H K E A

 

HKEA Group (servicing for two decades)

 

Updating

Project Name:Hangzhou Real Estate Project
Cooperation Mode: collaborative exploitation, land venture
Seeking: Cash   Technology  Equipment  Others
Total Investment: US$500 Million

Project Scale & Forecast:

Project outline:   Hangzhou is a yearning place for celebrities and scholars to live
in since ancient times. In the new century, with the implementation of eastward
urbanization strategy,  Hangzhou hold high the banner of living in hangzhou.
The growth of the real estate keeps at a high speed for a long time. In the
past 3 year, Hangzhou is one of the top 3 cities whose real estate price
increases by largest margin in China. In order to grasp this oppotunity, the
Jianggan committee of CPC and Jianggan district peoples Government take every
effort to stimulate the development of real estate by starting the 
construction of Qianjiang new CBD. Now in Jianggan district, real estate has
shown strong momentum , becoming a new growth point of jianggan economy. The
recommended plots are as follows:
1) Qingchun plaza: 82 mu, resident and public construction ground
2) Kaixuan neighborhood: more than 190 mu, resident and public
construction ground
3) Jiubao neighborhood: 2400 mu, residential land
4) Dingqiao neighborhood: 5000mu, residential land

Project Name: Qingchun Plaza Project
Cooperation Mode: Joint venture  cooperative development, lease, transfer of land-use right
Seeking: Cash   Technology  Equipment  Brand  Others
Total Investment: US$100 Million

Project Scale & Forecast:

Project outline: qingchun plaza is located at the north side of qingchun east
road opposite to jianggan district people*s government , only 4 km from
Westlake. Covering a land area of 44,000 m2 , qingchun plaza is the open-style
plaza in hangzhou with the highest level and most diversified functions. It is
also a comprehensive plaza in qianjiang new cbd integrating culture, leisure,
trade and so on.  Around the qingchun plaza, there are many communities and
commercial areas with strong business climate and purchase power. the high-
grade building offices and plot around is very suitable for business
development. Large and professional supermarket, department, restaurant, entertainment
industry and office building.

Name of Project

Production of Micro -Miniature Motors

Total Investment

36.15 million US dollars

Intended Mode of Coop

JV.

Project Scale

Annual output of 10 million micro-miniature motors.

Project Survey:

A. Scale of Production

The Nd-Fe-B micro-miniature motors would be mainly produced. The project would be carried out in
two phases. At the first phase, motors would be first turned out for fans in microcomputers with an
annual output of 4 million sets. And at the second phase, motor production would be extended to
mirrors for automobiles, locks for doors and windows, antenna control, glass-cleaning pumps, etc.,
with an annual output of 6 million sets. Most of our products would be exported, and then occupy the
domestic market gradually.

New building will be 13,000 square meters, including 10,000 square meters of factory building and
3,000 square meters of auxiliary houses for living. A requisition of land will be made on an area of
13,340 sq.ms. Electricity supply will be required to be 300 KVA. There will be 326 employees in
joint venture.

B. Estimated Investment

The project will involve a total investment of 36.15 million USD with the registered capital of 25.3
million USD. Both parties contributions will consist of equipments, technology and cash. The
duration of joint venture would be 50 years.

C. Prediction of Investment Result

Annual foreign exchange income would be 20 million US dollars, and annual profit 8.7 million US
dollars. Investment profit rate would be 34.4 percent and investment recovery term 2.9 years,
according to the ultimate annual output of 10 million sets.

 

Name of Project

Production of Crystal Materials

Total Investment

18 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

To annually produce 120 tons of quartz crystal and process 150 million pcs of crystal slice.

Project Survey:

A. To annually produce 150 million pcs of piezoelectric crystal for electronic industry which can
meet the international standard. To set up 5,781 sq.m. of factory buildings on an area of 20,510 sq.m.

B. Raw materials and energy supply

a. Raw materials: the quartzite as the major raw materials would be purchased from the domestic
market such as Jiangxi.

b. Power Supply: The installed capacity of 720 KVA with annual power supply of 3.1 million kwh. A
transformer of 150 kilovolts and a generating set of 300 horse-power are now provided. Besides,
another new generating set of 600 horse-power will be added.

c. Water supply: 15,000 T, solved from the filtered river water nearby.

d. Other auxiliary materials: purchased from the domestic market.

