RemeGen Co., Ltd. — Capital/Financing Update 2005

Nov 1, 2005

The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) and Hong Kong Securities Clearing Company Limited (“HKSCC”) 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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities.

Unless otherwise defined herein, the capitalised terms used in this announcement shall have the same meanings as those defined in the prospectus dated 24 October, 2005 (the “Prospectus”) issued by Huali Holdings (Group) Limited (the “Company” and, together with its subsidiaries, the “Group”).

Prospective investors of the Offer Shares should note that the joint lead managers (for themselves and on behalf of the other Underwriters) are entitled to terminate their obligations under the Underwriting Agreement by notice in writing to the Company, upon the occurrence of any of the events set forth under the paragraph headed “Grounds for termination” in the section headed “Underwriting” in the Prospectus at any time prior to 8:00 a.m. (Hong Kong time) on 2 November, 2005 (the “Termination Time”). Such events include, without limitation, those of a financial, political, industrial, regulatory, economic, military, legal, fiscal and/or other nature. Accordingly, any certificate relating to the Offer Shares issued by the Company or deposited into the Central Clearing and Settlement System (“CCASS”) prior to the Termination Time will not constitute evidence of title to the Offer Shares. Investors who trade the Offer Shares on the basis of publicly available allocation results or other information prior to the Termination Time will do so entirely at their own risk.

Huali Holdings (Group) Limited

(incorporated in the Cayman Islands with limited liability)

Listing on the Main Board of The Stock Exchange of Hong Kong Limited By Way of Public Offer and Placing

Number of Offer Shares : 50,000,000 Shares Number of Public Offer Shares : 5,000,000 Shares Number of Placing Shares : 45,000,000 Shares Offer Price : HK$1.30 per Offer Share (excluding brokerage of 1%, Stock Exchange trading fee of 0.005%, SFC transaction levy of 0.005% and SFC investor compensation levy of 0.002%) Nominal value : HK$0.10 each Stock code : 3366

Sponsor and Arranger

Joint Lead Managers and Bookrunners

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Underwriters

First Shanghai Securities Limited Grand Vinco Capital Limited South China Securities Limited Shinko Securities (H.K.) Limited Tokai Tokyo Securities (Asia) Limited

SUMMARY

The final Offer Price has been determined at HK$1.30 per Offer Share (excluding 1% brokerage, 0.005% Stock Exchange trading fee, 0.005% SFC transaction levy and 0.002% SFC investor compensation levy).

Based on the final Offer Price of HK$1.30 per Offer Share and the total number of 50,000,000 Offer Shares, the net proceeds from the Share Offer are estimated to be approximately HK$47.7 million.

A total of 274 valid applications were received pursuant to the Public Offer on WHITE and YELLOW application forms for a total of 10,986,000 Public Offer Shares, representing approximately 2.2 times of the total number of 5,000,000 Public Offer Shares initially available for subscription under the Public Offer.

A total of 45,000,000 Offer Shares were initially available for subscription under the Placing and the Placing Shares under the Placing were slightly over-subscribed.

The Placing is conducted in compliance with the placing guidelines for equity securities as set out in Appendix 6 to the Listing Rules. None of the connected persons (as defined in the Listing Rules) of the Company nor their respective associates (as defined in the Listing Rules), nor any of the connected clients (as defined in Appendix 6 to the Listing Rules) of the joint lead managers or the other Underwriters has been allocated or placed with any Placing Shares under the Placing. None of the placees for the Placing Shares will become a substantial shareholder (as defined in the Listing Rules) of the Company following completion of the Share Offer.

Applicants who apply on WHITE application forms for 1,000,000 Public Offer Shares or more and have indicated on their application forms that they wish to collect the share certificates (for wholly or partially successful applicants who have applied for the Public Offer Shares on WHITE application forms only) and/or refund cheques (if any) in person from the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, Shops 1712 — 16, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, may do so in person from 9:00 a.m. to 1:00 p.m. on 1 November, 2005. Applicants being individuals who opt for personal collection must not authorise any other person to make collection on their behalf. Applicants being corporations who opt for personal collection must attend by their authorised representatives bearing letters of authorisation from their corporations stamped with the corporations’ chops. Identification documents and (where applicable) authorisation documents acceptable to Computershare Hong Kong Investor Services Limited must be produced at the time of collection of share certificates and/or refund cheques (if any).

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Uncollected share certificates and/or refund cheques (if any) will be despatched by ordinary post at the applicants’ own risk to their respective addresses (or in the case of joint applicants, the address of the first-named applicant) specified in their application forms as soon as practicable after 1:00 p.m. on 1 November, 2005.

