The company would like to clear certain issues amid investor and media concerns over a report published on the website (www.sina.com.cn) and the website (www.eastmoney.com).

In those media, articles said that 'With regards to a case of dispute over the guarantee provided by the company in 2002 on a RMB 30 mln loan with Industrial and Commercial Bank of China, Shanghai Hongqiao Development Zone sub-branch for Shanghai Yingguang Industry Co., Ltd., the Shanghai No. 1 Intermediate People's Court issued a civil ruling, dated 4 Jun 2007. In enforcement of the civil ruling, the court entrusted certain intermediary agencies to auction the company's use rights to the ZF1425 state-owned industrial land, located in HanchengTaojialing, Yongfeng Town, Hanyang District, Wuhan, Hubei province. The use rights over the approximately 63,973 sq.meter land was finally transferred to the successful buyer, Wuhan Jiaxincheng Commerce Trade Co., Ltd., for RMB 12,567,300.'

Currently, the company is investigating and verifying the aforementioned issues. The transfer of the land will assert an adverse impact over the company's financial performance in current term.

Trading in shares of the company has been suspended since 19 May 2008, and will be delisted if the company sustains losses in 2008. Investors are advised to exercise caution when dealing in the company's shares.

The China Securities Journal, the Shanghai Securities News, the Securities Daily, the Securities Times and the website of the Shanghai Stock Exchange (www.sse.com.cn) are the company's designated media for information disclosure.

Board of Directors
21 Nov 2008


Source: Shanghai Stock Exchange

Date: 21 Nov 2008

CN01/FL/JL/VW/JW