Honghua Group Limited — Share Issue/Capital Change 2012

Jul 13, 2012

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: 196)

CLARIFICATION ANNOUNCEMENT

Reference is made to the announcement of Honghua Group Limited（the “Company” ） dated 5 April 2012 in relation to the Grant of Share Options (the “ Announcement ”). Capitalized terms used herein have the same meanings as defined in the Announcement unless otherwise specified.

As disclosed in the Announcement on 5 April 2012, the Company granted Share Options to subscribe for a total of 15,400,000 Shares to the grantees under the share option scheme adopted on 21 January 2008.

As further disclosed in the Announcement, under the grant of the Share Options, none of the grantees is a director, chief executive or substantial shareholder of the Company, or their respective associates.

It was noted that there was an inadvertent negligence of the grant to several members of concert group (as defined in the Prospectus of the Company) of the Company who are deemed as substantial Shareholders，which has not been disclosed in the Announcement. The Company would like to clarify that 590,000 Shares out of the total 15,400,000 Shares to be subscribed under the Share Options were granted to the following Grantees who are substantial Shareholders with details as follows (the “Grant” ):

Name	Grantee’s relationship withthe Company	Number of Shares to besubscribedundertheShare Options granted
Mr. Wang Jiangyang	substantial shareholder	250,000
Ms. Lv Lan	substantial shareholder	250,000
Mr. Tian Yu	substantial shareholder	90,000

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).

On 13 July 2012, the Grant has been duly approved, confirmed and ratified by the board of directors including all independent non-executive directors of the Company.

By order of the Board Honghua Group Limited Zhang Mi Chairman

PRC, 13 July 2012

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. Chen Guoming, Mr. Shi Xingquan and Mr. Guo Yanjun.