The company disclosed an announcement on 23 Oct 2008 regarding the counter guarantee which the company had provided Xiantao Finance Guarantee Co., Ltd. According to the announcement, Xiantao Finance has repaid the RMB 158 mln principal for the company to the Bank of China, Xiantao branch. The company is negotiating with Xiantao Finance about repaying the debt to Xiantao Finance by pledging the company's receivables in compliance with a counter-guarantee agreement.

Following negotiation, the company will repay RMB 158 mln to Xiantao Finance in cash.

If the repayment scheme is viable, the company will reverse its provision of RMB 80 mln for the receivables, adding significantly to the company's current profit.

To date, contracts pertaining to the repayment have not been signed yet.

Board of Directors
27 Oct 2008


Source: Securities Times

Date: 28 Oct 2008

CN01/ZZ/SW/JE/KM