Joint Funding & Cooperation with Hongkong Dongzhan Company before Public Listing

Dongzhan International( Hong Kong) Co., Ltd. is a subsidiary held by Dalian Dongzhan (Group) Co., Ltd. of Beitai Iron & Steel Group Company and established in Hong Kong. The company engages in imports & exports as well as materials circulation for Beitai Iron & Steel Group Company. In order to sharpen its core competition edge, we plan to introduce world advanced management concept, mature trade pattern and material circulation mode. Dongzhan International (Hong Kong) Co., Ltd. intends to apply for public listing at the main board of Hong Kong stock exchange market. We sincerely welcome people from all circle from home and abroad to join with us in the international operation of Dongzhan International (Hong Kong) Co., Ltd. In this way, we can enhance our international competitiveness while creating more value for our shareholders. Ⅰ.Basic conditions 1. Company briefing In early 2005, Dalian Dongzhan (Group) Co., Ltd. established Dongzhan International( Hong Kong) Co., Ltd. which was approved by China's Ministry of Commerce with a registered capital of US$60.24 million. Its main business scope is international trade and material circulation. 2. Business orientation Dongzhan International( Hong Kong) Co., Ltd. relies on the network resources and business relation resources to add the domestic sales network, import & export business and material circulation to itself. The business pattern of Dongzhan International (Hong Kong) Co., Ltd. is trade and material circulation. Trade is the mainstay while material circulation is the basis. This mode can achieve an effective connection between products and service in the process of production and circulation, which forms a network chain for higher and lower reaches as well as a complete supply chain. Firstly, we establish a offshore company in Macao. The offshore company does import & export business, imports iron mineral sand for domestic closely-connected companies and other customers as well as goods and accessory for parent company, export finished iron & steel products; Dongzhan International (Hong Kong) Co., Ltd. acquires the domestic sales network of Dalian Dongzhan (Group) Co., Ltd. In this way, the Company sell products of closely-connected companies and third party through the domestic sales network; Dongzhan International (Hong Kong) Co., Ltd. develops electronic management & commercial platform on material circulation, provides shipping service as well as storage service through setting up shipping company and purchasing ships, acts as shipping and forwarding agent, engages in wharf container business, etc. 3. Development program According to company's development program, Dongzhan International (Hong Kong) Co., Ltd. should firstly build a strong material circulation system, which provides a series of services, including transportation, storage and delivery, for Beitai Iron & Steel Group Company. When material circulation becomes mature, Dongzhan International (Hong Kong) Co., Ltd. can establish joint-ventured shipping companies, freight companies and other large-scale freight & storage companies in Hong Kong and mainland China, and set up solely-funded freight company and business office in main cities, hence, form a wide network of transportation. Meanwhile, the company adopts world advanced information system, which can meet the application requirements on material circulation service by first party and third party, and integrates the material circulation of first and third party to a common information platform. 4. Advantage a. The company set footing on the strong resources advantage of Beitai Iron & Steel Group Company, which guarantees the reliable business and achievement for Dongzhan International (Hong Kong) Co., Ltd. b. The company's management staff have years of experience in material circulation and trading business. To introduce senior management talents from home and abroad can guarantee the company's leading position in the industry. Ⅱ.Program for going on public listing Upon forming a complete pattern, the company will engage in the mainstay industries, i.e., trade and material circulation. It's estimated that before going on public listing, Dongzhan International (Hong Kong) Co., Ltd. can meet the mandatory requirements on public listing by Hong Kong stock market, i.e., the profit enjoyed by shareholders for the latest one year can't be lower than 20 million Hong Kong dollars and the accumulative profits enjoyed by shareholders for the latest two years can't be lower than 30 million Hong Kong dollars. Dongzhan International (Hong Kong) Co., Ltd. plans to go on public listing in early 2008 and intends to issue 40% of the total shares. The amount financed is estimated to reach US$1.21 billion. Ⅲ.Mode of joint funding & cooperation 1. Capital cooperation: Our partners could either buy parts or entire shareholdings of the company, or add investment to the company, the funds shall be used in the construction project of material circulation. The cooperation partner can act as a short-term strategic investor and can remove their investment through investment market after going on public listing. They can also ct as a long-term strategic investor and jointly make efforts for the material circulation business. 2. Technical cooperation: Our partners could invest in this project with their resources on material circulation, information network and business channels as capital. 3. Financing cooperation: Our partners could provide loan to us, including short term and long term circulating fund loans. 4. Cooperation on capital financing: cooperation partner from home and abroad can cooperate with our company and go on public listing with our company's existing conditions.