In April 2008, the company in general developed according to its plan. We control the cost of the production and sales strictly, to confront the strong increase of the price of materials (steel, copper). And we get some good effects. We increased the average price of our machines by about 7% percent.

The price hike increases the revenue, but it still lags behind the increase of the price of material. This will influence the profit strongly.

This month the export continued increasing, but domestic sales didn't change a lot. Now the market of China is not good, because of inflation and the government's control measures. We don't expect the difficult domestic market environment to change in the short term, so we must prepare well for this with various cost cutting measures.

Export market: The proportion of big orders (above USD 50000) increased substantially. We notice success in building a low cost, highly efficient export distribution net.

In April, we attended the forum held by DEUTSCHE BOERSE in Frankfurt, we met some of our shareholders. We reported about Gongyou's progress, answered some questions and explained the future plan of the company to them. We are trying to establish a better channel to communicate with our shareholders and our intention to never stop to create more profits for them.

Chairman of the Board

Dong Yanwei

[1]