The company is pleased to disclose progress in its asset acquisition via private placement with Chongqing Silver Star Economic & Technical Development Co., Ltd. (Silver Star) and Donghong Industrial (Chongqing) Co., Ltd. (Donghong Industrial) as follows:

The auditing, assessment and profit projection on assets to be purchased are still ongoing. Following the disclosure of the asset acquisition scheme via private placement on 28 July 2008, the company has not signed any supplementary agreements with Silver Star or Donghong Industrial.

According to the aforementioned scheme, the interim price of the newly-issued shares is RMB 4.92 per share, while the closing price of the company' stock on 9 Oct 2008 was RMB 3.26 per share. Consequently, there exists uncertainty in the implementation of the scheme, which is yet to be approved by a general meeting of shareholders and the China Securities Regulatory Commission.

Board of Directors
13 Oct 2008


Source: Shanghai Stock Exchange

Date: 13 Oct 2008

CN01/NS/MR/BT/KM