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

Oct 24, 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.

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

Unless otherwise defined herein, terms used in this announcement shall have the same respective meanings as defined in the prospectus of Huali Holdings (Group) Limited (the “Company”) dated 24 October, 2005 (the “Prospectus”).

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 the date on which dealings in Shares first commence on the Stock Exchange (which is currently expected to be Wednesday, 2 November 2005). Such events include, without limitation, those of a financial, political, industrial, regulatory, economic, military, legal, fiscal and/or other nature.

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
		(subject to reallocation)
Number of Placing Shares	:	45,000,000 Shares
		(subject to reallocation)
Offer Price	:	not more than HK$1.35 per Offer Share
		and expected to be not less than HK$1.25
		per Offer Share, payable in full on
		application,
		subject to refund
Nominal value	:	HK$0.10 per Share
Stock code	:	3366

Sponsor and Arranger

Joint Lead Managers and Bookrunners

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Application has been made by the Company to the Listing Committee for the listing of, and permission to deal in, the Shares in issue and to be issued as described in the Prospectus and the application forms. Dealings in Shares are expected to commence on 2 November, 2005. Subject to the granting of the listing of, and permission to deal in, the Shares in issue and to be issued as described in the Prospectus, as well as compliance with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in Central Clearing and Settlement System (“CCASS”) with effect from the date of commencement of dealings in the Shares on the Stock Exchange, or such other date as may be determined by HKSCC. All activities under CCASS are subject to the General Rules of CCASS and the CCASS Operational Procedures in effect from time to time.

The Share Offer comprises the Public Offer and the Placing. The total number of Offer Shares under the Share Offer is 50,000,000 Shares. 5,000,000 new Shares, representing 10% of the total number of Shares available under the Share Offer, will initially be offered for subscription under the Public Offer; and 45,000,000 new Shares, representing 90% of the total number of Shares available under the Share Offer, will initially be offered for subscription under the Placing. The total number of Placing Shares to be allotted and issued pursuant to the Placing may change as a result of the clawback arrangement referred to in the paragraph headed “Reallocation of the Offer Shares between the Public Offer and the Placing” under the section headed “Structure and conditions of the Share Offer” in the Prospectus. If either the Public Offer or the Placing is not fully subscribed, the joint lead managers have the authority to reallocate all or any of the unsubscribed Public Offer Shares originally included in the Public Offer to the Placing (or vice versa, as appropriate) in such proportion and manner as they consider appropriate.

Investors may apply for the Shares under the Public Offer or indicate an interest for the Shares under the Placing, but may not do both. The Public Offer is open to members of the public in Hong Kong as well as to institutional and professional investors. The Placing will involve selective marketing of Shares to professional, institutional, corporate and other private investors. Professional, institutional, corporate and other private investors generally include brokers, dealers, high net worth individuals, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities.

Allocation of Public Offer Shares will be based solely on the level of valid applications received under the Public Offer. The basis of allocation may vary, depending on the number of Public Offer Shares validly applied for by each applicant, but will otherwise be made on a strictly pro-rata basis. In addition, the allocation of Public Offer Shares in such circumstances may involve balloting, which would mean that some applicants may be allotted more Public Offer Shares than others who have applied for the same number of Public Offer Shares and that applicants who are not successful in the ballot may not receive any Public Offer Shares. Multiple applications or suspected multiple applications will be rejected. All of your applications will be rejected as multiple applications if you, or you and your joint applicants or any of your joint applicants together make more than one application (whether individually or jointly with others) on a WHITE or YELLOW Application Form; or apply (whether individually or jointly with others) on one WHITE or YELLOW Application Form for more than 100% of the total number of the Public Offer Shares initially

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available to the public under the Public Offer; or apply for, take up, indicate an interest in any Placing Shares or otherwise participate in the Placing. All of your applications will also be rejected as multiple applications if more than one application is made for your benefit. Applicants for Shares under the Public Offer are required to undertake and confirm that they or the relevant beneficial owner(s) have not applied for, taken up or indicated an interest in any Placing Shares or otherwise participated in the Placing.

The Share Offer is conditional upon fulfillment of the conditions as set out in the paragraph headed “Conditions of the Share Offer” under the section headed “Structure and conditions of the Share Offer” in the Prospectus. If the conditions are not fulfilled (or, where applicable, validly waived by the joint lead managers (for themselves and on behalf of the other Underwriters)) on or before their respective dates and times as specified in the Underwriting Agreement, and in any event not later than the date which is 30 days after the date of the Prospectus, the Share Offer will lapse and notice of the lapse of the Share Offer will be published by the Company in The Standard (in English) and the Hong Kong Economic Times (in Chinese) on the next business day following such lapse. In such event, application monies together with the brokerage, the Stock Exchange trading fee, the SFC transaction levy and the SFC investor compensation levy will be refunded, without interest. The terms on which the money will be returned are set out under the section headed “Refund of your money” on the application forms.

