----

----

----

----

| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

----

----

| Nevada                   |   | 27-2969090                        |
|--------------------------|--------|-----------------------------------|
| (State of incorporation) |   | (IRS Employer Identification No.) |

----

| Large accelerated filer |  ̈ |    | Accelerated filer              |  ̈ |
|-----------------------------------|--------|--------------|-------------------------------------|--------|
|                              |   |         |                                |
| Non-accelerated filer             |  ̈ |    | Smaller reporting company | x      |

----

----

| ITEM 1. | FINANCIAL STATEMENTS |
|--------------|----------------------|

|                                                                                | Page        |
|-------------------------------------------------------------------------------------|-------------|
| Independant Auditor's Report                                                        |  2     |
| Unaudited Condensed Consolidated Balance Sheet                                      |  3 - 4 |
| Unaudited Condensed Consolidated Income Statement                                   | 5           |
| Unaudited Condensed Consolidated Statement of Changes in Shareholders’ Equity | 6           |
| Unaudited Condensed Consolidated Cash Flow Statement                                | 7 -8   |
| Notes to Unaudited Condensed Consolidated Financial Statements                      | 9 - 25 |

----

----

|                               |   | Notes  |   |   | 30 JUNE2012 |       |       | 31 DECEMBER 2011 |   |
|------------------------------------|--------|--------|--------|--------|-------------|------------|------------|------------------|--------|
|                               |   |   |   |   | US$         |       |       | US$              |   |
| ASSETS                             |   |   |   |   |        |       |       |             |   |
|                               |   |   |   |   |        |       |       |             |   |
| Current Assets                     |   |   |   |   |        |       |       |             |   |
| Cash                               |   |   |   |   |        | 2,934,597  |       |             |   | 653,138 |   |
| Restricted Cash                    |   |   |   |   |        | 13,280,842 |       |             |   | 7,141,837 |   |
| Notes receivable                   |   |   | 3      |   |        |       | 625,035    |             |   |   | 2,306,189 |   |
| Accounts receivable, net           |   |   | 3      |   |        |       | 1,041,354  |             |   |   | 454,366 |   |
| Inventories, net                   |   |   |   |   |        |       | 2,474,473  |             |   |   | 2,592,703 |   |
| Advances to third party suppliers  |   |   |   |   |        |       | 144,915    |             |   |   | 524,525 |   |
| Other receivables                  |   |   |   |   |        |       | 360,416    |             |   |   | 356,980 |   |
| VAT paid in advance                |   |   | 4      |   |        |       | 968,985    |             |   |   | - |   |
| Deferred tax assets                |   |   | 10     |   |        |       | 239,409    |             |   |   | 246,127 |   |
|                               |   |   |   |   |        |     |       |             |   |   |   |
| Total Current Assets               |   |   |   |   |        |       | 22,070,026 |             |   |   | 14,275,865 |   |
|                               |   |   |   |   |        |       |       |             |   |   |   |   |
| Non-current Assets                 |   |   |   |   |        |       |       |             |   |   |   |   |
| Long-term equity investment        |   |   | 5      |   |        |       | 476,622    |             |   |   | - |   |
| Property, plant and equipment, net |   |   | 6      |   |        |       | 32,897,685 |             |   |   | 23,563,105 |   |
| Land use rights, net               |   |   | 7      |   |        |       | 2,444,290  |             |   |   | 2,477,367 |   |
|                               |   |   |   |   |        |       |       |             |   |   |   |   |
| Total Non-current Assets           |   |   |   |   |        |       | 35,818,597 |             |   |   | 26,040,472 |   |
|                               |   |   |   |   |        |       |       |             |   |   |   |   |
| TOTAL ASSETS                       |   |   |   |   |        |       | 57,888,623 |             |   |   | 40,316,337 |   |

----

|                                                                                            |   | Notes  |   |   | 30 JUNE 2012 |   |       | 31 DECEMBER 2011 |   |
|-------------------------------------------------------------------------------------------------|--------|--------|--------|--------|-------------------|--------|------------|------------------|--------|
|                                                                                            |   |   |   |   | US$               |   |       | US$              |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                 |   |   |   |   |              |   |       |             |   |
| Current Liabilities                                                                             |   |   |   |   |              |   |       |             |   |
| Short-term bank borrowings                                                                      |   |   | 8      |   |              |   | 14,624,737 |             |   |   | 11,665,000 |   |
| Accounts payable to third parties                                                               |   |   |   |   |              |   | 3,436,632  |             |   |   | 3,012,227 |   |
| Notes payable                                                                                   |   |   | 9      |   |              |   | 21,186,106 |             |   |   | 12,696,599 |   |
| Advance from third party customers                                                              |   |   |   |   |              |   | 838,299    |             |   |   | 355,159 |   |
| Payroll and welfare payable                                                                     |   |   |   |   |              |   | 46,064     |             |   |   | 32,548 |   |
| Accrued expenses                                                                                |   |   |   |   |              |   | 234,664    |             |   |   | 215,306 |   |
| Amounts due to related parties                                                                  |   |   | 14     |   |              |   | 4,122,292  |             |   |   | 212,270 |   |
| Income tax payable                                                                              |   |   |   |   |              |   | 219,822    |             |   |   | 872,912 |   |
| VAT payable                                                                                     |   |   | 4      |   |              |   | -          |             |   |   | 220,171 |   |
| Miscellaneous taxes payable                                                                     |   |   | 11     |   |              |   | 25,310     |             |   |   | 46,722 |   |
| Amounts  payable to constructors                                                      |   |   | 12     |   |              |   | 2,652,883  |             |   |   | 716,168 |   |
| Other payables to third parties                                                                 |   |   |   |   |              |   | 65,868     |             |   |   | 84,776 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Total Current Liabilities                                                                       |   |   |   |   |              |   | 47,452,677 |             |   |   | 30,129,858 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Non-current liabilities                                                                         |   |   |   |   |              |   |       |             |   |   |   |   |
| Deferred tax liabilities                                                                        |   |   | 10     |   |              |   | 85,710     |             |   |   | 84,809 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Total Non-current Liabilities                                                                   |   |   |   |   |              |   | 85,710     |             |   |   | 84,809 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Total Liabilities                                                                               |   |   |   |   |              |   | 47,538,387 |             |   |   | 30,214,667 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Shareholders' Equity                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Common stock, $.0001 par value, 13,294,500  shares authorized, issued and outstanding |   |   |   |   |              |   | 13,295     |             |   |   | 13,295 |   |
| Additional paid−in capital                                                                |   |   |   |   |              |   | 2,440,323  |             |   |   | 2,440,323 |   |
| Statutory reserves                                                                              |   |   | 13     |   |              |   | 1,079,781  |             |   |   | 1,053,819 |   |
| Accumulated other comprehensive income                                                          |   |   |   |   |              |   | (866,854   | )                |   |   | (961,005 | ) |
| Retained earnings                                                                               |   |   |   |   |              |   | 7,683,691  |             |   |   | 7,555,238 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| Total Shareholders’ Equity                                                                |   |   |   |   |              |   | 10,350,236 |             |   |   | 10,101,670 |   |
|                                                                                            |   |   |   |   |              |   |       |             |   |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                |   |   |   |   |              |   | 57,888,623 |             |   |   | 40,316,337 |   |

