AAC Technologies Holdings Inc. — Proxy Solicitation & Information Statement 2007

Dec 19, 2007

IMPORTANT

If you are in doubt about this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in AAC Acoustic Technologies Holdings Inc., you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION OF ASSETS

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Optima Capital Limited

A letter from the Board of AAC Acoustic Technologies Holdings Inc. is set out on pages 3 to 8 of this circular. A letter from the Independent Board Committee containing its recommendation in respect of the Agreement and the transaction contemplated is set out on page 9 of this circular. A letter from Optima Capital containing its advice and recommendation to the Independent Board Committee and the Independent Shareholders in connection with the Agreement and the transaction contemplated is set out on pages 10 to 15 of this circular.

A notice convening the extraordinary general meeting of AAC Acoustic Technologies Holdings Inc. is set out on page 36 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the form of proxy enclosed with this circular in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the extraordinary general meeting or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting at the extraordinary general meeting or any adjournment thereof should you so wish.

20th December, 2007

CONTENTS

		Page
Definitions. . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the	Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Letter from the	Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Letter from Optima Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Appendix I	— Asset Valuation Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Appendix II	— Properties Valuation Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix III	— General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Notice of extraordinary general meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

— i —

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meaning:

meaning:
“AAC (Shenzhen)”	AAC Acoustic Technologies (Shenzhen) Co., Ltd. (瑞聲聲學科技(深
	圳)有限公司), a wholly-owned foreign enterprise for a term of 20 years
	commencing from 12th January, 2004 and a wholly-owned subsidiary
	of the Company
“Acquisition”	the acquisition of Shenzhen Meiou by AAC (Shenzhen) pursuant to the
	Agreement
“Agreement”	the shares transfer agreement dated 7th November, 2007 entered
	into between AAC (Shenzhen) and the Vendors, who are the existing
	ultimate beneficial owners of the entire equity interests in Shenzhen
	Meiou
“Board”	the board of Directors
“Company”	AAC Acoustic Technologies Holdings Inc., a company incorporated in
	the Cayman Islands as an exempted company with limited liability on
	4th December, 2003 whose shares are listed on the Stock Exchange
“Completion Date”	date of completion of the sale and purchase under the Agreement
“Director(s)”	the director(s) of the Company
“EGM”	an extraordinary general meeting of the Company to be held at Elbrus
	Room, Pacific Place Conference Centre, 5/F., One Pacific Place, 88
	Queensway, Hong Kong on Friday, 4th January, 2008 at 10:30 a.m.
	to consider and, if appropriate, to approve the Acquisition under the
	Agreement
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Board	the independent board committee constituted by Mr. Koh Boon
Committee”	Hwee, Dr. Dick Mei Chang and Mr. Mok Joe Kuen Richard, all being
	independent non-executive Directors
“Independent	Shareholders who are independent of and not connected with the
Shareholders”	Vendors
“Latest Practicable Date”	18th December, 2007, being the latest practicable date prior to printing
	of this circular for ascertaining certain information contained herein
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Mr. Pan”	Mr. Benjamin Zhengmin Pan, an executive director and a substantial
	shareholder of the Company, spouse of Ms. Wu
“Ms. Wu”	Ms. Ingrid Chunyuan Wu, a non-executive director and a substantial
	shareholder of the Company, spouse of Mr. Pan

— 1 —

DEFINITIONS

• “Optima Capital” Optima Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong)

• “PRC” the People’s Republic of China

• “Shareholder(s)” the holder(s) of the shares in the Company

• “Shenzhen He Min” 深圳市和民電子有限公司 (Shenzhen He Min Electronics Co., Ltd)[#] , a company established under the laws of the PRC

• “Shenzhen Meiou” 深圳市美歐電子有限責任公司 (Shenzhen Meiou Electronics Co., Ltd)[#] , a company established under the laws of the PRC, which is the subject of the Acquisition, and 66.865% owned by Shenzhen Yuanyu, 32.067% owned by Shenzhen He Min, 0.035% owned by Mr. Zhonglai Pan, 1% owned by Mr. Jiazheng Sha (沙家正) and 0.033% owned by Mr. Desheng Li (李德生)

• “Shenzhen Yuanyu” 深圳市遠宇實業發展有限公司 (Shenzhen Yuanyu Industrial Development Co., Ltd)[#] , a company established under the laws of the PRC

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Valuer” Greater China Appraisal Limited

• “Vendors” Shenzhen Yuanyu, Shenzhen He Min, Mr. Zhonglai Pan, Mr. Jiazheng Sha (沙家正) and Mr. Desheng Li (李德生)

• “RMB” Renminbi, the lawful currency of the PRC “sq.m.” square metre

• # The English translations of Chinese names or words in this announcement, where indicated, are included for information purpose only, and should not be regarded as the official English translations of such Chinese names or words

— 2 —

LETTER FROM THE BOARD

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AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

Executive Director: Mr. Benjamin Zhengmin Pan (Chief Executive Officer)

Non-executive Directors: Ms. Ingrid Chunyuan Wu Mr. Pei Kang Dr. Thomas Kalon Ng

Independent non-executive Directors: Mr. Koh Boon Hwee (Chairman) Dr. Dick Mei Chang Mr. Mok Joe Kuen Richard

Registered office in the Cayman Islands: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Unit 2003, 20/F. 100 Queen’s Road Central Central Hong Kong

20th December, 2007

To the Shareholders,

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION OF ASSETS

INTRODUCTION

The Company announced in the announcement dated 8th November, 2007 that AAC (Shenzhen), a wholly-owned subsidiary of the Company, has entered into the Agreement with the Vendors in relation to the sale and purchase of the entire issued share capital of Shenzhen Meiou.

The purpose of this circular is to provide you with further information of (i) the Acquisition and the transactions contemplated thereunder, a letter of recommendation from the Independent Board Committee, a letter of advice from the independent financial adviser, Optima Capital, to the Independent Board Committee and the Independent Shareholders; (ii) the asset valuation report and properties valuation report of the Valuer and (iii) the notice of EGM.

— 3 —

LETTER FROM THE BOARD

AGREEMENT

Date

7th November, 2007

Parties

Purchaser

AAC (Shenzhen) is a wholly-owned foreign enterprise established for a term of 20 years commencing from 12th January, 2004 under the laws of the PRC and a wholly-owned subsidiary of the Company as at the date of this announcement. The principal activity of AAC (Shenzhen) is manufacture and sales of acoustic products, research and development.

Vendors

• (1) Shenzhen Yuanyu, an existing 66.865% shareholder of Shenzhen Meiou, which is wholly-owned by Mr. Boming Wu (吳柏明), who is the father of Ms. Wu and the father-in-law of Mr. Pan and therefore is a connected person of the Company. The principal activity of Shenzhen Yuanyu is leasing properties;

• (2) Shenzhen He Min, an existing 32.067% shareholder of Shenzhen Meiou, which is 9.97% owned by Mr. Zhonglai Pan (潘中來), who is the father of Mr. Pan and the father-in-law of Ms. Wu and therefore is a connected person of the Company; 19.94% owned by Mr. Junmin Pan (潘軍民), who is the younger brother of Mr. Pan and the brother-in-law of Ms. Wu and therefore is a connected person of the Company; and 70.09% owned by Shenzhen Yuanyu. The principal activity of Shenzhen He Min is investment holding;

• (3) Mr. Zhonglai Pan, an existing 0.035% shareholder of Shenzhen Meiou, who is the father of Mr. Pan and the father-in-law of Ms. Wu and therefore is a connected person of the Company;

• (4) Mr. Jiazheng Sha (沙家正), an existing 1% shareholder of Shenzhen Meiou, who, to the best of the Director’s knowledge, information, and belief having made all reasonable enquiry, is independent of the Company and its connected persons; and

• (5) Mr. Desheng Li (李德生), an existing 0.033% shareholder of Shenzhen Meiou, who, to the best of the Director’s knowledge, information, and belief having made all reasonable enquiry, is independent of the Company and its connected persons.

Assets to be acquired

Pursuant to the Agreement, AAC (Shenzhen) agreed to acquire and the Vendors agreed to sell the entire issued share capital of Shenzhen Meiou.

— 4 —

LETTER FROM THE BOARD

Consideration

The total consideration for the Acquisition is RMB120,000,000 which is to be satisfied in cash and expected to be funded by internal resources of the Group. The consideration was arrived at after arms length negotiation, with reference to (i) the net asset value of Shenzhen Meiou as at 30th September, 2007 amounting to approximately RMB122,590,537, which represents a discount of approximately 2.11%; (ii) the valuation of Shenzhen Meiou amounting to approximately RMB200,323,000, which represents a discount of approximately 40.10%; and (iii) the original acquisition cost amounting to RMB87,000,000, which represents a premium of approximately 37.93%. The consideration is to be satisfied according to the shareholdings proportion held by each Vendor. Shenzhen Meiou was acquired by the Vendors on 12th June, 1998. The original acquisition cost for Shenzhen Yuanyu, Shenzhen He Min and Mr. Zhonglai Pan were calculated according to the shareholdings proportion held by each parties, of which Shenzhen Yuanyu hold 58,172,550 shares had paid RMB58,172,550, Shenzhen He Min hold 27,898,290 shares had paid RMB27,898,290 and Mr. Zhonglai Pan hold 30,450 shares had paid RMB30,450, respectively. Given (i) the growth in the asset base of Shenzhen Meiou subsequent to the acquisition by the Vendors; and (ii) the consideration of the Acquisitions has made reference to the latest net asset value of Shenzhen Meiou, the Board considered that the premium of the consideration for the Acquisition over the original acquisition cost of the Vendors to be justifiable.

