Largest cotton textile producer Weiqiao Textile Company Limited: -- Turnover of RMB13,584,389,000, an Increase of 22.5 percent over 2004 -- Gross Profits of RMB2,244,130,000, up 20.8 percent -- Net Profit Attributable to Shareholders of RMB1,242,473,000, up 50.5 percent -- Gross Profit Margin of 16.5 percent, Compared to 16.8 percent in 2004 -- Basic Earnings Per Share of RMB1.35, up 39.2 percent -- Proposed Final Dividend of RMB0.287 Per Share The annual results for the year ended December 31, 2005. During the year under review, turnover of the Group grew 22.5 percent to RMB13,584,389,000; gross profit reached RMB2,244,130,000, represented an increment of 20.8 percent; net profit attributable to shareholders also rose 50.5 percent to RMB1,242,473,000. Basic earnings per share were RMB1.35. The board proposed a final dividend of RMB0.287. These results reinforced the Group's dominant position in China's domestic cotton textiles industry. During the year, it executed against strategy, expanding domestic and international market share. Gross profits remained at a relatively high level. The Chinese government provided significant tax relief for the Group's investments in technology upgrading. The Company and its non-wholly owned subsidiary Binzhou Industrial Park were granted tax relief by the local tax bureau in an aggregate amount of approximately RMB287,689,000 in 2005, owing to its investment in the domestic equipment used for technological reform. According to the existing tax law in PRC, the Group may apply for similar tax relief in the future. The decrease in the proportion of denim was attributable to the downtrend of denim sales in the low to medium end markets and therefore caused a reduction of production volume of denim by the Company. In cotton yarn, demand was focused on high quality cotton yarn. The Group adapted to this market trend, and saw turnover increase from RMB4.048 billion to RMB5.426 billion. Cotton yarn represented 39.9 percent of total turnover. Chinese demand dominated the global market in 2005, as global customers shifted manufacturing to China and domestic demand surged. China accounted for 54.0 percent of the Group's turnover, representing by far the largest customer base. The number of domestic customers rose by 21 percent during the year to 5,800. Agreements with the European Union and the United States during the year provided a relatively stable export environment to the industry and Group. The number of overseas customers for the Group's products rose by 20 percent, to 600. Weiqiao Textile Company Limited, a non state-owned enterprise, is the largest cotton textile producer in the PRC, specializing in the production, sales and distribution of cotton yarn, grey fabric and denim. During the past ten years, the Group developed large-scale production capabilities by capitalizing on China's rapid economic growth. It has achieved strong positioning in the global textile markets by employing advance technology in state-of-the-art facilities.   Weiqiao Textile Company