transactions are priced in line with the market practice.

Total amount of related transactions in which the listed company sold products to or provided service of its controlling shareholder and subsidiaries of the controlling shareholder was RMB 0 in the report period.

5.2 Particulars about major operations by geographical area

Unit: RMB’000

		Unit: RMB’000
Areas	Income from main operations	Increase/decrease in income from main operations over the sameperiod of lastyear(%)
Domestic sales	2,105,931	-19.83
Exports
Other countries in Asia	1,644,147	-25.48
Europe	86,847	-89.96
America	484,785	-9.62

5.3 Other operations materially affecting net profit □ Applicable √ Inapplicable

5.4 business operation of associated companies

□ Applicable √ Inapplicable

5.5 Explanation on reasons of material changes in major operations and its structure □ Applicable √ Inapplicable

5.6 Explanation on reasons of material changes in profitability of major operations (gross profit ratio) comparing to that of last year √ Applicable □ Inapplicable

Cyclical downward of the TFT-LCD industry resulting in collapsed TFT-LCD product price has largely decreased gross margin ratio comparing to the same period of last year.

5.7 Analysis to reasons of material changes in profit structure compared with the previous year □ Applicable √ Inapplicable 5.8 Use of the proceeds

5.8.1 Use of the raised proceeds □ Applicable √ Inapplicable

5.8.2 Particulars about the changed projects □ Applicable √ Inapplicable

5.9 Plan of the Board on amending the business plan in the second half of the year □ Applicable √ Inapplicable

5.10 Forecast of possible loss during the period from the beginning of the year ot the

end of the report period and warnings of material changes compared to the corresponding period of the last year √ Applicable □ Inapplicable

	√Loss
operating result	□Large-margin increase compared with the same period in previous year
forecast	□Large-margin decrease compared with the same period in previous year
	□change from loss toprofit
	Even though global environment of TFT-LCD market is going steady, hedged with
Explanation on	large-margin decrease of TFT-LCD price, it estimated that accumulated net profit would
operating result	still be negative during the period from the year-begin to the end of next report period. With
forecast (reason,	view to uncertainties in the market, the Company can not estimate the exact scale of loss,
uncertainty and its	though, the loss will scale down along with the recovery of the market and measures to be
influence)	taken for the purpose of profitability improvement. Investors are suggested to pay attention
	toinvestment–relatedrisks.

5.11 Explanation of the Management on “Qualified Opinion” issued by the Certified Public Accountants in the report period

□ Applicable √ Inapplicable

5.12 Explanation of the Management on changes and resolving of the problems involved in “Qualified Opinion” issued by the Certified Public Accountants in the last year

□ Applicable √ Inapplicable

§6. Significant Events

6.1 Acquisition and disposal of assets and assets restructure

6.1.1 Assets acquired □ Applicable √ Inapplicable

6.1.2 Assets sold

□ Applicable √ Inapplicable

6.1.3 Progress of these events and its influence on the operating results and financial status during the report period after the report on assets restructure or public notice on acquisition and disposal of assets being published

□ Applicable √ Inapplicable

6.2 Guarantees √ Applicable □ Inapplicable

Unit: RMB’0000

Particulars about externalguarantees(excluding guarantees for	Particulars about externalguarantees(excluding guarantees for	Particulars about externalguarantees(excluding guarantees for	Particulars about externalguarantees(excluding guarantees for	Particulars about externalguarantees(excluding guarantees for	subsidiaries)	subsidiaries)
	Date of happening					Guarantee for
		Amount of	Type of	tenor of	Accomplished
Name of warrantee	(date of agreement					related parties or
		guarantee	guarantee	guarantee	or not
	signing)					not (yes or no)

Beijing Municipal
Communication
	Jan., 2004	450.00	Guarantee	Till Apr. 2006	Yes	No
“All-in-one Card”
Co., Ltd.
Zhejiang Huanyu
Construction Group	Feb, 2005	5,000	Mutual	Till Mar. 2006	Yes	No
Co.,Ltd			guarantee
Total amount ofguarantees in the reportperiod					5,000
Total balance ofguarantees in the reportperiod					5,450
Particulars about the Company’sguarantee for subsidiaries
Total amount ofguarantees in the reportperiod					-
Total balance ofguarantees in the reportperiod					140,794
Particulars about total amount ofguarantees(including guarantee for subsidiaries)
Total amount ofguarantees					146,244
Thepercentage that the total amount ofguarantee represent the net assets of the Company					36.50%
Particulars aboutguarantees out of line
Total amount of guarantees for other related parties which are controlled less than 50% by
					0
the Companyor the controllingshareholder
The guarantee provided directly or indirectly for companies with a assets-liability ratio
					29,801
exceeding70% (Note)
totalguarantee amount exceedingthe 50% line of the net assets					0
Totalamount of irregularguarantees					29,801

Note: including guarantee of RMB 263,010,000 for subsidiary Zhejiang BOE Display Technology Co.,Ltd and guarantee of RMB 35,000,000 for subsidiary Suzhou BOE Chatani Electronics Co.,Ltd.