The total consideration is payable within 6 months of the conditions precedent and after the Agreement becoming effective.

Conditions Precedent

Completion of the Agreement is conditional upon, among other things, after the relevant conditions of the Agreement have been satisfied or waived by the relevant parties to the Agreement:

• (a) the approval of the Agreement and the transactions contemplated thereunder by the Independent Shareholders at the EGM;

• (b) all necessary approvals and consents in relation to the Acquisition having been obtained from relevant PRC authorities and the other third party(ies) (including the consent from the banker) and would not be withdraw or cancelled by the other third party(ies);

• (c) there has not revealed any breach of the undertakings of the Vendors in respect of the Agreement since the date of signing the Agreement and up to the Completion Date; and

• (d) there being no material adverse change (or effect) which has a material adverse effect on the financial position, business prospects, assets or liabilities of Shenzhen Meiou since the date of signing of the Agreement and up to the Completion Date.

There is no long stop date for the fulfilment of the conditions precedent to the Agreement. AAC (Shenzhen) may at its absolute discretion at any time waive conditions (b) to (d) above in writing. If condition (a) could not be satisfied upon the signing of the Agreement between AAC (Shenzhen) and the Vendors, there is no obligation on either party to complete.

— 5 —

LETTER FROM THE BOARD

Information on Shenzhen Meiou

Shenzhen Meiou is a company established under the laws of the PRC on 12th June, 1998 with a total issued share capital of RMB87,000,000. As at the date of this announcement, Shenzhen Meiou is beneficially wholly-owned by the Vendors. The principal activity of Shenzhen Meiou in the past two years were trading of raw materials and manufacture and sales of Voltage-Controlled Oscillator (VCO) and Bluetooth products etc. The business had been almost terminated as Shenzhen Meiou’s revenue for the ten months ended 31st October, 2007 was only approximately RMB179,000. The recent principal activity for Shenzhen Meiou is property holding.

According to the PRC accounting standards, the unaudited net asset value was RMB122,590,537.01 and the valuation of Shenzhen Meiou conducted by the Valuer using the asset approach was RMB200,323,000 as at 30th September, 2007. The following table sets out the unaudited net asset value of Shenzhen Meiou as at 30th September, 2007 and the net profits before and after taxation for the two financial years ended 31st December, 2005 and 2006 according to the PRC accounting standards:

	Unaudited
	net asset value
	of Shenzhen
	Meiou valued as at
	30th September,	Net loss before taxation		Net loss after taxation
	2007	2005	2006	2005	2006
	RMB	RMB	RMB	RMB	RMB
Shenzhen Meiou	122,590,537.01	(2,146.26)	(5,935,212.76)	(2,146.26)	(5,935,212.76)

Shenzhen Meiou owned certain properties in the PRC: a parcel of land and building located in Shenzhen currently occupied as a complex building for production and office; a parcel of land and 19 buildings and various structure located in Jiangsu, and will be used for production plants, dormitories and amenities etc.; and a parcel of land located in Jiangsu which is currently vacant and pending for future industrial use. Details of the properties can be found in the properties valuation report.

The full text of the asset valuation report and the properties valuation report on Shenzhen Meiou are set out in Appendices I and II respectively to this circular.

REASONS FOR THE ACQUISITION

The Group is principally engaged in the design and production of miniature acoustic components, which are used in mobile phone headsets, MP3 (MPEG, audio layer 3) players and other consumer handheld devices.

Shenzhen Meiou owned a property in Shenzhen and certain plants and land in Jiangsu. Shenzhen Meiou has been free-lending the property and equipment in Shenzhen in late August 2007 and plants in Jiangsu in April 2007 to the Company. After considering the current rental market and the cost for acquiring Shenzhen Meiou, the Board considers that the Acquisition will benefit the Group as it is more economical to acquire Shenzhen Meiou than renting properties from Shenzhen Meiou in the long term. Upon the normal commercial negotiation, Shenzhen Meiou has been free-lending the property and equipment in Shenzhen and plants in Jiangsu to the Company during the transitional period. Furthermore, after the Acquisition, the Company may utilize the piece of land in Jiangsu for further property construction and plant establishment to cater to the Company’s future development

— 6 —

LETTER FROM THE BOARD

in increasing the plant capacity. Save for the above reasons, the Board considers that the Acquisition will enhance the fixed asset base of the Group which the Board believes will have a good potential to appreciate in value and will therefore benefit the Group in the long term.

The terms of the Agreement were negotiated on an arm’s length basis and were made on normal commercial terms. The Directors (excluding the independent non-executive Directors whose views will be given after taking into account the advice of an independent financial advisor) consider that the terms of the Agreement are fair and reasonable to the Company and the Acquisition is in the interests of the Shareholders as a whole.

EFFECTS OF THE EARNINGS, ASSETS AND LIABILITIES OF THE GROUP

Upon completion of the Acquisition, Shenzhen Meiou will become a wholly-owned subsidiary of the Company and its accounts will be consolidated into the financial statements of the Group. There will not be any increase in the value of the earnings of the Group, while there will be increase in the value of liabilities of the Group but the Directors consider that the impact is not material. As the asset base of the Group will be enhanced as a result of the Acquisition in the long run, the Directors expect there will be a positive effect on the asset of the Group.

LISTING RULES IMPLICATIONS

As the applicable percentage ratios for the Acquisition under the Listing Rules are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules. As Shenzhen Yuanyu, Shenzhen He Min and Mr. Zhonglai Pan, being the vendors of this Acquisition, are the connected persons of the Company as mentioned under the section of “Vendors” of this circular, the entering into of the Agreement also constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to reporting, announcement requirements and the Independent Shareholders’ approval at the EGM. Accordingly, Mr. Pan, held, and controlled the voting rights in respect of, 293,837,504 Shares, representing approximately 23.73% of the issued share capital of the Company; Ms. Wu, held, and controlled the voting rights in respect of, 293,706,024 Shares, representing approximately 23.72% of the issued share capital of the Company, and their respective associates will abstain from voting at the EGM. Save from the above, no Shareholder is required to abstain from voting in connection with the matter to be resolved at the EGM.

EGM

The notice of the EGM is set out on page 36 of this circular.

A form of proxy for use at the EGM is enclosed with this circular and such form of proxy is also published on the website of the Stock Exchange (www.hkex.com.hk). In order to be valid, the form of proxy must be completed and signed in accordance with the instructions printed thereon and deposited at the Company’s Hong Kong branch share registrar, Investor Communications Centre of Computershare Hong Kong Investor Services Limited at Rooms 1806–1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of authority, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting. The completion and return of the form of proxy will not preclude any Shareholder from attending and voting at the meeting if so wished.

— 7 —

LETTER FROM THE BOARD

PROCEDURES BY WHICH A POLL MAY BE DEMANDED

Pursuant to article 66 of the Articles of Association, a resolution put to the vote of a meeting shall be decided on a show of hands unless voting by way of a poll is required by the rules of the Designed Stock Exchange (as defined in the Articles of Association) or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:

• (a) by the chairman of such meeting; or

• (b) by at least three members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

• (c) by a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) by a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right; or

• (e) if required by the rules of the Designated Stock Exchange (as defined in the Articles of Association), by any Director or Directors who, individually or collectively, hold proxies in respect of shares representing five per cent. (5%) or more of the total voting rights at such meeting.

A demand by a person as proxy for a member or in the case of a member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a member.

RECOMMENDATION

Your attention is drawn to (i) the letter from the Independent Board Committee set out on page 9 of this circular which contains the recommendation from the Independent Board Committee to the Independent Shareholders concerning the Acquisition and the transactions contemplated thereunder; (ii) the letter from Optima Capital set out on pages 10 to 15 of this circular which contains its recommendation to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition and the transactions contemplated thereunder and the principal factors considered by Optima Capital in arriving at its recommendation; and (iii) the asset valuation report and properties valuation report of the Valuer.

By Order of the Board AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC. Koh Boon Hwee

Chairman

— 8 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

20th December, 2007

To the Independent Shareholders,

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION ACQUISITION OF ASSETS

We refer to the circular of the Company to the Shareholders dated 20th December, 2007 (the “ Circular ”), in which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter shall have the same meanings as given to them in the section headed “Definitions” of the Circular.

We, being the independent non-executive directors of the Company, have been appointed as members of the Independent Board Committee to advise the Independent Shareholders on whether the terms of each of the Agreement and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned.

Your attention is drawn to the letter from Optima Capital concerning its advice to us regarding the Acquisition as set out on pages 10 to 15 of the Circular. Having considered the advice given by Optima Capital and the principal factors and reasons taken into consideration by them in arriving at its advice, we are of the opinion that the Acquisition is on normal commercial terms, in the best interests of the Company and the Shareholders as a whole and are fair and reasonable so far as the Shareholders are concerned. Accordingly, we recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Acquisition.

