FIYTA Precision Technology Co., Ltd. — Interim / Quarterly Report 2007

Aug 20, 2007

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Stock Code: 000026 200026 Short form of the Stock: S FIYTA A FIYTA B Public Notice No:2007-040

SHENZHEN FIYTA HOLDINGS LTD.

2007 Semi Annual Report Summary

§ 1 Important

I.1 The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives of the Company hereby confirm that there are no significant omissions, fictitious statements or serious misleading information carried in this report, and shall take all responsibilities, individually and/or jointly, for the authenticity, accuracy and completion of the whole contents.

This summary of the Semi-annual Report is taken from the full text of the Semi-annual Report and is published together with it on the CSRC designated website Investors are advised to read carefully the full text of the semi-annual report if they want to know the detailed information.

1.2 No director, director or any senior executive has expressed that he/she is not sure for the genuineness, accuracy or completeness of this annual report or has any different opinion on the same.

1.3 All the directors attended the board meeting.

1.4 The semi annual financial report has not been audited by the certified public accountants.

1.5 Mr. Wu Guangquan, the Chairman of the Board, Mr. Xu Dongsheng, the Managing Director, Mr. Li Dehua, Deputy General Manager and Chief Financial Officer and Mr. Hu Xinglong, Manager of the Financial Department, hereby ensure the accuracy and completeness of the financial report enclosed in this semi-annual report.

§2 Company Information

2.1. Basic Data

Short form of the stock:	S FIYTA A, FIYTA B
Stock Code:	000026, 200026
Stock Exchange Listed with	Shenzhen Stock Exchange
	Secretaryof the Board	Securities Affairs Representative
Names	Hao Huiwen	Li Wenjing
	20thFloor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen	20thFloor, FIYTA Technology Building, Gaoxin S. Road One, Nanshan District, Shenzhen
Liaison Address
Tel.	0755-86013992	0755-86013669
Fax	0755-83348369	0755-83348369
E-mail	investor@fiyta.com.cn	investor@fiyta.com.cn

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1

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

2.2 Financial Data Summary

2.2.1 Financial Highlights

In RMB	In RMB	In RMB	In RMB	In RMB	In RMB
				Increase/decrease of the end of
	End of the
		End of the previous year		the report period vs the end of
	report period
				the previous year (%)
		Before	After	Before	After
		adjustment	adjustment	adjustment	adjustment
	864,748,180.98	771,947,475.5 6	775,110,230.5 6	12.02%	11.56%
Total assets
	591,828,217.78	562,634,460.9 9	564,828,187.4 1	5.19%	4.78%
Owners’/shareholders’ equity
Net assetsper share	2.374	2.257	2.265	5.19%	4.78%
				Increase/decrease of the report
	Report period	Same Period of the Previous
				period vs the same period of the
	(Jan to Jun)	Year
				previous year (%)
		Before	After	Before	After
		adjustment	adjustment	adjustment	adjustment
Operating profit	30,145,875.35	15,629,210.86	16,964,402.50	92.88%	77.70%
Total profit	30,982,796.88	17,078,612.65	17,078,612.65	81.41%	81.41%
Netprofit	27,000,030.37	13,595,389.06	13,185,342.01	98.60%	104.77%
Net profit after deduction of non-	25,415,706.56	12,338,589.59	11,928,542.54	105.99%	113.07%
recurring loss/gain
Basic earningsper share	0.108	0.055	0.053	98.60%	104.77%
Diluted earnings per share	0.108	0.055	0.053	98.60%	104.77%
Net assets-income ratio	4.56%	2.49%	2.41%	2.07%	2.15%
Net cash flows arising from operating	-31,592,113.96	-26,564,640.47
activities
Net cash flows per share arising from	-0.13	-0.11
operating activities

2.2.2 Non-recurring gain and loss items

√ Applicable □ Inapplicable

√Applicable□Inapplicable
	In RMB
Non-recurring gain and loss items	Amount
Net amount of non-operating income and expenses	836,921.53
Earnings from short term investment	836,668.09
Amount affected by the income tax	-89,265.81
Total	1,584,323.81