Applicants who apply on YELLOW application forms for 1,000,000 Public Offer Shares or more may collect their refund cheques (if any) in person but may not elect to collect their share certificates, which will be deposited into CCASS for credit to their designated CCASS participants’ stock accounts or investor participant stock accounts, as appropriate. The procedures for collection of refund cheques (if any) for applicants who apply on YELLOW application forms are the same as those for applicants who apply on WHITE application forms.

For those wholly or partially successful applicants using YELLOW application forms who are allotted Public Offer Shares in the name of HKSCC Nominees Limited, the allotted Public Offer Shares will be deposited directly into CCASS for credit to their investor participant stock accounts or the stock accounts of their designated CCASS participants as instructed by such applicants at the close of business on Tuesday, 1 November, 2005, or under contingent situation, on any other date as shall be determined by HKSCC or HKSCC Nominees Limited.

The Directors confirm that none of the connected persons (as defined in the Listing Rules) of the Company nor their respective associates (as defined in the Listing Rules), Anglo Chinese, the joint lead managers, the Underwriters, their respective associates and connected clients (as defined in Appendix 6 to the Listing Rules) (where applicable) has taken up any Shares for its own benefit under the Share Offer.

The Directors confirm that immediately after completion of the Share Offer, the provisions under Rule 8.08 of the Listing Rules, including not less than 25% of the Shares to be held by the public, have been satisfied.

Dealings in the Shares (stock code: 3366) on the main board are expected to commence on Wednesday, 2 November, 2005. Shares will be traded in board lots of 2,000 Shares each.

DETERMINING THE OFFER PRICE

The indicative offer price range as stated in the Prospectus is HK$1.25 per Offer Share to HK$1.35 per Offer Share. The final Offer Price as determined between the Company and the joint lead managers (for themselves and on behalf of the other Underwriters) is HK$1.30 per Offer Share (excluding 1% brokerage, 0.005% Stock Exchange trading fee, 0.005% SFC transaction levy and 0.002% SFC investor compensation levy).

USE OF PROCEEDS

It is disclosed in the Prospectus that the net proceeds from the Share Offer, based on the minimum Offer Price of HK$1.25 per Offer Share, are estimated to amount to approximately HK$45.5 million, which is intended to be applied as to approximately HK$45 million to

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acquire a piece of land in Shenzhen for building a new factory, and approximately HK$0.5 million as general working capital of the Group. It is also disclosed in the Prospectus that in the event that the final Offer Price is above the minimum Offer Price of HK$1.25 per Offer Share, the Directors intend to apply the additional net proceeds from the Share Offer as general working capital of the Group.

Based on the final Offer Price of HK$1.30 per Offer Share and the total number of 50,000,000 Offer Shares, the net proceeds from the Share Offer are estimated to be approximately HK$47.7 million. The Directors intend to apply the net proceeds as to approximately HK$45 million to acquire a piece of land in Shenzhen for building a new factory, and the remaining approximately HK$2.7 million as general working capital of the Group.

APPLICATIONS RECEIVED AND ALLOCATION OF PUBLIC OFFER SHARES

A total of 5,000,000 Public Offer Shares were initially available to satisfy demand for applications made on WHITE and YELLOW application forms.

The Directors are pleased to announce that at the close of the application lists at 12:00 noon on Thursday, 27 October, 2005, a total of 274 valid applications were received pursuant to the Public Offer on WHITE and YELLOW application forms for a total of 10,986,000 Public Offer Shares, representing approximately 2.2 times of the total number of 5,000,000 Public Offer Shares initially available for subscription under the Public Offer.

Applications not based on the denominations set out in the application forms or otherwise not in accordance with the instructions set out therein are rejected. No multiple application or application for more than 100% of the Public Offer Shares initially being offered to the public for subscription under the Public Offer (that is, more than 5,000,000 Public Offer Shares) has been identified. The Public Offer Shares offered in the Public Offer were conditionally allocated on the basis set out in the paragraph headed “Basis of allocation of Public Offer Shares” below.

PLACING

A total of 45,000,000 Offer Shares were initially available for subscription under the Placing. The Directors are pleased to announce that the Placing Shares under the Placing were slightly over-subscribed.

The Placing is conducted in compliance with the placing guidelines for equity securities as set out in Appendix 6 to the Listing Rules. None of the connected persons (as defined in the Listing Rules) of the Company nor their respective associates (as defined in the Listing Rules), nor any of the connected clients (as defined in Appendix 6 to the Listing Rules) of the joint lead managers or the other Underwriters has been allocated or placed with any Placing Shares under the Placing. None of the placees for the Placing Shares will become a substantial shareholder (as defined in the Listing Rules) of the Company following completion of the Share Offer.