Yours faithfully For and on behalf of Independent Board Committee

Mr. Koh Boon Hwee Dr Dick Mei Chang Mr. Mok Joe Kuen Richard

Independent Non-executive Directors

— 9 —

LETTER FROM OPTIMA CAPITAL

The following is the text of the letter of advice from Optima Capital to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition prepared for incorporation in this Circular.

Unit 3618, 36th Floor, Bank of America Tower 12 Harcourt Road Central Hong Kong

20th December, 2007

To the Independent Board Committee and the Independent Shareholders of AAC Acoustic Technologies Holdings Inc.

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

ACQUISITION OF ASSETS

INTRODUCTION

We refer to our appointment, as approved by the Independent Board Committee, as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Agreement and the Acquisition, details of which are set out in the circular of the Company dated 20th December, 2007 (the “ Circular ”) to the Shareholders of which this letter forms part. Capitalized terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 8th November, 2007, the Company announced that on 7th November, 2007, AAC (Shenzhen), a wholly owned subsidiary of the Company, has entered into the Agreement with the Vendors, pursuant to which AAC (Shenzhen) agreed to acquire and the Vendors agreed to sell the entire issued share capital of Shenzhen Meiou for a total consideration of RMB120 million. The consideration will be satisfied in cash.

As the applicable percentage ratios for the Acquisition under the Listing Rules are more than 5% but less than 25% and certain of the Vendors, namely Shenzhen Yuanyu, Shenzhen He Min and Mr. Zhonglai Pan, are connected persons of the Company, the Acquisition constitutes a discloseable and connected transaction for the Company under the Listing Rules and is subject to reporting, announcement requirements and the approval of the Independent Shareholders at the EGM. Accordingly, Mr. Pan held, and controlled the voting rights in respect of 293,837,504 Shares, representing approximately 23.73% of the issued share capital of the Company; Ms. Wu held, and controlled the voting rights in respect of 293,706,024 Shares, representing approximately 23.72% of the issued share capital of the Company, and their respective associates will abstain from voting in relation to the resolution to approve the Acquisition at the EGM.

— 10 —

LETTER FROM OPTIMA CAPITAL

The Independent Board Committee, comprising all the independent non-executive Directors, namely Mr. Koh Boon Hwee, Dr. Dick Mei Chang and Mr. Mok Joe Kuen Richard, has been formed to advise the Independent Shareholders in respect of the Agreement and Acquisition. In our capacity as the independent financial adviser to the Company, our role is to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Agreement are on normal commercial terms in the ordinary and usual course of business of the Group and are fair and reasonable so far as the Independent Shareholders are concerned and whether the Acquisition is in the interests of the Company and the Shareholders as a whole.

BASIS OF OUR ADVICE

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular and supplied to us by the Company, and the opinion expressed by and the representations of the Directors and management of the Company. We have assumed that all the information and representations provided to us or contained or referred to in the Circular were true, accurate and complete in all respects at the time they were made and continue to be so up to the date of the EGM of the Company to be convened on 4th January, 2008 and may be relied upon. We have also assumed that all opinions made by the Directors in the Circular were made reasonably after due and careful enquiry and were based on honestly-held opinion. We have also relied on the responsibility statement set out in Appendix III to the Circular that the Directors collectively and individually accept full responsibility for the accuracy of the information contained in the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have also been advised by the Directors and believe that no material facts have been omitted from the information provided and referred to in the Circular misleading.

We have reviewed currently available information and documents, which are available under the present circumstances, and have performed all reasonable steps to enable us to reach an informed view and to justify our reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have no reason to suspect that any relevant information or reports have been withheld, nor are we aware of any facts on circumstances which would render the information provided and the representations made to us to be untrue, inaccurate or misleading. We have not, however, carried out an independent verification of the information provided, nor have we conducted an independent investigation into the business, affairs, operations, financial position or future prospects of the Company, AAC (Shenzhen), Shenzhen Meiou, or any of their respective subsidiaries or associates.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation in relation to the Agreement and the Acquisition, we have taken into account the principal factors and reasons as set out below:

1. Background to and reasons for the Acquisition

The Group is principally engaged in the design and production of miniature acoustic components, which are used in mobile phone headsets, MP3 (MPEG, audio layer 3) players and other consumer handheld devices.

Shenzhen Meiou was established in the PRC in 1998 and for the past two years, Shenzhen Meiou was principally engaged in trading of raw materials and manufacture and sales of VoltageControlled Oscillator (VCO) and Bluetooth products (“Previous Business”). As at the Latest

— 11 —

LETTER FROM OPTIMA CAPITAL

Practicable Date, the business of Shenzhen Meiou has been almost terminated. The recent principal activity for Shenzhen Meiou is property holding. Save for the sale of the remaining inventory of Shenzhen Meiou which accounted for less than 3% of the unaudited net assets of Shenzhen Meiou as at 30th September, 2007, the Company confirms that the Previous Business of Shenzhen Meiou will be terminated following completion of the Acquisition.

On 7th November, 2007, AAC (Shenzhen), a wholly owned subsidiary of the Company, entered into the Agreement with the Vendors, pursuant to which AAC (Shenzhen) agreed to acquire and the Vendors agreed to sell the entire issued share capital of Shenzhen Meiou for a total consideration of RMB120 million.

According to the asset valuation report dated 20th December, 2007 for the valuation of Shenzhen Meiou (the “Valuation Report”) conducted by the Valuer as set out in Appendix I to this Circular, the asset of Shenzhen Meiou as at 30th September, 2007 mainly comprised a property in Shenzhen (the “Shenzhen Property”), certain plants and land in Jiangsu (the “Jiangsu Property”) and production equipments currently utilized by the Group.

Based on the information provided by the Company, the Shenzhen Property comprises a six storey building with a total gross floor area of approximately 14,604 sq.m. on a piece of land with land area of approximately 4,850 sq.m.. Located in Nanshan district (南山區) in Shenzhen, the PRC, the Shenzhen Property has been utilized by the Group as its headquarter since August 2007. The Jiangsu Property comprises a piece of land located at Shuyang County (沭陽縣) in Jiangsu Province, the PRC with land area of approximately 273,974 sq.m., on which situated a production plant for the Group’s acoustic products. The construction of the production plant has been commenced since 2005 and completion of which has been taken place by stages. The Group has gradually moved certain parts of its production into the Jiangsu Property following the completion of the construction of the production plant by stages. As at the Latest Practicable Date, the total gross floor area of the production plant with which construction has been completed is approximately 59,750 sq.m.. As advised by the management of the Company, it is the intention of the Company to expand the production plant at the Jiangsu Property in the future in order to avail itself with capacity for growth and development in its business.

We understand from the Company that during the course of discussion regarding the terms for the utilization by the Group of the properties and equipments of Shenzhen Meiou, upon normal commercial negotiation between the Company and Shenzhen Meiou, Shenzhen Meiou allowed the utilization of the said properties and equipments by the Group without charges during the transitional period when the Group was moving its departments into the Shenzhen Property in late August 2007 and setting up its manufacturing facilities in the Jiangsu Property in April 2007.

Given that (i) majority of the assets of Shenzhen Meiou including, in particular, the Shenzhen Property , the Jiangsu Property and the equipments, were ultimately used by the Group; (ii) the acquisition of Jiangsu Property provides spaces for the Group to expand its production capacity in the future catering for growth and development of its business; (iii) the acquisition of the Shenzhen Property and the Jiangsu Property at a fair value would allow the Group to save rental expenses in long run and avoid leasing from connected persons of the Group which constitutes continuing connected transaction; and (iv) the asset base of the Group will be strengthened with assets useful for the Group’s operation and development, we concur with the view of the Directors that the Acquisition is in the interests of the Company and the Shareholders as a whole.

— 12 —

LETTER FROM OPTIMA CAPITAL

2. Consideration for the Acquisition

Pursuant to the Agreement, AAC (Shenzhen) agreed to acquire and the Vendors agreed to sell the entire issued share capital for a total consideration of RMB120 million.

The consideration will be satisfied in cash and is expected to be funded by internal resources of the Group. Based on the interim report of the Company for six months ended 30th June, 2007, the Group had unaudited bank balances and cash of approximately RMB1,114 million as at 30th June, 2007. Having advised by the Company that there is no material adverse change in the cash position of the Group since 30th June, 2007, we consider that there are sufficient cash resources for the Group to settle the consideration for the Acquisition.

As stated in the letter from the Board contained in the Circular (“Letter from the Board”), the consideration for the Acquisition of RMB120 million was arrived at after arm’s length negotiation between AAC (Shenzhen) and the Vendors with reference to (i) the net asset value of Shenzhen Meiou as at 30th September, 2007 amounting to approximately to RMB122.59 million, which represents a discount of approximately 2.11%; (ii) the valuation of Shenzhen Meiou amounting to approximately RMB200,323,000, which represents a discount of approximately 40.10%; and (iii) the original acquisition cost amounting to RMB87,000,000, which represents a premium of approximately 37.93%. On the basis that the current principal activity of Shenzhen Meiou is property holding, we consider the asset based approach to arrive at the consideration of the Acquisition to be fair and reasonable.