2.2.3 Discrepancies between Chinese Accounting Standards (CAS) and International Accounting Standards (IAS)

□ Applicable √ Inapplicable

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

§3 Changes in Share Capital and Particulars about Shareholders

3.1 Change in the Company’s Shares

□ Applicable √ Inapplicable

3.2 Shares Held by Top 10 Shareholders and Top 10 Shareholders of Negotiable Shares

In shares	In shares	In shares	In shares	In shares	In shares	In shares
Total Shareholders	18,737
Shares held by the top 10 shareholders
				Q’ty of
	Nature of	Proportion of	Total shares			Shares pledged or
Names of Shareholders				Non-negotiable
	Shareholders	shares held	held			frozen
				Shares Held
CATIC SHENZHEN HOLDINGS LTDS.	State owned corporate	52.24%	130,248,000	130,248,000		0
Henan Fangchen Technology & Trade Co., Ltd.	Domestic non-state corporate	2.50%	6,231,100	0		-
Shenzhen Xinglun Network Technology Co., Ltd.	Domestic non-state corporate	1.89%	4,700,157	0		-
Kaifeng Xinfeng Trade Co., Ltd.	Domestic non-state corporate	1.65%	4,101,800	0		-
Shanghai Delin Property Management Co., Ltd.	Domestic non-state corporate	1.59%	3,951,975	0		-
Bank of China – E Fund Stable Growth Securities Investment Fund	Domestic non-state corporate	1.12%	2,803,619	0		-
HANG SENG CONSUMER SECTOR FLEXIPOWER FUND	Domestic non-state corporate	1.09%	2,710,800	0		-
Bank of China – E Fund Positive Growth Securities Investment Fund	Domestic non-state corporate	1.04%	2,600,000	0		-
China Minsheng Banking Corp., Ltd. – Oriental Carefully Selected Mixed Open-End Securities Investment Fund	Domestic non-state corporate	0.86%	2,141,476	0		-
Bank of China – Huabao Xingye Advance Growth Stock Type Securities Investment Fund	Domestic non-state corporate	0.80%	2,000,000	0		-
Shares held bythe topten shareholders of negotiable shares
Names of Shareholders		Q’ty of Negotiable Shares Held			Share Type
Henan Fangchen Technology & Trade Co., Ltd.		6,231,100			RMB ordinary shares
Shenzhen Xinglun Network Technology Co., Ltd.		4,700,157			RMB ordinary shares
KaifengXinfengTrade Co., Ltd.		4,101,800			RMB ordinaryshares
Shanghai Delin Property Management Co., Ltd.		3,951,975			RMB ordinary shares

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Bank of China – E Fund Stable Growth Securities Investment Fund	Bank of China – E Fund Stable Growth Securities Investment Fund	2,803,619	RMB ordinary shares
HANG SENG CONSUMER SECTOR FLEXIPOWER FUND		2,710,800	Foreign shares listed domestically
Bank of China – E Fund Positive Growth Securities Investment Fund		2,600,000	RMB ordinary shares
China Minsheng Banking Corp., Ltd. – Oriental Carefully Selected Mixed Open-End Securities Investment Fund		2,141,476	RMB ordinary shares
Bank of China – Huabao Xingye Advance Growth Stock Type Securities Investment Fund		2,000,000	RMB ordinary shares
Industrial and Commercial Bank of China – E Fund Value Based Growth Mixed Securities Investment Fund		1,699,848	RMB ordinary shares
	The shareholder that holds over 5% (including 5%) of the total share capital is CATIC SHENZHEN HOLDINGS LTD. In the report period there was no change in the shareholding and there were no shares held by it pledged or frozen. Among the top ten shareholders, there exists no business relationship between the promoter shareholder and other shareholders of negotiable shares. The Company has not found any business relationship among other shareholders of negotiable shares and cannot identify whether there are any shares held other shareholders of negotiable shares pledged or frozen.
Relationship/concerted
action among the above
shareholders

The shareholder that holds over 5% (including 5%) of the total share capital is CATIC SHENZHEN HOLDINGS LTD. In the report period there was no change in the shareholding and there were no shares held by it pledged or frozen. Relationship/concerted Among the top ten shareholders, there exists no business relationship between the promoter action among the above shareholder and other shareholders of negotiable shares. The Company has not found any shareholders business relationship among other shareholders of negotiable shares and cannot identify whether there are any shares held other shareholders of negotiable shares pledged or frozen.

