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<SEC-DOCUMENT>0001116502-04-000345.txt : 20040225
<SEC-HEADER>0001116502-04-000345.hdr.sgml : 20040225
<ACCEPTANCE-DATETIME>20040225123116
ACCESSION NUMBER:		0001116502-04-000345
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040210
ITEM INFORMATION:		Acquisition or disposition of assets
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20040225

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA RESOURCES DEVELOPMENT INC
		CENTRAL INDEX KEY:			0000793628
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190]
		IRS NUMBER:				870263643
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26046
		FILM NUMBER:		04626764

	BUSINESS ADDRESS:	
		STREET 1:		ROOM 2105 WEST TOWER SHUN TAK CENTRE
		STREET 2:		200 CONNAUGHT ROAD C
		CITY:			SHEUNG WAN
		STATE:			K3
		ZIP:			-
		BUSINESS PHONE:		01185228107205

	MAIL ADDRESS:	
		STREET 1:		ROOM 2105 WEST TOWER SHUN TAK CENTRE
		STREET 2:		200 CONNAUGHT ROAD C
		CITY:			SHEUNG WAN HONG KONG
		STATE:			K3
		ZIP:			-

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MAGENTA CORP
		DATE OF NAME CHANGE:	19940217
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>chinaresources8k.htm
<DESCRIPTION>CURRENT REPORT
<TEXT>
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<TITLE><B>bp53100 -- China Resources Development -- 8K</TITLE>
<META NAME="keywords" CONTENT="Bassett Press, EDGAR, SEC Filing Agent">
<META NAME="author" CONTENT="Bassett Press, Inc. 954-928-2862">
<META NAME="date" CONTENT="02/23/2004">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>UNITED STATES</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" align=center><B>Washington, D.C. 20549</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>_______________</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>FORM 8-K</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><B>CURRENT REPORT</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><B>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center>Date of Report (Date of earliest event reported)<B> &nbsp;February 10, 2004</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:18pt; font-family:Times New Roman; font-size:18pt" align=center><B>CHINA RESOURCES DEVELOPMENT, INC.</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Exact name of registrant as specified in its charter)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman"><BR></P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=center><B>Nevada</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=center><B>0-26046</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=center><B>87-0263643</B></P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top rowspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(State&nbsp;or&nbsp;Other&nbsp;Jurisdiction</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>of&nbsp;Incorporation)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top rowspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Commission</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>File&nbsp;Number)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top rowspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(I.R.S.&nbsp;Employer</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>Identification&nbsp;No.)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Room 2105, West Tower, Shun Tak Centre,</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>200 Connaught Road C, Sheung Wan, Hong Kong</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Address of Principal Executive Office) (Zip Code)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><B>011-852-2810-7205</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Registrant&#146;s telephone number, including area code)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><B>Not Applicable</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(Former Name or Former Address, If Changed Since Last Report.)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; padding-right:72pt; width:414pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
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<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
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<A NAME="item5"></A><BR>
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<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>Item 2.&nbsp;&nbsp;&nbsp;Acquisition or Disposition of Assets.</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:27pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">On February&nbsp;10, 2004, the Registrant&#146;s wholly-owned subsidiary, Hainan Cihui Industrial Co. Ltd. (&#147;HARC&#148;), disposed of its 100% equity interest in Shenzhen Xubu Investment Co. Ltd. (&#147;Xubu&#148;) to an unaffiliated third party, effective January&nbsp;1, 2004, for total consideration of Rmb17,256,000 (US$2,084,058) (the &#147;Purchase Consideration&#148;). Xubu was formed to seek investment opportunities in China; however, no such opportunities were consummated. The assets of Xubu mainly consisted of fixed assets and cash. The Purchase Consideration was offset by capital in the amount of Rmb16,025,910 (US$1,935,496) that had been withdrawn from Xubu by HARC. The net Purchase Consideration to be received by HARC is Rmb1,230,090 (US$148,562), which is due and payable on or before May&nbsp;10,&nbsp;2004.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:11pt; text-indent:36pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(&#147;Rmb&#148; refers to Renminbi yuan, the lawful currency of the People&#146;s Republic of China. Translation of amounts from Renminbi to U.S. dollars have been made at the single rate of exchange as quoted by the People&#146;s Bank of China (the &#147;PBOC Rate&#148;) on December&nbsp;31, 2003, which was US$1.00&nbsp;=&nbsp;Rmb8.28. The Renminbi is not freely convertible into foreign currencies, and no representation is made that the Renminbi amounts referred to herein could have been or could be converted into U.S. dollars at the PBOC Rate or at&nbsp;all.)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=justify><B>Item 7.&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:-13pt; text-indent:36pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(a)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Financial Statements.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">None.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:-13pt; text-indent:36pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(b)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Pro Forma Financial Information</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">The unaudited pro forma financial information includes (1)&nbsp;a pro forma condensed consolidated statement of operations for the year ended December&nbsp;31, 2002 (2)&nbsp;pro forma condensed consolidated statements of operations for the three months and nine months ended September&nbsp;30, 2003, and (3) a pro forma condensed consolidated balance sheet as of September 30, 2003. The historical financial information has been derived from the audited financial statements included in the Company&#146;s annual report on Form&nbsp;10-KSB for the year ended December&nbsp;31, 2002, and the unaudited financial statements included in the Company&#146;s quarterly report on Form&nbsp;10-QSB for the quarter ended September&nbsp;30, 2003. The unaudited pro forma financial statements should be read in conjunction with the historical financial statements used in the
