Stock Falls by 20% to 16 Oct 2008

The recent decrease in the closing price of the company's stock over three consecutive trading sessions on 14, 15 and 16 Oct 2008 represents a deviation of 20%, thus constituting an unusual price movement.

On 16 Oct 2008, Yichang Xingfa Group Co., Ltd. (YXG), the largest shareholder of the company, purchased 590,000 shares of the company, equal to a 0.23% stake, through the trading system of the Shanghai Stock Exchange (SSE). Following the acquisition, YXG currently holds 47.56 mln shares of the company, equal to a 18.87% stake.

In addition, following consultation with senior managers of the company, the board of directors confirms that other than the aforementioned issue, there are currently no other significant undisclosed issues or related plans, negotiations, intentions or agreements outstanding, pursuant to relevant regulations, nor is there any remaining undisclosed information that would materially impact the company's stock price or the prices of its derivatives. The company and its subsidiaries are operating normally.

The Shanghai Securities News, the China Securities Journal, the Securities Times and the website of the SSE (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
17 Oct 2008


Source: Shanghai Stock Exchange

Date: 17 Oct 2008

CN01/SS/MR/BT/KM