Company Profitability and Market Share

www.cosl.com.cn COSL Operating Results Hit Record High (cont'd) Competitive cost advantage (RMB Mm) Repair and Employee compensation costs YoY growth = 24.3% 1,123 318 937 maintenance costs Consumption of supplies, materials, 357 fuels, services and 2,525 others Subcontracting 1,935 expenses 357 Operating lease 206 366 expenses 313 102 Selling, general and 81 administrative 1,042 900 expenses Depreciation 274 387 Other expenses 2006 2007 9 Although revenue and operating profit increased significantly, operating cost grew by a moderate 24.3% Increases in operating cost were mainly due to business expansion, full capacity utilization and increased expenses on equipment and staff headcount We have the confidence to maintain growth in both top. line and bottom line

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