6.3 balance due to/from related parties √ Applicable □ Inapplicable

Unit: RMB’0000

				Unit: RMB’0000	Unit: RMB’0000
Related parties	Related relationship	Funds provided	to related parties	Funds provided by related parties to the Company
		amount newly added	Balance at period-end	amount newly added	Balance at period-end
BEIJING DONGDIAN INDUSTRIAL DEVELOPMENT COMPANY	Controlled by the same ultimate controlling shareholder of the company	0.00	0.00	850.00	116.06
Beijing Orient Mould Factory	Controlled by the same ultimate controlling shareholder of	0.00	402.44	0.00	0.00

	the company
Beijing Orient Mosler Security Technology Systems Co., Ltd.	Associate company	201.03	10.81	0.00	0.00
Beijing BOE Digital Technology Co., LTD.	Subsidiary	57.33	0.00	0.00	0.00
Beijing Boe Investment&Development Co., Ltd.	Mother company	0.00	491.19	90.40	0.00
Beijing Matsushita Color CRT Co., Ltd.	Associate company	773.72	1,685.02	5.60	0.00
BOE Land Co., Ltd.	Joint venture	19.36	7,324.67	500.00	500.00
Beijing Intelligence & Science Technology Development Co., Ltd.	Shareholder of mother company	466.89	0.00	0.00	0.00
TPV Technology Limited	Associate company	4,881.12	45,295.78	4,194.70	13,051.66
Shenzhen Evergreat Industrial Co., Ltd.	Associate company	37.39	0.00	0.00	0.00
Hyundai LCD, Inc.	Associate company	12,224.61	2,309.74	11,307.98	2,876.19
Marubeni Corporation of Japan	Shareholder of the mother company	0.00	0.00	4,551.62	4,551.62
Total		18,661.45	57,519.65	21,500.30	21,095.53

capital provided by the listed company to the controlling shareholder and its subsidiaries during the report period and the balance at the end of the period were RMB 0 and RMB 4,911,900 respectively

6.4 Material lawsuits and arbitrations

□ Applicable √ Inapplicable

6.5 Other significant events and explanation on analysis to their influences and solutions

□ Applicable √ Inapplicable

§7. Financial Report

7.1 Auditing opinion

Financial Report √ Un-audited □ Audited

7.2 Financial Statement

BOE Technology Group Co., Ltd.

Consolidation statement of profit and loss Jan. – Jun., 2005

(unit: RMB’000)

(unit: RMB’000)
Sales cost of goods sold gross profit Other operating income Sales expenses Administration expenses Other operational expenses Operating profit Financial expenses – net amount Profit of the Group before tax Investment available for selling Shared profit from associate company before tax Profit before tax Income tax Profit after tax before deducting minority interests Minority interests Net profit	2005 2004 4,321,711 6,234,212 (4,596,766) (5,167,515)
	(275,055) 1,066,697 14,092 24,215 (136,716) (128,362) (413,692) (517,911) (22,942) (22,706)
	(834,313) 421,933
	(175,191) (36,317)
	(1,009,504) 385,616 (2,778) 7,021 108,793 244,136
	(903,489) 636,773 (40,430) (93,292)
	(943,919) 543,481 (21,817) (22,962) (965,736) 520,519

7.3 Notes to financial report

7.3.1 Explanation on accounting policies, accounting estimates and correction of accounting error.

√ Applicable □ Inapplicable

‘ ’ In the report period, the company has made some adjustment according to Rule No.3 Consolidation .

7.3.2 Compared with the latest annual report, explanation on material changes in consolidated scope in the report period

√ Applicable □ Inapplicable

1, On December 30, 2004, HyLCD, originally subsidiary of our company, converted the convertible ’ bonds it has issued toSEC, a Korea company, into its share capital, resulting in the our company s share interests in HyLCD decreased from 48.49% to 39.11%. Thus, our company will not consolidate ’ HyLCD s financial statements any longer.

2, FineICs Limited was set up in 2004 by BOE HYDIS, the wholly owned subsidiary of our company. It was not consolidated in 2004. However, it has started its operation in 2005, so it has been consolidated in this report. Detailed information has been reflected in the consolidated data

of BOE HYDIS.

7.3.3 List notes related to the involved issues if t a qualified opinion is issued □ Applicable √ Inapplicable

Board of Directors of BOE Technology Group Co., Ltd. Aug. 24, 2005