C. Estimated Investment and Fund Raising

a. Total investment of 18 million US dollars, including 13.074 million US dollars of current capital
and 4.926 million US dollars of fixed assets. The registered capital will be 7.5 million US dollars.

b. Way of contributions:

The Chinese side may make its investment in land, factory buildings, equipments and part of cash,
leaving the foreign partner with cash..

Total investment minus registered capital is the balance of 10.5 million US dollars, which would be
settled by loan from the bank.

D. Evaluation of Economic Result

The profit rate on sale will be 35.4 percent, the profit rate on investment 24.9 percent and the
investment return horizon 3.2 years, as are expected.

Chinese Partner

Yuyao Industry Company

 

Name of Project

Production of Colour Monitors

Total Investment

30 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

To produce 1 million sets of colour monitor with the screen width less than 20 inches

annually.

Project Survey:

A. Scale of Production

The ultimate annual production will be 1 million sets of colour monitor with screen width less than
20 inches, which will be realized step by step. The products will be mainly for export and will be
gradually extended to the domestic market afterwards.

B. Investment Estimation and Cooperative Modes

Total investment: 30 million USD

Registered capital: 15 million USD

It is intended to set up a sino-foreign joint venture to manufacture colour and monochromatic
monitors. It is also planned to manufacture terminations of micro-computer and other electronic
system.

Proportion of investment: Itís proposed that foreign partner can hold more shares than Chinese
partner.

Ways of investment: Chinese partner: to invest in cash, some equipment, land and factory building.

Foreign partner: to invest in cash, technology and equipment.

Duration of the joint venture: 15-20 years

C. Prediction of Economic Result

The sales income will be 2 billion RMB yuan, profit 160 million RMB yuan and the investment
recovery term 2 years, as are computed on the basis of annual production of 1 million sets of the
colour monitor with the screen width less than 20 inches.

Chinese Partner

Television Set Factory

 

Name of Project

Computer

Total Investment

26.5 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

To produce 600,000 sets of display and 100,000 sets of computers annually.

Project Survey:

A. Capital of JV.:The project will involve a total investment of 26.5 milliUS
dollars with the registered capital of 9 million US dollars. The Chinesside
will make a 4.5 million US dollars investment in cash while foreign side
willsupply the joint venture with cash, part of equipment and technology,
totalling 4.5 million US dollars. The working capital of about 17.5 million
US dollars would be loaned from banks.

B. Location of the Joint Venture:It will be located in Ningbo Science and Technology
Garden Area to cover an area of 40,000 sq.m. with construction of 15,000 sq.m.

C. Plan of Production and Sales

Annual production: 600,000 sets of color displays and 100,000 sets of computers, by
singly-shift operation in the normal year. Annual sales income will be 1.36 billion
RMB yuan, including 400 million yuan from computer.

D. Duration of the Joint Venture:It will be decided by the two parties of the joint
venture.

E. Supply of Raw Materials and Power

The materials required by the joint venture will be part imported and part from
domestic market. The volume of power consumption for normal production will be
360 KVA. Water and coal are unneccessarry.

F. Economic Result Analysis

During the first decade of the joint venture:

a. The joint venture will bring a total profit of 44 million US dollars in the ten years,
from which the Chinese side will make about 15.4 million US dollars in profit and the
foreign side about 15.4 million US dollars in profit.

b. Investment recovery term: 3.17 years.

c. Financial internal rate of return: 52%.

d. Sales profit rate: 3.69%.

e. Investment profit rate: 22.8%.

f. Total output to maintain cost shall be 295,000 sets of display and 49,200 sets of
computer.

g. Net cash circulation during ten years: 41.28 million US dollars.

h. Taxes payable shall be 277.38 million RMB yuan.

Chinese Partner

Industry Investment Corp.

 

Name of Project

Silicon Slice for Integrated Circuit from 4 to 6 inches

Total Investment

51.32 million US dollars

Intended Mode of Coop

JV or co-op

Project Scale

To produce 5 million pcs of polished sillicon slices and 120 tons of monocystalline silicon
Annually.

Project Survey:

A/a. Production Scale: to produce the polished slices of silicon for integrated circuit from 4 to 6 inches with an
annual output of 5 million pcs in terms of 4 inches.

b. Equipments: main equipments will be imported.

c. Export Rate: 95 percent or more (100% for export at priliminary stage)

d. Cooperation Period: 15 years.

e. Coutribution Proportion: The chinese side will own 51 percent of the shares in the venture and the foreign side
will own the remaining 49 percent.

