EGR Project Relocated

The company issued 30 mln shares at a price of RMB 8.38 per share and thereby raised RMB 230.44 mln in funds. The company's budget for its three investment projects is RMB 224.77 mln, which will be financed with raised funds.

As market demand for EGR (exhaust gas recirculation) products is expanding following the establishment of emissions laws and regulations by the state government, the original production capacity of the company will not be sufficient to satisfy demand, thus new workshops and production lines are urgently required.

In addition, at the 3rd Meeting of the 4th Board of Directors, held on 18 Aug 2008, a proposal was examined and approved to relocate the EGR production project, which is one of the aforementioned three projects, to a former aluminum-plate pattern factory, of which the construction was completed at the end of 2007. As a result, the company plans to redirect RMB 16.947 mln worth of raised funds, originally planned for the EGR project, to supplement working capital instead.

Pursuant to opinions of independent directors, the board of supervisors and the sponsoring institution, the relocation of the EGR project will not change the investment project content and will not materially impact the implementation of the project. On the contrary, the relocation, in line with the company's actual situation, will promote the efficient use of raised funds, improve the company's operations and help realize maximum benefits for the company and all of its investors.

Board of Directors
19 Aug 2008


Source: Securities Times

Date: 19 Aug 2008

CN01/SC/LZ/BT/KM