----

|                                                  |   |   |   |   | THREE MONTHS ENDED30 JUNE |   |       | SIX MONTHS ENDED30 JUNE |   |
|-------------------------------------------------------|--------|--------|--------|--------|---------------------------|--------|------------|-------------------------|--------|
|                                                  |   | Notes  |   |   | 2012                      |   |       | 2011                    |   |   | 2012 |   |   | 2011 |   |
|                                                  |   |   |   |   | US$                       |   |       | US$                     |   |   | US$ |   |   | US$ |   |
| Revenues                                              |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |
| Cornstarch                                            |   |   | 16     |   |                      |   | 17,010,860 |                    |   |   | 16,572,603 |   |   |   | 33,964,537 |   |   |   | 29,723,798 |   |
| Glucose                                               |   |   | 16     |   |                      |   | 2,951,332  |                    |   |   | 2,906,547 |   |   |   | 6,062,390 |   |   |   | 5,818,429 |   |
| Others                                                |   |   |   |   |                      |   | 41,745     |                    |   |   | 30,087 |   |   |   | 82,965 |   |   |   | 88,846 |   |
| Total Revenues                                        |   |   |   |   |                      |   | 20,003,937 |                    |   |   | 19,509,237 |   |   |   | 40,109,892 |   |   |   | 35,631,073 |   |
| Cost of Sales                                         |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cornstarch                                            |   |   | 16     |   |                      |   | 16,752,958 |                    |   |   | 14,697,383 |   |   |   | 32,199,689 |   |   |   | 25,871,925 |   |
| Glucose                                               |   |   | 16     |   |                      |   | 2,601,796  |                    |   |   | 2,219,458 |   |   |   | 5,199,342 |   |   |   | 4,399,795 |   |
| Others                                                |   |   |   |   |                      |   | 63,983     |                    |   |   | 30,533 |   |   |   | 178,419 |   |   |   | 89,292 |   |
| Total Cost of Sales                                   |   |   |   |   |                      |   | 19,418,737 |                    |   |   | 16,947,374 |   |   |   | 37,577,450 |   |   |   | 30,361,012 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross Profit                                          |   |   |   |   |                      |   | 585,200    |                    |   |   | 2,561,863 |   |   |   | 2,532,442 |   |   |   | 5,270,061 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                                    |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and distribution                              |   |   |   |   |                      |   | 572,762    |                    |   |   | 247,862 |   |   |   | 1,087,661 |   |   |   | 541,383 |   |
| General and administrative                            |   |   |   |   |                      |   | 197,774    |                    |   |   | 371,567 |   |   |   | 403,544 |   |   |   | 488,014 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Operating Expenses                              |   |   |   |   |                      |   | 770,536    |                    |   |   | 619,429 |   |   |   | 1,491,205 |   |   |   | 1,029,397 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                       |   |   |   |   |                      |   | 79,387     |                    |   |   | 1,034 |   |   |   | 117,277 |   |   |   | 2,344 |   |
| Interest expenses                                     |   |   |   |   |                      |   | 597,223    |                    |   |   | 223,345 |   |   |   | 835,814 |   |   |   | 398,519 |   |
| Foreign exchange gain                                 |   |   |   |   |                      |   | 155        |                    |   |   | - |   |   |   | 508 |   |   |   | - |   |
| Gain/(Loss) from disposals of fixed assets            |   |   |   |   |                      |   | 45,539     |                    |   |   | - |   |   |   | (113,144 | ) |   |   | - |   |
| Other Income, net                                     |   |   |   |   |                      |   | 36,983     |                    |   |   | (80,415 | ) |   |   | 35,392 |   |   |   | (121,704 | ) |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Income/(Loss) Before Income Tax Expenses              |   |   |   |   |                      |   | (620,495   | )                       |   |   | 1,639,708 |   |   |   | 245,456 |   |   |   | 3,722,785 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expenses                                   |   |   | 10     |   |                      |   | (166,455   | )                       |   |   | 404,798 |   |   |   | 91,041 |   |   |   | 951,304 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| NET  INCOME                                 |   |   |   |   |                      |   | (454,040   | )                       |   |   | 1,234,910 |   |   |   | 154,415 |   |   |   | 2,771,481 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding |   |   |   |   |                      |   | 13,294,500 |                    |   |   | 13,294,500 |   |   |   | 13,294,500 |   |   |   | 13,294,500 |   |
|                                                  |   |   |   |   |                      |   |       |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic net earnings per share                          |   |   |   |   |                      |   | (0.03      | )                       |   |   | 0.09 |   |   |   | 0.01 |   |   |   | 0.21 |   |

