While a majority of the world’s current electricity supply is generated from fossil fuels such as coal, oil and natural gas, these traditional energy sources face a number of challenges including rising prices, security concerns over dependence on imports from a limited number of countries which have significant fossil fuel supplies, and growing environmental concerns over the climate change risks associated with power generation using fossil fuels.

As a result of these and other challenges facing traditional energy sources, governments, businesses and consumers are increasingly supporting the development of alternative energy sources and new technologies for electricity generation. Renewable energy sources such as solar, biomass, geothermal, hydroelectric and wind power generation have emerged as potential alternatives which address some of these concerns. As opposed to fossil fuels which draw on finite resources that may eventually become too expensive to retrieve, renewable energy sources are generally unlimited in availability.

The solar power market has grown significantly in the past decade. According to Solarbuzz, the global solar power market, as measured by annual solar power system installations, increased from 345 MW in 2001 to 1,460 MW in 2005, representing a CAGR of 43.4%, while solar power industry revenues grew from approximately US$2.0 billion in 2000 to approximately US$9.8 billion in 2005, representing a CAGR of 37.4%.

Despite the rapid growth, solar energy constitutes only a small fraction of the world’s energy output and therefore may have significant growth potential. Solarbuzz projects that annual solar power industry revenues will reach US$18.6 billion by 2010, representing a CAGR of 13.7%, from 2005.

The Company currently produces only monocrystalline solar cells because all its silicon wafer supplies are monocrystalline. Monocrystalline cells are generally more efficient than multicrystalline cells, but costs of monocrystalline wafers are generally higher than multicrystalline wafers.

The Company sells its products to solar module manufacturers who assemble and integrate its solar cells into modules and systems that convert sunlight into electricity. The Company currently sells its products to customers primarily in China, and it has sold its products to customers in Germany, Sweden, Spain, South Korea and the United States.

The Company has technical expertise for solar cell production, established supplier relationships and scalable low-cost manufacturing capabilities. The Company’s monocrystalline solar cells have generally achieved conversion efficiency rates in the range of 16.0% to 16.5%, and the highest conversion efficiency rate achieved by its monocrystalline solar cells to date was 17.47%, as tested by the Photovoltaic and Wind Power System Quality Test Center of the Chinese Academy of Science.

The Company was established in May 2005 and commenced commercial operations in April 2006 with the opening of its first solar cell manufacturing line located in Hebei province which has a rated manufacturing capacity of 25 MW per annum.

The Company plans to construct four additional manufacturing lines in its planned new facilities in Shanghai to increase its total rated manufacturing capacity to 175 MW per annum by the end of the third quarter of 2007.

Since commencement of commercial operations, the Company’s monthly production output has grown from approximately 0.6 MW in April 2006 to approximately 4.5 MW in September 2006, and the Company manufactured approximately 5.6 MW, 5.0 MW and 6.4 MW in October, November and December 2006, respectively.

Cost of revenues for the nine months ended September 30, 2006 totaled approximately RMB 258.4 million (US$32.7 million).

Gross profit for the nine months ended September 30, 2006 totaled approximately RMB 88.6 million (US$11.2 million).

Operating expenses for the nine months ended September 30, 2006 totaled approximately RMB 31.5 million (US$4.0 million).

Interest expense for the nine months ended September 30, 2006 was approximately RMB 2.8 million (US$0.4 million).