As discussed in the paragraph headed “Background to and reasons for the Acquisition” above, the assets of Shenzhen Meiou comprised mainly the Shenzhen Property, the Jiangsu Property and the production equipments currently utilized by the Group. We also note from the Valuation Report that, as at 30th September, 2007, the valuation of Shenzhen Meiou was RMB200,323,000. The Valuer has adopted the asset approach to determine the fair value of Shenzhen Meiou since (i) Shenzhen Meiou has significant portion of its assets recorded at historical value; and (ii) the underlying assets of Shenzhen Meiou are the driving factor in the valuation of Shenzhen Meiou because it may discontinue its operation.

We have discussed with the Valuer in connection with the adoption of such approach and understand that they have considered among the three common approaches namely the market approach, the income approach and the asset approach. Given the Previous Business of Shenzhen Meiou will be discontinued, the Valuer considered that (i) the adoption of market approach is not appropriate as it not practical to compare the value of Shenzhen Meiou with other public or private companies with ongoing operations; and (ii) the income approach is not appropriate as they were unable to satisfy themselves as to any profit forecast prepared for Shenzhen Meiou. Having considered that (i) the principal assets of Shenzhen Meiou, including the Shenzhen Property, the Jiangsu Property and the production equipments currently utilized by the Group, are being recorded in the accounts of Shenzhen Meiou using historical cost, the fair values of which as at current date have not been reflected; and (ii) the discontinuation of the Previous Business would result in Shenzhen Meiou primarily an assets holding company, we would concur with the Valuer that the adoption of the asset approach is fair and reasonable in the valuation of Shenzhen Meiou.

We have also review the assumptions as set out in the Valuation Report and the valuation report of the properties of Shenzhen Meiou contained in Appendices I and II respectively to the Circular. Save for the assumptions which are general to any property valuation, the Valuer has not adopted any other assumptions which are specific to the valuation of Shenzhen Meiou and its properties. We consider that the assumptions adopted by the Valuer in their valuation of the properties of Shenzhen Meiou are fair and reasonable.

— 13 —

LETTER FROM OPTIMA CAPITAL

Given the consideration of the Acquisition of RMB120 million represents a discount of (i) approximately 2.11% to the net asset value of Shenzhen Meiou as at 30th September, 2007; and (ii) approximately 40.10% to the valuation of Shenzhen Meiou of RMB200,323,000 as appraised by the Valuer, we are of the view that the consideration for the Acquisition is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

3. Possible financial effects of the Acquisition

(a) Effect on net asset value

As set out in the paragraph headed “Consideration for the Acquisition” above, the consideration of the Acquisition of RMB120 million to be settled in cash represents a discount to the valuation appraised by the Valuer and the net asset value of Shenzhen Meiou. Upon completion of the Acquisition, the net asset of the Group is expected to be enhanced.

(b) Effect on earnings

Upon completion of the Acquisition, Shenzhen Meiou will become a wholly-owned subsidiary of the Company and its profit and loss will be consolidated into the financial statements of the Group. We note from the Letter from the Board that there will not be any increase in earnings of the Group upon completion of the Acquisition.

As discussed in the paragraph headed “Background to and reasons for the Acquisition” above, during the course of discussion regarding the terms for the utilization by the Group of the properties and equipments of Shenzhen Meiou, Shenzhen Meiou allowed the utilization of the Shenzhen Property, Jiangsu Property and equipments by the Group without charges during the transitional period when the Group is moving its departments into the Shenzhen Property and setting up its manufacturing facilities in the Jiangsu Property. We are given to understand by the Company that such free-lending of the assets of Shenzhen Meiou to the Company was a temporary arrangement during the transitional period and the Company will be charged rental fees for utilizing the said properties and equipments after the transitional period. As such, the Group may incur rental expenses for the continuous utilization of the properties and equipments of Shenzhen Meiou should completion of the Acquisition does not take place. In other words, the Acquisition allows the saving of rental expenses which may have positive impact to the earnings of the Group in long run.

(c) Effect on working capital

The consideration of the Acquisition of RMB120 million represents only approximately 10.77% of the cash and unaudited bank balances of the Group of approximately RMB1,114 million as at 30th June, 2007. As such, we consider that the Acquisition to be satisfied in cash will not have a material impact to the working capital position of the Group.

Having considered that the Acquisition may have positive effects to the net asset value and earnings but have no material adverse effect to the working capital of the Group, we are of the view that the Acquisition is in the interests of the Company and the Shareholders as a whole.

— 14 —

LETTER FROM OPTIMA CAPITAL

RECOMMENDATION

Having taken into account the principal factors and reasons as discussed above, we consider that the terms of the Agreement are (i) on normal commercial terms and in the ordinary and usual course of the Company’s business; and (ii) fair and reasonable so far as the Independent Shareholders are concerned; and the Acquisition is in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders and also advise the Independent Shareholders to vote in favour of the ordinary resolution to approve the Agreement and the Acquisition at the EGM.

Yours faithfully, For and on behalf of Optima Capital Limited Gary Mui Executive Director Head of Corporate Finance

— 15 —

ASSET VALUATION REPORT

APPENDIX I

==> picture [261 x 31] intentionally omitted <==

Room 2703 Shui On Centre 6–8 Harbour Road Wanchai Hong Kong

20th December, 2007

The Directors AAC Acoustic Technologies Holdings Inc. Unit 2003, 20/F. 100 Queen’s Road Central Central Hong Kong

Dear Sirs,

In accordance with the instructions from AAC Acoustic Technologies Holdings Inc. (the “Company”), we have completed a valuation of the fair value of the 100% controlling, non-marketable equity interest in Shenzhen Meiou Electronics Co., Ltd. (the “Shenzhen Meiou”) in the People’s Republic of China.

We confirm that we have made relevant enquiries and obtained such information as we consider necessary for the purpose of providing our opinion of the fair value of Shenzhen Meiou as at 30th September, 2007 (the “Valuation Date”). We understand that this valuation will be used as a reference for your investment purpose in consideration of acquiring entire issued capital of Shenzhen Meiou. Our analysis was conducted for the abovementioned purpose only and this report should be used for no other purposes.

INTRODUCTION

Shenzhen Meiou is a company established under the laws of the PRC on 12th June, 1998 with a issued share capital of RMB87,000,000. The principal activities of Shenzhen Meiou in the past two years were trading of raw materials and manufacture and sales of Voltage-Controlled Oscillator (VCO) and Bluetooth products. The business had been almost terminated as Shenzhen Meiou’s revenue for the ten months ended 31st October, 2007 was only approximately RMB179,000. The recent principal activity for Shenzhen Meiou is property holding.

— 16 —

ASSET VALUATION REPORT

APPENDIX I

BASIS OF VALUATION

We have valued Shenzhen Meiou on the basis of fair value.

Fair Value

According to Hong Kong Financial Reporting Standard, fair value is the amount for which an asset could be exchanged, or a fair value liability settled, between knowledgeable, willing parties in an arm’s length transaction.

For the purpose of this valuation, the term fair value is similar and/or interchangeable with the valuation standards or definitions below and will be used throughout this valuation report.

Market Value

According to The Hong Kong Business Valuation Forum – Business Valuation Standards, market value is defined as the estimated amount for which an asset (a property) should exchange on the date of valuation between a willing buyer and willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.

Fair Market Value

The International Valuation Glossary defined fair market value as the amount at which property would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.

Our valuation has been prepared in accordance with the HKIS Valuation Standards on Traderelated Business Assets and Business Enterprise (First Edition 2004) published by the Hong Kong Institute of Surveyors and the Business Valuation Standards (First Printed 2005) published by the Hong Kong Business Valuation Forum which are generally accepted valuation standards followed by relevant professional practitioners in Hong Kong. These standards contain the detailed guidelines on the basis and valuation approaches in valuing assets used in the operation of a trade or business and business enterprises.

PREMISE OF VALUE

Although valuation is a range concept, current valuation theory suggests that there are three basic “levels” of value applicable to a business or business interest. The levels of value are respectively:

• Controlling interest: the value of the enterprise as a whole

• As if freely tradable minority interest: the value of a minority interest, lacking control, but enjoying the benefit of market liquidity

• Non-marketable minority interest: the value of a minority interest, lacking both control and market liquidity

This valuation is prepared on a controlling and non-marketable basis.

— 17 —

ASSET VALUATION REPORT

APPENDIX I

METHODOLOGIES CONSIDERED AND REJECTED

In formulating our opinion of fair value of Shenzhen Meiou, we have considered and rejected and the following valuation methodologies:

The Market Approach

The market approach develops a value using the principle of substitution. This simply means that if one thing is similar to another and could be used (our case invested in) for the other, then they must be equal. Furthermore, the price of two alike and similar items should approximate one another. For the market approach to be used, there must be a sufficient number of comparable companies to make comparisons, or, alternatively, the industry composition must be such that meaningful comparisons can be made.

We have considered but decided against the market approach due to the following reason:

• Shenzhen Meiou is about to discontinue its business operation and we were not able to satisfy ourselves to compare it with other public or private companies with ongoing operation.