 preparation of such pro forma financial statements. The pro forma financial information presented in not necessarily indicative of that which would have been attained had the transaction occurred at an earlier date.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">The assumptions used in developing the pro forma adjustments include (1)&nbsp;all historical expenses and income for the periods concerned would have been diminished had the disposition occurred at the beginning of such periods, and (2)&nbsp;the sales proceeds would remain the same had the disposition occurred on the balance sheet date.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
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<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>2</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:-13pt; text-indent:36pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(c)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:11pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Exhibits.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:11pt; text-indent:72pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">The following exhibit is filed with this report:</P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD valign=top><P style="margin:0pt; text-indent:72pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Exhibit&nbsp;No.</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Exhibit Description</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin-top:0pt; margin-bottom:11pt; font-family:Times New Roman; font-size:11pt"><A HREF="salepurchaseagrmnt.htm"><FONT COLOR=#0000FF>10.18</FONT></A>&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Agreement for the Sale and Purchase of Shares in Shenzhen Xubu </P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Investment Co. Ltd. by and between HARC and Su Wei Min dated </P>
<P style="margin-top:0pt; margin-bottom:11pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">February 10, 2004.</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><A HREF="salepurchaseagrmn2t.htm"><FONT COLOR=#0000FF>10.19</FONT></A>&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Agreement for the Sale and Purchase of Shares in Shenzhen Xubu </P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Investment Co. Ltd. by and between Li Fei Lie, as nominee for HARC </P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">and Su Wei Min dated February 10, 2004.</P>
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<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>3</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
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<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>SIGNATURES</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:36pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=top colspan=2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>CHINA&nbsp;RESOURCES&nbsp;DEVELOPMENT,&nbsp;INC.</B></P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Date:&nbsp;&nbsp;February 24, 2004</P>
</TD><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">By:&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">/s/ C<SMALL>HING<BIG> L<SMALL>UNG<BIG> P<SMALL>O</SMALL></P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top rowspan=2><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Ching Lung Po</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Chairman</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>4</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>(UNAUDITED)</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>FOR THE YEAR ENDED DECEMBER 31, 2003</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Amounts in thousands, except share and per share data)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:-27pt; width:486pt; font-family:Times New Roman"><BR></P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; font-family:Times New Roman; font-size:8pt" align=right><BR></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Historical</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>adjustments</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; font-family:Times New Roman; font-size:8pt" align=right><BR></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
</TD><TD valign=bottom>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">NET&nbsp;SALES</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>9,170</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>9,170</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">COST&nbsp;OF&nbsp;SALES</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(8,504</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(8,504</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">GROSS&nbsp;PROFIT</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>666</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>666</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">DEPRECIATION</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(842</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>529</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(313</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">VALUATION&nbsp;ALLOWANCE</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(48,178</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(48,178</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">SELLING,&nbsp;GENERAL&nbsp;AND</P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;ADMINISTRATIVE&nbsp;EXPENSES</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>(11,164</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>3,478</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>(7,686</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">FINANCIAL&nbsp;INCOME,&nbsp;NET</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>669</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(1</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>668</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">OTHER&nbsp;EXPENSES,&nbsp;NET</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(1,333</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>106</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