Stock Hits Min Intraday Limit

The company's stock price reached its minimum intraday limit in three consecutive trading sessions on 4, 5 and 6 Nov 2008, thus constituting an unusual price movement.

Following consultation and self-inspection, the company's controlling shareholder confirms that there are no significant undisclosed issues, including equity transfer, private placement, debt restructuring, business restructuring, asset stripping, asset injections or other significant matters outstanding.

The board of directors confirms that there are no significant undisclosed issues, plans, negotiations, intents or agreements currently outstanding, pursuant to relevant regulations, nor is there any remaining undisclosed isssues planned for the next two weeks that might materially impact the company's stock price.

It is projected that the company will suffer losses in 2008. It has suffered losses both in 2006 and in 2007, and if the company continues to suffer losses in 2008, it will have its listing suspended.

The new strategic investors in China Energy Petrochemical Corporation, a party related to the company's major asset restructuring, have not fulfilled their commitment to boost capital. Thus the major asset reconstructing has stalled and it is at risk of not making any further progress.

Board of Directors
7 Nov 2008


Source: Shanghai Stock Exchange

Date: 7 Nov 2008

CN01/CW/RL/JE/KM