----

|                                    |   | CommonStock |   |   | Additional Paid-in capital |   |      | Statutoryreserves |   |   | Retainedearnings |   |   | Accumulated other comprehensive loss |      |   | Total shareholders’ equity |   |
|-----------------------------------------|--------|-------------|--------|--------|----------------------------|--------|-----------|-------------------|--------|--------|------------------|--------|--------|--------------------------------------|-----------|--------|----------------------------------|--------|
|                                    |   | US$         |   |   | US$                        |   |      | US$               |   |   | US$              |   |   | US$                                  |      |   | US$                              |   |
|                                    |   | (Note 1)    |   |   |                       |   |      |              |   |   |             |   |   |                                 |      |   |                             |   |
|                                    |   |        |   |   |                       |   |      |              |   |   |             |   |   |                                 |      |   |                             |   |
| Balance as at 31 December 2011          |   |        | 13,295 |   |                       |   | 2,440,323 |              |   |   | 1,053,819        |   |   |                                 | 7,555,238 |   |                             |   | (961,005 | ) |   |   | 10,101,670 |   |
|                                    |   |        |   |   |                       |   |      |              |   |   |             |   |   |                                 |      |   |                             |   |   |   |   |   |   |   |
| Net income                              |   |        | -      |   |                       |   | -         |              |   |   | -                |   |   |                                 | 154,415   |   |                             |   | - |   |   |   | 154,415 |   |
| Foreign currency translation adjustment |   |        | -      |   |                       |   | -         |              |   |   | -                |   |   |                                 | -         |   |                             |   | 94,151 |   |   |   | 94,151 |   |
| Total comprehensive income              |   |        | -      |   |                       |   | -         |              |   |   | -                |   |   |                                 | 154,415   |   |                             |   | 94,151 |   |   |   | 248,566 |   |
|                                    |   |        |   |   |                       |   |      |              |   |   |             |   |   |                                 |      |   |                             |   |   |   |   |   |   |   |
| New shares issued                       |   |        | -      |   |                       |   | -         |              |   |   | -                |   |   |                                 | -         |   |                             |   | - |   |   |   | - |   |
| Appropriation of statutory reserve      |   |        | -      |   |                       |   | -         |              |   |   | 25,962           |   |   |                                 | (25,962   | )      |                             |   | - |   |   |   | - |   |
| Contribution from shareholders          |   |        | -      |   |                       |   | -         |              |   |   | -                |   |   |                                 | -         |   |                             |   | - |   |   |   | - |   |
|                                    |   |        |   |   |                       |   |      |              |   |   |             |   |   |                                 |      |   |                             |   |   |   |   |   |   |   |
| Balance as at 30 June 2012              |   |        | 13,295 |   |                       |   | 2,440,323 |              |   |   | 1,079,781        |   |   |                                 | 7,683,691 |   |                             |   | (866,854 | ) |   |   | 10,350,236 |   |

----

|                                                                            |   | SIX MONTHS ENDED30 JUNE |      |
|---------------------------------------------------------------------------------|--------|-------------------------|-----------|
|                                                                            |   | 2012                    |      |   | 2011 |   |
|                                                                            |   | US$                     |      |   | US$ |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                            |   |                    |      |   |   |   |
|                                                                            |   |                    |      |   |   |   |
| Net income                                                                      |   |                    | 154,415   |   |   |   | 2,771,481 |   |
|                                                                            |   |                    |      |   |   |   |   |   |
| Adjustment to reconcile net income to net cash provided by operating activities |   |                    |      |   |   |   |   |   |
|                                                                            |   |                    |      |   |   |   |   |   |
| Depreciation of property, plant and equipment                                   |   |                    | 735,938   |   |   |   | 383,091 |   |
| Amortization of land use rights                                                 |   |                    | 33,077    |   |   |   | 31,882 |   |
| Allowance for doubtful accounts                                                 |   |                    | 18,865    |   |   |   | - |   |
| Finance expense                                                                 |   |                    | 835,306   |   |   |   | 398,519 |   |
| Loss from disposals of fixed assets                                             |   |                    | 113,144   |   |   |   | 48,518 |   |
|                                                                            |   |                    |      |   |   |   |   |   |
| Changes in operating assets and liabilities                                     |   |                    |      |   |   |   |   |   |
| Accounts receivable to third parties                                            |   |                    | (605,853  | ) |   |   | (628,954 | ) |
| Notes receivable                                                                |   |                    | 1,681,154 |   |   |   | 2,060,907 |   |
| Advances to third party suppliers, net                                          |   |                    | 379,610   |   |   |   | 406,352 |   |
| Other receivables                                                               |   |                    | (3,436    | ) |   |   | (189,295 | ) |
| VAT paid in advance                                                             |   |                    | (968,985  | ) |   |   | - |   |
| Amounts due from related parties                                                |   |                    | -         |   |   |   | (980,517 | ) |
| Inventories                                                                     |   |                    | 118,230   |   |   |   | (159,783 | ) |
| Accounts payable to third parties                                               |   |                    | 424,405   |   |   |   | 582,436 |   |
| Tax payable                                                                     |   |                    | (894,673  | ) |   |   | 251,858 |   |
| Advances from third party customers                                             |   |                    | 483,140   |   |   |   | 179,912 |   |
| Payroll and welfare payable                                                     |   |                    | 13,516    |   |   |   | 16,769 |   |
| Other payables to third parties                                                 |   |                    | (18,908   | ) |   |   | (923,159 | ) |
| Amounts due to related parties                                                  |   |                    | 3,910,022 |   |   |   | 90,922 |   |
| Accrued expenses                                                                |   |                    | 19,358    |   |   |   | 26,246 |   |
| Deferred tax assets                                                             |   |                    | 6,718     |   |   |   | 13,208 |   |
| Deferred tax liabilities                                                        |   |                    | 901       |   |   |   | (27,155 | ) |
| Net cash provided by operating activities                                       |   |                    | 6,435,944 |   |   |   | 4,353,238 |   |

