Hong Ta Venture Capital Investment Co., Ltd., which our company holds 4.75% of its share, is a high-tech investment company. Founded on June 15th, 2000, this company chose to invest in some high-tech projects with high potential through strict market research and scientific investment rationale, and achieved a good overall performance. From June 2000 to the end of 2005, it had realized a profit of RMB 70.37 million. In all 16 high-tech projects it invested, 6 of them had been successfully listed on the Shanghai Stock Exchange or Shenzhen Stock Exchange.

In order to achieve sustainable development and adapt to the positive changes in capital market and venture investment environment, this company paid greater attention to the investment project selection. It has been in contact with more than 40 new projects through various channels, and gained some valuable investment project resources. Based on evaluations and distinctions according to company guidelines, the company conducted systematic and comprehensive market research in some of the projects, which established a foundation for its investment business in 2006.

Our country has raised the development of science and innovative capability to a strategic level, which supplies abundant market resources and support for high-tech investment companies. Our government has successfully conducted shareholding restructuring within the Chinese capital market. Thus a market-oriented and full-circulating stock market will be established soon. We believe that Hongta Venture Capital Investment Co., Ltd. is facing a favorable market environment, more flexible policies and regulations and a broad developing prospect. We also believe that this company will bring a high rate of return to SZITIC.