# Our customers may reduce their demand for aluminum extrusion products in favor of alternative materials.

Our aluminum extrusion products compete with products made from other materials, such as plastic, wood or other metal composites, for various applications. The willingness of customers to accept substitutions for aluminum or the ability of major customers to exert leverage in the marketplace to reduce the pricing for aluminum extrusion products could adversely affect the demand for our products and thus adversely affect our business, financial condition and results of operations.

# We derive a substantial portion of our sales from China.

A substantial portion of our sales are generated from China. During the Track Record Period, we generated approximately 92.8%, 94.7% and 96.7% of our total revenue, respectively, from sales to customers in China. To boost our sales revenue, we seek to increase our market share in overseas markets; however, we anticipate that sales of our products in China will continue to represent a substantial proportion of our total sales in the near future. Any significant decline in the condition of the PRC economy could, among other things, reduce consumption of our products which in turn would have a material adverse effect on our business, financial condition and results of operations.

# We had net current liabilities as of December 31, 2006 and 2007.

As of December 31, 2006 and 2007, we had net current liabilities of approximately RMB260.9 million and RMB207.0 million, respectively. We had net current liabilities as of each of these balance sheet dates mainly due to (i) our large amounts of borrowings, comprising mainly short-term borrowings from commercial banks in China which are the primary source of financing for our Company and offer interest rates that are generally lower than those of long-term loans, and (ii) our issuance of short-term debentures. The amount of payment obligations of our bank borrowings and short-term debentures in the 12-month period following the Listing is estimated to be approximately RMB4.8 billion. Our net current liabilities position exposes us to liquidity risk, and we may have net current liabilities in the future. Our future liquidity, the payment of trade and other payables and the repayment of our outstanding bank borrowings as and when they become due will primarily depend on our ability to maintain adequate cash inflows from operating activities, cash and cash equivalents, and our access to further financial resources to fulfill our short-term payment obligations, which will be affected by our future operating performance, prevailing economic conditions, and financial, business and other factors, many of which are beyond our control.

# Our business, reputation and brand may be materially and adversely affected by actions taken by our distributors.

During the Track Record Period, our sales to distributors accounted for approximately 39.9%, 31.9% and 12.9% of our total revenue, respectively. As of December 31, 2008, we had 17 distributors responsible for domestic sales in China and four distributors responsible for our overseas markets. Save as disclosed in the section headed “Relationships with Our Controlling Shareholder and Continuing Connected Transactions,” our Directors have confirmed that during the Track Record Period, all of our distributors were Independent Third Parties. It has been our policy that our distributors may not take any improper or illegal actions, commit bribery or use any payments or other means prohibited under the relevant anti-corruption laws in the PRC and thej urisdictions where they operate or prohibited under the agreed terms

between us and the distributors to promote or sell our products, and that we will terminate our relationship with them if they engage in such activities. However, our distributors could take one or more of the following actions, any of which could have a material adverse effect on our business, reputation and brand:

• breach our agreements with them, including by selling products that compete with our products that they have contracted to sell for us or by selling our products outside their designated territory, possibly in violation of the exclusive distribution rights of other distributors;

• unauthorized use or misuse of our brand name;

• fail to adequately promote our products;

• fail to provide proper training and service to the end-users of our products; or

• violate the anti-corruption laws of China, the United States or other countries.

Non-compliance by our distributors with our agreements or any improper or illegal actions taken by our distributors could harm our corporate image and disrupt our sales. We ultimately have limited control over the actions of our distributors who are Independent Third Parties, and cannot assure you that they will not breach their agreements with us or violate relevant laws. We are not aware of any breach of agreement, or improper or illegal actions taken by our distributors during the Track Record Period.

If our distributors violate PRC laws or otherwise engage in illegal practices with respect to their sales or marketing of our products, our brand and reputation, our sales activities or the price of our Shares could be adversely affected if we become the target of any negative publicity as a result of actions taken by our distributors.

# The global financial markets have experienced significant deterioration and volatility recently, which have had negative repercussions on the global economy and, as a result, may adversely affect our business operations.

Certain recent adverse financial developments have impacted the global financial markets. These developments include a general slowing of economic growth both in the U.S. and globally, substantial volatility in equity securities markets, and volatility and tightening of liquidity in credit markets. While it is difficult to predict how long these conditions will exist and which markets and businesses of our Company may be affected, these developments could continue to present risks for an extended period of time for our Company, including a potential slowdown in our sales to customers, increase in interest expenses on our bank borrowings, or reduction of the amount of banking facilities currently available to us. If this economic downturn continues, our business, financial condition and results of operations may be adversely affected.