3.3 Change in Controlling Shareholder and the Actual Controller

□ Applicable √ Inapplicable

§ 4 Directors, Supervisors and Senior Executives

4.1 Changes in shares held by directors, supervisors and senior executives

□ Applicable √ Inapplicable

The Company’s stock option held by and number of restrictive shares granted to the aforesaid persons □ Applicable √ Inapplicable

§5 Report of the Board of Directors

5.1 Status of Principal Business Based on Sectors and Products

In RMB ‘000

	In RMB ‘000	In RMB ‘000	In RMB ‘000	In RMB ‘000	In RMB ‘000	In RMB ‘000
	Principal Businesses Based on Sectors
				Increase/decre	Increase/decre
						Increase/decrea
				ase of revenue	ase of principal
						se of gross profit
Based on sectors or	Business	Business costs	Gross profit	from principal businesses th	business cost over the same id f	rate over the
products	income		rate (%)			same period of
				over e previous year	pero o previous year	the previous
						year (%)
				(%)	(%)
Industrial manufacture and sales	6,971.83	3,250.97	53.37%	14.75%	14.24%	0.21%
Retail	25,432.82	19,650.88	22.73%	73.54%	71.10%	1.10%
Property operation	2,734.19	388.79	85.78%	21.88%	-0.75%	3.24%
Other business	249.11	99.69	59.98%	54.71%	35.69%	5.61%

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

	Principal Businesses Based on Products
Manufacture and sales of FIYTA watches	6,971.83	3,250.97	53.37%	14.75%	14.24%	0.21%
Sales of foreign top brand watches	25,432.82	19,650.88	22.73%	73.54%	71.10%	1.10%

Where: the total amount of the related transactions in which the Company sold products and offered labor services to its controlling shareholder and its subsidiaries in the report period was RMB 3.2482 million.

5.2 Principal Businesses Based on Regions

	In RMB ‘000	In RMB ‘000
		Increase/decrease of revenue
Regions	Operation income	from businesses over the previous
		year (%)
Northeast China	3,647.50	57.00%
North China	4,612.33	60.50%
Northwest China	7,320.74	68.10%
East China	4,736.03	49.70%
Southwest China	1,330.72	35.50%
South China	10,407.43	48.00%

5.3 Significant change in principal business and its structure in comparison with the previous report period and the reasons.

□ Applicable √ Inapplicable

5.4 Material Changes in the Earning Capacity (Gross Profit Rate) of the Principal Business over the Previous Year

□ Applicable √ Inapplicable

5.5 Reasons of Big Change in Profit Composition over the Previous Year

□ Applicable √ Inapplicable

5.6. Application of the Proceeds Raised through Share Offering

5.6.1 Application of Proceeds Raised through Share Offering

□ Applicable √ Inapplicable

5.6.2 Change of Projects

□ Applicable √ Inapplicable

5.7 Plan of the Board of Directors to Update the Business Plan of the Second Half Year

□ Applicable √ Inapplicable

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

5.8 Prediction of the possibility of the accumulated net profit from the year beginning to the end of the next report period being of loss; or warning for big changes in the net profit in comparison with the same period of the previous year and the reasons

√ Applicable □ Inapplicable

As the Company’s income from the principal business grows and the earning power improves, it is predicted that the － accumulative net profit of January to September 2007 shall increase by 50% 100% over the same period of the previous year.

5.9 Explanation of the Board of Directors on the Non-standard Auditor’s Report of the Report Period Issued by the Certified Public Accountants

□ Applicable √ Inapplicable

5.10 Explanation of the Board of Directors on the Change of the Affairs Involved in the Non-standard Auditor’s Report of the Previous Year and the Treatment

□ Applicable √ Inapplicable

§6 Important Events

6.1 Assets Acquisition and Sales of Assets and Assets Restructuring

6.1.1 Assets Acquisition

□ Applicable √ Inapplicable

6.1.2 Sales of Assets

□ Applicable √ Inapplicable

6.1.3 Progress and of the assets restructuring or acquisition/sales of assets and effect of the activity upon the operation result and financial status of the report period report since publication of the assets restructuring report or announcement on acquisition/sales of assets