(1,227</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">LOSS&nbsp;BEFORE&nbsp;INCOME&nbsp;TAXES</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(60,182</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(56,070</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">INCOME&nbsp;TAXES</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(50</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(50</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">NET&nbsp;LOSS</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(60,232</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(56,120</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">LOSS&nbsp;PER&nbsp;SHARE:</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;Basic&nbsp;and&nbsp;diluted</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(71.89</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(66.98</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">WEIGHTED&nbsp;AVERAGE&nbsp;NUMBER</P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;OF&nbsp;SHARES&nbsp;OUTSTANDING</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>837,823</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>837,823</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Note: Pro forma adjustments present adjustments to the results of operations to reflect the disposition of Xubu as if it had occurred on January 1, 2002 and applicable historical expenses of the Company for the year 2002 would have been adjusted accordingly.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:-27pt; width:486pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; text-indent:-27pt; width:486pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>F-1</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS </B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>(UNAUDITED)</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2003</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Amounts in thousands, except share and per share data)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom colspan=7><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>Three&nbsp;months&nbsp;ended&nbsp;</B></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>September&nbsp;30,&nbsp;2003</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom colspan=7><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>Nine&nbsp;Months&nbsp;Ended&nbsp;</B></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=center><B>September&nbsp;30,&nbsp;2003</B></P>
</TD><TD valign=bottom>&nbsp;</TD></TR>
<TR><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; font-family:Times New Roman; font-size:8pt" align=right><BR></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Historical</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>adjustments</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; font-family:Times New Roman; font-size:8pt" align=right><BR></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; font-family:Times New Roman; font-size:8pt" align=right><BR></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Historical</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>adjustments</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; font-family:Times New Roman; font-size:8pt" align=right><BR></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
</TD><TD valign=bottom>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">NET&nbsp;SALES</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>853</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>853</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,297</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,297</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">COST&nbsp;OF&nbsp;SALES</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(761</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(761</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(1,205</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(1,205</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">GROSS&nbsp;PROFIT</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>92</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>92</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>92</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>92</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">DEPRECIATION</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(202</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>142</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(60</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(554</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>426</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(128</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">SELLING,&nbsp;GENERAL&nbsp;AND</P>
<P style="margin:0pt; text-indent:8pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">ADMINISTRATIVE&nbsp;EXPENSES</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(17,097</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>635</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(16,462</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(26,985</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,725</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(25,260</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">FINANCIAL&nbsp;INCOME,&nbsp;NET</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>87</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(1</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>86</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>346</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(1)</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>345</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">OTHER&nbsp;INCOME,&nbsp;NET</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,084</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,084</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,153</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,153</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">LOSS&nbsp;FROM&nbsp;CONTINUING&nbsp;OPERATIONS</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;BEFORE&nbsp;INCOME&nbsp;TAXES</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(16,036</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(15,260</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(25,948</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(23,798</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">INCOME&nbsp;TAXES</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">LOSS&nbsp;FROM&nbsp;CONTINUING&nbsp;OPERATIONS</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(16,036</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(15,260</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(25,948</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(23,798</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">DISCONTINUED&nbsp;OPERATIONS</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top rowspan=4><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;Income&nbsp;from&nbsp;operations&nbsp;of&nbsp;discontinued</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;supermarket&nbsp;segment&nbsp;(including&nbsp;gain</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;on&nbsp;disposal&nbsp;of&nbsp;RMB327&nbsp;in&nbsp;2003),</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;net&nbsp;of&nbsp;taxes&nbsp;of&nbsp;RMB0</P>
