The recent increase in the closing price of the company’s stock over three consecutive trading sessions on 26 Sept, 6 Oct and 7 Oct 2008 represents a deviation of 15%, thus constituting an unusual price movement.

The company recently lost a lawsuit over a debt dispute involving loans in arrears. According to the ruling, the assets of the company must be sold or auctioned to settle the related debts, incurring great financial losses and leading to insolvency. Uncertainty persists in the operations of the company, for which it is urgently seeking a strategic investor to secure capital injection and assist with debt restructuring. However, as of the date of this announcement, all attempts have failed without any tentative agreements reached or cooperation secured. Apart from the above-mentioned issue, there is no other significant price-sensitive information outstanding.

Following consultation, the company's largest shareholder asserts that it is actively seeking an investor to sustain the company. As of the date of this announcement, apart from the above-mentioned issue, there is no significant undisclosed information foreseeable within the next two weeks.

The board of directors also confirms that apart from the above-mentioned issue, pursuant to relevant regulations, there are no significant undisclosed issues or information that would materially impact the company's stock price.

The China Securities Journal, the Shanghai Securities News and the website of the Shanghai Stock Exchange (www.sse.com.cn) are the company's designated media for information disclosure. Investors are advised to exercise caution when dealing in the company's shares.

Board of Directors
8 Oct 2008


Source:Shanghai Stock Exchange

Date: 8 Oct 2008

CN01/DC/LZ/BT/KM