SINGAPORE, 11 November 2010

(中 国环保有限公司)

profit after tax attributable to shareholders of RMB68.5 million (approximately S$13.9

million) for the nine months ended 30 September 2010, expanding 72% over the previous

corresponding period. The Group also saw an increase in revenue of RMB435.0 million

(approximately S$88.6 million), 13% more than the RMB385.2 million a year before.

Corresponding to the revenue expansion, gross profit was RMB124.9 million, increasing

8% over the RMB115.8 million previously. Its gross profit margin marginally decline to

29% for the period compared to 30% in the same period a year before.

Earnings per share for the nine months ended 30 September 2010 was 10.7 RMB cents

which increase from 6.9 RMB cents previously

For the period under review 31 projects were completed, with 2 others ongoing. In

comparison, for the corresponding period last year, the Group completed 30 projects and

7 were ongoing.

The lion’s share of revenues were from customers in the power generation segmen

which contributed 94.0%. Customers in the chemical industry made up 3.7% followed by

the paper mill segment with 2.2%.

Quarter-on-quarter, the Group’s revenue came in at RMB104.4 million compared to

RMB154.8 million previously. Profit after tax attributable to shareholders returned to

positive territory at RMB12.7 million in comparison to a net loss of RMB5.0 million a year

ago. The increase in net profit for the third quarter of 2010 was mainly due to reduction of

RMB29.3 million in goodwill written-off in the third quarter of 2009. Revenue decrease

was due to a lower number of completed projects compared to the preceding

corresponding period; 18 dust collectors projects were completed compared to 14 in the

third quarter of 2010.

For the nine months ended 30 September 2010, operating expenses were 46% higher at

RMB31.3 million against RMB21.4 million incurred in the nine months ended 30

September 2009. This was because of an increase in the level of business activities for

the period that led to higher sales and marketing expenses and salaries, on top of other

sales-related expenses.

China Environment is a provider of waste gas treatment systems in the People’s Republic

of China. It designs and constructs waste gas treatment systems and its key products

comprise Electrostatic Precipitators (ESPs) including Electrostatic Lentoid Precipitators

(ESLPs), baghouses and hybrid dust collectors. Its products and solutions are very

effective in treating waste gas with dust particles particularly in highly-polluting industries

such as power generation, cement, mining and chemical industries.

The Group has an order book valued at RMB62.3 million based on firm contracts as at 30

September 2010. The Group has secured additional 3 new contracts with the total

contract sum amounting to RMB35.9 million in October 2010.

Mr Huang Min (黄敏), China Environment’s Executive Chairman and Chief Executive

Officer, said the results showed a healthy expansion on both the top and bottom lines for

the nine months ended 30 September 2010. “Our strategic direction remains unchanged;

we will continue to grow the business through prudent investment in R&D and intensify

our business development into new markets within and outside of China.

“We are confident that these moves will strengthen our market position and put us in a

better position to capture new opportunities in a sector that continues to offer enormous

growth potential. We remain committed to achieving sustained profitability and increasing

long term shareholder value," added Mr Huang.

China Environment continues to benefit from a strong balance sheet. Net working capita

stayed healthy at RMB442.8 million. Total assets were RMB562.8 million, cash and cash

equivalents were RMB61.8 million and net assets were RMB447.3 million. This gave a

net asset value of RMB69.9 cents per share compared with RMB59.0 cents per share as

at 31 December 2009, growing by 18%.