</TD><TD valign=top rowspan=4>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top rowspan=4><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top rowspan=4><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top rowspan=4><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>366</P>
</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD valign=top rowspan=4>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top rowspan=4><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>366</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt">&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">NET&nbsp;LOSS</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(16,036</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(15,260</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(25,582</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(23,432</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">LOSS&nbsp;PER&nbsp;SHARE:&nbsp;basic&nbsp;and&nbsp;diluted</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;Continuing&nbsp;operations</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(15.56</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(14.81</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(28.75</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(26.37 </P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;Discontinued&nbsp;operations</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>&#151;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>0.41</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>0.41</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(15.56</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(14.81</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(28.34</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>(25.96</P>
</TD><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">)</P>
</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">WEIGHTED&nbsp;AVERAGE&nbsp;NUMBER&nbsp;</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;OF&nbsp;SHARES&nbsp;OUTSTANDING</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,030,345</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>1,030,345</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>902,702</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=right>902,702</P>
</TD><TD valign=top>&nbsp;</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=justify>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Note: Pro forma adjustments present adjustments to the results of operations to reflect the disposition of Xubu as if it had occurred on January 1, 2003 and applicable historical expenses of the Company for the periods concerned would have been adjusted accordingly.</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<BR>
<BR>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>F-2</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>AS OF SEPTEMBER 30, 2003</B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Amounts in thousands, except share and per share data)</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=justify><BR></P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom rowspan=2><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
<P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>adjustments</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD></TR>
<TR><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Historical</B></P>
</TD><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right><B>Pro&nbsp;forma</B></P>
</TD><TD valign=bottom>&nbsp;</TD></TR>
<TR><TD valign=bottom>&nbsp;</TD><TD valign=bottom>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt" align=right>RMB</P>
</TD><TD valign=bottom>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">ASSETS</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">CURRENT&nbsp;ASSETS:</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Cash&nbsp;and&nbsp;cash&nbsp;equivalents</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>12,249</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(180</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>12,069</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Trading&nbsp;securities</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>749</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>749</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Trade&nbsp;receivables</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>277</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>277</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Other&nbsp;receivables,&nbsp;deposits&nbsp;and&nbsp;prepayments</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>790</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>767</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>1,557</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Short&nbsp;term&nbsp;loans&nbsp;receivable</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>1,113</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>1,113</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">TOTAL&nbsp;CURRENT&nbsp;ASSETS</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>15,178</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>15,765</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">PROPERTY&nbsp;AND&nbsp;EQUIPMENT</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>2,679</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(1,243</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>1,436</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">INVESTMENTS</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>48,000</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>48,000</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">GOODWILL</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>5,865</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>5,865</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">TOTAL&nbsp;ASSETS</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>71,722</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>71,066</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">LIABILITIES&nbsp;AND&nbsp;SHAREHOLDERS&#146;&nbsp;EQUITY</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">CURRENT&nbsp