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BASIS OF ALLOCATION OF PUBLIC OFFER SHARES

Subject to the Share Offer becoming unconditional in all respects and not having been terminated in accordance with its terms, the 5,000,000 Public Offer Shares available to satisfy applications by the public on WHITE and YELLOW application forms will be allocated on the following basis:

			Approximate
			percentage allotted
Number	Number		of the total
of Shares	of valid		number of Shares
applied for	applications	Basis of allotment / ballot	applied for
2,000	175	2,000 Shares	100.00%
4,000	12	4,000 Shares	100.00%
6,000	6	6,000 Shares	100.00%
8,000	4	8,000 Shares	100.00%
10,000	11	10,000 Shares	100.00%
12,000	3	12,000 Shares	100.00%
14,000	3	14,000 Shares	100.00%
16,000	2	16,000 Shares	100.00%
20,000	4	20,000 Shares	100.00%
22,000	2	22,000 Shares	100.00%
28,000	1	28,000 Shares	100.00%
30,000	2	30,000 Shares	100.00%
32,000	2	32,000 Shares	100.00%
34,000	1	34,000 Shares	100.00%
36,000	1	36,000 Shares	100.00%
40,000	2	40,000 Shares	100.00%
42,000	1	42,000 Shares	100.00%
44,000	3	44,000 Shares	100.00%
50,000	18	50,000 Shares	100.00%
100,000	7	90,000 Shares	90.00%
150,000	4	112,000 Shares plus 1 out of 4 to receive additional	75.00%
		2,000 Shares
200,000	1	126,000 Shares	63.00%
250,000	2	132,000 Shares plus 1 out of 2 to receive additional	53.20%
		2,000 Shares
300,000	2	138,000 Shares	46.00%
350,000	1	140,000 Shares	40.00%
550,000	1	168,000 Shares	30.55%
700,000	1	190,000 Shares	27.14%
1,000,000	1	194,000 Shares	19.40%
3,600,000	1	374,000 Shares	10.39%
	274

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RESULTS OF VALID APPLICATIONS MADE USING WHITE APPLICATION FORMS

The following are the identification document numbers (where supplied) of wholly or partially successful applicants using WHITE application forms and the number of Public Offer Shares conditionally allotted to them.

Identification	Number of Public	Identification	Number of Public	Number of Public
document number	Offer Shares allotted	document number	Offer Shares allotted
A353839A	50,000	G0760470		2,000
A482860A	50,000	G6220125		2,000
A9515790	2,000	G6315401		2,000
B4503436	10,000	G6784053		44,000
C2389035	2,000	G6849325		10,000
C3686947	2,000	G7052617		2,000
C3778728	2,000	G9020070		2,000
C4667709	2,000	H3210849		2,000
C5243600	12,000	H4071001		2,000
C5702850	2,000	H4665890		2,000
C5787384	2,000	K0577936		2,000
D000404A	2,000	K0791172		44,000
D3341519	4,000	K0917796		2,000
D3426778	2,000	K1478176		2,000
D4836678	2,000	K2358379		2,000
D5837279	2,000	K4353277		8,000
E4651344	2,000	K5841348		8,000
E4973880	2,000	K8532915		2,000
E7920613	2,000	P0282573		2,000
E9504625	6,000	P1619148		2,000
E9799307	2,000	Z0072517		2,000
G0602832	2,000	Z1617274		2,000
G0669562	2,000	Z6210121		2,000

RESULTS OF VALID APPLICATIONS MADE BY CCASS INVESTOR PARTICIPANTS USING YELLOW APPLICATION FORMS

No application was received from any CCASS investor participants using YELLOW application forms.

DESPATCH/COLLECTION/POSTING OF SHARE CERTIFICATE(S)/REFUND CHEQUE(S)

Share certificates for wholly or partially successful applications on WHITE application forms and refund cheques in respect of (i) the surplus application monies for the Public Offer Shares unsuccessfully applied for, if the application is partially unsuccessful; (ii) all the application monies if the application is wholly unsuccessful; and (iii) the surplus application monies by reference to the difference between the final Offer Price and the maximum Offer Price paid on application; in the case of (i) and (ii), including brokerage of 1%, Stock Exchange trading fee of 0.005%, SFC transaction levy of 0.005% and SFC investor

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compensation levy of 0.002% and in the case of (iii), including brokerage of 1%, Stock Exchange trading fee of 0.005%, SFC transaction levy of 0.005% and SFC investor compensation levy of 0.002% on the difference between the final Offer Price and the maximum Offer Price paid on application in respect of the Public Offer Shares conditionally allotted and in each case, WITHOUT INTEREST , are expected to be despatched by ordinary post to those entitled at their own risk on Tuesday, 1 November, 2005.

