Investment Outline of Business Inviting Projects of
Hunan Xinhua Printing Group Co., Ltd.

Information of the Group

Hunan Xinhua Printing Group Co., Ltd. (hereinafter abbreviated as Group), merging Hunan Xinhua Printing 1st Factory and Hunan Xinhua Printing 3rd Factory, integrating Hunan Xinhua Printing 2nd Factory (Shaoyang), was established in December 2001. The Group is a wholly owned subsidiary of Hunan Publishing Investment Holding Group Co., Ltd. and the largest comprehensive printing enterprise of Hunan Province.
Legal person of the Group: Liu Hongjun
Registered Capital: 108,611,400.00 Yuan RMB.
Registration Address: Hunan Wangcheng Pressing Science Park

Business scope of the Group
The main business of the Group is printing books, periodicals, commercial printing, security printing, and real estate development and tertiary industry development.
Incomes distribution of main business:

Profile of printing industry
Market scale and its increment: from the Group was established in 2001, the low-level economic operation and industrial situation with redundant development, resource dissipation, pell-mell development were changed, and fund, projects, human resources, technologies and other productive factors have been aggregated and developed with their own advantages. In 2005, the Group has 6 main economic indexes ranked 2 among 120 printing corporations of China. In recent years, the Group has integrated advanced equipments effectively, and according to the view of ¡°Relying on Publication, Beyond Publication¡±, the Group has developed new market business, avoided operational risks by business combination and reduced the dependence on traditional publication. At present, the market share of newspaper printing and commercial printing is larger and larger, so the situation of printing market with 3 main business, publication printing, newspaper printing and commercial printing has been formed basically; the Group¡¯s technology and equipment advantages has been exercised as industrial and economic advantages. As to the newly established park of the Group, its functional layout, planning structure, environment, and infrastructural facilities are first-class in printing industry of China, which provides foundation and conditions for the Group¡¯s technical, management and system innovation, promotes printing production more aggregated and improves organizational level of the industry. The Group¡¯s overall strength ranks among the largest printing enterprises of China, and the Group is one of the printing groups with the largest scale and strongest strength in China. Having made great efforts for several years, the Group has made a relatively great improvement, and now the Group has more than 50 advanced equipments for plate making, printing and binding, and possesses rather high market capabilities against market risks. The Group ranks among the best on comprehensive economic indexes, impression number for ¡°Excellent Products¡±, share of ¡°Excellent Varieties¡± in China.
Competition of the industry: the competition of printing market is violent, and the development of each enterprise will be more difficult than ever. Main rivals of the Group: 1. world-class printing enterprises, which have entered into China market one after another by means of wholly-owned enterprise, holding enterprise and annexation, rooted in Zhujiang River Delta, Yangtze River Delta and Bohai Sea Ring Area, and been penetrating into inland of China; and Zhujiang River Delta has formed a world printing base as a basic situation. 2. the private-owned printing enterprises having accomplished previous accumulation, many state-owned or collective enterprises in succession changed their ownership as private-owned enterprises with the profound change of China¡¯s economic system and operation and market relationship of supply and demand, which give new activities to these enterprises, which are swiping market share from state-owned enterprises by their lower cost, flexible marketing measures and their levels of equipment and management are rather competitive. 3. the enterprises established by tobacco enterprises and posts and telecommunications enterprises by their solid capital and product advantages, which have large investment, high technologies and wide scope of products, and their market share is increasing gradually now. 4. press groups of Hunan Province, such as Hunan Daily Group and Changsha Evening News Paper Group, etc, which have strengthened technical transformation and introduced color rotary press machine and multi-color offset printing machine with high technologies, and penetrated into traditional color printing market. These rivals have strong market capabilities and are non-negligible, and their advance productivities, consummate marketing network and quick reaction on market change will cause market competition changed into competition of improving technology and value-added from price war as the single means of competition, and then into competition of mechanism, structure and strategy.
Management group and staff
1800 employees have been enrolled in the Group.
Management group: Chairman of Board, General Manager Liu Hongjun, Secretary of CPC Committee of the Group, vice Chairman of Board Huang Xisu, vice Chairman of Board, vice General Manager Gu Jianji, Director, vice General Manager Yue Yong, Director, vice General Manager Li Xintao, vice Secretary of CPC Committee of the Group, Chairman of Supervisory Board Xia Nianqing, Director Wu Qingyuan, Director, Chairman of Labor Union of the Group Yang Jianping, Director Liu Gang, General Engineer Zhou Zhengnian, General Accountant Jiang Jianhua.
Business Development
Orientation of the Group: depending on large group, large industrial park and large project, the Group will strengthen its strength, business and brand, give prominence to its development objective, promote its reform and development and make efforts to achieve a first-class modern large-type printing industrial group of China.
Business development plan:
1. To consummate integrative model of department management, form a corporate organizational frame coordinative to the integration with the industries of new industrial park and renewal of operational processes; to transform the Group into an industrial structure dominated by high technologies and with overall innovation of traditional industries from the industrial structure with traditional industries as its main body.
2. To innovate in mechanism, technical process, equipment, settlement and etc, to consummate the productive processes of plate making, printing, binding, to accomplish the transformations of changing sheet-fed printing into web-fed printing for batch color printing, of changing traditional plate making into CTP computer plate making for plate making.
3. According to market orientation, to integrate advanced equipments and divide main equipments into several clusters for different products, to develop new social business and reduce the dependence on printing textbook products, and form a structure of publication printing, commercial printing, newspaper printing as 3 main products.
4. To aggregate productive factors including capital, technologies, equipment, human resources, market, management and etc, to form an integrated system and improve the Group¡¯s industrial capabilities, enlarge and quicken productivity, and form a new development platform.
5. To optimize ownership structure, introduce state-owned capital, civilian capital and overseas capital into the Group, actually achieve mechanism innovation, to meet the target of assets shared in privatization, modern management, large business site and comprehensive business functions.
In future 3 years, the Group¡¯s incomes from main business will successively increase in plan.
Financial situation
Unit: 10,000 Yuan

Requirements to target investors
1. To devote itself to long-term development strategy and financial investment of the Group;
2. To be able to provide enough investment fund to support future development of the Group;
3. To identify with present business opinions and basic market orientation of the Group, the present management group of the Group, and being able to introject present corporate culture of the Group.
Contact Information
Contact person: Tang Zhenyu, Zhang Wenfei
Tel: 0731-4302627 4302523
Mobile: 13873119586
Fax: 0731-4302627
E-mail: tangzhenyu@hnpg.com.cn
zhangwenfei@hnpg.com.cn