Progress in Equity Transfer

On 27 Sept 2008, the company announced its progress in the transfer of a 42% in Shenzhen Shenbao Industrial Co., Ltd., jointly held by the company and Shenzhen Investment Holding Co., Ltd., to Huike System (Hong Kong) Co., Ltd. As the company received a letter from Huike System stating that Huike System proposed to terminate the aforementioned equity transfer, on 9 Oct and 19 Oct 2008, the company and Shenzhen Investment negotiated with Huike System on the issue. Details are as follows:

1. Huike System petitioned the company and Shenzhen Investment to terminate the equity transfer agreement.
2. The company and Shenzhen Investment clearly indicated that they did not wish to terminate the agreement, requiring Huike System to continue to fulfill the agreement.
3. As both parties differed widely on the issue, legal intervention will be applied.

Additional information will be disclosed in a timely manner as it becomes available.

As there exists uncertainty in the matter, investors are advised to exercise caution when dealing in the company's shares.

Board of Directors
14 Oct 2008


Source: Securities Times

Date: 15 Oct 2008

CN01/IS/LZ/BT/KM