– We require significant capital investments and a high level of working capital to sustain our operations and overall growth

– We manufacture our products in a single location, and any material disruption of our operations could adversely affect our business

– Our expansion plans may not be successful

– Our production capacity might not be able to meet with growing market demand or changing market conditions

– We manufacture and sell only “high-end” steel flow control products

– We may not be able to develop new products or expand into new markets

– We may be subject to product liability claims

– We may be subject to liability in connection with industrial accidents at our production facilities

– Lack of business insurance coverage may incur substantial costs for our Group

– We are subject to foreign exchange exposure

– The interests of our Controlling Shareholders may differ from those of our other Shareholders

# Risks relating to the industry

– Our business depends very much on the continuous casting method in the steel manufacturing industry. Industry-wide adoption of other existing or new technologies that do not require steel flow control products in the future might seriously affect our business

– We cannot assure that we will be able to renew all necessary licences, certificates, approvals and permits for our production. Changes in licensing requirements applicable to our industry may adversely affect us

– The PRC Government may adopt measures to slow down growth in the steel manufacturing industry and other steel consuming industries, thereby adversely affecting the demand for our products

– Our industry is subject to global economic and market conditions

– We operate in a highly competitive industry

# Risks relating to conducting business in the PRC

– Political and economic policies of the PRC government and social conditions and legal developments of the PRC could affect our business

– The government control of currency conversion could affect our business operations

– Uncertainties regarding interpretation and enforcement of the PRC laws and regulations may impose adverse impact on our business, operations and profitability

– The implementation of the new labour contract law and increase in labour costs in the PRC may adversely affect our business and financial conditions

– Under the Enterprise Income Tax Law (中華人民共和國企業所得稅法) and the related implementation regulations, which became effective on 1 January 2008, dividends from our subsidiary in the PRC may be subject to withholding tax or we may be subject to PRC tax on our worldwide income

– Dividends payable by us to our foreign investors and gain on the sale of our Shares may be subject to the PRC tax

– We cannot assure that we will continue to enjoy preferential tax treatments or financial incentives in the future

– PRC regulations on loans to and direct investment by offshore holding companies in PRC entities may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiary

– We are a holding company and rely on dividend payments from our operating subsidiary

– Uncertainties on the PRC withholding tax rate on dividends payable by our subsidiary in the PRC

– PRC regulations relating to acquisitions of the PRC companies by foreign entities may limit our ability to acquire the PRC companies and adversely affect the implementation of our strategy as well as our business and prospects

– PRC regulations relating to the establishment of offshore special purpose companies by the PRC residents may subject our PRC resident shareholders or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’s ability to increase their registered capital or distribute profit to us, or may otherwise adversely affect us

– A shortage of electricity and water supply in the PRC would affect our production and affect our business and financial performance

# Risks relating to the Global Offering

– Shareholders’ interests in the share capital of our Company may be diluted in the future

– Lack of liquidity of our Shares and volatility of the market price may be resulted

– Fluctuation of RMB may affect value of our dividends (if any) and our financial condition

– Investors may experience difficulties in effecting service of legal process and enforcing judgments against our Company and our management

– We cannot guarantee the accuracy of facts and other statistics with respect to the global steel industry, the PRC economy, the PRC steel industry and the PRC steel flow control products industry in the continuous casting process contained in this prospectus

– Forward-looking statements contained in this prospectus are subject to risks and uncertainties

– We strongly caution you not to place any reliance on any information contained in press articles or media regarding us or the Global Offering