On 12 Oct 2008, the company announced that it would jointly sell together with Shenzhen Investment Holdings Co., Ltd. their total holding of 76,407,697 A-shares in Shenzhen Shenbao Industrial Co., Ltd. to Huike System (Hong Kong) Co., Ltd. at a price of RMB 8.63 per share, of which the company would sell 38,589,008 A-shares for RMB 333 mln. On 3 Apr 2008, the issuance was approved by the State-owned Assets Supervision and Administration Commission of the State Council.

On 26 Sept 2008, the company received a letter from Huike System stating that due to force majeure such as changes in relevant laws and regulations during the 11 months since the execution of the equity transfer agreement, Huike System had to propose to terminate the equity transfer agreement signed with Shenzhen Investment Holdings and the company. As of the date of this announcement, Shenzhen Investment Holdings and the company are negotiating with Huike System concerning the above-mentioned issue. The company will disclose information in a timely manner as it becomes available.

Uncertainty persists in the above-mentioned equity transfer. Investors are advised to exercise caution when dealing in the company's shares.

Board of Directors
26 Sept 2008


Source: Securities Times

Date: 27 Sept 2008

CN01/DC/LZ/BT/KM