China Automation Group Limited

Announces Proposed Listing on the Main Board of the SEHK

[27 June 2007, Hong Kong] — China Automation Group Limited (“CH Automation” and its subsidiaries, collectively the “Group”, stock code: 569) today announced its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”).

CH Automation will offer a total of 200,000,000 new shares for subscription by way of placing (“Placing”) and public offer (“Public Offer”), comprising 180,000,000 Placing Shares and 20,000,000 Public Offer Shares (subject to reallocation). The Placing to institutional, professional and/or other investors will make up initially 90% of the offer, while the remaining 10% will be open for public subscription. The Offer Price will be not more than HK$1.53, and is expected to be not less than HK $1.19. Based on an Offer Price of HK$1.36 (being the mid-point of the Offer Price range per Offer Share), the net proceeds from the Share Offer will amount to approximately HK$249.5 million.

First Shanghai Capital Limited is the Sponsor, and First Shanghai Securities Limited and Daiwa Securities SMBC Hong Kong Limited are the Joint Bookrunners and Joint Lead Managers. The Public Offer will open on 28 June 2007 (Thursday), and will close on 4 July 2007 (Wednesday). The allotment results of the Share Offer will be announced on 11 July 2007 (Wednesday). Dealing in Shares of CH Automation is expected to commence on the Main Board of the SEHK on 12 July 2007 (Thursday), under stock code 569.

Mr. Xuan Rui Guo, Chairman of the Group, said, “We are extremely excited to witness this milestone in the Group’s history. Since its founding, CH Automation has grown rapidly to become the leading safety and critical control systems provider in the PRC. We believe that our listing on the Main Board of The Stock Exchange of Hong Kong Limited will both support and accelerate our business expansion plans. “

China Automation Group Limited is the largest provider of safety and critical control systems in the PRC. It specializes in safety and critical control systems for the petrochemical, oil and gas, and railways industries, together with the provision of related professional maintenance and engineering services. Since its establishment in 1999, the Group has sold more than 600 safety and critical control systems.  According to Frost & Sullivan, in 2006 the Group was the largest safety and critical control system provider in the PRC, with a market share of approximately 68% in terms of revenue.

CH Automation designs and produces safety and critical control systems that include emergency shutdown devices (“ESD”), integrated turbine and compressor controls (“ITCC”), fire and gas systems (“FGS”), and railway interlocking systems (“RIS”). These are all widely used in the petrochemical, oil and gas, and railway industries. They help to minimize industrial risks by effectively protecting, monitoring and controlling the operations of all key production facilities.

The Group was granted sole PRC rights by an advanced international hardware system provider, enabling it to develop advanced safety and critical control systems for end-users in the PRC. The Group has also been accredited with international ISO9001:2000 certification, and won the China Petrochemical Corporation’s ‘Technology Advancement Award’ in 2003. These achievements reflect the Group’s all-round commitment to operational, management and product excellence.

CH Automation has a strong engineering team which enables it to stay abreast of the stringent regulations and requirements governing safety and critical control systems. It has placed great emphasis on establishing its own core competencies in software customization and engineering, in order to be able to meet the changing needs of its customers. The Group has developed eight different software systems tailored specifically for businesses in the petrochemical, oil and gas and chemical industries. The Group has also from time to time been engaged to provide specialized engineering services in overseas locations such as Dubai and Singapore.

CH Automation has five liaison points in the PRC, giving it wide coverage of the country’s major cities. The Group is also dedicated to exploring new markets, it has set up a subsidiary in Singapore that cover a wide range of customers, and also plans to set up branch offices in the Middle East and North America. Due to its long industry experience and trustworthy product quality, the Group has built up a strong customer base. Its major customers are all well-established and renowned enterprises in the PRC, and provide the Group with a stable source of income. The Group also provides customers with comprehensive maintenance services, which include online help, a 24-hour hotline, and emergency on-site assistance. These back-up services strengthen customer confidence in the Group and boost its competitiveness.

Speaking of how the Group plans to cope with expected rapid growth in the market, Mr. Xuan concluded, “Given the ongoing growth in demand for safety and critical control systems from the petrochemical, oil and gas, and chemical industries in the PRC, CH Automation is very optimistic about the future and confident in its ability to boost profits. For the future, CH Automation is committed to expanding its overseas business and increasing the Group’s share of the market. We will expand our production facilities and closely match our output with changing demand for safety and critical control system products. We will also increase our technological and R&D capabilities, with the aim of meeting the needs of customers in different industries and raising our all-round product quality. The Group is fully devoted to grasping new market opportunities to create a brighter and better future. We also plan to further diversify the Group’s business into the international market, with the aim of delivering the best possible returns to our investors.”

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Issued by Porda International PR Company Limited for and on behalf of China Automation Group Limited. For further information, please contact:

China Automation Group Limited

C/O Porda international (Finance) PR Company Limited

Tel: 2544-6388                      Fax: 2544-6126

Ms. Kelly Fung / Ms. Sheila Chow / Ms. Phoebe Sou

Porda International (Finance) PR Company Limited

Tel: 2180-9211 / 3529-1377/ 2185-6353

Email: kelly@pordafinance.com.hk / sheila@pordafinance.com.hk / phoebe@pordafinance.com.hk

At-a-Glance Fact Sheet

Offering Statistics

Number of Offer Shares           : 200,000,000 Shares (subject to Over-allotment Option)

Number of Placing Shares         : 180,000,000 Shares (subject to reallocation and

Over-allotment Option)

Number of Public Offer Shares     : 20,000,000 Shares (subject to reallocation)

Offer Price                       : not more than HK$1.53 per Offer Share and expected to be not

                                                  less than HK$1.19 per Offer Share

Nominal value                     : HK$0.01 per Share

Dealing Expected to Commence   : 12 July 2007 (Thursday)

Stock code                 : 569

Use of Proceeds

Based on an Offer Price of HK$1.36 per Share (being the mid-point of the Offer Price Range of HK$1.19 per Offer Share and HK $1.53 per Offer Share), the net proceeds of the Share Offer are estimated to amount to approximately HK$249.5 million. The Directors currently intend to apply the net proceeds of the Share Offer as follows:

Ÿ           approximately HK$ 40 million for R&D expenditure;

Ÿ           approximately HK$ 40 million for the construction of a new complex comprising R&D centre, production facilities and office premises;

Ÿ           approximately HK$ 30 million for expanding and improving the Group’s sales network in the PRC;

Ÿ           approximately HK$ 25 million for expanding and improving the Group’s service network in the PRC;

Ÿ           approximately HK$ 30 million for setting up offices in Dubai and Canada, for the provision of engineering services in the Middle East and North America respectively;

Ÿ           approximately HK$ 60 million for pursuing suitable acquisitions to expand the Group’s business either horizontally or vertically; and

Ÿ           the remainder for general corporate purposes and general working capital.

In the event that the Over-allotment Option is exercised, the additional net proceeds of about HK$39.8 million (assuming the Offer Price is determined at the mid-point of the stated range) will be applied by the Group for general corporate purposes and general working capital.

Trading Record

The table below summarizes the audited combined results of the Group for the three years ended 31 December 2006:

Main products

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