The Offer Price will not be more than HK$1.35 per Offer Share and is currently expected to be not less than HK$1.25 per Offer Share. The Offer Price is expected to be fixed by agreement between Huali and the joint lead managers (for themselves and on behalf of the other Underwriters) on or before the Price Determination Date, which is expected to be on or before Thursday, 27 October, 2005 (Hong Kong time) and, in any event, not later than Friday, 28 October, 2005 (Hong Kong time). The joint lead managers (for themselves and on behalf of the other Underwriters) may, where considered appropriate, based on the level of interest expressed by prospective professional, institutional, corporate and other private investors during the “book-building” process, and with the consent of the Company, reduce the indicative offer price range below that stated in the Prospectus at any time prior to the morning of the last day for lodging applications under the Public Offer. In such case, Huali will, as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodging applications under the Public Offer, cause to be published in The Standard (in English) and Hong Kong Economic Times (in Chinese) an announcement of such change. If applications for the Public Offer Shares have been submitted, then even if the indicative offer price range is so reduced, such applications cannot be subsequently withdrawn. If, for whatever reason, the Company and joint the lead managers (for themselves and on behalf of the other Underwriters) are unable to reach an agreement on the Offer Price on or before the Price Determination Date but in any event not later than Friday, 28 October, 2005, the Share Offer will not become unconditional and will lapse immediately. In such event, the Company will issue an announcement to be published in The Standard (in English) and Hong Kong Economic Times (in Chinese).

Applications for the Public Offer Shares will only be considered on the basis of the terms and conditions of the Prospectus and the application forms. Applicants who would like to be allotted Public Offer Shares in their own names should complete and sign the WHITE

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application forms. Applicants who would like to have the allotted Public Offer Shares issued in the name of HKSCC Nominees Limited and deposited directly into CCASS for the credit of their investor participant stock accounts or the stock accounts of their designated CCASS participants maintained in CCASS should complete and sign the YELLOW application forms, copies of which, together with copies of the Prospectus, may be obtained during normal business hours from 9:00 a.m. on Monday, 24 October, 2005 until 12:00 noon on Thursday, 27 October, 2005 at the Depository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong or the Customer Service Centre of HKSCC at Upper Ground Floor, V-Heun Building, 128-140 Queen’s Road Central, Hong Kong. Copies of the Prospectus, together with the WHITE application forms, may be obtained during normal business hours for the same period from:

1. any participants of the Stock Exchange;

2. Anglo Chinese Corporate Finance, Limited at 40th Floor, Two Exchange Square, 8 Connaught Place, Central, Hong Kong;

3. China Merchants Securities (HK) Co., Limited at 48th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong;

4. Watterson Asia Limited at 5th Floor, 8 Queen’s Road Central, Hong Kong;

1. First Shanghai Securities Limited at 1905, Wing On House, 71 Des Voeux Road Central, Hong Kong;

2. Grand Vinco Capital Limited at Room 4909 - 10, 49th Floor, The Center, 99 Queen’s Road Central, Hong Kong;

3. South China Securities Limited at 28th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong;

4. Tokai Tokyo Securities (Asia) Limited at Suite 1704, 17th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong; and

5. any one of the following branches of Standard Chartered Bank (Hong Kong) Limited :

Branches

Address

Hong Kong Island

1. Central Branch Shop No 16, G/F & LG/F, New World Tower, 16-18 Queen’s Road, Central

2. Des Voeux Road Branch Standard Chartered Bank Building, 4-4A Des Voeux Road, Central

3. 88 Des Voeux Road Branch 88 Des Voeux Road Central 4. Leighton Centre Branch Shop 12-16, UG/F Leighton Centre, 77 Leighton Road, Causeway Bay

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5.	Hennessy Road Branch	399 Hennessy Road, Wanchai
6.	Quarry Bay Branch	G/F, Westlands Garden, 1027
		King’s Road, Quarry Bay
Kowloon
7.	Kwun Tong Branch	88-90 Fu Yan Street, Kwun Tong
8.	Mongkok Branch	Shop B, G/F, 1/F & 2/F, 617-623
		Nathan Road, Mongkok
9.	Tsimshatsui Branch	10 Granville Road, Tsimshatsui
10.	Cheung Sha Wan Branch	828 Cheung Sha Wan Road,
		Cheung Sha Wan
**New **	Territories
11.	Tsuen Wan Branch	Shop C, G/F & 1/F, Jade Plaza,
		No. 298 Sha Tsui Road, Tsuen Wan

