Qingdao Yaxing Industry Co., Ltd. will restructure the company's non-performing loans as part of its effort to restore its listing. The following loan restructuring scheme will be submitted to Agricultural Bank of China, Shenzhen Luohu sub-branch, and the China Securities Regulatory Commission for examination:

1. to petition the bank to eliminate interest on loans, beginning 31 Jul 2008
2. for the bank to re-calculate the interest on a RMB 46,370,842.28 loan, beginning 1 Aug 2008, using the benchmark interest rate, a term ranging from one to three years and monthly interest payments.
3. to pay RMB 4 mln in principal in 2008
Quarterly principal payments of RMB 2 mln will be made from 1 Jul 2008 to 31 Dec 2008, resulting in depletion of RMB 4 mln.
4. to repay RMB 9 mln of principal in early 2009
Quarterly payments of RMB 2 mln will be made for the first three quarters, followed by a RMB 3 mln payment in 4Q 2009.
5. to repay RMB 33,370,842.28 of principal in early 2010
Quarterly payments of RMB 9 mln will be made for the first two quarters, followed by RMB 3 mln monthly payments between 1 Jul 2010 and full repayment of principal.
6. to release the joint liability guarantee provided by Zhunhua Xinli Energy Development Co., Ltd.
Qingdao Yaxing Industry Co., Ltd. will provide a joint liability guarantee by pledging 5 mln company shares.

The restructuring scheme outlined above was approved at the 16th 2008 Meeting of the 6th Board of Directors.

Board of Directors
15 Oct 2008


Source: Securities Times

Date: 22 Oct 2008

CN01/FL/JL/NK/MM