The company announced on 16 July 2008 that it will jointly establish Mianzhu Puyin County Bank Co., Ltd. with registered capital of RMB 50 mln, of which it will subscribe an equity between 51% and 75% for up to RMB 37.5 mln.

According to the announcement, the company will propose the establishment of the joint venture in Jiannan County, Mianzhu, and will contribute between RMB 25.5 mln and RMB 37.5 mln of the total RMB 50 mln capital. The proposal is awaiting approval from related government departments.

The announcement also indicated that the company will invest in Laiwu Commercial Bank and sign a subscription agreement and a strategic cooperation agreement with Laiwu Commercial Bank.

In May 2008, the company announced that it had signed a strategic cooperation memorandum with Laiwu Commercial Bank to cooperate in equity investment, company management and bank related businesses. The total capital of Laiwu Commercial Bank is RMB 12.9 bln. The local bank is recognised as the number one metropolitan commercial bank in Shandong Province and ranks fifth in China for its high quality assets and low nonperforming loan ratio of 0.55%, which has been steadily decreasing in the past years. The company has only eight branches with total assets of RMB 22.2 bln in Shandong. Its development in the region will greatly benefit from the cooperation with Laiwu Commercial Bank.

Included in the announcement, the company noted that it has decided to extend the validity on a resolution related to an issuance of financing bonds to 30 June 2009.

On 15 July 2008, its share price fell by 7.11% to RMB 21.83 per share.

Source: China Business News

Date: 16 Jul 2008

CN01/NW/RZ/BT/KM