;LIABILITIES:</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Accounts&nbsp;payable</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>154</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>154</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Other&nbsp;payables&nbsp;and&nbsp;accrued&nbsp;liabilities</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>4,196</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(187</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>4,009</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Current&nbsp;portion&nbsp;of&nbsp;capital&nbsp;lease</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>140</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>140</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Amounts&nbsp;due&nbsp;to&nbsp;related&nbsp;companies</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>366</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>366</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">TOTAL&nbsp;CURRENT&nbsp;LIABILITIES</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>4,856</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>4,669</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">Capital&nbsp;lease&nbsp;net&nbsp;of&nbsp;current&nbsp;portion</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>365</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>365</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">TOTAL&nbsp;LIABILITIES</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>5,221</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>5,034</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">SHAREHOLDERS&#146;&nbsp;EQUITY</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Preferred&nbsp;stock,&nbsp;authorized&nbsp;&#150;&nbsp;10,000,000&nbsp;shares</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;Series&nbsp;B&nbsp;preferred&nbsp;stock,&nbsp;US$0.001&nbsp;par&nbsp;value:&nbsp;</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized&nbsp;-&nbsp;320,000&nbsp;shares</P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issued&nbsp;and&nbsp;outstanding&nbsp;&#150;&nbsp;320,000&nbsp;shares</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>3</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>3</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Common&nbsp;stock,&nbsp;US$0.001&nbsp;par&nbsp;value:</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;Authorized&nbsp;&#150;&nbsp;200,000,000&nbsp;shares</P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;Issued&nbsp;and&nbsp;outstanding&nbsp;&#150;&nbsp;1,143,823&nbsp;shares</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>9</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>9</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">Additional&nbsp;paid-in&nbsp;capital</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>181,681</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>181,681</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">Reserves</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>28,028</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>28,028</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">Accumulated&nbsp;deficit</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(143,374</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(469</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>(143,843</P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman">)</P>
</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">Accumulated&nbsp;other&nbsp;comprehensive&nbsp;gains</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>154</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>154</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">TOTAL&nbsp;SHAREHOLDERS&#146;&nbsp;EQUITY</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>66,501</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>66,032</P>
</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman">TOTAL&nbsp;LIABILITIES&nbsp;AND&nbsp;SHAREHOLDERS&#146;&nbsp;EQUITY</P>
</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>71,722</P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD valign=top>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=top><P style="margin:0pt; font-family:Times New Roman" align=right>71,066</P>
</TD><TD valign=top>&nbsp;</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Note: Pro forma adjustments present adjustments to the September 30, 2003 balance sheet to reflect the disposition of Xubu as if it had occurred on September 30, 2003.</P>
<BR>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center>F-3</P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>INDEX TO EXHIBITS </B></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<TABLE style="margin-right:126pt" cellspacing=0><TR><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>Exhibit&nbsp;No.</B></P>
</TD><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><B>Exhibit Title</B></P>
</TD></TR>
<TR><TD valign=top><P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><A HREF="salepurchaseagrmnt.htm"><FONT COLOR=#0000FF>10.18</FONT></A></P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between HARC and Su Wei Min dated February 10, 2004.</P>
</TD></TR>
<TR><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><A HREF="salepurchaseagrmn2t.htm"><FONT COLOR=#0000FF>10.19</FONT></A></P>
</TD><TD valign=top>&nbsp;</TD><TD valign=top><P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between Li Fei Lie, as nominee for HARC and Su Wei Min dated February 10, 2004.</P>
</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; padding-left:27pt; text-indent:-27pt; width:459pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:126pt; margin-bottom:0pt; width:486pt; font-family:Times New Roman; font-size:11pt"><BR></P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>3
<FILENAME>salepurchaseagrmnt.htm
<DESCRIPTION>SALE AND PURCHASE AGREEMENT
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>BP53100 -- China Resources Development -- Exhibit 10.18</TITLE>
<META NAME="keywords" CONTENT="Bassett Press, SEC EDGAR Filing Agent">
<META NAME="author" CONTENT="Bassett Press Inc. 954-928-2862">
