Key Summary
　　Revenue increased by 30.5% to RMB 1,052 million
　　Profit for the period was RMB 140 million, up 54.6%
　　Earnings per share (basic) increased to RMB 4.26 cents, rose by 52.7%．

　　(Hong Kong, 7 August 2008) Shandong Molong Petroleum Machinery Company Limited (“Shandong Molong” or the “Group”; Stock Code: 568), today announced its interim results for the six months ended 30 June 2008.

　　The Group recorded impressive business growth during period under review. For the six months ended 30 June 2008, the Group achieved revenue of RMB 1,052 million, representing an increase of approximately 30.5% as compared to the corresponding period of last year. Over the same period, the profit attributed to equity shareholders and earnings per share (basic) were approximately RMB 140 million and RMB 4.26 cents, representing an increase of approximately 54.6% and 52.7% respectively. 

　　Mr. Zhang En Rong, Chairman of Shandong Molong was very pleased with the results. “The achievements in the first half of 2008 further consolidated our leading position in the global petroleum machinery industry. The sharp increase in revenue in the year was attributed to the rising global demand for crude oil and a corresponding increasing in the capital for oil drilling which directly promote the development in the petroleum drilling and extraction machinery industry.”

　　To cope with the market trend, the Group further expanded the overseas market in the period under review. The Group’s sales derived from overseas markets continued to grow steadily, achieving an increase of 25.8% in sales revenue over the corresponding period in 2007. The Group stepped up its efforts in developing the Russia market. As a result, the proportion of products exported to Russia increased rapidly. The Group has become the largest Chinese supplier of oil well pipes and casing products in Russia market for now; the Group also developed other overseas emerging markets including Turkey, Libya, India, Vietnam, Columbia and Ecuador. Currently, apart from maintaining the rapid growth in its export business to regions such as North America, Russia, Southeast Asia, the Group also secures new clients in the Middle East, Africa and etc, and the sales growth contributed to the Group will be reflected in the annual report.

　　Apart from expanding overseas market, the Group focused on the development of new products in the reporting period. The Group has increased investment in technology which is mainly for accelerating the development of new products, standardizing the technology basic administration, enhancing the improvement of technology and optimizing the structure of existing products. It has made remarkable achievements in the development of new products. The evaluation tests on new products with proprietary intellectual property rights such as non-API corrosion resistant tubing and casing, thermal well casing, low-temperature resistant tubing and casing and special thread tubing and casing and preparations for the trial operation of the large-caliber casing and the high-grade line pipes were completed.

　　Regarding the Group’s future development strategies, Mr. Zhang said, “We will continue to capture opportunities and further enhance our competitive capability through various strategies, including expansion of the production volume of new products and high value-added products, improvement of product quality, strengthening of our research and development capability, enhancement of market promotion and adoption of effective cost control.”

　　“The Group will continue to focus on its business of petroleum drilling and extraction machinery. We will further increase the scale of the production of oil well pipes and casings with a concentration on the petroleum drilling and extraction machinery business, expand the petroleum drilling and extraction machinery business, step into foundry and band processing manufacturing and keep researching and developing in the petroleum and natural gas and the Coal Mine Methane drilling and extraction equipment industry,” he added.

　　As a kind of non-fungible energy, it is expected that the demand for crude oil will not be affected by the recent oil price fluctuation and the demand for oil machinery will also display a rising trend. Shandong Molong will surely seize the opportunities to expand its business, thus ensuring its profitability and achieving the best return for the shareholders.