RemeGen Co., Ltd. — Capital/Financing Update 2007

May 10, 2007

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims 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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HUALI HOLDINGS (GROUP) LIMITED 華力控股（集團）有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 3366)

DISCLOSEABLE TRANSACTION DISPOSAL OF 100% EQUITY INTEREST IN MISSION HOLDINGS SERVICES LIMITED

The Board is pleased to announce that the Transferor, a wholly-owned subsidiary of the Company, and the Transferee have entered into the Transfer Agreement on 8 May 2007 pursuant to which the Transferor agrees to transfer 100% equity interest in Mission Holdings to the Transferee. Upon Completion, the Company will cease to have any equity interest in Mission Holdings and Mission Holdings will cease to be a subsidiary of the Company.

The consideration of the Equity Interest Transfer is HK$9,920,000 (equivalent to RMB9,780,000).

The Equity Interest Transfer constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. A circular containing further details of the Equity Interest Transfer and other information required by the Listing Rules will be dispatched to the shareholders of the Company as soon as practicable in accordance with the relevant requirements of the Listing Rules.

DISCLOSEABLE TRANSACTION

The Transfer Agreement

Date: 8 May 2007

Transferor: Max Surplus, a wholly owned subsidiary of the Company

Transferee: Mr. Liu

To the best of the Directors’ knowledge, information and belief having made all reasonable enquires, the Transferee is a third party independent of and not connected with the Group and the connected persons (as defined under the Listing Rules) of the Company.

Pursuant to the Transfer Agreement, the Transferor agrees to transfer 100% equity interest in Mission Holdings to the Transferee, subject to the terms and conditions thereof.

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Consideration

Pursuant to the Transfer Agreement, the Transferor agrees to transfer 100% equity interest in Mission Holdings to the Transferee, at the Consideration of HK$9,920,000 (equivalent to RMB9,780,000), which was arrived at after arm’s length negotiations between the Transferor and the Transferee and was determined by reference to the unaudited net asset value of Mudanjiang Huali, a subsidiary which is held directly as to 85% by Mission Holdings, as at 31 March 2007 as shown in its management accounts, and the value as assessed by an independent valuer engaged by the Group as at 31 March 2007. According to the valuation report, the book value (after adjustment) of the net assets of Mudanjiang Huali as at 31 March 2007 amounted to approximately HK$10,800,000, and the net assets of Mudanjiang Huali as at 31 March 2007 as valued by the valuer amounted to approximately HK$10,820,000.

Payment Terms

The Consideration shall be satisfied by the Transferee in the following manner:

• (a) within 3 days from the date of the Transfer Agreement, the Transferee shall pay 50% of the Consideration to the Transferor;

• (b) the remaining 50% of the Consideration shall be paid by the Transferee to the Transferor on or before 20 May 2007.

If the total sum of the balances of the account receivables and inventories netting of the account payables of Mudanjiang Huali as at 31 March 2007 as confirmed by both the Transferor and the Transferee is less than the total sum of the balances of the account receivables and inventories netting of the account payables of Mudanjiang Huali as reported in the management accounts of Mudanjiang Huali as at 31 March 2007 for an amount over RMB100,000 (except the discrepancy is caused by applying different accounting standards for the preparation of the financial statements), the Transferor shall compensate the Transferee for the amount equivalent to the portion in excess of RMB100,000.

Within 90 days from the date of the Transfer Agreement, Mudanjiang Huali could be operated under its original name “牡丹江華力包裝有限公司”. Upon expiration of such period, the Transferee shall procure Mudanjiang Huali to change its name and refrain from using any trade name containing the word “華力”.

Completion

Completion will take place when the Consideration has been fully paid by the Transferee to the Transferor and the formalities in regard to the Equity Interest Transfer have been completed, including the approval of transfer of share from the Transferor to the Transferee by the board of directors of Mission Holdings. Upon Completion, the Company will cease to have any direct or indirect equity interest in Mission Holdings and Mudanjiang Huali (as the case may be), and both companies will cease to be subsidiaries of the Company.