<META NAME="date" CONTENT="02/23/2004">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=right>EXHIBIT 10.18</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>AGREEMENT FOR THE SALE AND PURCHASE OF SHARES IN</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>SHENZHEN XUBU INVESTMENT CO. LTD.</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement is made and entered into by and between: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; padding-left:70.9pt; text-indent:-70.9pt; width:397.1pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; padding-left:70.9pt; text-indent:-70.9pt; width:397.1pt; font-family:Times New Roman" align=justify>The Seller: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; padding-left:70.9pt; width:397.1pt; font-family:Times New Roman" align=justify>Hainan Cihui Industrial Co. Ltd.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; padding-left:70.9pt; width:397.1pt; font-family:Times New Roman" align=justify>Legal representative: Mr. Ching Lung Po</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>Mr. Su Wei Min</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>WHEREAS the Seller owns 27,000,000 shares, representing 90% of the total issued and outstanding share capital of Shenzhen Xubu Investment Co. Ltd. (the &#147;Company&#148;) and desires to sell all of and the Purchaser desires to purchase all of such share capital. </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>NOW IT IS HEREBY AGREED AS FOLLOWS:-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE I </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>SALE AND PURCHASE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>Upon and subject to the terms and conditions of this Agreement, the Seller shall sell and the Purchaser shall purchase 27,000,000 shares of the Company (the &#147;Shares&#148;) held by the Seller.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE II </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>EFFECTIVE DATE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:24pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:24pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement shall be effective on January 1, 2004 and shall be binding on all parties to this Agreement.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE III </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>PURCHASE PRICE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The consideration for the Shares shall be RMB15,530,400 (the &#147;Purchase Price&#148;) and shall be payable within three months from the date of this Agreement. However, the Purchaser shall be allowed to set off the Purchase Price by the amount due by the Seller to the Company on the Effective Date. The Shares shall include all rights and interests attached to the Shares from the Effective Date.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE IV </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>COMPLETION OF TRANSFER</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The transfer of Shares shall take place at the headquarters of the Company, except otherwise agreed by all parties concerned, the following business shall be completed:-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(1)</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>The Seller shall deliver or procure the delivery to the Purchaser the following document:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(A) the share certificate for the Shares; and</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(B) the written resignation of all directors nominated by the Seller.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(2)</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>The Seller shall procure that a board meeting of the Company be held to adopt the following resolutions:-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(A) appoint the nominees of the Purchaser as directors;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(B) approve the resignation submitted by the directors nominated by the Seller and</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(C) approve the registration of the transfer of Shares on the shareholders register.</P>
<BR>
<BR>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<BR>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE V</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>REPRESENTATIONS AND WARRANTIES OF THE SELLER</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Seller is a legal person duly organized and validly existing under the laws of the People&#146;s Republic of China. The Seller has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Seller shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Seller.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>3</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Shares are validly issued, outstanding, fully paid and nonassessable. All related stamp duty has been paid. The Shares are free and clear of all liens, security interests, pledges or encumbrances of any kind.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>4</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The execution by the Seller of this Agreement and the performance by the Seller of its responsibility under this Agreement:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(A)&nbsp;shall not breach any articles of association or other comparable corporate charter documents of the Seller and the Company;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(B)&nbsp;shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Seller and the Company or any of their assets and properties.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE VI</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>REPRESENTATIONS AND WARRANTIES OF THE PURCHASER</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Purchaser.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>3</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The execution by the Purchaser of this Agreement and the performance by the Purchaser of its responsibility under this Agreement:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(A)&nbsp;shall not breach any articles of association or other comparable corporate charter documents of the Purchaser;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(B)&nbsp;shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Purchaser or any of its assets and properties.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE VII</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>CONTINUING PERFORMANCE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>Both the Seller and the Purchaser shall execute and perform and cause or procure to execute and perform all such other documents, acts and things as may be required by or incidental to the preparation, execution, completion and performance of this Agreement and the documents and transactions contemplated hereby.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>After the completion of the transfer, all provisions hereof shall, so far as they remain capable of being performed or observed, continue in full force.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center>-2-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman; font-size:11pt"><BR></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE VIII</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>LAW AND JURISDICTION</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement is governed by and shall be construed in accordance with the laws of the People&#146;s Republic of China.