The company has announced that it has signed an agreement with Qingdao Hisense Air-Conditioning Co., Ltd. to terminate a previously-signed agreement. Under the agreement, the company had planned to purchase white goods assets from Hisense through a supplementary issuance of A-shares. The new agreement has been approved by its board of directors.

The company claims that since it disclosed the above-mentioned scheme on 28 May, great changes have taken place in both the domestic and international economies. Due to spiralling global financial risks, soaring prices for core raw materials, fluctuating overseas and domestic capital markets, severe domestic macroeconomic policies and a number of other unfavourable factors, the external conditions for the asset restructuring scheme have changed dramatically.

The company asserts that it plans to conduct an asset restructuring scheme in good time pending economic conditions. Hisense has also announced that it will continue to inject its white goods assets into the company. However, in accordance with relevant regulations, the asset restructuring scheme cannot be launched within three months from the date of this announcement.

Source: China Securities Journal

Date: 19 Jul 2008

CN01/BG/MZ/BT/MM