□ Applicable √ Inapplicable

6.2. Guarantees

□ Applicable √ Inapplicable

6.3 Non-Operational Related Assets & Liabilities

√ Applicable □ Inapplicable

√ Applicable □ Inapplicable
	In RMB ‘000
			Fund provided by related parties to the
	Fund provided to related parties
Related Parties			Company
	Amount incurred	Balance	Amount incurred	Balance
Shenzhen CATIC Property Management Co., Ltd.	843.00	58.30	716.50	716.50
Shenzhen Rainbow Supermarket Co., Ltd.	2,405.20	0.00	0.00	0.00

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Shenzhen Maiwei Cable TV Equipment Co Ltd	0.00	0.00	154.40	154.40
Shenzhen CATIC Real Estate	0.00	0.00	659.70	0.00
Total	3,248.20	58.30	1,530.60	870.90

Where: The total amount of the funds the Company provided to the holding shareholder and its subsidiaries was RMB 3,248.20 thousand and the balance was RMB 58.30 thousand in the report period.

6.4 Significant Lawsuits and Arbitrations

□ Applicable √ Inapplicable

6.5 Other Significant Events, their Impacts and the Solutions

□ Applicable √ Inapplicable

6.5.1 Securities Investment

√ applicable □ non-applicable

√applicable□non-applicable	√applicable□non-applicable	√applicable□non-applicable
			In RMB
						Proportion in
			Original		Bk l t	the total
Type of	Stock Code	Short form of	investment	Number of	oo vaue a the end of the	securities	Gain and loss in
Securities		stock	amount in	shares held		investment	the report period
			RMB		period	at the end of
						the period
Corporate shares	000543	WANNENG POWER (a)	3,000,000.00	1,100,000.00	3,000,000.00	100%	0.00
Other securities investments held at the end of			0.00	-	0.00	0.00%	0.00
the period
Gain and loss from investment in securities			-	-	-	-	0.00
already sold in the report period
Total			3,000,000.00	-	3,000,000.00	100%	0.00

6.5.2 Equity in other listed companies held by the Company

• √ Applicable □ Inapplicable

		In RMB	In RMB	In RMB	In RMB	In RMB
		Initial	Proportion in	Book value at	Gain and loss in	Change in the owner’s
	Short form of
Stock Code		investment	the company’s	the end of the	the report	equity in the report
	stock
		amount	equity	period	period	period
600057	Xiaxin Electronics	6,496,000.00	0.13%	2,970,000.00	836,668.09	-
Total		6,496,000.00	-	2,970,000.00	836,668.09	-

6.5.3 Equity in non-listed financial enterprises and companies to be listed held by the Company

□ Applicable √ Inapplicable

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

6.6 Statement of such activities as reception, research, communication, interview in the report period

				Matters discussed and information
Reception time	Reception place	Way of reception	Visitors received
				provided
January 9, 2007	the Company	Site research	Tong Dongcai from Guojin Securities	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
January 19, 2007	the Company	Site research	Zhao Xuegui from Everbright Securities	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
February 8, 2007	the Company	Site research	Chen Chen from CITIC Securities	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
March 7, 2007	the Company	Site research	Pan Feng from E-Fund; Cao Jianfei from Huabao Fund; Yang Lei from Dacheng Fund	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
April 3, 2007	the Company	Site research	Shi Hongmei from Orient Securities	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
April 3, 2007	Head Office of Dacheng Fund	Communication	Cao Xiongfei, Yang Lei and Yang Jianhua from Da Cheng Fund	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
April 5, 2007	Head Office of E-Fund	Communication	Jiang Zuoliang, Panfeng, Sun Song from E-Fund	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of the Company’s public brochures
June 16, 2007	the Company	Site Research	Zhao Fengbo from Martin Currie Fund	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of 2006 Annual Report and the Company’s public brochures

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

June 29, 2007	the Company	Site research	Xia Maosheng from Guodu Securities	Development trend of the domestic luxury goods sector, some measures concerning the Company’s strategic development, brand construction, terminal management in the past three years. Provision of 2006 Annual Report and the Company’s public brochures