The Income Approach

The income approach is the most generally accepted way of determining a value indication of a business/project, business ownership interest, security, or intangible asset using one or more methods that convert anticipated economic benefits into a present single amount.

• We have considered but decided against the income approach due to the following reason:

• Shenzhen Meiou is about to discontinue its business operation and we were unable to satisfy ourselves as to any profit forecast prepared by management of Shenzhen Meiou.

METHODOLOGY APPLIED

The Asset Approach

The asset approach is based on the so-called economic principle of substitution; it essentially measures what is the net asset value today and how much it would cost to replace those assets. Either one of the replacement value, liquidation value and adjusted book value method is used to estimate the current fair value of the business or its assets.

• We accepted the adjusted book value method due to the following reasons:

• Shenzhen Meiou has signification port of its assets recorded at historical cost; and

• the underlying assets Shenzhen Meiou are the driving factor in the valuation of the because Shenzhen Meiou may discontinue its business operation.

— 18 —

ASSET VALUATION REPORT

APPENDIX I

We have adjusted the book values of Shenzhen Meiou’s assets and liabilities to their actual or estimated fair values to estimate the net asset value of Shenzhen Meiou. Since the assets and liabilities of Shenzhen Meiou have already adjusted to their actual or estimated fair values, marketability discount in the case of Shenzhen Meiou is not applicable.

LIMITING CONDITIONS

We have made no investigation of and assumed no responsibility for the title to or any liabilities against the business valued.

The opinions expressed in this report have been based on the information supplied to us by Shenzhen Meiou and its staff, as well as from various institutes and government bureaus without verification. All information and advice related to this valuation are provided by the company management and reader of this report may perform due diligence themselves. We have exercised all due care in reviewing the supplied information. Although we have compared key supplied data with expected values, the accuracy of the results and conclusions from the review are reliant on the accuracy of the supplied data. We have relied on this information and have no reason to believe that any material facts have been withheld, or that a more detailed analysis may reveal additional information. We do not accept responsibility for any errors or omissions in the supplied information and do not accept any consequential liability arising from commercial decision or actions resulting from them.

This valuation reflects facts and conditions existing at the valuation date. Subsequent events have not been considered, and we have no obligation to update our report for such events and conditions.

SYNTHESIS AND RECONCILIATION

Because valuations cannot be made on the basis of a prescribed formula, there is no means whereby the various applicable factors in a particular case can be assigned mathematical weights in deriving the fair value. For this reason, no useful purpose is served by taking an average of several factors (for example, book value, capitalized earnings and capitalized dividends) and basing the valuation on the result. Such a process excludes active consideration of other pertinent factors, and the end result cannot be supported by a realistic application of the significant facts in the case except by mere chance.

The following comparative data summarizes and the various methods that we have accepted or considered and rejected, along with their respective final values. Each method is rated relative to the applicability of the method relative to Shenzhen Meiou’s facts and circumstances, and strengths/ weaknesses are discussed.

— 19 —

ASSET VALUATION REPORT

APPENDIX I

Asset Approach

Adjusted Book Value Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RMB200,323,000

Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

Market Approach

Guideline Company Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable

Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .No

Income Approach

Discounted Cash Flow Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable

Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .No

Since asset approach was the only valid method, we took the asset approach to conclude our valuation of RMB200,323,000.

CONCLUSION OF VALUE

Based on the investigation and analysis stated above and on the valuation method employed, in our opinion, the fair value of the 100% controlling, non-marketable equity interest in Shenzhen Meiou as of the Valuation Date is:

RENMINBI TWO HUNDRED MILLION AND THREE HUNDRED AND TWENTYTHREE THOUSAND ONLY (RMB200,323,000).

The opinion of value was based on generally accepted valuation procedures.

We hereby certify that we have neither present nor prospective interests in Shenzhen Meiou and the Company and have neither personal interest nor bias with respect to the parties involved.

This valuation report is issued subject to our general service conditions.

Yours faithfully, For and on behalf of GREATER CHINA APPRAISAL LIMITED K. K. Ip Samuel Y.C. Chan Registered Business Valuer of HKBVF MBA, AVA, CM&AA MRICS, MHKIS and RPS (GP) Vice President Managing Director Head of Business Valuation

Mr. Samuel Y.C. Chan, MBA, Accredited Valuation Analyst of The National Association of Certified Valuation Analysts and Certified Merger & Acquisition Advisor, has been conducting business enterprise and intellectual property valuations for various purposes since 2004. He also spends a significant portion of his time in valuation of financial instruments including convertible bonds, preference shares, swaps, corporate guarantees and employee share options for private and public companies in China, Hong Kong, Taiwan, Japan, Singapore and the United States.

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PROPERTIES VALUATION REPORT

APPENDIX II

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Room 2703 Shui On Centre 6–8 Harbour Road Wanchai Hong Kong

20th December, 2007

The Directors AAC Acoustic Technologies Holdings Inc. Unit 2003, 20/F. 100 Queen’s Road Central Central Hong Kong

Dear Sirs,

In accordance with the instructions from AAC Acoustic Technologies Holdings Inc. (“the Company”) to value the property interests of Shenzhen Meiou Electronic Company Limited (“Shenzhen Meiou”) in the People’s Republic of China (the “PRC”) and Hong Kong, we confirm that we have carried out inspections, made relevant enquires and obtained such further information as we consider necessary for the purpose of providing the market values of such properties as at 30th September, 2007 (referred to as the “valuation date”).

This letter which forms part of our valuation report explains the basis and methodology of valuation, and clarifies our assumptions made, title investigation of properties and the limiting conditions.

BASIS OF VALUATION

The valuation of such properties is our opinion of the market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

VALUATION METHODOLOGY

Due to the nature of buildings and structures constructed, there is no readily identifiable market comparable to them, we have applied the cost method of valuation in assessing the property. It is a method of using current replacement costs to arrive at the value to the business in occupation of the property as existing at the date of valuation.

This method of valuation, cost method, is based on an estimate of the market value for the existing use of the land, plus the current gross replacement costs of the improvements, less allowances for physical deterioration and all relevant forms of obsolescence and optimization.

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PROPERTIES VALUATION REPORT

APPENDIX II

The cost method generally furnishes the most reliable indication of value for property in the absence of a known market based on comparable.

ASSUMPTIONS

Our valuation has been made on the assumption that the owner sells the properties on the open market in their existing states without the benefit of any deferred terms contracts, leaseback, joint ventures, management agreements or any similar arrangement which would serve to increase the value of the properties.

Continued use assumes the properties will be used for the purposes for which the properties are designed and built, or to which they are currently adapted. The valuation on the property in continued use does not represent the amount that might be realized from piecemeal disposition of the property on the open market.

As the properties are held under long term land use rights, we have assumed that the owners of the properties have free and uninterrupted rights to use or transfer the properties for the whole of the unexpired term of the respective land use rights. In our valuation, we have assumed that the properties can be freely disposed of and transferred to third parties on the open market without any additional payment to the relevant government authorities. Unless stated as otherwise, vacant possession is assumed for the properties concerned.

We have assumed that all consents, approvals and licenses from relevant government authorities for the buildings and structures erected thereon have been granted. Also, we have assumed that all buildings and structures fall within the site are held by the owner or permitted to be occupied by the owner.

In the course of valuation, we have assumed that all the properties are currently held by Shenzhen Meiou, which have the rights to occupy, use, sell, lease, charge, mortgage or otherwise dispose of the interests within their respective terms of land use rights granted by the government without the need to seek further approval from and paying additional premium to the government.

It is assumed that all applicable zoning and use regulations and restrictions have been complied with unless nonconformity has been stated, defined, and considered in the appraisal report. Moreover, it is assumed that the utilization of the land and improvements is within the boundaries of the site held by the owner or permitted to be occupied by the owner. In addition, we assumed that no encroachment or trespass exists, unless noted in the report.

No environment impact study has been ordered or made. Full compliance with applicable national, provincial and local environmental regulations and laws is assumed unless otherwise stated, defined, and considered in the report. It is also assumed that all required licences, consents, or other legislative or administrative authority from any local, provincial, or national government or private entity or organization either have been or can be obtained or renewed for any use which the report covers.

Other special assumptions of each property, if any, have been stated out in the footnotes of the valuation certificate for the respective properties.

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PROPERTIES VALUATION REPORT

APPENDIX II

TITLESHIP INVESTIGATION

For the properties held by Shenzhen Meiou in the PRC, we have been provided with copy of title documents. However, due to the current registration system of the PRC, no investigations have been made for the legal title or any material liabilities attached to the property.

In the course of our valuation, we have relied upon the legal opinions as stated in the title report given by the legal advisor of the Company (the “PRC Lawyer”) in relation to the legal title to the properties located in the PRC under valuation.

All legal documents disclosed in this report, if any, are for reference only and no responsibility is assumed for any legal matters concerning the legal title to the properties set out in this report.

LIMITING CONDITIONS

We have not carried out detailed site measurements to verify the correctness of the land or building areas in respect of the relevant properties but have assumed that the areas shown on the legal documents provided to us are correct. Based on our experience of valuation of similar properties, we consider the assumptions so made to be reasonable. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations.