Applicants who apply on WHITE application forms for 1,000,000 Public Offer Shares or more and have indicated on their application forms that they wish to collect the share certificates (for wholly or partially successful applicants who have applied for the Public Offer Shares on WHITE application forms only) and/or refund cheques (if any) in person from the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, Shops 1712 — 16, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, may do so in person from 9:00 a.m. to 1:00 p.m. on 1 November, 2005. Applicants being individuals who opt for personal collection must not authorise any other person to make collection on their behalf. Applicants being corporations who opt for personal collection must attend by their authorised representatives bearing letters of authorisation from their corporations stamped with the corporations’ chops. Identification documents and (where applicable) authorisation documents acceptable to Computershare Hong Kong Investor Services Limited must be produced at the time of collection of share certificates and/or refund cheques (if any). Uncollected share certificates and/or refund cheques (if any) will be despatched by ordinary post at the applicants’ own risk to their respective addresses (or in the case of joint applicants, the address of the first-named applicant) specified in their application forms as soon as practicable after 1:00 p.m. on 1 November, 2005.

Applicants who apply on YELLOW application forms for 1,000,000 Public Offer Shares or more may collect their refund cheques (if any) in person but may not elect to collect their share certificates, which will be deposited into CCASS for credit to their designated CCASS participants’ stock accounts or investor participant stock accounts, as appropriate. The procedures for collection of refund cheques (if any) for applicants who apply on YELLOW application forms are the same as those for applicants who apply on WHITE application forms.

For applicants who have applied for 1,000,000 Public Offer Shares or more and have not indicated on their application forms that they wish to collect the share certificates (for wholly or partially successful applicants who have applied for the Public Offer Shares on WHITE application forms only) and/or refund cheques (if any) in person, and applicants who have applied for less than 1,000,000 Public Offer Shares, their share certificates and/or refund cheques (if any) will be sent to their respective addresses (or in the case of joint applicants, the address of the first-named applicant) specified in their application forms by ordinary post and at their own risk on 1 November, 2005.

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DEPOSIT OF SHARE CERTIFICATES INTO CCASS

For those wholly or partially successful applicants using YELLOW application forms who are allotted Public Offer Shares in the name of HKSCC Nominees Limited, the allotted Public Offer Shares will be deposited directly into CCASS for credit to their investor participant stock accounts or the stock accounts of their designated CCASS participants as instructed by such applicants at the close of business on Tuesday, 1 November, 2005, or under contingent situation, on any other date as shall be determined by HKSCC or HKSCC Nominees Limited.

If you are applying through a designated CCASS participant (other than an investor participant), you can check the number of Public Offer Shares allotted to you with that CCASS participant.

If you are applying as an CCASS investor participant, you should check the results of the Public Offer published herein and report any discrepancies to HKSCC before 5:00 p.m. on Tuesday, 1 November, 2005 or such other date as shall be determined by HKSCC or HKSCC Nominees Limited. Immediately after the credit of the Public Offer Shares to your investor participant stock account, you can check your new account balance via the CCASS Phone System and CCASS Internet System (under the procedures contained in the HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC will also make available to you an activity statement showing the number of Public Offer Shares credited to your investor participant stock account.

GENERAL

The Directors confirm that none of the connected persons (as defined in the Listing Rules) of the Company nor their respective associates (as defined in the Listing Rules), Anglo Chinese, the joint lead managers, the Underwriters, their respective associates and connected clients (as defined in Appendix 6 to the Listing Rules) (where applicable) has taken up any Shares for its own benefit under the Share Offer.

The Directors confirm that immediately after completion of the Share Offer, the provisions under Rule 8.08 of the Listing Rules, including not less than 25% of the Shares to be held by the public, have been satisfied.

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COMMENCEMENT OF DEALINGS IN THE SHARES

Dealings in the Shares (stock code: 3366) on the main board are expected to commence on Wednesday, 2 November, 2005. Shares will be traded in board lots of 2,000 Shares each.

As at the date of this announcement, the directors of the Company are:

Executive Directors

Mr. Zheng Fan, Mr. Ni Zheng, Mr. Zhou Guangneng

Non-executive Director

Ms. Xie Mei

Independent non-executive Directors

Mr. Lee Kit Wah, Mr. Chen Xiangdong, Mr. Xiao Yongping

By order of the board of Huali Holdings (Group) Limited Zheng Fan Chairman

Hong Kong, 1 November, 2005

Please also refer to the published version of this announcement in The Standard.

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