§ 7 Financial Report

7.1 Auditor’s Opinion

Financial Report √ Unaudited □ Audited

7.2 Financial Report

7.2.1. Balance Sheet

Prepared by: SHENZHEN FIYTA HOLDINGS LTD. June 30, 2007 In RMB

	Endingbalance	Endingbalance	Openingbalance	Openingbalance
I
tems	Consolidated	Parent company	Consolidated	Parent company
Current assets:
Monetary funds	67,373,208.75	61,305,801.33	60,226,078.54	48,521,282.16
Settlement funds
Offered fund
Transaction based financial	2,970,000.00	2,970,000.00	2,138,400.00	2,138,400.00
assets
Notes receivable
Accounts receivable	35,284,640.15	17,727,618.21	29,949,363.85	12,258,698.48
Advance to Suppliers	12,058,462.35	-0.01	7,785,252.34	59,999.99
Receivablepremium
Reinsurance accounts
receivable
Reserve for reinsurance
contract receivable
Interest receivable		2,770,434.88	244,066.90	2,770,434.88
Other receivables	21,437,385.99	262,622,917.04	13,863,209.85	214,996,031.04
Buy of resold financial assets
Inventories	435,474,193.84	55,616,949.61	371,196,239.94	55,072,650.67
Non-current assets due
within a year
Other current assets	0.00	0.00	0.00	0.00
Total current assets	574,597,891.08	403,013,721.06	485,402,611.42	335,817,497.22
Non-current assets:
Provision of loans and
advance in cash
Available-for-sale financial
assets
Held to maturityinvestments
Long term accounts payable

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9

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Long-term equityinvestment	5,519,041.29	147,433,298.65	5,519,041.29	161,199,323.70
Real Estate Investment
Fixed assets	260,723,533.15	242,370,034.41	260,501,370.86	242,888,183.06
Construction-in-progress	205,261.50	205,261.50	151,261.50	151,261.50
Engineeringsupplies
Disposal of fixed assets
Productive biological asset
Oil and gas asset
Intangible assets	11,643,695.56	11,530,495.56	11,815,732.72	11,702,532.72
Development expenditures
Goodwill
Long-term expenses to be	7,923,238.20	6,041,404.06	8,557,457.77	6,226,236.60
apportioned
Deferred income tax	4,135,520.20	4,003,061.18	3,162,755.00	3,030,295.98
Other non-current assets
Total non-current assets	290,150,289.90	411,583,555.36	289,707,619.14	425,197,833.56
Total assets	864,748,180.98	814,597,276.42	775,110,230.56	761,015,330.78
Current liabilities
Short-term Loan	190,000,000.00	190,000,000.00	140,000,000.00	140,000,000.00
Borrowings from the Central
Bank:
Deposit taking and due from
banks
Loan from other banks
Transactional financial
liabilities
Notespayable
Accounts payable	47,621,390.26	1,703,505.91	39,397,856.09	11,749,442.14
Advance receipts	3,862,052.99	74,292.00	550,455.25	242,866.25
Payment from sale of the
repurchased financial assets
Service charge and
commission receivable
Salaries Payable to Staff	5,099,331.72	2,042,139.61	4,838,675.92	2,048,540.41
Taxespayable	-21,751,641.51	3,789,861.31	-17,689,494.22	4,235,357.75
Interest payable
Otherpayables	32,363,157.74	32,741,594.67	26,635,471.04	28,622,329.62
Reinsurance accounts
payable
Reserve for insurance
contract
Income from securities
trading on commission
Income from securities
underwriting on commission
Non-current liabilities due
within a year
Total other current liabilities	0.00	0.00	0.00	0.00
Total current liabilities	257,194,291.20	230,351,393.50	193,732,964.08	186,898,536.17

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10

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Non-current liabilities:
Long-term Loan	0.00
Bondspayable
Long term accounts payable	5,000,000.00		5,000,000.00
Special accountspayable	3,000,000.00	3,000,000.00	3,000,000.00	3,000,000.00
Predicted liabilities
Deferred income tax liability			967,398.56	967,398.56
Other non-current liabilities
Total non-current liabilities	8,000,000.00	3,000,000.00	8,967,398.56	3,967,398.56
Total liabilities	265,194,291.20	233,351,393.50	202,700,362.64	190,865,934.73
Owners’/shareholders’ equity
Paid-up capital (or capital	249,317,999.00	249,317,999.00	249,317,999.00	249,317,999.00
stock)
Capital Reserve	191,847,232.65	191,847,232.65	191,847,232.65	191,847,232.65
Less: shares in stock
Surplus Reserve	101,480,997.62	101,480,997.62	101,480,997.62	101,480,997.62
Reserve forgeneral risks
Retained Earnings	49,181,988.51	38,599,653.65	22,181,958.14	27,503,166.78
Balance of Foreign Currency
Conversion in Statements
Total owners’ equity	591,828,217.78	581,245,882.92	564,828,187.41	570,149,396.05
attributable to the parent
company
Minority shareholders’ equity:	7,725,672.00		7,581,680.51
Total owner’s equity	599,553,889.78	581,245,882.92	572,409,867.92	570,149,396.05
Total liabilities and owners’	864,748,180.98	814,597,276.42	775,110,230.56	761,015,330.78
equity