----

|                                                    |   | SIX MONTHS ENDED30 JUNE |         |
|---------------------------------------------------------|--------|-------------------------|--------------|
|                                                    |   | 2012                    |         |   | 2011 |   |
|                                                    |   | US$                     |         |   | US$ |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                    |   |                    |         |   |   |   |
|                                                    |   |                    |         |   |   |   |
| Proceeds from disposal of property, plant and equipment |   |                    |  45,365 |   |   |   | - |   |
| (Increase)/release of restricted cash                   |   |                    | (6,139,005   | ) |   |   | 226,494 |   |
| Acquisition of long-term equity investment              |   |                    | (476,622     | ) |   |   | - |   |
| Purchases of property, plant and equipment              |   |                    | (8,292,312   | ) |   |   | (7,501,763 | ) |
|                                                    |   |                    |         |   |   |   |   |
| Net cash used in investing activities                   |   |                    | (14,862,574  | ) |   |   | (7,275,269 | ) |
|                                                    |   |                    |         |   |   |   |   |   |

| CASH FLOWS FROM FINANCING ACTIVITIES                |   |              |       |   |   |       |
|-----------------------------------------------------|--------|-------------------|------------|--------|--------|------------|
|                                                |   |              |       |   |   |       |
| Bank loan repaid                                    |   |              | (3,996,895 | )      |   |       | (5,349,520 | ) |
| Interest paid                                       |   |              | (835,814   | )      |   |       | (398,519 | ) |
| Proceeds from additional paid-in capital            |   |              | -          |   |   |       | 23,877 |   |
| Proceeds from additional short-term bank borrowings |   |              | 6,956,632  |   |   |       | 3,056,868 |   |
| Increase of notes payable                           |   |              | 8,489,507  |   |   |       | 1,545,213 |   |
|                                                |   |              |       |   |   |       |   |   |
| Net cash (used in)/provided by financing activities |   |              | 10,613,430 |   |   |       | (1,122,081 | ) |
|                                                |   |              |       |   |   |       |   |   |
| Effect of foreign exchange rate changes             |   |              | 94,659     |   |   |       | 108,747 |   |
| Net increase/ (decrease) in cash                    |   | 2,281,459  |       |   |   | (3,935,365 | ) |
|                                                |   |              |       |   |   |       |   |   |
| Cash, beginning of period                           |   |              | 653,138    |   |   |       | 6,634,012 |   |
|                                                |   |              |       |   |   |       |   |   |
| Cash, end of the period                             |   |              | 2,934,597  |   |   |       | 2,698,647 |   |
|                                                |   |              |       |   |   |       |   |   |
| Supplementary disclosure of cash flow information:  |   |              |       |   |   |       |   |   |
| Interest expenses paid                              |   |              | 835,814    |   |   |       | 398,519 |   |
| Income taxes paid                                   |   |              | 736,512    |   |   |       | 713,393 |   |

----

| 1.   | CORPORATE INFORMATION AND BASIS OF PRESENTATION |
|----------------|-------------------------------------------------|

| a)   | Corporate Information |
|----------------|-----------------------|

----

| 1.   | CORPORATE INFORMATION AND BASIS OF PRESENTATION (CONTINUED) |
|----------------|-------------------------------------------------------------|

|                                            |   | Common Stock |       |
|-------------------------------------------------|--------|--------------|------------|
|                                            |   | Shares       |       |   | Amount(US$) |   |
|                                            |   |         |       |   |   |   |
| Shares issued as of 31 December 2010            |   |         | 530,615    |   |   |   | 531 |   |
| New shares issued                               |   |         | 400,000    |   |   |   | 400 |   |
| Recapitalization for reverse acquisition        |   |         | 12,363,885 |   |   |   | 12,364 |   |
| Balance as of 31  December  2011 |   |         | 13,294,500 |   |   |   | 13,295 |   |

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----------------|--------------------------------------------|

| a)   | Principles of Consolidation |
|----------------|-----------------------------|

| b)   | Basis of Preparation |
|----------------|----------------------|

| c)   | Use of Estimates |
|----------------|------------------|

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----------------|--------------------------------------------------------|

| d)   | Foreign Currency |
|----------------|------------------|

|              | Period end exchange rate |   | Year end exchange rate |
|-------------------|--------------------------|--------|------------------------|
|              | US$:RMB                  |   | US$:RMB                |
|              |                     |   |                   |
| June 30, 2012     | 6.3249                   |   | N/A                    |
| December 31, 2011 | N/A                      |   | 6.3009                 |

|                   | Three months average |   | Six months average |
|------------------------|----------------------|--------|--------------------|
|                   | US$:RMB              |   | US$:RMB            |
|                   |                 |   |               |
| Second quarter of 2012 | 6.3130               |   | N/A                |
| First half of 2012     | N/A                  |   | 6.3061             |
| Second quarter of 2011 | 6.4850               |   | N/A                |
| First half of 2011     | N/A                  |   | 6.5426             |

| e)   | Fair Value of Financial Instruments |
|----------------|-------------------------------------|

|  ● |  Level 1 -   | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.                       |
|---------------|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
|  ● |  Level 2 -        | Include other inputs that are directly or indirectly observable in the marketplace; and                                                |
|  ● |  Level 3 -        | Unobservable inputs which are supported by little or no market activity, therefore requiring an entity to develop its own assumptions. |

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----------------|--------------------------------------------------------|

| f)   | Cash |
|----------------|------|

| g)   | Restricted Cash |
|----------------|-----------------|

| h)   | Notes and Accounts Receivable |
|----------------|-------------------------------|

| i)   | Inventories |
|----------------|-------------|

| j)   | Property, Plant and Equipment |
|----------------|-------------------------------|

| EstimatedCategory |   | Estimateduseful life |   | Residual value |   |   | Annualdepreciation rate |   |
|-------------------|--------|----------------------|--------|----------------|--------|--------|-------------------------|--------|
|              |   |                 |   |           |   |   |                    |   |
| Buildings         |   | 20 years             |   |           | 5      | %      |                    |   | 4.75 | % |
|              |   |                 |   |           |   |   |                    |   |   |   |
| Machinery         |   | 5-10 years           |   |           | 5      | %      |                    |   | 9.5%-19 | % |
|              |   |                 |   |           |   |   |                    |   |   |   |
| Office equipments |   | 5-10 years           |   |           | 5      | %      |                    |   | 9.5%-19 | % |
|              |   |                 |   |           |   |   |                    |   |   |   |
| Vehicles          |   | 10 years             |   |           | 5      | %      |                    |   | 9.5 | % |

