The goal of the development planning of the Company’s new business is to strive for the establishment of a core business which is combined with the principal business of CASC. The Company will, on the foundation of the hi-tech manufacturing business, through the development of the comprehensive development project of the Complex Zone of the Launching Site in Hainan Province and the construction of Shenzhen Aerospace International Centre, gradually establish the business base for aerospace and aerospace service business.

Though the recovery of external economy still exists uncertainty, it is expected that the performance of the hi-tech manufacturing business will gradually be stabilized and restored to growth. The hi-tech manufacturing business, to be operated by the newly established China Aerospace Industrial Limited, will continue to improve the integration after the restructure, and firmly take the measures to control investments, reduce receivables, cut down inventories, stringently control costs, strengthen quality control, maintain close connection with existing clients and actively explore new markets, with a view to bringing the operating performance back to the level prevailing before the outbreak of the financial tsunami as soon as possible and continuing to provide the Company with performance contribution and stable cash flow.

Shenzhen Aerospace will speed up the pace of the construction to complete each tendering according to the relevant laws and regulatory procedures. Shenzhen Aerospace International Centre will become the operational headquarters of CASC in the south, the research and development center for minisatellites and the investment property of the Company upon completion, and will bring another major recurrent revenue for the Company. The minisatellite industry will be a starting point for the development of aerospace business of the Company and has a broad development prospect. The Company will soon carry out the preparatory work of this business and will continue to maintain a good communication with CASC as well with a view to promptly establishing a business platform of the minisatellite industry.

China’s State Council formally approved the planning concerning the construction of an “international tourism island” in Hainan Province at the end of 2009. It is planned that Hainan Province will initially build a world-class island leisure resort by 2020 and this will be incorporated into the State’s major strategic plan. The information, upon announcement, immediately caused a high attention from domestic and overseas, a new historic trading high constantly made in the real estate market. Yet, the related cost is also expected to increase relatively. The long-term development in Hainan Province is encouraging. Hainan Aerospace will actively communicate with Hainan and the Wenchang Governments, step up to carry out each relevant work, including launching the works concerning the expropriation, demolition, resettlement and infrastructure projects of the entire Complex Zone and timely introduce the strategic partners to jointly develop the aerospace theme park and other commercial supporting projects.