Lizhong Wheel 1H Result Press Release

Lizhong Wheel interim net profit up 15% to RMB63.7m

Singapore, 12 August 2008 – Lizhong Wheel Group Ltd. (“The Group” or “立中车轮”), one of the largest PRC manufacturers of aluminum alloy wheels, reported a 16.0% increase in revenue to RMB518.0 million for the 6 months ended 30 June 2008 (1H2008) as China continues to be the world’s fastest growing car market. Net profit attributable to equity holders rose a proportionate 14.9% to RMB63.7 million. Earnings per share came in at RMB27.11 cents versus RMB23.59 cents recorded in the last corresponding period.

“We have always strived to ensure that we have sufficient capacity to meet our clients’ demands. While we have completed our Tianjin plant Phase 1 and are into Phase 2 of our expansion plan, we are still experiencing strong demand for our products as our marketing activities continue to gain momentum.

During the first half of 2008, our focus has been to get the Tianjin plant up and running smoothly, so as to lay the foundation for future growth. In view of the challenges, we have achieved a good set of results at the half year mark.”Mr. Zang Ligen (臧立根), Lizhong Wheel’s Executive Chairman

Gross profit rose 16.3% to RMB88.2 million, representing gross profit margin of 17.0%, similar to last year. Distribution costs went up by RMB3.3 million to RMB10.0 million due mainly to increase in delivery costs arising from increased sales volume and accrued bonus for the Group’s sales personnel. Administrative expenses increased by RMB9.4 million to RMB26.7 million due mainly to increase in research and development expenses of RMB2.0 million, pre-operating expenses of RMB3.1 million incurred by the newly set up subsidiaries, and other expenses in line with higher business volume.

Other operating income increased from RMB0.8 million previously to RMB20.6 million largely due to RMB4.9 million of fair value gain on the Group’s convertible bond issue and RMB15.1 million of foreign exchange gains from the appreciation of RMB against the US dollar as a result of the Group’s US dollar denominated borrowings.

The Group incurred income tax expenses of RMB2.1 million representing an effective tax rate of 3.2% for 1H2008 versus tax benefits of RMB10.0 million in 1H2007. This is largely due to timing differences in the receipts of tax benefits from the local tax authorities. Tianjin plant to contribute to stronger 2nd half

Phase 1 of the Group’s Tianjin plant had started commercial production in April. This has successfully raised the Group’s annual production capacity to 5.6 million wheels with the additional capacity of 2.0 million wheels arising from Phase 1. With production scaling up gradually since April, the Group expects Phase 1 to have a stronger contribution to the Group’s performance in the 2nd half of 2008. However, the group may be indirectly affected by certain regulations or restrictions the PRC government may introduce during Beijing Olympics games. However, it is premature and impossible to quantify the impact at the moment. Barring unforeseen circumstances, the Group expects to achieve favourable performance in 2008.