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----------------|--------------------------------------------------------|

| j)   | Property, Plant and Equipment (continued) |
|----------------|-------------------------------------------|

| k)   | Land Use Rights |
|----------------|-----------------|

| l)   | Investments |
|----------------|-------------|

| m)   | Revenue Recognition |
|----------------|---------------------|

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----------------|--------------------------------------------------------|

| n)   | Shipping and Handling Costs |
|----------------|-----------------------------|

| o)   | Cost of Goods Sold |
|----------------|--------------------|

| p)   | Advertising Expenditures |
|----------------|--------------------------|

| q)   | Comprehensive Income |
|----------------|----------------------|

| r)   | Income Taxes |
|----------------|--------------|

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----------------|--------------------------------------------------------|

| s)   | Value-added Tax (VAT) |
|----------------|-----------------------|

| t)   | Employee Benefits |
|----------------|-------------------|

| u)   | Impairment of Long-lived Assets |
|----------------|---------------------------------|

| v)   | Government Grants |
|----------------|-------------------|

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
|----------------|--------------------------------------------------------|

| w)   | Income (Loss) per Share |
|----------------|-------------------------|

| x)   | Recently Issued Accounting Pronouncements |
|----------------|-------------------------------------------|

----

| 3.   | NOTES AND ACCOUNTS RECEIVABLE, NET |
|----------------|------------------------------------|

| 4.   | VAT PAID IN ADVANCE AND VAT PAYABLE |
|----------------|-------------------------------------|

| 5.   | LONG-TERM EQUITY INVESTMENT |
|----------------|-----------------------------|

| 6.   | PROPERTY , PLANT AND EQUIPMENT, NET |
|----------------|-------------------------------------|

|                               |   | 30 JUNE2012 |       |   | 31 DECEMBER2011 |   |
|------------------------------------|--------|-------------|------------|--------|-----------------|--------|
|                               |   | US$         |       |   | US$             |   |
| Buildings                          |   |        | 4,191,217  |   |            |   | 3,552,203 |   |
| Machinery                          |   |        | 11,443,935 |   |            |   | 13,052,509 |   |
| Office equipment                   |   |        | 28,549     |   |            |   | 25,316 |   |
| Vehicles                           |   |        | 93,329     |   |            |   | 65,650 |   |
| Total                              |   |        | 15,757,030 |   |            |   | 16,695,678 |   |
| Less: Accumulated depreciation     |   |        | (6,281,624 | )      |            |   | (7,059,879 | ) |
| Subtotal                           |   |        | 9,475,406  |   |            |   | 9,635,799 |   |
| Construction in progress           |   |        | 23,422,279 |   |            |   | 13,927,306 |   |
| Property, plant and equipment, net |   |        | 32,897,685 |   |            |   | 23,563,105 |   |

----

| 6.   | PROPERTY , PLANT AND EQUIPMENT, NET (CONTINUED) |
|----------------|-------------------------------------------------|

| 7.  | LAND USE RIGHTS, NET |
|----------|----------------------|

|                           |   | 30 JUNE2012 |      |   | 31 DECEMBER2011 |   |
|--------------------------------|--------|-------------|-----------|--------|-----------------|--------|
|                           |   | US$         |      |   | US$             |   |
| Land use rights, cost          |   |        | 2,766,860 |   |            |   | 2,766,860 |   |
| Less: accumulated amortization |   |        | (322,570  | )      |            |   | (289,493 | ) |
| Land use rights, net           |   |        | 2,444,290 |   |            |   | 2,477,367 |   |

| 8. | BANK BORROWINGS |
|----|-----------------|

|                                         |   | 30 JUNE2012 |       |   | 31 DECEMBER2011 |   |
|----------------------------------------------|--------|-------------|------------|--------|-----------------|--------|
|                                         |   | US$         |       |   | US$             |   |
| Rural Cooperative Bank of Dongping, Shandong |   |        | 4,506,000  |   |            |   | 4,523,163 |   |
| China Merchants Bank                         |   |        | 948,631    |   |            |   | 1,587,075 |   |
| Agricultural Development Bank                |   |        | 4,743,158  |   |            |   | 4,761,225 |   |
| Bank of Communications                       |   |        | 1,581,053  |   |            |   | 793,537 |   |
| TaiAn  City Commercial Bank        |   |        | 2,845,895  |   |            |   | - |   |
| Total                                        |   |        | 14,624,737 |   |            |   | 11,665,000 |   |

----

| 9. | NOTES PAYABLE |
|----|---------------|

| 10. | INCOME TAXES |
|-----|--------------|

|                      |   | THREE MONTHS ENDED 30 JUNE |     |
|---------------------------|--------|----------------------------|----------|
|                      |   | 2012                       |     |   | 2011 |   |
|                      |   | US$                        |     |   | US$ |   |
| Income before taxes:      |   |                       |     |   |   |   |
| US Federal                |   |                       | -        |   |   |   | - |   |
| US State                  |   |                       | -        |   |   |   | - |   |
| BVI                       |   |                       | -        |   |   |   | - |   |
| PRC                       |   |                       | (620,495 | ) |   |   | 1,639,708 |   |
| Total income before taxes |   |                       | (620,495 | ) |   |   | 1,639,708 |   |

|                             |   | THREE MONTHS ENDED 30 JUNE |     |
|----------------------------------|--------|----------------------------|----------|
|                             |   | 2012                       |     |   | 2011 |   |
|                             |   | US$                        |     |   | US$ |   |
| Provision for income taxes:      |   |                       |     |   |   |   |
| Current:                         |   |                       |     |   |   |   |
| US Federal                       |   |                       | -        |   |   |   | - |   |
| US State                         |   |                       | -        |   |   |   | - |   |
| BVI                              |   |                       | -        |   |   |   | - |   |
| PRC                              |   |                       | (173,223 | ) |   |   | 402,440 |   |
| Current income taxes             |   |                       | (173,223 | ) |   |   | 402,440 |   |
|                             |   |                       |     |   |   |   |   |   |
| Deferred:                        |   |                       |     |   |   |   |   |   |
| US Federal                       |   |                       | -        |   |   |   | - |   |
| US State                         |   |                       | -        |   |   |   | - |   |
| BVI                              |   |                       | -        |   |   |   | - |   |
| PRC                              |   |                       | 6,768    |   |   |   | 2,358 |   |
| Deferred income taxes            |   |                       | 6,768    |   |   |   | 2,358 |   |
|                             |   |                       |     |   |   |   |   |   |
| Total provision for income taxes |   |                       | (166,455 | ) |   |   | 404,798 |   |