We have inspected the exterior and, where possible, the interior of the properties included in the attached valuation certificates. However, no structural survey has been made and we are therefore unable to report as to whether the properties is free from rot, infestation or any other structural defects. Also, no tests were carried out on any of the services.

No site investigations have been carried out to determine the suitability of the ground conditions or the services for any property development. No soil analysis or geological studies were ordered or made in conjunction with this report, nor were any water, oil, gas or other subsurface mineral use rights or conditions investigated.

We do not investigate any industrial safety, environmental and health related regulations in association with any particular manufacturing process of the Group. It is assumed that all necessary licenses, procedures and measures were implemented in accordance with government legislation and guidance.

Having examined all relevant documentation, we have relied to a very considerable extent on the information provided and have accepted advice given to us by the Company or Shenzhen Meiou on such matters as planning approvals, statutory notices, easements, tenure, occupation, lettings, construction costs, rentals, site and floor areas and in the identification of those properties in which Shenzhen Meiou has valid interests. Floor areas of the property stated herein are ascertained by us by scaling off the registered floor plans of the subject development.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Company or Shenzhen Meiou We were also advised by the Company or Shenzhen Meiou that no material factors have been omitted from the information to reach an informed view, and have no reason to suspect that any material information has been withheld.

— 23 —

PROPERTIES VALUATION REPORT

APPENDIX II

No allowances have been made in our valuation for any charges, mortgages or amounts owing on any of the properties valued nor for any expenses or taxation which may be incurred in effecting a sale.

Unless otherwise stated, it is assumed that all the properties are free of encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

Since the property is located in a relatively under-developed market, the PRC, those assumptions are often based on imperfect market evidence. A range of values may be attributable to the property depending upon the assumptions made. While the valuer has exercised his professional judgment in arriving at the value, report readers are urged to consider carefully the nature of such assumptions which are disclosed in the valuation report and should exercise caution in interpreting the valuation report.

OPINION OF VALUE

Valuation figures of the properties held by Shenzhen Meiou are shown in the attached summary of valuation and their respective valuation certificates.

REMARKS

Our valuation has been prepared in accordance with generally accepted valuation procedures. In valuing the properties, we have complied with the requirements contained in the HKIS Valuation Standards on Properties (1st Edition 2005) published by the Hong Kong Institute of Surveyors and effective from 1st January, 2005.

All amounts are denominated in Chinese Renminbi.

We enclose herewith the summary of valuation and valuation certificates.

This valuation report is issued subject to our General Service Conditions.

Yours faithfully, For and on behalf of GREATER CHINA APPRAISAL LIMITED K. K. Ip BLE LLD Chartered Valuation Surveyor Registered Professional Surveyor Managing Director

• Note : Mr. K. K. Ip, a Chartered Valuation Surveyor and a Registered Professional Surveyor, has substantial experience in valuation of properties in the PRC and Hong Kong since 1992.

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PROPERTIES VALUATION REPORT

APPENDIX II

SUMMARY OF VALUATION

Group I — Property held by Shenzhen Meiou in for owner occupation the PRC

No. Property 1. Ruisheng Technology Building Northern Area Shenzhen Hi-Tech Industrial Park Nanshan District Shenzhen Guangdong Province The PRC 2. Phase I Land and Buildings located at Southern Area of Shuyang Technical and Development Zone Shuyang Jiangsu Province The PRC Sub-total:	Market value in existing state as at 30th September, 2007 (RMB) No commercial value 69,300,000 69,300,000

Group II — Property held by Shenzhen Meiou for development in the PRC

No. Property 3. Phase II Land located at Southern Area of Shuyang Technical and Development Zone Shuyang Jiangsu Province The PRC Sub-total: Grand Total:	Market value in existing state as at 30th September, 2007 (RMB) 28,100,000 28,100,000 97,400,000

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PROPERTIES VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group I — Property held by the Shenzhen Meiou for owner occupation in the PRC

				Market value in
				existing state as at
No.	Property	Description	Particulars of Occupancy	30th September, 2007
				(RMB)
1.	Ruisheng Technology	The property comprises a parcel of	The property is currently	No commercial value
	Building	land (“the Land”) and 1 building	occupied as a complex	(see note (vi))
	Northern Area	(the “Building”) and the various	building for production and
	Shenzhen Hi-Tech	structures erected on the Land. The	office.
	Industrial Park	Building was completed in 2006.
	Nanshan District
	Shenzhen	The land area of the Land is
	Guangdong Province	approximately 4,850 square metres.
	The PRC	The Building is a 6-storey building
		above a 2-storey basement which has
		a gross floor area of approximately
		14,603.52 square metres, inclusive
		of basement area of 2,499.93 square
		metres.
		The various structures comprise
		internal road, boundary walls,
		greenery and etc.
		The property is held under a Real
		Estate Ownership Certificate for a
		term of 50 years commencing on
		15th April, 2005 and expiring on
		14th April, 2055 for industrial use.
		The Land is restricted to be used for
		high technology project and is not
		transferable.

Notes :

• (i) According to a Shenzhen City Land Use Rights Grant Contract (深地合字(2005)0003號) dated 15th April, 2005 entered into between Shenzhen City State-owned Land Resources and Building Administration Bureau and Shenzhen Meiou, the land use rights of the Land was agreed to be granted to Shenzhen Meiou.

• (ii) According to a Real Estate Ownership Certificate (深房地字第4000223860號) dated 15th May, 2005, the land use rights of the Land have been granted to Shenzhen Meiou with a term of 50 years commencing from 15th April, 2005 and expiring on 14th April, 2055 for industrial use. The Land is restricted for the use of high technology project of which the land use rights is not transferable and is not allowed to be mortgaged without consent of Shenzhen City State-owned Land Resources and Building Administration Bureau.

• (iii) According to a Construction Works Planning Approval (深規建許字[2005]綜合028號) dated 27th April, 2005 and Construction Works Commencement Permit (44030420050038001) dated 3th June, 2005, Shenzhen Meiou was permitted to construct the Building with gross floor area of approximately 14,471 square metres (inclusive of basement area of 2,471 square metres) on the Land.

• (iv) Shezhen City Land Surveying Team confirmed in writing on 15th March, 2007 that the gross floor area of the Building is 14,603.52 square metres, inclusive of the basement area of 2,499.93 square metres.

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PROPERTIES VALUATION REPORT

APPENDIX II

• (v) Opinions of the PRC Lawyer are summarized as follows:

• (a) In respect of the Land, a Land Use Rights Grant Contract has been entered into between Shenzhen City State-owned Land Resources and Building Administration Bureau and Shenzhen Meiou, and all land premium, land development cost and ancillary facility fees have been settled in full. Shenzhen Meiou is in possession of a Real Estate Ownership Certificate by which the land use rights of the Land have been granted to Shenzhen Meiou with a term of 50 years commencing from 15th April, 2005 and expiring on 14th April, 2055 for industrial use.

• (b) In respect of the Building, Shenzhen Meiou has obtained the necessary approvals or permits from the relevant authorities, construction of the Building has been permitted. There are no legal impediments for Shenzhen Meiou to obtain title documents of the Building.

• (c) In accordance with the Land Use Rights Grant Contract and the Real Estate Ownership Certificate mentioned, the land use rights of the Land are non-transferable and the mortgage of which is not allowed without consent of Shenzhen City State-owned Land Resources and Building Administration Bureau.

• (vi) Due to the non-transferability of the property, we have assigned no commercial value to the property. For reference purpose, assuming free from encumbrances, the depreciated replacement cost of the property as at the valuation date would be approximately RMB45,900,000.

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PROPERTIES VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

No. Property

Description

Particulars of Occupancy

Market value in existing state as at 30th September, 2007 (RMB)

1. Phase I Land and The property comprises a parcel of land (“the Buildings located at Land”) and 19 buildings (the “Buildings”) and Southern Area of various structures erected on the Land. Shuyang Technical and Development Zone The land area of the Land is approximately Shuyang 113,973.90 square metres and the gross floor Jiangsu Province area of the Building is approximately 59,749.25 The PRC

As at the date of 69,300,000 inspection, 17 blocks of the Buildings were just completed in 2007. For the remaining 2 blocks, namely Workshop No. 4 and Bath Room, internal decoration and installation of building services were being carried out.

The land area of the Land is approximately 113,973.90 square metres and the gross floor area of the Building is approximately 59,749.25 square metres. Detailed breakdown is shown as follows:

No. of No. of Gross services were being Buildings Blocks Storeys Floor Area carried out. (sq.m.) As advised by Shenzhen Workshop 4 4 36,215.42 Meiou, the property Ancillary 2 1 333.56 will be occupied as a Dormitory 11 4 20,664.55 production plant late 2007. Amenities 2 1–2 2,535.72 Total: 19 59,749.25

The property is held under a Real Estate Ownership Certificate for a term of 50 years expiring on 30th December, 2053 for industrial use.

Notes :

• (i) According to a State-owned Land Use Rights Certificate (沭國用(2003)字第27178號) dated 30th December, 2003, the land use rights of the Land have been granted to Shenzhen Meiou for a term of 50 years expiring on 30th December, 2053 for industrial use.