Information of Mission Holdings and Mudanjiang Huali

Mission Holdings is an investment holding company incorporated in the British Virgin Islands with paidup share capital of US$1.00. Its only asset is the holding of 85% equity interest of Mudanjiang Huali, a Sino-foreign equity joint venture enterprise incorporated in the PRC and is principally engaged in manufacturing and operating of cartons and other packaging materials. Save as the equity interest in Mudanjiang Huali, Mission Holdings does not have any other investment or operations.

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Financial Information

The net profits (both before and after taxation and extraordinary items) attributable to the shareholders of Mudanjiang Huali for the two financial years ending 31 December 2006, were approximately HK$2,055,000 and HK$1,830,000 respectively. As a result of the Equity Interest Transfer pursuant to the Transfer Agreement, the Group expects to record an unaudited gain of approximately HK$731,000 by reference to the Group’s share of Mudanjiang Huali’s net book value of approximately HK$9,183,000 as at 31 March 2007. The net proceeds of HK$9,872,000 of the Equity Interest Transfer are intended to be used for general working capital purposes.

Reasons for the Equity Interest Transfer

Taking into account Mudanjiang Huali situated at a relatively remote location and the Group’s plan to centralize its operations at economically-developed cities in the PRC, the Directors consider it is in the Group’s long term interest in disposing Mission Holdings at a premium.

The Directors consider that the terms of the Equity Interest Transfer and the Transfer Agreement are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.

Information of the Group

The Group is principally engaged in the manufacture of quality paper-based packaging containers and materials, including corrugated paperboard and printed cartons for customers in the PRC.

Information of the Transferee

The Transferee is a businessman principally engaged in packaging industry. He is the legal representative of two PRC companies which are principally engaged in the manufacture of packaging containers and materials and the manufacture of plastic products respectively.

Discloseable Transaction

The Equity Interest Transfer constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. A circular containing further details of the Equity Interest Transfer and other information required by the Listing Rules will be dispatched to the shareholders of the Company as soon as practicable in accordance with the relevant requirements of the Listing Rules.

DEFINITIONS

“Board”

the board of Directors

• “Company”

• Huali Holdings (Group) Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange

• “Completion” the completion of the Transfer Agreement

• “Consideration” the consideration for the Equity Interest Transfer pursuant to the Transfer Agreement, being HK$9,920,000 (equivalent to RMB9,780,000)

• “Directors”

the directors of the Company

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• “Equity Interest Transfer” the transfer of 100% equity interest in Mission Holdings from the Transferor to the Transferee pursuant to the terms of the Transfer Agreement

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “HK$” Hong Kong dollars, the lawful currency of the Hong Kong

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Max Surplus” or Max Surplus Limited (盈豐有限公司 ), a company incorporated in “Transferor” British Virgin Islands with limited liability

• “Mission Holdings” Mission Holdings Services Limited, a company incorporated in British Virgin Islands with limited liability

• “Mudanjiang Huali” 牡丹江華力包裝有限公司 (Mudanjiang Huali Packaging Company Limited), a Sino-foreign equity joint venture enterprise incorporated in the PRC

• “PRC” the People’s Republic of China

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Transfer Agreement” the agreement for the transfer of the 100% equity interest in Mission Holdings owned by the Transferor to the Transferee dated 8 May 2007 entered into between the Transferor and the Transferee

• “Transferee” Mr. Liu, a third party independent of and not connected with the Group and the connected persons (as defined under the Listing Rules) of the Company

“%” per cent

As at the date of this announcement, the Board of the Company comprises eight directors, namely: Mr. Zheng Fan, Mr. Ni Zheng, Mr. Liu Danlin and Mr. Zhou Guangneng as executive directors; Ms. Xie Mei as a non-executive director; Ms. Wong Wai Ling, Mr. Chen Xiangdong and Mr. Xiao Yongping as independent non-executive directors.

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

Hong Kong, 9 May 2007

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

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