----

| 10. | INCOME TAXES (CONTINUED) |
|-----|--------------------------|

|                      |   | SIX MONTHS ENDED 30 JUNE |    |
|---------------------------|--------|--------------------------|---------|
|                      |   | 2012                     |    |   | 2011 |   |
|                      |   | US$                      |    |   | US$ |   |
| Income before taxes:      |   |                     |    |   |   |   |
| US Federal                |   |                     | -       |   |   |   | - |   |
| US State                  |   |                     | -       |   |   |   | (3,877 | ) |
| BVI                       |   |                     | -       |   |   |   | - |   |
| PRC                       |   |                     | 245,456 |   |   |   | 3,726,662 |   |
| Total income before taxes |   |                     | 245,456 |   |   |   | 3,722,785 |   |

|                             |   | SIX MONTHS ENDED 30 JUNE |   |
|----------------------------------|--------|--------------------------|--------|
|                             |   | 2012                     |   |   | 2011 |   |
|                             |   | US$                      |   |   | US$ |   |
| Provision for income taxes:      |   |                     |   |   |   |   |
| Current:                         |   |                     |   |   |   |   |
| US Federal                       |   |                     | -      |   |   |   | - |   |
| US State                         |   |                     | -      |   |   |   | - |   |
| BVI                              |   |                     | -      |   |   |   | - |   |
| PRC                              |   |                     | 83,422 |   |   |   | 965,251 |   |
| Current income taxes             |   |                     | 83,422 |   |   |   | 965,251 |   |
|                             |   |                     |   |   |   |   |   |   |
| Deferred:                        |   |                     |   |   |   |   |   |   |
| US Federal                       |   |                     | -      |   |   |   | - |   |
| US State                         |   |                     | -      |   |   |   | - |   |
| BVI                              |   |                     | -      |   |   |   | - |   |
| PRC                              |   |                     | 7,619  |   |   |   | (13,947 | ) |
| Deferred income taxes            |   |                     | 7,619  |   |   |   | (13,947 | ) |
|                             |   |                     |   |   |   |   |   |   |
| Total provision for income taxes |   |                     | 91,041 |   |   |   | 951,304 |   |

|                                     |   | THREE MONTHS ENDED 30 JUNE |     |
|------------------------------------------|--------|----------------------------|----------|
|                                     |   | 2012                       |     |   | 2011 |   |
|                                     |   | US$                        |     |   | US$ |   |
| Profit (loss) before income tax          |   |                       | (620,495 | ) |   |   | 1,639,708 |   |
| Corporate income tax rate                |   |                       | 25       | % |   |   | 25 | % |
| Computed tax at statutory rate           |   |                       | (155,124 | ) |   |   | 409,927 |   |
| Income exempted from taxation            |   |                       | (11,331  | ) |   |   | (5,129 | ) |
| Expenses not deductible for tax purposes |   |                       | -        |   |   |   | - |   |
| Provision for income taxes               |   |                       | (166,455 | ) |   |   | 404,798 |   |

----

| 10.  | INCOME TAXES (CONTINUED) |
|-----------|--------------------------|

|                                     |   | SIX MONTHS ENDED 30 JUNE |    |
|------------------------------------------|--------|--------------------------|---------|
|                                     |   | 2012                     |    |   | 2011 |   |
|                                     |   | US$                      |    |   | US$ |   |
| Profit before income tax                 |   |                     | 245,456 |   |   |   | 3,722,785 |   |
| Corporate income tax rate                |   |                     | 25      | % |   |   | 25 | % |
| Computed tax at statutory rate           |   |                     | 61,364  |   |   |   | 930,696 |   |
| Income exempted from taxation            |   |                     | -       |   |   |   | (6,098 | ) |
| Expenses not deductible for tax purposes |   |                     | 29,677  |   |   |   | 26,706 |   |
| Provision for income taxes               |   |                     | 91,041  |   |   |   | 951,304 |   |

|                            |   | 30 JUNE2012 |    |   | 31 DECEMBER2011 |   |
|---------------------------------|--------|-------------|---------|--------|-----------------|--------|
|                            |   | US$         |    |   | US$             |   |
| Deferred tax assets             |   |        |    |   |            |   |
| Allowance for doubtful accounts |   |        | 239,409 |   |            |   | 246,127 |   |
| Total deferred tax assets       |   |        | 239,409 |   |            |   | 246,127 |   |

| Deferred tax liabilities                       |   |   |   |   |   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Depreciation of property, plant and equipments |   |   | 85,710 |   |   |   | 84,809 |   |
| Total deferred tax liabilities                 |   |   | 85,710 |   |   |   | 84,809 |   |

| 11.  | MISCELLANEOUS TAXES PAYABLE |
|-----------|-----------------------------|

|                                            |   | 30 JUNE2012 |   |   | 31 DECEMBER2011 |   |
|-------------------------------------------------|--------|-------------|--------|--------|-----------------|--------|
|                                            |   | US$         |   |   | US$             |   |
| Urban construction tax                          |   |        | -      |   |            |   | 18,728 |   |
| Land use tax                                    |   |        | 15,849 |   |            |   | 15,909 |   |
| Real estate tax                                 |   |        | 3,383  |   |            |   | 4,496 |   |
| Stamp duty                                      |   |        | 2,471  |   |            |   | 2,852 |   |
| Personal income tax payable on behalf of staffs |   |        | 3,607  |   |            |   | 4,737 |   |
|                                            |   |        |   |   |            |   |   |   |
| Total                                           |   |        | 25,310 |   |            |   | 46,722 |   |