• (ii) According to a Building Ownership Certificate (沭城0060419號), 7 blocks of the Buildings with a total gross floor area of 17,007.61 square metres are held by Shenzhen Meiou. As advised by Shenzhen Meiou, application of the Building Ownership Certificate for the remaining 12 blocks of the Building is in progress.

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PROPERTIES VALUATION REPORT

APPENDIX II

• (iii) Opinions of the PRC Lawyer are summarized as follows:

• (a) According to a Land Use Rights Grant Contract dated 30th December, 2003 entered into between Shuyang State-owned Land Resources Bureau and Shenzhen Meiou, the land use rights of the Land with land area of 113,973 square metres was agreed to be granted to Shenzhen Meiou for industrial use with a consideration of RMB9,117,840.

• (b) In respect of the Land, Shenzhen Meiou is in possession of a Land Use Right Certificate by which the land use rights of the Land have been granted to Shenzhen Meiou with a term expiring on 30th December, 2053 for industrial use.

• (c) Shenzhen Meiou is the legal holder of the land use rights of the Land and have the right to transfer the land use rights of the Land freely.

• (d) According to the relevant PRC Laws, Shenzhen Meiou has to complete formal land grant procedures by settling the required land premium in full to Shuyang State-owned Land Resources Bureau before Shenzhen Meiou can freely transfer the land use rights of the Land.

• (iv) According to a confirmation dated 24th October, 2007 issued by Jiangsu Shuyang Economic Development Zone Management Committee and co-stamped by Shuyang State-owned Land Resources Bureau, Shenzhen Meiou has fully settled the land premium as agreed.

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PROPERTIES VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group II — Property held by Shenzhen Meiou for development in the PRC

				Market value in
				existing state as at
No.	Property	Description	Particulars of Occupancy	30th September, 2007
				(RMB)
3.	Phase II Land located at	The property comprises a parcel of	The property is currently	28,100,000
	Southern Area of Shuyang	land (“the Land”) with a land area	vacant.
	Technical and Development	of approximately 160,000 square
	Zone	metres.
	Shuyang
	Jiangsu Province	The property is contracted to be
	The PRC	acquired by Shenzhen Meiou under
		an agreement dated 4th September,
		2003 for industrial purpose.

Notes :

• (i) According to an agreement dated 4th September, 2003 entered into between Shuyang People’s Government (“Party A”) and Shenzhen Meiou (“Party B”), Party A agreed to issue State-owned Land Use Rights Certificate to Party B after receipt of land requisition fee, approval fee, greenery compensation fee and relocation fee from Party B. The land use rights will be of 50 years.

• (ii) According to a confirmation stamped by Management Committee of Jiangsu Shuyang Economic Development Zone and Shuyang State-owned Land Resources Bureau dated 24th October, 2007, all required land premiums have been settled in full by Shenzhen Meiou and the issuance of Land Use Rights Certificate is pending due to construction progress which has been scheduled to be commenced in May 2008.

• (iii) Opinions of the PRC Lawyer are summarized as follows:

• (a) According to an agreement (the “Agreement”) entered into between Shuyang People’s Government and Shenzhen Meiou dated 4th September, 2003, a parcel of industrial land with area of about 266,668 square metres (which includes the lands as described in properties numbered 2 and 3) will be provided to Shenzhen Meiou with consideration of RMB5,220,000.

• (b) According to a confirmation dated 24th October, 2007 issued by Jiangsu Shuyang Economic Development Zone Management Comittee and co-stamped by Shuyang State-owned Land Resources Bureau, Shenzhen Meiou has fully settled the land premium as agreed in the Agreement. The Land Use Rights Certificate will be issued after commencement of construction work which has been scheduled in May 2008.

• (c) Subject to the formal Land Use Rights Grant Contract to be entered into between Shuyang State-owned Land Resources Bureau and Shenzhen Meiou and full settlement of land premium according to the Land Use Rights Grant Contract, Shenzhen Meiou will have no legal impediment to obtain the Land Use Rights Certificate for the Land and will have the right to transfer the land use rights of the land freely.

• (iv) In our valuation, we have assumed that Shenzhen Meiou will have no legal impediments to obtain the title certificate of the property. We have also assumed that the property is free from any encumbrances and Shenzhen Meiou has the right to use, lease, transfer, mortgage or otherwise dispose of the property without paying any additional premiums.

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GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquires, confirm that, to the best of their knowledge and belief:

• (a) the information contained in this circular is accurate and complete in all material respects and not misleading;

• (b) there are no other matters the omission of which would make any statement in this circular misleading; and

• (c) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and Chief Executives’ Interest in Shares and Underlying Shares

As at the Latest Practicable Date, the beneficial interests of the directors and chief executives in any shares, underlying shares and debentures of the Company and any of its associated corporations (within the meaning of Part XV of the Hong Kong Securities and Futures Ordinance (the “SFO”)) as recorded in the register required to be kept by the Company under Section 352 of the SFO, or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions) which they are taken or deemed to have taken under such provisions of the SFO and pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”), were as follows:

Long positions in ordinary shares of US$0.01 each of the Company:

					Percentage
					of the
					Company’s
Name of director/	Personal	Corporate	Other	Total number	issued share
chief executive	interests	interests	interests	of shares	capital
Mr. Benjamin Zhengmin	161,632,926	51,439,440	80,765,138	293,837,504	23.73%
Pan (“Mr. Pan”)(1)
Ms. Ingrid Chunyuan Wu	212,940,886	—	80,765,138	293,706,024	23.72%
(“Ms. Wu”)(2)
Mr. Koh Boon Hwee	1,307,562	—	—	1,307,562	0.11%
Mr. Li Xiang	35,055,887	—	—	35,055,887	2.83%
Mr. Kang Pei	12,000	—	—	12,000	0.001%

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GENERAL INFORMATION

APPENDIX III

Notes :

• (1) Mr. Pan beneficially owns 161,632,926 shares. Mr. Pan is also deemed or taken to be interested in the following shares:

• (i) 51,439,440 shares which are beneficially owned by Silver Island Limited, a company 100% owned by Mr. Pan;

• (ii) 72,108,142 shares which are deemed to be beneficially owned by Mr. Pan, as trustee of the Benjamin Zhengmin Pan 2005 Annuity Trust dated 18th June, 2005; and

• (iii) 8,656,996 shares which are deemed to be beneficially owned by Mr. Pan and Ms. Wu’s descendents, as beneficiaries of the Pan 2005 Irrevocable Trust dated 10th May, 2005. Both children of Mr. Pan and Ms. Wu are under the age of 18.

• (2) Ms. Wu beneficially owns 212,940,886 shares. Ms. Wu is also deemed or taken to be interested in the following shares for the purposes of the SFO:

• (i) 72,108,142 shares which are deemed to be beneficially owned by Ms. Wu, as trustee of the Ingrid Chunyuan Wu 2005 Annuity Trust dated 18th June, 2005; and

• (ii) 8,656,996 shares which are deemed to be beneficially owned by Mr. Pan and Ms. Wu’s descendents, as beneficiaries of the Pan 2005 Irrevocable Trust dated 10th May, 2005. Both children of Mr. Pan and Ms. Wu are under the age of 18.

Other than as disclosed above, as at the Latest Practicable Date, none of the directors or chief executives had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations.

(b) Substantial Shareholders

As at the Latest Practicable Date, the register of interests and short positions kept by the Company under section 336 of the SFO showed that the following persons held interests or short positions in the Company’s shares:

		Percentage of
		the Company’s
	Number of	issued share
Name of shareholder	Shares	capital
Mr. Pan(1)	578,886,532(L)	46.76%
Ms. Wu(2)	578,886,532(L)	46.76%
JP Morgan Chase & Co.(3)	222,691,012(L)	17.99%
	75,211,000(L)	6.08%
	644,000(S)	0.05%
Credit Suisse Group(4)	93,600,000(L)	7.56%
	93,600,000(S)	7.56%
Emerging Markets Management, L.L.C.	75,608,000(L)	6.11%
Prudential Plc(5)	87,256,000(L)	7.05%
Schroder Investment Management (Hong Kong) Limited	74,920,000(L)	6.05%

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GENERAL INFORMATION

APPENDIX III

• (1) Mr. Pan beneficially owns 161,632,926 shares. Mr. Pan is also deemed or taken to be interested in the following shares:

• (i) 51,439,440 shares which are beneficially owned by Silver Island Limited, a company 100% owned by Mr. Pan;

• (ii) 285,049,028 shares which are beneficially owned by Ms. Wu as Mr. Pan is Ms. Wu’s husband;

• (iii) 72,108,142 shares which are deemed to be beneficially owned by Mr. Pan, as trustee of the Benjamin Zhengmin Pan 2005 Annuity Trust dated 18th June, 2005; and

• (iv) 8,656,996 shares which are deemed to be beneficially owned by Mr. Pan and Ms. Wu’s descendents, as beneficiaries of the Pan 2005 Irrevocable Trust dated 10th May, 2005. Both children of Mr. Pan and Ms. Wu are under the age of 18.