B. Products Specifications

The polished slices of silicon from 4 to 6 inches will be mainly produced in batches.

After their production is completed, six-inch slices, as is main products, will be put into production, and eight-inch
slices

may be turned out in small batches. 95 percent of them will be exported.

C. Investment Estimation and Fund Raising

  1. Investment estimation: equipment: RMB 210 million Yuan

  2. Equipment installment: RMB 3 million Yuan

    tools & intruments: RMB 1 million Yuan

    construction expense: RMB 37 million Yuan

    other expense: RMB 25 million Yuan

    Total: RMB 276 million Yuan

  3. Current Capital Prediction: RMB 150 million Yuan

  4. Total Investment: RMB 426 million Yuan

  5. Fund Raising:

The contributions of the partners to the registered capital shall be as follows:

Chinese partner: RMB 140 million Yuan

Foreign partner: RMB 136 million Yuan

The curent capital will be raised as follows:

Loan from bank: RMB 100 million Yuan

Ventureís raising by itself: RMB 50 million Yuan

 

Chinese Partner

Zhe Semiconductor Co., Ltd.

 

Name of Project

Production of CD-R Disk

Total Investment

5 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

Annual capacity of 2 million pcs, 100% exported.

Project Survey:

A. Construction Scale

A new production line to make CD-R disks will be built, and its annual capacity will be 200 million
pcs, which will be 100% exported.

B. Investment Estimation and Cooperative From of Project

The total investment for the project shall be 5 million US dollars. The registered capital shall be 3.5
million US dollars, and the form of Chinese-foreign joint-venture management will be adopted. The
financial contribution proportion of the Chinese party and the foreign party is 50% to 50%. The form
of investment are may be contributed in cash and equipment. The term of the joint venture will be 11
years.

C. Construction Place and Reason

The joint venture is to be constructed in Ningbo Bonded Area so that it will reduce its production
cost in duties, value-added taxes on import equipment, raw materials and accessaries and enjoy
favorable policies for export given by the state .

D. Financial Benefit Prediction

If the annual capacity reaches 200 million CD-R disks, the financial benefit will be as follows:

Annual sales income 5.9 million US dollars

Annual profit after taxes 1.75 million US dollars

Payback period 2 years

E. Brief Introduction to the Enterprise of the Chinese Party

Ningbo Gramophone Record Factory is an enterprise directly under Ningbo Electronic Instrument
Industry Bureau and an only enterprise approved by the broadcast-film-television Department and the
News Publication Department to make audio-video products in Zhejiang Province.

In order to develop new products, the factory introduced in the years from 1982 to 1984 complete
sets of equipment from Japan, the United States and Switzerland. At present, it has ability to produce
4.5 million boxes of audio tape and 0.5 million boxes of video tape.

Chinese Partner

Gramophone Record Factory

 

Name of Project

DVD Video Players

Total Investment in 104 USD

6.6 million USD

Intended Mode of Coop

JV. or co-op

Project Scale

Annual output of 200,000 sets

Project Survey:

A. Scale of production:

  1. To build 9000 sq.m of factory building and import 4 assembly lines.

  2. To produce 80000 sets of DVD Video Players in 1998, 100,000 sets in 1999 and 200,000 sets
    in the year of 2000.

B. 1. Components , Devices and Raw Materials:

The components, devices and raw materials are all availabe in both domestic and foreign markets. The
DVD deck, a key part, would be imported from Japan. All other components and parts are available at home except
for the imported integrated circuits, triodes and diodes.

. Supply of Water and Power Together with Gas and Fuel:

No water and fuel would be reguired for the industrial purpose because DVD video players are
assembled with less power consumption.

C. Estimation of Investment:

The total investment of the project: 6.6 milion US dollars.

D. Investment Result Prediction:

  1. Annual average profit of RMB 32.84133 million yuan from the year 2005 to 2007.

  2. Higher investment profit rate: 55.117percent before taxation and 73.78 percent after taxation.

  3. Expected investment return horizon: 3.89 years, including 0.5 year of construction.

  4. Itís seen from the indefinite analysis that the balance point of profit and loss would be 15.535
    percent. Based on the annual output of 200,000 sets, the sales price to keep cost would be
    RMB 1875.322 Yuan per set, accounting for 78.14 percent of the price available in markets
    today. Therfore, the project is available.