----

| 12. | AMOUNTS PAYALBE TO CONSTRUCTORS |
|-----|---------------------------------|

| 13. | STATUTORY RESERVES |
|-----|--------------------|

|                  |   | 30 JUNE2012 |      |   | 31 DECEMBER2011 |   |
|-----------------------|--------|-------------|-----------|--------|-----------------|--------|
|                  |   | US$         |      |   | US$             |   |
|                  |   |        |      |   |            |   |
| Statutory reserve     |   |        | 674,863   |   |            |   | 658,637 |   |
| Discretionary reserve |   |        | 404,918   |   |            |   | 395,182 |   |
| Total                 |   |        | 1,079,781 |   |            |   | 1,053,819 |   |

| 14.  | RELATED PARTY TRANSACTIONS |
|-----------|----------------------------|

| Name                                       |   | Relationship                    |
|--------------------------------------------|--------|---------------------------------|
|                                       |   |                            |
| Shandong Runyin Bio-chemical Co., Ltd.     |   | Affiliates under common control |
| Ruixing Group Co., Ltd.                    |   | Affiliates under common control |
| Shandong Xinrui Chemical Devices Co., Ltd. |   | Affiliates under common control |
| Shandong Runyin Pawn Co., Ltd.             |   | Affiliate                       |

----

| 14.  | RELATED PARTY TRANSACTIONS (CONTINUED) |
|-----------|----------------------------------------|

|                                   |   |   | SIX MONTHS ENDED 30 JUNE |      |
|----------------------------------------|--------|--------|--------------------------|-----------|
|                                   |   |   | 2012                     |      |   | 2011 |   |
|                                   |   |   | US$                      |      |   | US$ |   |
| Shandong Runyin Bio-chemical Co., Ltd. | (i)    |   |                     | 1,917,806 |   |   |   | 982,686 |   |

|                                   |   |   | SIX MONTHS ENDED 30 JUNE |      |
|----------------------------------------|--------|--------|--------------------------|-----------|
|                                   |   |   | 2012                     |      |   | 2011 |   |
|                                   |   |   | US$                      |      |   | US$ |   |
| Shandong Runyin Bio-chemical Co., Ltd. | (i)    |   |                     | 2,070,788 |   |   |   | 998,990 |   |

|                                   |   | SIX MONTHS ENDED 30 JUNE |    |
|----------------------------------------|--------|--------------------------|---------|
|                                   |   | 2012                     |    |   | 2011 |   |
|                                   |   | US$                      |    |   | US$ |   |
| Shandong Runyin Bio-chemical Co., Ltd. |   |                     | 739,381 |   |   |   | 1,362,750 |   |
| Ruixing Group Co., Ltd.                |   |                     | 10,133  |   |   |   | - |   |
|                                   |   |                     | 749,514 |   |   |   | 1,362,750 |   |

|                                   |   |   | SIX MONTHS ENDED 30 JUNE |   |
|----------------------------------------|--------|--------|--------------------------|--------|
|                                   |   |   | 2012                     |   |   | 2011 |   |
|                                   |   |   | US$                      |   |   | US$ |   |
| Shandong Runyin Bio-chemical Co., Ltd. | (ii)   |   |                     | 4,908  |   |   |   | 4,700 |   |

|                                       |   | SIX MONTHS ENDED 30 JUNE |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | 2012                     |   |   | 2011 |   |
|                                       |   | US$                      |   |   | US$ |   |
| Shandong Xinrui Chemical Devices Co., Ltd. |   |                     | 2,474  |   |   |   | - |   |

|                                       |   | SIX MONTHS ENDED 30 JUNE |   |
|--------------------------------------------|--------|--------------------------|--------|
|                                       |   | 2012                     |   |   | 2011 |   |
|                                       |   | US$                      |   |   | US$ |   |
| Shandong Xinrui Chemical Devices Co., Ltd. |   |                     | 68,612 |   |   |   | - |   |

----

| 14.   | RELATED PARTY TRANSACTIONS (CONTINUED) |
|-----------------|----------------------------------------|

| (i)   | In January 2009, the Group entered into a non-cancelable contract with Shandong Runyin Bio-chemical Co., Ltd. to secure the steam and electricity supply for the Company’s cornstarch and glucose production. The non-cancelable utility supply contract with Shandong Runyin Bio-chemical Co., Ltd. expires in December 2014 whose price was determined by reference to market price. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | In December 2008, the Group entered into a rental contract with Shandong Runyin Bio-chemical Co., Ltd. for leasing two plants. The lease contract has been renewed on an annual basis with yearly payment of US$9,000, which was determined by reference to market price. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | 30 JUNE2012 |      |   | 31 DECEMBER2011 |   |
|--------------------------------------------|--------|-------------|-----------|--------|-----------------|--------|
|                                       |   | US$         |      |   | US$             |   |
| Ruixing Group Co., Ltd.                    |   |        | 300,835   |   |            |   | 212,270 |   |
| Shandong Xinrui Chemical Devices Co., Ltd. |   |        | 62,499    |   |            |   | - |   |
| Shandong Runyin Bio-chemical Co., Ltd.     |   |        | 3,758,958 |   |            |   | - |   |
| Total                                      |   |        | 4,122,292 |   |            |   | 212,270 |   |

| 15.   | COMMITMENTS AND CONTINGENCIES |
|-----------------|-------------------------------|

----

| 16.   | SEGMENT AND GEOGRAPHIC INFORMATION |
|-----------------|------------------------------------|

|          |   | SIX MONTHS ENDED 30 JUNE |       |
|---------------|--------|--------------------------|------------|
|          |   | 2012                     |       |   | 2011 |   |
|          |   | US$                      |       |   | US$ |   |
| Revenues      |   |                     |       |   |   |   |
| Cornstarch    |   |                     | 33,964,537 |   |   |   | 29,723,798 |   |
| Glucose       |   |                     | 6,062,390  |   |   |   | 5,818,429 |   |
| Cost of sales |   |                     |       |   |   |   |   |   |
| Cornstarch    |   |                     | 32,199,689 |   |   |   | 25,871,925 |   |
| Glucose       |   |                     | 5,199,342  |   |   |   | 4,399,795 |   |
| GPM           |   |                     |       |   |   |   |   |   |
| Cornstarch    |   |                     | 5          | % |   |   | 13 | % |
| Glucose       |   |                     | 14         | % |   |   | 24 | % |

| 17.   | SUBSEQUENT EVENTS |
|-----------------|-------------------|

----

| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|--------------|---------------------------------------------------------------------------------------------|

