1Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1333)ANNOUNCEMENT PRICE SENSITIVE INFORMATION FRAMEWORK AGREEMENT FOR ACQUISITIONThe Board is pleased to announce that on 9 February 2010, Liaoning Zhongwang, a wholly- owned subsidiary of the Company, entered into the Framework Agreement with the Sellers pursuant to which Liaoning Zhongwang proposed to acquire 100% equity interests in the Target Company from the Sellers with a total investment of approximately RMB1.2 billion. The Framework Agreement is legally binding on the Parties thereto.If the Proposed Acquisition proceeds, the transaction is expected to constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules. The Board wishes to emphasise that the Proposed Acquisition may or may not proceed. Shareholders and investors of the Company are urged to exercise caution when dealing in the securities of the Company.INTRODUCTIONThe Board is pleased to announce that, on 9 February 2010, Liaoning Zhongwang, a wholly-owned subsidiary of the Company, entered into the Framework Agreement with the Sellers pursuant to which Liaoning Zhongwang proposed to acquire 100% equity interests in the Target Company from the Sellers.PRINCIPAL TERMS OF THE FRAMEWORK AGREEMENTDate9 February 2010Sellers(1) Xining Investment, which holds 53.93% of the equity interests in the Target Company(2) Qinghai Northwest, which holds 34.12% of the equity interests in the Target Company2(3) Xining ETZ, which holds 11.95% of the equity interests in the Target CompanyPurchaserLiaoning Zhongwang, a wholly-owned subsidiary of the CompanyThe Directors confirm that to the best of the Directors knowledge, information and belief, having made all reasonable enquiries, the Sellers and their ultimate beneficial owners are third parties independent of the Company and its connected persons (as defined in the Listing Rules).Total Investment Pursuant to the Framework Agreement, the total investment of the Proposed Acquisition is expected to be approximately RMB1.2 billion, which shall consist of:(1) approximately RMB100 million to be paid by way of cash to the Sellers in proportion to their equity interests in the Target Company;(2) total debt liabilities of approximately RMB880 million of the Target Company to be assumed by the Purchaser after the completion of the share transfer registration in accordance with relevant PRC laws and regulations; and(3) no more than RMB250 million in cash to be injected by the Purchaser into the Target Company as working capital after the completion of the share transfer registration in accordance with relevant PRC laws and regulations.The total investment of the Proposed Acquisition was arrived at after arms length negotiations among the Parties, and takes into account the market environment, operating conditions, and profitability of the Target Company. If the Proposed Acquisition proceeds, the amount of the total investment may change subject to the results of due diligence review as stated below.Due Diligence Review Pursuant to the Framework Agreement, the Group and its professional advisers will commence a due diligence review of the financial, legal and business affairs of the Target Company as soon as practicable following the execution of the Framework Agreement. Pursuant to the Framework Agreement, the Target Company and the Sellers agreed to provide full assistance to the Group and its professional advisers in connection with such review. The due diligence review is expected to be completed within three months of its commencement and such period may be extended with the consent of the Target Company. Other Matters Before the Proposed Acquisition ProceedsPursuant to the Framework Agreement, the Parties agreed to enter into definitive transaction documents in accordance with the major terms of the Framework Agreement, including a share purchase agreement and a shareholders resolution of the Target Company and to negotiate and finalise further details of the Proposed Acquisition, subject to the results of the due diligence 3review being satisfactory to Liaoning Zhongwang. Pursuant to the Framework Agreement, Liaoning Zhongwang is entitled to terminate the Proposed Acquisition, at its sole discretion, or propose alternative terms and conditions for the Proposed Acquisition, subject to the results of the due diligence review being satisfactory to Liaoning Zhongwang.INFORMATION ON THE TARGET COMPANYThe Target Company is based in Qinghai Province, the PRC and is one of the largest professional manufacturers of high-pre