Chinese Partner

Electronic Meters & Instruments Industry Company

 

Name of Project

High-grade Coated Paperboard for Boxes & Cabinets

Total Investment

36 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

To build two production lines each with an annual production of 50000tons, amounting to

100,000 tons annually.

Project Survey:

A. Construction Scale

It's intended to build two production lines for multi-cylinder coated paperboard for boxes and
cabinets with the width of 3,200mm, two boilers with capacity of 35T/H for co-generation plant and a
production line for boxes and print. The wasted water treatment project will be extended with the
daily capacity of 60,000 tons.

B. Conditions for Building a Plant

a. Water supply: water consumption will be reduced to 50 tons for every ton of paper by extending
wasted water treatment project. Hence, it wouldnít lead to the lack of water in the canal.

b. Drainage :

Water drainage will be greatly reduced for each ton of paper because of the wasted water recovery.
The existing sewage disposal system will be still utilized for production.

c. Necessary electricity and steam will be supplied by new co-generation.

C. Investment Estimation

a. Equipment cost: 130 million RMB yuan b. Expense necessary for equipment : 60 million RMB
yuan

c. Civil construction cost: 40 million RMB yuan d. Others: 20 million RMB yuan e. Current Capital:
50 million RMB yuan f. Total: 300 million RMB yuan

D. Main Economic & Technical Target

a. Fixed assets: 250million RMB yuan b. Employees: 300 people

c. Wages: 1,000 RMB yuan per month for each person d. Output: 100,000 tons/Y e. Selling price:
5,300 RMB yuan/ton

f. Current capital: 50 million RMB yuan

g. Proportion of raw materials: 18% of wood pulp, 35% of OCC, 35% of yellow pulp and 12% of
coating.

E. Location

Ningbo Zhenhai Hualun paper Co., Ltd. is located at the Xiepu Development Zone, a ETD zone of the
municipal level, next to the No.329 National Highway and 1.41 km away from the East China Sea.

Chinese Partner

Ningbo Zhenhai Hualun Paper Co., Ltd.

 

Name of Project

Expansion of Mold Production

Total Investment

3.60 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

Annual production of 300 sets of various molds with the output value of RMB 25 million.

Project Survey:

A. Briefing:

Yuyao City, always honored as "home of plastics" and" kingdom of molds", is the most developed
region for plastic molds in the country, China Plastics town set up with the investment of RMB 100
million and the Far East Industrial Town under construction with the total investment of over USD
200 million mainly from Taiwanese business people have provided new challenges and opportunities
for the development of the mold-making industry. And meanwhile there are few large specialized
mold-making factories in the country. The large high-grade precise molds are required to be
imported. With the further adjustment of the product structure and the development of the plastic
processing industry during the period of the ninth five-year plan, the demand for molds will be
greatly increased and there will be a bright market future and a huge development potentiality for the
mold-making industry. At present the enterprise has 11 sets of imported equipment and over 30 sets
of home-made metalworking equipment, such as the numerically-controlled copying milling
machines, numerically-controlled sparkers, numerically-controlled cutting equipment, machining
centre and computer console, etc. It can make not only the big or medium-sized precise molds, but
also the general molds so as to meet the different needs. However, the enterprise has not yet reached
the scale production and there is still a gap left in comparison with the world's advanced level as
regards the mold design and production technology. The project is to further improve the product
quality and upgrade the product, enlarge the production scale through the introduction of foreign
capital and advanced technology so as to meet the ever thriving market requirements of domestic
market.

B. Scale of Production

Annual production of 300 sets of various molds with the output value of RMB 25 million.

C. Estimation of Economic Result

Annual sales of RMB 25 million yuan, annual profit of RMB 6.5 million, and investment recovery
term of three years.

Chinese Partner

Zhejiang Plastic Mold Fabrication Center

 

Name of Project

East-outer-ring Road

Total Investment

210 million US dollars

Intended Mode of Coop

JV., co-op or BOT

Project Scale

Total length: 8 km. Driving speed: 80 km/hour. Roadbed width, first phase: 20 m,

second phase: 40m, third phase: 108 m.

Project Survey:

  1. Location

  2. East-outer-ring Road, located on the east part of Ningbo city, covering the distance of 8 km,
    extends from the south to the north. It is connected with the old city proper in the west,
    Yongjiang New Area and Yin County in the east, Panhuo Flyover in the south, and the
    intersection of Ningbo-zhenhai High-way and 329 national highway in the north.