Completed WHITE and YELLOW application forms (to which one cheque or one banker’s cashier order should be securely stapled) should be deposited in the special collection boxes provided at any one of the branches of Standard Chartered Bank (Hong Kong) Limited referred to above on the following dates during the following times:

Monday, 24 October, 2005 — 9:00 a.m. to 4:00 p.m. Tuesday, 25 October, 2005 — 9:00 a.m. to 4:00 p.m. Wednesday, 26 October, 2005 — 9:00 a.m. to 4:00 p.m. Thursday, 27 October, 2005 — 9:00 a.m. to 12:00 noon

Subject to the terms and conditions set out in the Prospectus and the application forms, applications under the WHITE and YELLOW application forms must be received by no later than 12:00 noon on Thursday, 27 October, 2005 (or such later date as may apply in the case of a tropical cyclone warning signal No. 8 or above or a “black” rainstorm warning signal being in force as described in the paragraph headed “Effect of bad weather on the opening of the application lists of the Public Offer” in the section headed “How to apply for the Public Offer Shares” in the Prospectus). Announcements of the final Offer Price, the level of indication of interest in the Placing, the results of applications and the basis of allocation of the Public Offer Shares and the procedure for collecting share certificates and refund cheques are scheduled to be published in The Standard (in English) and Hong Kong Economic Times (in Chinese) on Tuesday, 1 November, 2005.

If you are applying for 1,000,000 Public Offer Shares or more and have indicated on your application form that you wish to collect your share certificate(s) (if applicable) and refund cheque (if any) in person, you may collect them in person from the Company’s share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong between 9:00 a.m. to 1:00 p.m. on the date notified by the Company in the newspapers as the date of despatch of share certificates and refund cheques. Share certificates for the Offer Shares are expected to be despatched on Tuesday, 1 November, 2005.

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Applicants being individuals who opt for personal collection must not authorise any other person to make collection on their behalf. You must show your identification documents (which must be acceptable to Computershare Hong Kong Investor Services Limited) to collect your share certificate(s) (if applicable) and refund cheque (if any) at the time of collection. Applicants being corporations which opt for personal collection must attend by their authorised representatives bearing letters of authorisation from their corporations stamped with the corporations’ chop. Their authorised representatives must produce, at the time of collection, evidence of identity acceptable to Computershare Hong Kong Investor Services Limited. Uncollected share certificate(s) (if applicable) and refund cheque (if any) will be sent to the address on your application form by ordinary post at your own risk on Tuesday, 1 November, 2005. If you have applied for less than 1,000,000 Shares or if you have applied for 1,000,000 Shares or more but have not indicated on your application form that you wish to collect your share certificate(s) (if applicable) and refund cheque (if any) personally, then your share certificate(s) (if applicable) and refund cheque (if any) will be sent to the address on your application form on Tuesday, 1 November, 2005 by ordinary post and at your own risk.

You should be aware that no temporary documents of title will be issued by the Company in connection with the Share Offer.

If you have applied for the Public Offer Shares on a YELLOW application form and your application is wholly or partially successful, your share certificate(s) will be issued in the name of HKSCC Nominees Limited and deposited into CCASS for credit to your investor participant stock account or your designated CCASS participant’s stock account as instructed by you at the close of business on Tuesday, 1 November, 2005 or under contingent situation on any other date HKSCC or HKSCC Nominees Limited chooses. You should check the number of Public Offer Shares allotted to you with your designated CCASS participant, if you are applying through a designated CCASS participant, or in the announcement to be published by the Company on Tuesday, 1 November, 2005 and check your new account balance via the CCASS Phone System and CCASS Internet System (under the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time) immediately after the credit of Public Offer Shares to your investor participant stock account if you are applying as CCASS investor participant. For CCASS investor participants, HKSCC will also make available to you an activity statement showing the number of Public Offer Shares credited to your investor participant stock account.

As at the date of this announcement, the Board comprises three executive Directors, namely Mr. Zheng Fan, Mr. Ni Zheng and Mr. Zhou Guangneng, one non-executive Director, namely Ms. Xie Mei and three independent non-executive Directors, namely Mr. Lee Kit Wah, Mr. Chen Xiang Dong and Mr. Xiao Yongping.

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

Hong Kong, 24 October, 2005

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

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