7.2.2 Statement of Profit

Prepared by: SHENZHEN FIYTA HOLDINGS LTD. January to June, 2007 In RMB

	Report Period	Report Period	Same Period of the Previous Year	Same Period of the Previous Year
Items
	Consolidated	Parent company	Consolidated	Parent company
I. Total business income	350,380,602.40	100,926,241.66	231,353,224.49	84,240,346.76
Including: business income	350,380,602.40	100,926,241.66	231,353,224.49	84,240,346.76
Interest income
Earnedpremium
Service charge and
commission income
II. Total operatingcost	321,071,395.14	91,272,205.36	215,724,013.63	77,443,610.99
Including: business income	230,404,336.46	42,956,580.97	147,959,110.10	37,942,818.18
Interestpayment
Service charge and
commission expense
Surrender value
Compensation pay-out,
net
Provision of reserve for
insurance contract, net

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11

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Payment ofPolicy
Dividends
Reinsurance expenses
Business Taxes and	2,106,269.38	1,744,703.03	1,393,440.96	1,200,007.23
Surcharge
Sales expenses	47,669,139.13	26,650,743.15	36,359,095.06	22,164,024.18
Overheads	34,079,236.97	19,815,542.67	27,926,820.32	15,864,374.25
Financial expenses	6,812,413.20	104,635.54	2,085,547.19	272,387.15
Loss from impairment of
assets
Add: Income from change of
fair value (loss is stated with
“-“)
Investment income (loss	836,668.09	836,668.09	1,335,191.64	1,335,191.64
is stated with “-“)
Including: income from
investment in associates and
joint ventures
Exchange income (loss is
stated with “-“)
III. Operating Profit (loss is	30,145,875.35	10,490,704.39	16,964,402.50	8,131,927.41
stated with “-“)
Plus: Non-operatingincome	843,780.30	331,739.40	186,868.70
Less: Non-operating	6,858.77		72,658.55	3,556.96
expenses
Including: Loss from
disposal of non-current assets
IV. Total profit (total loss is	30,982,796.88	10,822,443.79	17,078,612.65	8,128,370.45
stated with “-“)
Less: Income tax expense	3,838,775.02	-274,043.08	4,013,334.62	2,460,180.05
V. Net Profit (loss is stated with	27,144,021.86	11,096,486.87	13,065,278.03	5,668,190.40
“-“)
Net profit attributable to	27,000,030.37	11,096,486.87	13,185,342.01	5,668,190.40
the owner of the parent
company
Minority shareholders’	143,991.49		-120,063.98
equity
VI. Earnings per share*
(I) Basic earnings per	0.108		0.053
share
(II) Diluted earnings per	0.108		0.053
share

7.2.3 Cash Flow Statement

Prepared by: SHENZHEN FIYTA HOLDINGS LTD. January to June, 2007 In RMB

	Report Period	Report Period	Same Period of the Previous Year	Same Period of the Previous Year
I
tems	Consolidated	Parent company	Consolidated	Parent company
I. Net cash flows arising from
operating activities
Cash received from sales	409,107,319.92	103,924,762.27	279,614,438.26	95,107,822.32
of goods and supply of labor
Netincrease ofthe