  3. Technical Specification

It is closed city highway, designed driving speed 80 km/hour. The project red-line width is 108 m,
first phase 20 m, four lanes; second phase 40 m, eight lanes, double directions; third phase 108 m.
There are 2 grade separation viaducts, one motorway-railway viaduct, and one under-the-river tunnel
(Changhong Tunnel). There are five bridges of small or medium size, and two rhombus-formed partial
interchanges.

C. Fund Sources

Due to the large investment, the project is intended to be constructed by sino-foreign co-operation,
joint venture, BOT or bank loans. The construction of Changhong tunnel (covering the distance of
1660 meters with the total investment of around 850 million RMB), and the south section of
East-outer-ring Road, which are the two component projects, is the most urgent and important.

D. Plan on Construction and Loan Payoff

The project will be completed during the ninth-five-year planning according to the general
construction planning of the city . The project payoff will mainly depend on the traffic tolls of the
tunnel and the expressway, and profit from the comprehensive development of project land. The
project profit will have a great increase after the completion of the bridge over Hangzhou Bay .
Further more, because of the remarkable social benefit of this project, the municipal government and
finance bureau will provide various preferential policies to support and co-ordinate the project, and
use the comprehensive income from traffic tolls for the city roads and bridges as investment return
or repayment of capital with interest.

Chinese Partner

Urban Infrastructure Construction and Development Corp.

 

Name of Project

Engineering of Xiangshan Connection Line of the Main State
Expressway Along the Coast

Total Investment

35.3 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

The highway is 53 km in length, 80 km/h in speed, 26.5 m in subgrade
width and with 4

lanes.

Project Survey:

A. The highway, from Dancheng (Xiangshan county) to Meiling (2 km away to the south of Ninghai
county), connects with the main state expressway along the coast. The highway covers the distance of
53 km, of which 36 km within the boundaries of Xiangshan county and 17 km within Ninghai county.

B. Traffic Volume Forecasting(unit: minibus/day.)

Year 2000 2005 2010 2015 2020

Xiangshan-Xizhou flyover 5476 8489 13072 21128 28947

Xizhou-meiling flyover 5989 9498 14206 21851 29924

Xiangxi Road (Dancheng-Maling) 10943 810 5462 6894 11030

C. Technical Specification

It is designed as grade one vehicle accommodation highway standard with 4 lanes . The designed
speed is 80 km/hour, and the subgrade width is 26.5 meters. The concrete road surface is built with a
separation belt in the middle. The net width of bridge: 2◊10.75 meters, designed loads for bridges
:super grade 20 for trucks and grade 120 for trailers,

Tunnel: two holes section

Net width of tunnel:10.25 meters

Net height of tunnel:5.0 meters.

Net clearance between two tunnels:>30 meters

Lighting in the tunnel is designed based on the driving speed of 80 km/hour.

Chinese Partner

Xiang Communication Bureau

 

Name of Project

Expressway from Xiwu to Puli

Total Investment

380 million US dollars

Intended Mode of Coop

JV. , co-op or sole foreign

funded

Project Scale

The expressway is 73.89 km in length and 26 m in roadbed width.

Project Survey:

A: Technical Specification:The section from Xiwu to Guanzhuang, covering the distance of
38.056km, will be built according to the standard of expressway on plains with tiny hills, the
designed driving speed being 120 km/hour and the roadbed width being 26meters. The
Guangzhuang-Puli section covering the distance of 35.834 km, will be built according to the
expressway standard of heavy-hilly area, the designed driving speed being 100 km/hour and the
roadbed width being 24.5 meters.

B: Location and Role of the Project:Xiwu-Puli Expressway is a south section in Ningbo city of the
Main State Expressway from Tongjiang city, in Heilongjiang province, to Sanya city, in Hainan
province, which is planned to be completed by the end of this century. The north section Daqi-Xiwu
expressway has started in October 1995, and is planned to be completed by the end of 1999.

C: Investment:(unit: 10 thousand yuan)

Total investment: 319,000 Government appropriation and self-financing: 127,600 Foreign
Investment: 191,400

D: Traffic volume forecasting

Xiwu-Guanzhuang Year Small Size Medium Size Large Size Special Size Total

2002 6053 4134 4138 467 14792

2021 17667 12065 12075 1364 43171

Guanzhuang-Puli Year Small Size Medium Size Large Size Special Size Total

2002 3205 2188 2190 247 7830

2021 8850 6043 6049 683 21625

E: Investment Mode:The investment mode for Daqi-Xiwu Expressway is intended to establish a joint
venture with our mutual investment in and operation on the project. That is the government invests
RMB 1.276 million yuan to establish a joint venture with 20 years of operation period (construction
period excluded). During this 20-year operation period, the government and the investors will share
the revenues of the joint venture, with all kinds of operation costs and expenditures deducted at
certain proportions which both parties have agreed to. After 20 years of operation period, the joint
venture will be disbanded and all its assets will belong to the government .

