SGX SESDAQ-listed Hosen Group Ltd. ("Hosen" or the "Company"), a leading fast-moving consumer goods ("FMCG") importer, exporter and distributor in Asia, is pleased to announce that it has today entered into a sale and purchase agreement ("SPA") with Dynamic Cast Limited, Geng Shang Zhen, Central Point Co. Ltd, Pang Yan and Yu Meng Heng Henry (collectively, the "Vendors") to acquire from the Vendors 100% of More Winner Investment Ltd. ("More Winner") for a Purchase Consideration of S$52.5 million ("Proposed Acquisition"). More Winner had acquired 49% of the registered capital of Shenzhen Catic System Integration Co., Ltd. ("SCSI") as part of a restructuring exercise wherein SCSI will become an equity joint venture company in the PRC.

The Vendors had jointly and severally guaranteed that the actual audited cumulative net profit after tax and minority interests attributable to More Winner?s 49% stake in SCSI will not be less than US$7.0 million ("Profit Guarantee") (excluding all profits, if any, arising from the revaluation or realisation of assets or any extraordinary or exceptional items) for the period of 24 months starting from 1 January 2008 ("Profit Guarantee Periods").

SCSI ventured into the thriving lottery market by focusing on the research and development of a first-of-its-kind self-service terminal that allows customers in China to buy Welfare Lottery tickets and collect lottery winnings in a cashless form using only their bank cards 24/7 around-the-clock.

By providing the system solutions, including all the hardware, software, marketing and promotion, SCSI collect a fixed commission for every lottery ticket sold through its terminals. It has exclusivity for all its operations for periods of 5 to 10 years, renewable at the end of each period.

SCSI signed its first collaboration contract with Tianjin Lottery Center in May 2005 to place its first trial lottery terminal in Tianjin, allowing SCSI to showcase its terminal to other lottery centers in various provinces. SCSI has been receiving positive interest from the other local lottery centers who visited Tianjin demo site while it continues improvement on the terminal which is currently the third version. As of 31 October 2007, there are 100 terminals already on soft operation in Tianjin. SCSI plans to roll out the lottery terminals to 2 other provinces within the next 6 months.

SCSI?s self-service lottery terminals come in 5 models which are user-friendly to operate using local ATM bank cards. They allow for easy and flexible addition of new games. They also facilitate data mining and analysis as customer information and data are captured through the bank cards. Auto crediting of winnings to customers? bank cards is another unique feature of the SCSI lottery terminals.

The terminals ensure secured wireless communication with powerful 128-bit encryption while reducing operational risks and settlement risks with its cashless settlements. SCSI system has passed all the stringent tests for robustness required by all relevant authorities including the PBOC (Peoples Bank of China-Central Bank).

Traditional lottery kiosks by other operators are cash transaction basis only and located mainly around the city outskirts, with no presence in the rural areas and busy business districts within the city. They also have fixed and limited hours of operation. SCSI?s stand-alone self-service terminals however operate and sell lottery tickets round-the-clock. SCSI?s system can be efficiently spread out in rural areas, widening coverage and lottery distribution channel. They can also be conveniently placed at office blocks to capture the untapped white-collar market. These further boost the already fast-growing China lottery market and enhance revenues for the industry. Integrating bank cards with traditional lottery terminals also promotes automation and digitalization of the industry in the rural area while helping the government tackle tackling illegal gambling.