The company will hold an extraordinary general meeting of shareholders on 18 Aug 2008 to examine its major asset reorganization scheme and related proposals. According to the related reorganization report, Ningbo Urban Construction Investment Holding Co., Ltd., the controlling shareholder of the company, plans to subscribe shares placed by the company by offering three real estate projects as consideration worth RMB 8.8 bln.

Chen Jianxin, the secretary to the board, said that with the success of the asset reorganization, the company's net assets will reach an eleven-fold increase. Although the market remains low, Chen said, the company will stick to its share price of RMB 7.58 per share in the private placement. Meanwhile, Ningbo Urban Construction also committed not to sell the company's shares via the Shanghai Stock Exchange at less than RMB 15 per share.

Chen implied that, with the asset reorganization completed, Ningbo Urban Construction will hold a 78.62% stake in the company, whose main business will then be changed to commercial real estate, with its net asset per share increasing up to RMB 6.00.

It is estimated that the company's profit for 2008 will be RMB 195 mln, with an EPS of RMB 0.125, of which the EPS for 2009 will be RMB 0.127. Investors suggest that there would be no obvious increase in its performance after the reorganization. To this, Chen explained that since the contract period of the lease agreements signed with famous brands, was initially introduced in the Tianyi Square, are long and based on a relatively low rental in 2002, during which the Tianyi Square begun operations, it won't contribute to the company's performance within the near future. The aforementioned real estate projects are still in their early phases, with profit expected to be made only after 2010.

Source: China Securities Journal

Date: 18 Aug 2008

CN01/NW/DM/BT/KM