F: Benefit Analysis:Not considering the benefit from the comprehensive development of project
lands, the annual coverage Internal Rate of Return is expected to reach 14% during the 20-year long
operation period by charging traffic tolls.

Chinese Partner

Communications Investment & Development Corp.

 

Name of Project

Reconstruction of Beijiao Road in Ningbo

Total Investment

25 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

The area to be developed covers an area of 40 hectares with the road 1.45 km in length

and 42 m in width.

Project Survey:

A. General Situation

This area of 40 hectares is intended to be developed into a high quality residential zone, cultural and
educational zone and sightseeing and recreational zone. By transforming and constructing the area
along the sides of the road, which is extending to Yao Jing River in the east, to the branch of Beidou
River and Wenjiao road in the west. The road, 42meters in width in plan, will be con constructed into
34 meters in width in the 1st stage. The project, with the total investment of 210 million RMB,
includes road engineering, dismantling & recovering in tract, land development, accessaries projects
and city image projects, etc. The construction period is about 0.9 year and the calculated project
development period is 5 years.

B. Economic Evaluation

Capital raising: through cooperation, joint venture or bank loans combined with municipal finance
allocation .

Capital balance: depending on renting the land on the sides of the road and real estate development.
Although this area is now temporarily in backward condition, its potential advantages will produce
great land grades difference after its completion. The capital return period is estimated to be 4.2
years, and its internal financial profit rate is 23.6%.The economic benefit and social benefit are both
prosperous .

C. Investment Return and Repayment Guarantee

As one of the city projects, the municipal government has specially promised to provide preferential
policies for it, such as appropriating relative land free of charge, the reduction and exemption of tax
and the use of annual income charged from the municipal city and country construction maintenance
as the guarantee of the investment profit return on the payoff of the capital and interest of the project
.

Chinese Partner

Urban Infrastructure Construction & Development Corp.

 

Name of Project

Ningbo Bridge

Total Investment

51 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

The main part of the stayed-cable bridge is 568 m in length, the approach bridge is 1798 m

long. Zhaobao Mountain Tunnel is 170 m, the approach road is 629 m long.

Project Survey:

A. Construction Scale:Ningbo bridge, is located at the entrance of Yong Jiang River, starting from
Ningbo ETD zone in the east, connecting with the main bridge over Yong Jing River through bridge
approach on Jingji hill, leading through the Zhaobao mountain tunnel in Zhenhai district and joining
with the highway towards the port through bridge approach. The bridge covers a total distance of
2,482 meters with the navigable space of 258meters and the net bridge height of 32 m, which allows
the vessel of 5,000 tonnage to pass. Ningbo bridge is the main passage to Zhenhai district and Beilun
district and it also connects Belilun with the outside. The project is composed by the main bridge,
east bridge approach (including the ring road), west bridge approach (including the ring road) and
Zhaobao mountain tunnel.

B. Investment Estimation:The preliminary budget of this project is 426.6223 million RMB. After
the review by Ningbo Planning Commission ,the approved total budget for the project was reduced by
3.3388million RMB to 423.2835 million RMB. According to the summary of the preliminary
design conference on the building of the east bridge ring road of Ningbo Bridge, the original main
line to Xiao Gang ETD Zone is cancelled. Two double-layer ring roads to Donghai Road in ETD
Zone will be built. With this modification, 15,000,000 RMB yuan more will be needed for the
construction. The total cost for the above mentioned two sections is 438,283,500 RMB yuan.

C. Investment Benefit Forecasting:It is planned to charge traffic tolls before the end of 1998 after
the completion of the bridge so the project charge profit will be calculated from 1999. Because of
the repayment of capital during the construction and after the completion, the municipal government
will subsidize 12million RMB per year for 8 years. Through it helps to keep the balance in the
preliminary stage of construction and the payoff of capital and interest, however 50 million RMBof
loans for the pay of the capital and interest is still required during this period .

a. The registered capital of foreign partner will be paid off in the second year after its completion,
extra dividends can be drawn at the fixed return rate for ten years starting from the third year after the
completion.

b. Overseas financing funds will be paid off by the third year after the completion.

c. Domestic loans will be paid off from its fourth year to the ninth year after the completion.

d. Profit will be made starting from the ninth year and all the capital outlay can be recouped in the thirteenth year.

