The Company?s board of directors and all the directors guarantee the announced information does not contain any false record, misleading statement or significant omission and will bear several and joint responsibilities for the authenticity, accuracy and completeness of the announced information. On May 16, 2011, Shanghai Sanmao Real Estate Co., Ltd., Shanghai Runyu Properties Co., Ltd. and Shanghai Jiangtao Real Estate Co., Ltd. signed the "Capital Increase Agreement". Replenishment party: Shanghai Jiangtao Real Estate Co., Ltd. ("Jiangtao Real Estate") Original shareholders: Shanghai Sanmao Real Estate Co., Ltd.("Sanmao Real Estate") Target Company: Shanghai Runyu Properties Co., Ltd. ("Runyu Properties") Replenishment amount: Shanghai Jiangtao Real Estate Co., Ltd. adds capital to Shanghai Runyu Properties Co., Ltd., as a result the company's registered capital raised to 100 million yuan from 10 million yuan. After the capital increase, Jiangtao Real Estate will hold Runyu Properties 90% of the shares, while Sanmao Real Estate will hold Runyu Properties10% of the equity. I. Investment Overview Runyu Properties is a wholly owned subsidiary of Sanmao Real Estate, a controlled subsidiary of Shanghai Sanmao Enterprise (Group) Co., Ltd., with registered capital of 10 million yuan, main businesses including real estate development, property management, real estate information consulting, business information consulting, the original shareholder Sanmao Real Estate holding Runyu Properties 100% stake. On March 9, 2011, Jiangtao Real Estate, Sanmao Real Estate and Runyu Properties signed "Cooperation Agreement", the parties decided to cooperate on a construction project, i.e. Chongqing Office Building in Shanghai (tentative name) of area of 35,000 square meters as described in the Yang Fang Di Fu Zi (bulletin 2007) No. 1602 (see March 11, 2011"Shanghai Securities News","Hong Kong's Wen Wei Po"). According to the  "Cooperation Agreement" approved by Shanghai Sanmao 2010 Annual General Meetingthe, Jiangtao Real Estate Runyu Properties has the intention to add capital, the company's registered capital will thus rise to 100 million yuan from 10 million yuan. After the capital increase, Jiangtao Real Estate will hold Runyu Properties 90% of the shares, while Sanmao Real Estate will hold Runyu Properties10% of the equity. The said capital addition does not constitute related transaction. II. Profiles of the agreement parties (1) Shanghai Jiangtao Real Estate Co., Ltd. Jiangtao Real Estate is a professional real estate development company, with registered capital of 5 million yuan, business covering: real estate development and operation, properties management, business information consultation (except for operation) (subject to approval when so required). (2) Shanghai Sanmao Real Estate Co., Ltd. Sanmao Real Estate is a controlled subsidiary of Shanghai Sanmao Enterprise (Group) Co., Ltd., with registered capital of 20 million yuan, business covering: real estate development and operation, consultation service, redecoration development, gardening and planting, sales of building and redecoration materials, metal materials, wood, hardware products, electric equipment and accessories, commodities (subject to approval when so required). (3) Shanghai Runyu Properties Co., Ltd. Runyu Properties is a subsidiary wholly invested by Shanghai Sanmao Real Estate Co., Ltd., the controlled subsidiary of Shanghai Sanmao Enterprise (Group) Co., Ltd., with a registered capital of 10 million yuan, business coverage: real estate development and operation, properties management, real estate consultation, business information consultation (no operating is allowed for the said consultation); sales of building and decorating materials, electric machinery, commodities, chemical material (except for hazardous chemical products, supervised chemicals, fireworks, civil explosives, drug -easy chemicals), stationery, clothing, finery, metal material; CI design. III. Increase capital price and the replenishment approach The parties agree that, according to the "Capital Increase Target Corporate Value Assessment Report" issued by Shanghai Yinxin Huiye Assets Appraisal Co., Ltd. with March 31, 2011 as the base date, as of valuation date 31 March 2011 all the shareholders equity of Runyu Properties is at a value of RMB 9,992,156.95 yuan. Jiangtao Real Estate and Sanmao Real Estate confirm Sanmao Real Estate equity value at 10 million yuan. In view of it that after this capital increase, Jiangtao Real Estate will hold Runyu Properties 90% of the shares and Sanmao Real Estate will hold Runyu Properties 10% of the shares, the parties agreed, Jiangtao Real Estate should invest 90 million yuan to subscribe for the new issue shares of Runyu Properties. Replenishment ways: Jiangtao Real Estate will complete the said capital increase in cash. IV. Purpose of this capital increase and impact The capital increase agreement is signed on the basis of the March 9, 2011 "Cooperation Agreement". The purpose is to introduce partners to better help Runyu Properties to complete construction in progress project on schedule, so that the company expected the property to obtain a conditional return in a timely manner. This helps to reduce the pressure brought to the company by report loss in the project investment period. V. Reference documents 1. Resolutions of the 2010 Annual General Meeting 2. "Capital Increase Agreement" 3. "Cooperation Agreement" Notice is hereby given. Shanghai Sanmao Enterprise (Group) Co., Ltd. May 17, 2011