Honghua Group Limited — Director's Dealing 2011

Jun 20, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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Honghua Group Limited

宏華集團有限公司

(a company incorporated in the Cayman Islands with limited liability) (Stock Code: 0196)

GRANT OF SHARE OPTIONS

This announcement is made pursuant to Rule 17.06A of the Rules Governing the Listing of Securities (the “ Listing Rules ”) on the Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”).

The board of directors (the “Board ”) of Honghua Group Limited (the “Company” ) hereby announces that on 20 June 2011, share options (the “ Share Options ”) to subscribe for a total of 8,450,000 ordinary shares of HK$0.10 each in the capital of the Company (the “ Shares ”) were granted to the grantees (the “Grantees” ) , subject to acceptance of the Grantees, under the share option scheme adopted by resolutions in writing of all the shareholders of the Company on 21 January 2008.

The Share Options shall entitle the Grantees to subscribe for an aggregate of 8,450,000 new Shares to be issued upon the exercise of the Share Options in full at an exercise price of HK$0.83 per Share, which represents the highest of (i) the closing price of HK$0.78 per Share as stated in the daily quotations sheet issued by the Stock Exchange on the date of grant of the Share Options, i.e. 20 June 2011 (the “Date of Grant” ); (ii) the average closing price of HK$ 0.83 per Share as stated in the daily quotations sheets issued by the Stock Exchange for the five business days immediately preceding the Date of Grant; and (iii) the nominal value of Share, which is HK$0.10. The valid period of the Share Options is up to 19 June 2021.

The Share Options are exercisable on or after 19 July 2011 by the Grantees with details as follows:

1. up to 30% of the Share Options granted to each Grantee from 19 July 2011 to 19

June 2012;

1. up to 60% of the Share Options granted to each Grantee on or before 19 June 2013;

2. all the remaining Share Options granted to each Grantee on or after 20 June 2013; and in each case, not later than 19 June 2021.

6,050,000 Shares out of the total 8,450,000 Shares to be subscribed under the Share Options were granted to the following Grantees who are directors of the Company with details as follows:

with details as follows:
Name	Grantee’s relationship withthe Company	Number of Shares to besubscribedundertheShare Optionsgranted
Mr.SiegfriedMeissner	non-executive director of theCompany	850,000
Mr. Qi Daqing	Independentnon-executivedirector of the Company	1,000,000
Mr. Liu Xiaofeng	Independentnon-executivedirector of the Company	1,000,000
Mr. Tai Kwok Leung,Alexander	Independentnon-executivedirector of the Company	850,000
Mr. Chen Guoming	Independentnon-executivedirector of the Company	750,000
Mr. Shi Xingquan	Independentnon-executivedirector of the Company	750,000
Mr. Guo Yanjun	Independentnon-executivedirector of the Company	850,000

Save as disclosed above, none of the Grantees is a director, chief executive or substantial shareholder of the Company, or their respective associates (as defined in the Listing Rules).

By order of the Board of HONGHUA GROUP LIMITED Zhang Mi Chairman

China, 20 June 2011

As at the date of this announcement, the executive directors of the Company are Mr. Zhang Mi, Mr. Ren Jie and Mr. Liu Zhi; the non-executive directors of the Company are Mr. Huang Dongyang and Mr. Siegfried Meissner; and the independent non-executive directors of the Company are Mr. Liu Xiaofeng, Mr. Qi Daqing, Mr. Tai Kwok Leung, Alexander, Mr. Shi Xingquan, Mr. Chen Guoming and Mr. Guo Yanjun.