Chinese Partner

Xingye Bridge Co., Ltd.

 

Name of Project

Medium - Density Fiberboard

Total Investment

24.1 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

Annual output of 50,000 cubic meters of medium - density fiberboard.

Project Survey:

A. To annually produce 50,000 cubic meters of medium density fiberboard (1.25 million pcs/year).
These fiberboard can be processed into various boards with different depths of 10-75 mm. Itís
planned to use 8 sq.km of land for this project and 2 sq.km of land will be used at first phase. The
factory covers an area of 80040 sq.m.

Products Schemes: 2440◊1220◊10 350,000 pcs

2440◊1220◊12 350,000 pcs

2440◊1220◊15 300,000 pcs

2440◊1220◊18 250,000 pcs

B. Main Technical Schemes:

a. The equipments to be imported for board workshop are expected to be invested by foreign side.

b. The equipment of glue workshop for production of pollopas shall be purchased from domestic
market.

C. Construction Site

The factory shall be located in the Ningbo Scientific Industrial Garden, 10 km away from Beilun
Port, 18 km away from the airport.

D. Estimated Investment:

Total investment: 24.1 million US dollars, including 10.3010 million US dollars of foreign
exchange, 0.71 million US dollars of credit interest during the construction period, 1.67 US dollars
million of floating capital.

E. Funds Raising:

The registered capital shall be 40% of the total investment. The equipments contributed by foreign
partner will be evaluated in terms of funds as investment. Chinese Partner will contribute with reform
capital and self-owned capital. The want amount of funds shall be contributed by both partners
according to their investment proportions.

F. Investment Benefit Prediction:

Annual profit of 1.72 million US dollars, investment return period: 6.74 years pre-tax, 7.20 years
post-tax.

Chinese Partner

Building Materials Industry Company

 

Name of Project

The Development and Utilization of Tantoushan Island

Total Investment

1.55 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

The amount of livestock in the first stage reaches 5,000-10,000 in the second stage reaches

20,000.

Project Survey:

A. Production Scale:The production and processing of commercial livestock and poultry together
one to be carried out in compliance with the unique environment of Tantoushan Island. The suggested
livestock and poultry are cattle pigs, poultry and other animals of special types. According to the
calculation of medium-sized livestock, the amount will reach 5000-10000 in the first stage and
20000 in the second stage. The number of animals for sale will rely on production purposes.

B. Location:The project is intended to be located on Tantoushan Island which is in the southern part
of the town of Shipu, Xiangshan County and 8Kms from the mainland. The island has an overall area
of 10.2 square km.

C. The Estimated Investment:

The total investment will be 12.86 million yuan RMB, of which,

1.5 million yuan RMB investment for 3,000 M2 newly-built livestock (poultry) sheds.

0.4 million yuan RMB investment for 800 M2 feed-processing plant and storehouse.

0.8 million yuan RMB investment for the rebuilding of the wharf and repairing of the highway.

0.5 million yuan RMB investment of electric facilities.

0.5 million yuan RMB investment for the disposal of wastes and facilities for environmental
protection..

2 million yuan RMB investment for introducing breeding stock and poultry.

5 million yuan RMB for circulation funds

The investment made by the Chinese party includes land, houses and a part of fixed facilities while
the investment made by the foreign party includes breeding stock, poultry and circulating funds.

D. Investment Benefit Prediction:When production capacity reaches what is planned, the annual
sales income will exceed 22 million yuan RMB. The total annual production cost will be 19 million
yuan RMB, which includes 4 million yuan RMB fixed capital and 15 million RMB yuan circulating
capital. The annual profit should be 3 million yuan RMB.

Sales profit-tax rate=300/2200=13.21%

Capital profit-tax rate=300/1290=23.26%

Recovery period of the investment =1290/300+1.7=6 years (Note: Production will be carried out
over construction one year after the investment period, during which one year is regarded as 0.7 year.)

Chinese Partner

Shipu Agriculture Service Corporation of Xiangshan County.

 

Name of Project

Production of Hollow Fibres

Total Investment

19 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

Annual output of 15 million km with an output value of 19.5 million US dollars.