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The parties irrevocably submit to the exclusive jurisdiction of the courts of the People&#146;s Republic of China.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE IX</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>MISCELLANEOUS</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement supersedes all prior discussion and agreements between the parties hereto with respect to the subject matter hereof and contain the sole and entire agreement between the parties hereto with respect to the subject matter hereof.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The heading used in this Agreement have been inserted for convenience of reference only and do not define or limit the provision hereof.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>3</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement shall be executed in required number of counterparts, each of which shall be deemed an original.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Dated this 10th day of February, 2004</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>The Seller: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Hainan Cihui Industrial Co. Ltd.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify><U>By: /s/Ching Lung Po</U></P>
<U><P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:144pt; width:468pt; font-family:Times New Roman" align=justify><BR></U></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Ching Lung Po</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify><U>By: /s/Su Wei Min</U></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:108pt; width:468pt; font-family:Times New Roman" align=justify><U><BR></U></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Su Wei Min</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between HARC and Su Wei Min dated February 10, 2004 (Certified English translation of original Chinese version)</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>The undersigned officer of China Resources Development, Inc. hereby certifies that the foregoing is a fair and accurate English translation of the original Chinese version of the Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between HARC and Su Wei Min dated February 10, 2004.</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; text-indent:216pt; width:468pt; font-family:Times New Roman"><U>/s/ Wong Wah On</U></P>
<U><P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:432pt; width:468pt; font-family:Times New Roman"><BR></U></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:216pt; width:468pt; font-family:Times New Roman">Wong Wah On, Director and Financial Controller</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center>-4-</P>
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<DESCRIPTION>SALE AND PURCHASE AGREEMENT
<TEXT>
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<TITLE>BP53100 -- China Resources Development -- Exhibit 10.19</TITLE>
<META NAME="keywords" CONTENT="Bassett Press, SEC EDGAR Filing Agent">
<META NAME="author" CONTENT="Bassett Press Inc. 954-928-2862">
<META NAME="date" CONTENT="02/23/2004">
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<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman; font-size:11pt"><BR></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=right>EXHIBIT 10.19</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>AGREEMENT FOR THE SALE AND PURCHASE OF SHARES IN</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>SHENZHEN XUBU INVESTMENT CO. LTD.</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman"><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement is made and entered into by and between: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; padding-left:70.9pt; text-indent:-70.9pt; width:397.1pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; padding-left:70.9pt; text-indent:-70.9pt; width:397.1pt; font-family:Times New Roman" align=justify>The Seller: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; padding-left:70.9pt; width:397.1pt; font-family:Times New Roman" align=justify>Mr. Li Fei Lie</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>Mr. Su Wei Min</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>WHEREAS the Seller owns 3,000,000 shares, representing 10% of the total issued and outstanding share capital of Shenzhen Xubu Investment Co. Ltd. (the &#147;Company&#148;) and desires to sell all of and the Purchaser desires to purchase all of such share capital. </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>NOW IT IS HEREBY AGREED AS FOLLOWS:-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE I </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>SALE AND PURCHASE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>Upon and subject to the terms and conditions of this Agreement, the Seller shall sell and the Purchaser shall purchase 3,000,000 shares of the Company (the &#147;Shares&#148;) held by the Seller.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE II </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>EFFECTIVE DATE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:24pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:24pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement shall be effective on January 1, 2004 and shall be binding on all parties to this Agreement.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE III </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>PURCHASE PRICE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The consideration for the Shares shall be RMB1,725,600 (the &#147;Purchase Price&#148;) and shall be payable within three months from the date of this Agreement. The Shares shall include all rights and interests attached to the Shares from the Effective Date.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE IV </B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>COMPLETION OF TRANSFER</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The transfer of Shares shall take place at the headquarters of the Company, except otherwise agreed by all parties concerned, the following business shall be completed:-</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(1)</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>The Seller shall deliver or procure the delivery to the Purchaser the following document:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(A) the share certificate for the Shares; and</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>&nbsp;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(B) the written resignation of all directors nominated by the Seller.