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12

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

customers’ deposit and amount
from banks
Net increase of borrowing
from the central bank
Net increase of borrowing
from other financial institutions
Cash received from the
premium of the original
insurance contract
Cash received from the
reinsurance business, net
Increase of the reserve
from policy holders and
investment, net
Increase of transactional
financial assets, net
Cash from collection of
interest, service charge and
commission
Increase of loanfrom
other banks, net
Increase of fund from
repurchase business, net
Rebated taxes received
Other cash in connection	5,389,442.42	2,776,003.47	1,498,569.30	1,009,428.31
with operation activities as
received
Subtotal of cash flow in	414,496,762.34	106,700,765.74	281,113,007.56	96,117,250.63
from operating activities
Cash paid for purchase of	337,985,392.66	31,526,203.50	225,397,611.12	36,853,225.59
goods and reception of labor
services
Net increase of loans and
advances to the customers
Net increase of amounts
due from the central bank and
other banks
Cash from payment for
settlement of the original
insurance contract
Cash for payment of
interest, service charge and
commission
Cash for payment of policy
dividend
Cashpaid to and for staff	36,542,923.26	16,962,882.54	28,530,696.04	13,018,518.31
Taxes paid	19,117,691.66	11,573,497.56	12,412,814.74	7,373,835.97
Other operation related	52,442,868.72	77,209,800.69	41,336,526.13	63,257,829.46
cash payments
Subtotal of cash flow out	446,088,876.30	137,272,384.29	307,677,648.03	120,503,409.33
from operating activities
Net cash flows arising	-31,592,113.96	-30,571,618.55	-26,564,640.47	-24,386,158.70
from operating activities
II. Cash flows arising from
investment activities:

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13

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Cash received from			3,000,000.00	3,000,000.00
recovery of investment
Cash received from
investment income
Net amount of cash	561,045.00	561,045.00	112,885.00
received from disposal of fixed
assets, intangible assets and
other long term assets
Net cash received from
disposal of subsidiaries and
other operating units.
Other investment related
cash receipts
Subtotal of cash flow in	561,045.00	561,045.00	3,112,885.00	3,000,000.00
from investment activities
Cash paid for	6,844,601.83	2,227,708.28	10,123,823.65	5,408,915.42
construction/purchase of fixed
assets, intangible assets and
other long term assets
Cash paid for investment
Net increase of
hypothecated loans
Net cash paid by
subsidiaries and other
operating units
Other investment related
cash payments
Subtotal of cash flow out	6,844,601.83	2,227,708.28	10,123,823.65	5,408,915.42
from investment activities
Net cash flow arising	-6,283,556.83	-1,666,663.28	-7,010,938.65	-2,408,915.42
from investment activities
III. Cash flows arising from
fund raising activities:
Cash received from
absorption of investment
Incl.: Cash received from
absorption of minority
shareholders’ investment
Cash received from	70,000,000.00	70,000,000.00	40,000,000.00	40,000,000.00
borrowings
Cash received from bond
issuing
Other fund raising related
cash receipts
Subtotal of cash flow in	70,000,000.00	70,000,000.00	40,000,000.00	40,000,000.00
from fund-raising activities
Cash paid for liabilities	20,000,000.00	20,000,000.00
repayment
Cash paid for	4,977,199.00	4,977,199.00	1,461,300.00	1,461,300.00
dividend/profit distribution or
repayment of interest
Incl.: Dividend and profit
paid by the subsidiaries to
minority shareholders
Other fund raising related
cash payments

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14

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

Subtotal of cash flow out	24,977,199.00	24,977,199.00	1,461,300.00	1,461,300.00
from fund-raising activities
Net cash flow arising	45,022,801.00	45,022,801.00	38,538,700.00	38,538,700.00
from fund-raising activities
IV. Amount involved in change
of exchange rate influencing
the cash and cash equivalent
V. Net increase of cash and	7,147,130.21	12,784,519.17	4,963,120.88	11,743,625.88
cash equivalents
Plus: Opening balance of	60,226,078.54	48,521,282.16	47,710,206.11	29,988,789.99
cash and cash equivalents
VI. Ending balance of cash and	67,373,208.75	61,305,801.33	52,673,326.99	41,732,415.87
cash equivalents

