What' s the impact: YZJ&rsquo s 1H16 revenue of CNY5.7bn was down by 35%

YoY. The lower revenue was due to the cancellation of 8 vessels in 1H16,

all of which are currently under construction (revenue has not been

recognised in P& L instead, work completed has been booked under

inventory). All of these 8 vessels have been resold to new buyers, albeit at

a lower value (original: USD180m in total vs. re-contracted: USD160m).

Hence, as revenue from these 8 vessels will be recognised in 3Q16, overall

shipbuilding margins will be negatively impacted for the period (recognition

of forfeited deposits will have a positive impact on later quarters).