When CYG (ChangYuan Group) was established in 1986 in Shenzhen, it was only a small company with about 10 employees, cash of US$30,000*, and 7 simple machines for production. After 20 years of development, CYG has grown into an enterprise with more than 1,200 employees, 5 production facilities with total area of 80,000 square meters, and 7 sets of professional electronic accelerators, -- the most with the largest radiation processing capacity in China. With profit after tax over US$12,300,000 in 2006 and net worth close to US$247 million, CYG has become the market leader of the industries of heat shrinkable products and power cable accessories in China.

Today, CYG has grown into a real substantial business group with 12 subsidiaries, 3 venture capital companies, 5 companies in which we have substantial interest, 1 engineering technology center endorsed by the municipal government, and 1 R & D Center endorsed by the central government.

In 2005, CYG became one of the Founding Members of China Heat Shrinkable Materials Industry Association, and Mr. Steven Xu, the CEO of CYG, was elected as the first President of this association. This reflected the market leader position of CYG in the industry in China.

Integration of Organic Growth and M&A Growth

The mission of CYG is to become a world-class supplier of heat shrink products and other facilities for power grids. In order to achieve this mission, CYG has been focusing on the competitive strategies of differentiation, matching international standards, and integration of organic growth and M&A growth.

While we worked hard in expanding the existing business of our subsidiaries and developing our product portfolio, we, by boldly using our experience of corporate finance and assets management, successfully acquired the respective minority stake of Changyuan Electronics, Shanghai Xinghe Irradiation Technology, Guangdong Power Cable Accessories, and Shenzhen Jiacai Fine Chemicals Co., Ltd. We will put more resources in M&A activities in the coming year.

With effective from 3 June 2006, CYG holds 35% of Shenzhen NARI Co., Ltd. by acquiring APC Technology. After that, CYG has successfully increased the shareholding of Dongguan Gaoneng Industrial Co., Ltd from 19.33% to 36.31%.

The milestones of successfully becoming Shenzhen NARI’s substantial shareholder and increasing the shareholding of Dongguan Gaoneng have established a strong base for the future development of CYG.

Approved as National-Class Corporate Technology Center

In February 2006, headed by Mr. Jiazuan Ni, an academician of China Academy of Sciences, Changyuan R&D Center (along with Huawei and ZTE) was approved as a national-class corporate technology center by the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance, the China Customs, and the State Administration of Taxation.

This demonstrates the recognition of the innovation capabilities and the technology research level of CYG by the central government and the industry. It also provides a strong support to the competitiveness and sustainable development for CYG.

In June 2006, CYG was listed as a unit of postdoctoral scientific research by the Ministry of Personnel. This will facilitate the technological collaboration of CYG with scientific research institutes, and further raise the innovation capabilities of CYG.

Some of our Major Awards

These awards demonstrate the recognition from external third parties on CYG’s fast and healthy expansion, clear mission, sustainable growth, and excellent systems for business management and operation.

* Based on a reference exchange rate of US$ 1=RMB7.7339 as at 16 April 2007.