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(2)</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>The Seller shall procure that a board meeting of the Company be held to adopt the following resolutions:-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(A) appoint the nominees of the Purchaser as directors;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(B) approve the resignation submitted by the directors nominated by the Seller and</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:72pt; width:468pt; font-family:Times New Roman" align=justify>(C) approve the registration of the transfer of Shares on the shareholders register.</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE V</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>REPRESENTATIONS AND WARRANTIES OF THE SELLER</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Seller has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Seller shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Seller.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>3</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Shares are validly issued, outstanding, fully paid and nonassessable. All related stamp duty has been paid. The Shares are free and clear of all liens, security interests, pledges or encumbrances of any kind.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>4</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The execution by the Seller of this Agreement and the performance by the Seller of its responsibility under this Agreement:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(A)&nbsp;shall not breach any articles of association or other comparable corporate charter documents of the Seller and the Company;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(B)&nbsp;shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Seller and the Company or any of their assets and properties.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE VI</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>REPRESENTATIONS AND WARRANTIES OF THE PURCHASER</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Purchaser.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>3</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The execution by the Purchaser of this Agreement and the performance by the Purchaser of its responsibility under this Agreement:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(A)&nbsp;shall not breach any articles of association or other comparable corporate charter documents of the Purchaser;</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>(B)&nbsp;shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Purchaser or any of its assets and properties.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE VII</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>CONTINUING PERFORMANCE</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>Both the Seller and the Purchaser shall execute and perform and cause or procure to execute and perform all such other documents, acts and things as may be required by or incidental to the preparation, execution, completion and performance of this Agreement and the documents and transactions contemplated hereby.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>After the completion of the transfer, all provisions hereof shall, so far as they remain capable of being performed or observed, continue in full force.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE VIII</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>LAW AND JURISDICTION</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement is governed by and shall be construed in accordance with the laws of the People&#146;s Republic of China.</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center>-2-</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman; font-size:11pt"><BR></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The parties irrevocably submit to the exclusive jurisdiction of the courts of the People&#146;s Republic of China.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>ARTICLE IX</B></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center><B>MISCELLANEOUS</B></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>1</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement supersedes all prior discussion and agreements between the parties hereto with respect to the subject matter hereof and contain the sole and entire agreement between the parties hereto with respect to the subject matter hereof.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>2</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>The heading used in this Agreement have been inserted for convenience of reference only and do not define or limit the provision hereof.</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify>3</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:36pt; width:468pt; font-family:Times New Roman" align=justify>This Agreement shall be executed in required number of counterparts, each of which shall be deemed an original.</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Dated this 10th day of February, 2004.</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>The Seller: </P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify><U>By: /s/Li Fei Lie</U></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Li Fei Lie</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>The Purchaser:</P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify><BR></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; width:468pt; font-family:Times New Roman" align=justify><U>By: /s/Su Wei Min</U></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:108pt; width:468pt; font-family:Times New Roman" align=justify><U><BR></U></P>
<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>Su Wei Min</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center>-3-</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman">Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between Li Fei Lie and Su Wei Min dated February 10, 2004 (Certified English translation of original Chinese version)</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=justify>The undersigned officer of China Resources Development, Inc. hereby certifies that the foregoing is a fair and accurate English translation of the original Chinese version of the Agreement for the Sale and Purchase of Shares in Shenzhen Xubu Investment Co. Ltd. by and between Li Fei Lie and Su Wei Min dated February 10, 2004.</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:-12pt; text-indent:216pt; width:468pt; font-family:Times New Roman"><U>/s/ Wong Wah On</U></P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; text-indent:216pt; width:468pt; font-family:Times New Roman">Wong Wah On, Director and Financial Controller</P>
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<P style="margin-top:0pt; margin-right:144pt; margin-bottom:0pt; width:468pt; font-family:Times New Roman" align=center>-4-</P>
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