• (2) Ms. Wu beneficially owns 212,940,886 shares. Ms. Wu is also deemed or taken to be interested in the following shares:

• (i) 72,108,142 shares which are deemed to be beneficially owned by Ms. Wu as trustee of the Ingrid Chunyuan Wu 2005 Annuity Trust dated 18th June, 2005;

• (ii) 285,180,508 shares which are beneficially owned by Mr. Pan as Ms. Wu is Mr. Pan’s wife; and

• (iii) 8,656,996 shares which are deemed to be beneficially owned by Mr. Pan and Ms. Wu’s descendents, as beneficiaries of the Pan 2005 Irrevocable Trust dated 10th May, 2005. Both children of Mr. Pan and Ms. Wu are under the age of 18.

• (3) JP Morgan Chase & Co. through its various controlled corporations is interested in an aggregate of 222,691,012 shares of the Company.

Of these 222,691,012 shares, 75,211,000 shares are directly held by JP Morgan Chase Bank, N.A., which is a wholly-owned subsidiary of JP Morgan Chase & Co.; 644,000 shares are directly held by JPMorgan Securities Ltd. (“JPMorgan”), JPMorgan is a 98.95% owned subsidiary of J.P. Morgan Chase International Holdings (“J.P. Morgan International”), J.P. Morgan International is a 97.58% owned subsidiary of J.P. Morgan Chase (UK) Holdings Limited (“J.P. Morgan (UK)”), J.P. Morgan (UK) is a wholly-owned subsidiary of J.P. Morgan Capital Holdings Limited (“J.P. Morgan Capital”), J.P. Morgan Capital is a wholly-owned subsidiary of J.P. Morgan International Finance Limited (“J.P. Morgan Finance”), J.P. Morgan Finance is a wholly-owned subsidiary of Bank One International Holdings Corporation (“Bank One”), Bank One is a wholly-owned subsidiary of J.P. Morgan International Inc (“J.P. Morgan Inc”), J.P. Morgan Inc is a whollyowned subsidiary of JPMorgan Chase Bank, N.A., which in turn is a wholly-owned subsidiary of JP Morgan Chase & Co. 146,836,012 shares are directly held by J.P. Morgan Investment Management Inc. (“JP Morgan Investment”). JP Morgan Investment is a wholly-owned subsidiary of JP Morgan Asset Management Holdings Inc., which in turn is a wholly-owned subsidiary of JP Morgan Chase & Co..

Comprising 75,211,000 shares in the lending pool as described in the SFO. The term “lending pool” is defined as (i) shares that the approved lending agent holds as agent for a third party which he is authorised to lend and other shares that can be lent according to the requirements of the Securities Borrowing and Lending Rules; and (ii) shares that have been lent by the approved lending agent and only if the right of the approved lending agent to require the return of the shares has not yet been extinguished.

• (4) By virtue of Credit Suisse Group’s 100% interest in Credit Suisse, Credit Suisse’s 100% interest in Credit Suisse First Boston (International) Holdings AG, Credit Suisse First Boston (International) Holdings AG’s 100% interest in Credit Suisse First Boston International (Guernsey) Limited and 70.2% interest in Credit Suisse First Boston (Hong Kong) Limited; and Credit Suisse First Boston International (Guernsey) Limited also owns 29.8% interest in Credit Suisse First Boston (Hong Kong) Limited, each of Credit Suisse Group, Credit Suisse and Credit Suisse First Boston (International) Holdings AG is deemed to be interested in 93,600,000 shares in the Company directly held by Credit Suisse First Boston (Hong Kong) Limited.

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GENERAL INFORMATION

APPENDIX III

• (5) By virtue of Prudential Plc’s 100% interest in Prudential Holdings Ltd, Prudential Holdings Ltd’s 100% interest in Prudential Corporation Holdings Ltd, Prudential Corporation Holdings Ltd’s 100% interest in Prudential Asset Management (Hong Kong) Ltd, each of Prudential Plc, Prudential Holdings Ltd and Prudential Corporation Holdings Ltd is deemed to be interested in 87,256,000 shares in the Company directly held by Prudential Asset Management (Hong Kong) Ltd.

Save as the interests and short positions disclosed above, as at the Latest Practicable Date, so far as was known to any director of the Company, no other persons had an interest or short position in the shares, equity derivatives, underlying shares or debenture of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO and section 336 of the SFO or, who were interested in, directly or indirectly, 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of the Company.

3. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31st December, 2006, being the date up to which the latest published audited financial statements of the Group were made up.

4. EXPERT AND CONSENT

The following is the qualification of the expert who has given opinions or advice which are contained in this circular:

Name	Qualification
Optima Capital	Licensed corporation to carry out Type 1 (dealing in
	securities), Type 4 (advising on securities) and Type
	6 (advising on corporate finance) regulated activities
	under the Securities and Futures Ordinance
	(Chapter 571 of Laws of Hong Kong)

Optima Capital has given and has not withdrawn its written consents to the issue of this circular with the inclusion herein of its letter and reference to its name, in the form and context in which it appears.

As at the Latest Practicable Date, Optima Capital was not beneficially interested in the share capital of any member of the Group, nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did it have any interest, either direct or indirect, in any assets which had been since 31st December, 2006 (being the date to which the latest published audited accounts of the Company were made up) acquired or disposed of by or leased to any member of the Group or which were proposed to be acquired or disposed of by or leased to any member of the Group.

5. SERVICES CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into any service contracts with any member of the Group which were not expiring or determinable by the employer within one year without payment of compensation other than statutory compensation.

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GENERAL INFORMATION

APPENDIX III

6. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or claims of material importance and, so far as the Directors are aware, there was no litigation or claims of material importance known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries.

7. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective associates had an interest in a business which competes or may compete with the business of the Group.

8. MISCELLANEOUS

• (i) The registered office of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1–111, Cayman Islands. The principal place of business in Hong Kong is at Unit 2003, 20/F., 100 Queen’s Road Central, Central, Hong Kong.

• (ii) The company secretary and qualified accountant of the Company is Mr. Cheung Yuk Chuen (“Mr. Cheung”). Mr. Cheung is a fellow member of the Association of Chartered Certified Accountants, United Kingdom and an associate member of the Hong Kong Institute of Certified Public Accountants. Mr. Cheung has over 10 years of experience in accounting, auditing and tax consultancy before joining the Company in May 2007.

• (iii) The Hong Kong branch share register and transfer office of the Company is Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (iv) The English text of this circular and the accompanying proxy form shall prevail over its Chinese text.

9. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the Agreement is available for inspection during normal business hours at the principal place of business of the Company from the date of this circular up to and including the date of the EGM.

— 35 —

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [52 x 54] intentionally omitted <==

AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2018)

NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting of AAC Acoustic Technologies Holdings Inc. (the ‘‘Company’’) will be held at Elbrus Room, Pacific Place Conference Centre, 5/F., One Pacific Place, 88 Queensway, Hong Kong, on Friday, 4th January, 2008 at 10:30 a.m. for the purposes of considering and, if thought fit, passing, with or without modifications, the following resolution of the Company:

ORDINARY RESOLUTION

“ THAT the transactions contemplated under the shares transfer agreement (the “Agreement”) entered into between AAC Acoustic Technologies (Shenzhen) Co., Ltd. and the Vendors (as defined in the circular of the Company dated 20th December, 2007) in relation to the acquisition (the “Acquisition”) by the Company from the Vendors of 深圳市美歐電子有限責任公司 (Shenzhen Meiou Electronics Co. Ltd.), (a copy of which is produced to the meeting marked “A” and initialled by the chairman for the purpose of identification) be and is hereby confirmed, approved and ratified, and that the directors of the Company be and are hereby authorized to take all actions and execute all documents which they deem necessary, desirable or appropriate in order to implement and validate anything related to the Agreement and the Acquisition.”

By Order of the Board AAC ACOUSTIC TECHNOLOGIES HOLDINGS INC. Koh Boon Hwee Chairman

Hong Kong, 20th December, 2007

Notes:

• (1) A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and, in the event of a poll, vote in his stead. A proxy need not be a member of the Company. In order to be valid, the form of proxy must be deposited at the Company’s Hong Kong branch share registrar, Investor Communications Centre of Computershare Hong Kong Investor Services Limited at Rooms 1806–1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, not less than 48 hours before the time for holding the meeting or adjourned meeting.

• (2) Completion and return of the form of proxy will not preclude members from attending and voting in person at the extraordinary general meeting or any adjournment.

• (3) The Register of Members of the Company will be closed from 31st December, 2007 to 4th January, 2008, both days inclusive, during which period no transfers of shares shall be effected. In order to qualify for attending the forthcoming Extraordinary General Meeting, all transfers of shares accompanied by the relevant share certificates and transfer forms, must be lodged with the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on 28th December, 2007.

• (4) As at the date of this notice, the Board of Directors of the Company comprises an executive director, Mr. Benjamin Zhengmin Pan; three non-executive directors, Ms. Ingrid Chunyuan Wu, Mr. Pei Kang and Dr. Thomas Kalon Ng; and three independent non-executive directors, Mr. Koh Boon Hwee, Dr. Dick Mei Chang and Mr. Mok Joe Kuen Richard.

— 36 —