Project Survey:

A. A Brief introduction to the Chinese Party

Ningbo Firs Group Co., Ltd. is a diversified-management, Joint-stock enterprise group specializing
in brand"Firs"suits and several other series of brand"Firs"garments with finance, real estate and
international trade, etc. as its guiding trade. It owns 34subsidiaries and registered capital of 54
million yuan (RMB). It is one of the major enterprises in China`s garment industry with total annual
sales of 1000 million yuan (RMB) and profit and tax of nearly 200 million yuan (RMB). At present
the company owns 300mu of land in the central part of Yin county, where the supply of gas, power
and water are available. The location and environment favorable for investment is quite superior.

B. Production Scale:

A joint venture is intended to be set up to produce man-made kidney-use hollow fibres). The annual
production capacity is planned to be 15 million km with and output value of 19.5 million US dollars.
50% of its products are to be exported.

C. Investment Budget of the project.

The total investment will be 19 million US dollars and the registered capital will be 15.3 million US
dollars including 11.25 million US dollars invested by the Chinese side which accounts for 75% of
the registered capital and 3.75 million US dollars invested by foreign side which accounts for 25%.
Investments of the both sides should be made in cash of US dollars.

D. Equipment

The equipment is intended to be imported from USA and Europe. The foreign side should be in
charge of the work for imports, but the representatives from the Chinese side should also take part in
the purchase of the equipment. After the establishment of the company the foreign side should be
responsible for the maintenance and repair of the production equipment of the joint company so as to
ensure normal operation to meet the needs of production of the company.

E. Preliminary Financial and Economic Analysis.

It is planned that the annual output of hollow fibres will be 15 million kilometers and the output value
will be 19.5 million US dollars. The profit is estimated to be 4.886 million US dollars. The recovery
period of the i*nvestment is 4 years.

Chinese Partner

Firs Group Co., Ltd.

 

Name of Project

Clinical Diagnostic Reagents

Total Investment

5 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

Annual production of 150 million ml. reagents, 500 million tablets and 500 million

capsules.

Project Survey:

A. Construction Scale

It is planned to produce and sell clinical biochemical diagnostic reagents and medicinal preparations
to produce 150 million ml. of biochemical diagnostic reagents, 500 million tablets and 500 million
capsules of medicinal preparations a year .

B. Investment Estimation

The registered capacity will be 20 million (RMB) yuan. The Chinese party will invest in the project
by their present production equipment, plant, facilities, test instruments and facilities for
communication and transportation. The foreign party will be asked to make contribution in cash of
US dollars.

C. Material Supply

Chemical reagents and supplementary materials will be bought at home and the original enzyme and
coenzyme will be imported from abroad.

D. Duration of Joint Venture and Profit Distribution

a. The duration of joint venture will be 20 years or determined by both parties.

b. The profit will be distributed in proportion and all the losses and risk will be borne also in proportion .

E. Investment Benefit Prediction

The total sales income will be 50 million yuan, including 30 million yuan from reagents and 20
million yuan from medicines. The total pre-tax profit 19 million yuan, may be realized in which the
net profit will be 10.5 million yuan. The payback period will be 4.4 years.

F. Brief Introduction to the Enterprise of the Chinese Party

Ningbo Yatai Biological Technology Company Ltd. has such main products as biochemical
diagnostic reagents, diagnostic reagents for hepatitis and AIDS and some medicinal preparations .The
construction of the companyís plant will be designed and supervised by the American Yapei Company
on the spot, the total floor space of the plant will be 3,000 square meters.

Chinese Partner

Yatai Biological Technology Company Ltd.

 

Name of Project

Production of Hollow Fiber Film

Total Investment

2 million US dollars

Intended Mode of Coop

JV. or co-op

Project Scale

To produce 600,000 km of hollow-fiber ploy vitriol film for blood filtering annually.

Project Survey:

A. Scale of Production

To introduce production technology and advanced techniques from foreign countries to annually
produce 600,000 km of Hollow Fiber Ploy Vitriol Film for blood filtering annually.

B. Location of the Project

The project will be located at 65 Cangsong Road, Ningbo.

C. Investment Estimation

The project will involve a total investment of 2 million US dollars. The proportion of investment will
be decided by both parties. The contribution of Chinese party shall consist of production equipment,
factory building, measurement instruments, communications and technology while the contribution
of foreign part involved fund and foreign technology and market.

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