----

|                                             | Three months Ended                 |   |   |   |   |   |     |   |
|--------------------------------------------------|------------------------------------|--------|--------|--------|--------|--------|----------|--------|
|                                             | June 30,                           |   |   |   |   |   |     |   |
|                                             | (unaudited)                        |   |   |   |   |   |     |   |
|                                             | 2012                               |   |   | 2011   |   |   | $ Change |   |   | % Change |   |
|                                             | (In thousands, except percentages) |   |
| Statement of operations data                     |                               |   |   |   |   |   |     |   |   |   |   |   |   |
| Revenues                                         |                               | $      | 20,004 |   |   |   | 19,509   |   |   |   |   | 495 |   |   |   | 3 | % |
| Cost of sales                                    |                               |   | 19,419 |   |   |   | 16,947   |   |   |   |   | 2,472 |   |   |   | 15 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                     |                               |   | 585    |   |   |   | 2,562    |   |   |   |   | -1,977 |   |   |   | -77 | % |
| Operating expenses                               |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Selling and distribution expenses                |                               |   | 573    |   |   |   | 248      |   |   |   |   | 325 |   |   |   | 131 | % |
| General and administrative expenses              |                               |   | 198    |   |   |   | 371      |   |   |   |   | -173 |   |   |   | -47 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Total operating expenses                         |                               |   | 771    |   |   |   | 619      |   |   |   |   | 152 |   |   |   | 25 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) from operations                    |                               |   | -185   |   |   |   | 1,942    |   |   |   |   | -2,217 |   |   |   | -110 | % |
| Interest income                                  |                               |   | 79     |   |   |   | 1        |   |   |   |   | 78 |   |   |   | 7,800 | % |
| Interest expenses                                |                               |   | 597    |   |   |   | 223      |   |   |   |   | 374 |   |   |   | 168 | % |
| Other expenses, net                              |                               |   | -82    |   |   |   | 80       |   |   |   |   | -162 |   |   |   | -203 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Income(Loss) before income tax expenses          |                               |   | -620   |   |   |   | 1,640    |   |   |   |   | -2,260 |   |   |   | -138 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Income taxes expenses                            |                               |   | -166   |   |   |   | 405      |   |   |   |   | -571 |   |   |   | -141 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to ordinary shareholders |                               |   | -454   |   |   |   | 1,235    |   |   |   |   | -1,689 |   |   |   | -137 | % |

----

|                                             | Six Months Ended                   |   |   |   |   |   |     |   |
|--------------------------------------------------|------------------------------------|--------|--------|--------|--------|--------|----------|--------|
|                                             | June 30,                           |   |   |   |   |   |     |   |
|                                             | (unaudited)                        |   |   |   |   |   |     |   |
|                                             | 2012                               |   |   | 2011   |   |   | $ Change |   |   | % Change |   |
|                                             | (In thousands, except percentages) |   |
| Statement of operations data                     |                               |   |   |   |   |   |     |   |   |   |   |   |
| Revenues                                         |                               | $      | 40,109 |   |   |   | 35,631   |   |   |   | 4,478 |   |   |   | 12 | % |
| Cost of sales                                    |                               |   | 37,577 |   |   |   | 30,361   |   |   |   | 7,216 |   |   |   | 23 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Gross profit                                     |                               |   | 2,532  |   |   |   | 5,270    |   |   |   | -2,738 |   |   |   | -52 | % |
| Operating expenses                               |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Selling and distribution expenses                |                               |   | 1,087  |   |   |   | 541      |   |   |   | 546 |   |   |   | 100 | % |
| General and administrative expenses              |                               |   | 403    |   |   |   | 488      |   |   |   | -84 |   |   |   | -17 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Total operating expenses                         |                               |   | 1,491  |   |   |   | 1,029    |   |   |   | 461 |   |   |   | 44 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Income from operations                           |                               |   | 1,041  |   |   |   | 4,240    |   |   |   | -3,199 |   |   |   | -75 | % |
| Interest income                                  |                               |   | 117    |   |   |   | 2        |   |   |   | 115 |   |   |   | -4903 | % |
| Interest expenses                                |                               |   | 835    |   |   |   | 398      |   |   |   | 437 |   |   |   | 109 | % |
| Other expenses, net                              |                               |   | 77     |   |   |   | 121      |   |   |   | -44 |   |   |   | -36 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Income before income tax expenses                |                               |   | 245    |   |   |   | 3,722    |   |   |   | -3,477 |   |   |   | -93 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Income taxes                                     |                               |   | 91     |   |   |   | 951      |   |   |   | -860 |   |   |   | -90 | % |
|                                             |                               |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Net income attributable to ordinary shareholders |                               |   | 154    |   |   |   | 2,771    |   |   |   | -2,617 |   |   |   | -94 | % |

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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

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| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

| ITEM 1. | LEGAL PROCEEDINGS |
|--------------|-------------------|

| ITEM 1A. | RISK FACTORS |
|---------------|--------------|

| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|--------------|-------------------------------------------------------------|

| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
|--------------|---------------------------------|

| ITEM 4. | MINE SAFETY DISCLOSURE |
|--------------|------------------------|

| ITEM 5. | OTHER INFORMATION |
|--------------|-------------------|

| ITEM 6. | EXHIBITS |
|--------------|----------|

| Exhibit No. |   | Description                                                            |
|-------------|--------|------------------------------------------------------------------------|
|        |   |                                                                   |
| 31.1*       |   | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
|        |   |                                                                   |
| 31.2*       |   | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
|        |   |                                                                   |
| 32.1*       |   | Section 1350 Certification of Chief Executive Officer             |
|        |   |                                                                   |
| 32.2*       |   | Section 1350 Certification of Chief Financial Officer             |

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|                   | SMSA Treemont Acquisition Corp. |                    |
|------------------------|---------------------------------|-------------------------|
|                   |                            |                    |   |
| Dated: August 14, 2012 | By:                             | /s/ Guo Wang            |   |
|                   |                            | Guo Wang                |   |
|                   |                            | Chief Executive Officer |   |
|                   |                            |                    |   |
| Dated: August 14, 2012 | By:                             | /s/ Wencai Pan          |   |
|                   |                            | Wencai Pan              |   |
|                   |                            | Chief Financial Officer |   |

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