AVIC : Announcements and Notices -

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(formerly known as CATIC Shenzhen Holdings Limited (深圳中航集團股份有限公司))

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00161) OVERSEAS REGULATORY ANNOUNCEMENT

The document attached hereof is the 2016 first quarterly financial report of KHD Humboldt Wedag International AG posted on the website of www.KHD.com by KHD Humboldt Wedag International AG. KHD Humboldt Wedag International AG is a subsidiary of AVIC International Holdings Limited.

By Order of the Board

AVIC International Holdings Limited Wu Guang Quan

Chairman

Shenzhen, the People's Republic of China, 13 May 2016

As at the date of this announcement, the board of directors of AVIC International Holdings Limited comprises a total of 9 directors, Mr. Wu Guang Quan, Mr. Lai Wei Xuan, Mr. You Lei, Mr. Pan Lin Wu, Mr. Chen Hong Liang and Mr. Liu Jun as executive directors; and Ms. Wong Wai Ling, Mr. Wu Wei and Mr. Wei Wei as independent non-executive directors.

KHD Humboldt Wedag International AG, Cologne, Germany Interim Report as of May 13, 2016 corresponding to Section 51 BörsO (Stock Exchange Regulations issued by the Frankfurt Stock Exchange)

ISIN: DE0006578008

GERMAN SECURITIES IDENTIFICATION NUMBER (WKN): 657800

Stock Exchange Symbol: KWG www.khd.com

Summary of the 1st Quarter 2016

• Continued restraint among customers in awarding orders

• Revenue decrease of 31.4% with respect to the first quarter of the previous year to

  € 34.8 million

• EBIT in the amount of € -8.0 million, due to lower revenues, additional costs in some projects and under-utilization of existing capacities

• Adjustment of key financial targets in the forecast for the financial year 2016

Key Figures at a Glance

in € million	Jan. 1 - Mar. 31, 2016		Jan. 1 - Mar. 31, 2015
Order Intake	-1.1		58.3
Revenue	34.8		50.7
Adjusted Gross Profit	2.6		4.8
Adjusted Gross Profit margin (in %)	7.5		9.5
EBIT	-8.0		-5.5
EBIT-Margin (in %)	-23.0		-10.8
EBT	-6.2		-3.0
Group net result for the period	-6.5		-4.2
EPS (in €)	-0.13		-0,08
Cash flow from operating activities	-14.7	*	-12.3	*
Cash flow from investing activities	1.2	*	1.3	*
Cash flow from financing activities	0.0		0.0
in € million	Mar. 31, 2016		Dec. 31, 2015
Equity	195.6		203.4
Equity ratio (in %)	51.5		51.8
Cash and Intercompany loans **	197.6		212.7
Net Working Capital	32.1		25.1
Order Backlog	148.0		183.8
Employees	744		735

• The disclosure of interest received under cash flow from operating activities or cash flow from investing activities from 2015 financial year onwards.

  ** Intercompany loans amounting to € 100 million, including intercompany loan of € 50 million with entitlement to call for early repayment by giving 30 days' notice.

  Please note that the use of rounded amounts and percentage figures may result in differences due to commercial rounding.

  Management of the KHD Group

  Mr. Tao Xing was appointed as an additional member of the Management Board of KHD Humboldt Wedag International AG (hereafter also referred to as "KHD" or "Group") effective January 1, 2016. With his many years of experience in the cement industry, the primary focus of his work includes expanding KHD's business activities in China, Asia Pacific and America. Mr. Tao Xing was a member of KHD's Supervisory Board from June to December 2015.

  On March 11, 2016, Mr. Johan Cnossen resigned from his office as Chief Executive Officer (CEO) and member of the Management Board with immediate effect. After the former CEO's resignation the Management Board re-organized its responsibilities in agreement with the Supervisory Board for an interim period. The Chief Financial Officer (CFO), Mr. Jürgen Luckas, took over the role of spokesman for KHD's Management Board.

  Market Environment

  The International Monetary Fund (IMF) predicts global growth of 3.4% (previous year: 3.1%) for the year overall. In the emerging economies growth is predicted to be the lowest since 2008 at just 4.0%. Growth in the advanced industrialized economies is expected to increase to 2.1% (previous year 1.9%).

  According to the CW Group global cement consumption decreased by 1.7% in 2015, which was primarily caused by the slowdown in China, geopolitical turmoil as well as low oil and commodity prices. Global cement consumption will again contract by 1.2% in 2016. Nevertheless, cement consumption excluding China is expected to grow by 4.2%. KHD's markets demonstrated varying tendencies with regard to expected cement consumption:

  • In India, although the government expects overall growth of 7.5%, infrastructure projects are not going as fast as expected. Nevertheless, 10,000 km of highways are in discussion and cement consumption is expected to grow by 6.0% through 2016.

  • Russia continues to be impacted by the sanctions as well as low oil prices. Construction declined by 7.5% in 2015 and another decline is expected for 2016. This will result in a predicted 5.0% contraction in cement consumption.