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15

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

7.2.4 Statement of Change in Owner’s Equity

Prepared by: SHENZHEN FIYTA HOLDINGS LTD. June 30, 2007 In RMB

	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the report period	Amount in the previous period	Amount in the previous period	Amount in the previous period	Amount in the previous period	Amount in the previous period	Amount in the previous period	Amount in the previous period	Amount in the previous period	Amount in the previous period
	Total owners’ equity attributable to the parent company									Total owners’ equity attributable to the parent company
	Paid-up							Minority		Paid-up							Minority
					Reserv	Retaine			Total					Reserv	Retaine			Total
Items
	capital	Capital	Less:	Surplus				shareh		capital	Capital	Less:	Surplus				shareh
					e for	d			owner’s					e for	d			owner’s
	(or	Reserv	shares	Reserv			Others	olders’		(or	Reserv	shares	Reserv			Others	olders’
					general	Earning			equity					general	Earning			equity
	capital	e	in stock	e				equity:		capital	e	in stock	e				equity:
					risks	s								risks	s
	stock)									stock)
	249,31 7,999.0 0	191,84 7,232.6 5		101,48 0,997.6 2		19,988, 231.72		7,580,0 50.49	570,21 4,511.4 8	249,31 7,999.0 0	191,84 7,232.6 5		98,654, 301.02		-6,448, 293.31		7,502,6 82.77	540,87 3,922.1 3
I. Balance at the end of the
previous year
Plus: Change of						2,193,7 26.42		1,630.0 2	2,195,3 56.44
accounting policy
Correction of previous
errors
	249,31 7,999.0 0	191,84 7,232.6 5		101,48 0,997.6 2		22,181, 958.14		7,581,6 80.51	572,40 9,867.9 2	249,31 7,999.0 0	191,84 7,232.6 5		98,654, 301.02		-6,448, 293.31		7,502,6 82.77	540,87 3,922.1 3
II. Balance at the year
beginning
III. Amount involved in the						27,000, 030.37		143,99 1.49	27,144, 021.86				2,826,6 96.60		26,436, 525.03		77,367. 72	29,340, 589.35
change of
increase/decrease
(decrease is marked with

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16

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

“-“)
						27,000, 030.37		143,99 1.49	27,144, 021.86						29,263, 221.63		77,367. 72	29,340, 589.35
(I) Net profit
(II) Profit and loss directly
charged to the owner’s
equity
1. Net change in the
fair value of the financial
assets available for sale
2. Influence from change
of the other owner’s equity
of the investee
3. Influence from the
income tax in connection
with the owner’s equity as
charged
4. Others
Total of the aforesaid (I)						27,000, 030.37		143,99 1.49	27,144, 021.86						29,263, 221.63		77,367. 72	29,340, 589.35
and (II)
(III) Capital provided and
decreased by the owner
1. Capital provided by
the owner
2. Amount of share
payment charged to the

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17

SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

owner’s equity
3. Others
													2,826,6 96.60		-2,826, 696.60			0.00
(IV) Profit Distribution
1. Provision of surplus													2,826,6 96.60		-2,826, 696.60			0.00
public reserve
2. Provision for general
risks
3. Distribution to the
owner (or shareholders)
4. Others
(V) Internal carry-over of
owner’s equity
1. Increased capital
converted from capital
reserve (or capital stock)
2. Increased capital
converted from surplus
reserve (or capital stock)
3. Making up Deficit
with Surplus Public Reserve
4. Others
	249,31 7,999.0	191,84 7,232.6		101,48 0,997.6		49,181, 988.51		7,725,6 72.00	599,55 3,889.7	249,31 7,999.0	191,84 7,232.6		101,48 0,997.6		19,988, 231.72		7,580,0 50.49	570,21 4,511.4
IV. Ending balance

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													SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary	SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary	SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary	SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary	SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary	SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary
	0	5		2					8	0	5		2					8

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SHENZHEN FIYTA HOLDINGS LTD. 2007 Semi Annual Report Summary

7.3 Notes to the Accounting Statements

7.3.1 In case there is any change in accounting policy or accounting estimate, or correction of accounting errors, describe the relevant details, the cause(s) and amount affected

In the report period, the Company conducted adjustment of the opening balance on the balance sheet in accordance with the new Enterprise Accounting Standard, recognized the deferred income tax asset amounting to RMB 3,162,755, deferred income tax liability amounting to RMB 967,398.56; the opening balance of the retained earnings and minority shareholders’ equity were adjusted correspondingly.

7.3.2 In case significant change takes place in the consolidation scope of the financial statements, describe the causes and the amount affected

□ Applicable √ Inapplicable

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