1. Market Prospects:

This equipment is a high-efficiency and energy-conservation product invented and developed by our company, which has the single energy input (electricity) and dual function output (producing hot water and refrigeration), saving 50~100% energy for the users. It is mainly used in guesthouses, hotels, newly-built buildings and breweries where both central air-conditioning and hot water are needed. Investigations show, in the 14 provinces and autonomous regions south of north latitude 320, there are over 50,000 units such as guesthouses and hotels in need of this equipment. The average sales price of each set of the equipment is 500,000 yuan, so the market absorption capacity is 25 billion yuan of sales, and at the same time, the guesthouses and hotels can save over 10 billion yuan of energy expenditure. In view of this, there is great market demand.

2. Construction Scale and Contents of the Project:

2.1 Construction scale: 1,000 sets a year.

2.2 Main contents of the project: a new factory building, 2 production lines.

3. Construction Conditions:

The site is located in North District of Nanning City, which has convenient communications and transport, developed telecommunications, and enough and normal power and water supply.

4. Total Investment: USD 20,000,000.00, of which USD 2,400,000.00 is foreign capital to be used.

5. Mode of Cooperation: Equity joint venture

6. Expected Returns:

--- Construction time: 1 year

--- Internal returns on investment: 21%

--- Period for recovery of investment: 3.5 years

7. Construction Place: 22 North Beihu Road, Nanning City

8. Progress of the Project Preparations: The feasibility study completed and small-scale trial-production being proceeded on.

9. The Local Government's Preferential Policy Applied to the Project:

9.1 Starting from the year of operation, the enterprise will be exempted from the income tax for 2 years.

9.2 It is a new and high-tech enterprise that is exempted from the VAT (retained by the local financial department) and enjoys relevant preferential policies granted to new and high-tech enterprises.

10. Project Sponsor: Guangxi Dayeyu Scientific and Technical Co. Ltd.

--- Registered capital (USD): 1,200,000.00

--- Original value of fixed assets (USD): 512,100.00

--- Net value of the fixed assets (USD): 493,000.00

--- Factory area coverage (m2): 5,000

--- Factory building floorage (m2): 1,000

--- Number of staff (person): 500

--- Number of technical staff (person): 200

--- Present staple products: exhaust-heat-type, wind-heat-type and water-heat-type central hot water equipment.