History

In April 1999, Xinxiang Huilong was set up by Ms Feng Li and Mr Guo Xinqiang (as nominee for Feng Li) to develop properties in Xinxiang. Our Group commenced the development of our first office building, Xinxiang Huilong Building, in January 1999. With its completion in November 1999, this project with an approximate GFA of 7,359 sq. m., is marked as one of our developments with the shortest development cycle. In May 2001, our Group commenced development of our Group's first residential condominium project, Xinxiang Huilong Garden. As the project was exceedingly popular and proved to be well-received among the locals, it boosted our Group's profile in Henan's property development industry.

In October 2003, our Group made our very first foray into the development of a modern shopping complex, Shining Holiday Shopping Centre, which was completed in September 2004. We currently lease out two floors of Shining Holiday Shopping Centre to Henan Century Lianhua Hypermart Co., Ltd . We have also entered into a strategic co-operation agreement with Shanghai Century Lianhua Hypermart Co., Ltd with a view to co-operate on potential future commercial developments to be modeled after the arrangement at Shining Holiday Shopping Centre.

In September 2002, Xinxiang Huilong entered into a 50:50 joint venture with Ms Qin Hong Yan (as nominee for Ms Feng Li) to set up Xinxiang Huilong Zhongxing. Xinxiang Huilong Zhongxing was awarded the tender for the project of Sunlight City in September 2002. Sunlight City is to be carried out in three developments; Sunlight City - Jing Yuan which was completed in October 2004, and Sunlight City-Ming Yuan and Sunlight City-Yi Yuan which are expected to be completed in 2006. In January 2004, Ms Qin Hong Yan (as nominee for Ms Feng Li) transferred her entire shareholding in Xinxiang Huilong Zhongxing to Xinxiang Huilong and Henan Huilong Management. After the transfer, the shareholding in Xinxiang Huilong Zhongxing was held by Xinxiang Huilong and Henan Huilong Management in the proportion of 80% and 20% respectively.

In April 2002, Henan Huilong Management was set up by Mr Ma Xiu Hai and Mr Meng Xiang Bin (both as nominees for Ms Feng Li) in the shareholding proportion of 60:40 to undertake property management services for our Group's developed projects, such as Xinxiang Huilong Building and Xinxiang Huilong Garden. In August 2004, Ms Feng Li acquired Mr Ma Xiu Hai's shareholding in Henan Huilong Management which amounted to 60% of the registered capital in Henan Huilong Management and injected a further RMB 4 million into the registered capital of Henan Huilong Management. As a result, Ms Feng Li held 77.8% of the registered capital of Henan Huilong Management. In September 2004, Feng Li and Mr Meng Xiang Bin entered into an agreement with Elegant Jade to transfer their entire equity interest in Henan Huilong Management to Elegant Jade.

In October 2002, Xinxiang Huilong entered into a joint venture with Ms Qin Hong Yan and Mr Qu Hui both as nominees for Feng Li) to set up Anyang Huilong in the respective shareholding proportions of 65:15:20. In March 2003, Xinxiang Huilong entered into an agreement with Ms Qin Hong Yan to transfer its 65% interest in Anyang Huilong to Ms Qin Hong Yan. In December 2003, Ms Qin Hong Yan entered into an agreement with Xinxiang Huilong to transfer her 50% interest in Anyang Huilong to Xinxiang Huilong. In January 2004, Mr Guo Yinghui and Ms Feng Li acquired the entire shareholding in Anyang Huilong from Xinxiang Huilong, Ms Qin Hong Yan and Mr Qu Hui (both as nominees for Feng Li), and after the share transfer, each of Mr Guo Yinghui and Ms Feng Li owned Anyang Huilong in equal shareholding proportions. Anyang Huilong completed the cluster housing development project, Anyang Huilong City Garden, in December 2004.

On 1 November 2004, Xinxiang Huilong Zhongxing entered into a share transfer agreement with Mr Wang Jin You, Mr Sun Xi Li and Mr Liu Li Ming to acquire 90% of the shareholding in Jiaozuo Jindeli. The remaining 10% of the shareholding in Jiaozuo Jindeli are held by three independent third parties, namely, Mr Wang Jin You, Mr Sun Xi Li and Mr Liu Li Ming, in the proportions of 5%, 4.9% and 0.1% respectively. Jiaozuo Jindeli completed our Group's second shopping mall development, Ming Pin Cheng, in October 2004.

Whitewood was incorporated under the laws of the British Virgin Islands on 11 March 1998. It was set up to provide design and consultancy services to our Group. Elegant Jade was incorporated under the laws of the British Virgin Islands on 1 July 2003. It was set up as an investment holding company of our Group. Sunshine Holdings Limited was incorporated under the laws of the Cayman Islands on 30 September 2004 as an exempted company limited by shares to serve as the holding company of our Group. Pursuant to the restructuring process as described in detail in the section entitled "Restructuring Exercise" of this Prospectus, Anyang Huilong, Henan Huilong Management, Xinxiang Huilong, Xinxiang Huilong Zhongxing, Elegant Jade and Whitewood became our Company's wholly-owned subsidiaries and Jiaozuo Jindeli our 90%-owned subsidiary.

Xinxiang Huilong has been awarded the Certificate of Credit Rating Grade AAA by the Xinxiang City Capital Credit Rating Committee for five consecutive years from 2001 to 2005. Xinxiang Huilong has also been awarded the Certificate of Honour for the top 50 developers in Henan for 2002 by the Henan Building Authority and Henan Statistical Bureau, PRC in September 2003. In 2004, Xinxiang Huilong was accorded the accolade of "PRC Leading Property Developer" by the Construction Cultural Centre of PRC Building Department.

Track Record and Relevant Experience of our Management and Shareholders Notwithstanding that our Group's history and development records began in April 1999 with the incorporation of Xinxiang Huilong, our Group's Chairman and a controlling shareholder of our Company, Mr Guo Yinghui, and another controlling shareholder of our Company, Ms Feng Li, had gained relevant property development management experience prior to 1999. Mr Guo, who was a member of the civil service in the PRC for 15 years prior to 1996, developed an interest in the property market in the PRC after observing the upward trending property market in the PRC during the mid-1990s. Recognising the vast potential in the property development business then, he left the civil service in 1996 to manage Jiaozuo Huilong and subsequently Jiazuo Huizhong as described in the proceeding paragraphs. Since managing Jiaozuo Huilong and Jiaozuo Huizhong, Mr Guo has accumulated more than eight years of management experience relevant to the property development sector.

In May 1996, Jiaozuo Huilong was set up as a sino-foreign equity joint venture between Crownunion, a company with limited liability incorporated in Hong Kong (which is beneficially owned by Ms Feng Li pursuant to a verbal agreement between the nominated shareholders of Crownunion and Ms Feng Li) and Jiaozuo Great Wall, a company with limited liability incorporated in the PRC (which is beneficially owned by Ms Feng Li, pursuant to a verbal agreement between the nominated shareholders of Jiaozuo Greatwall and Ms Feng Li) which owns 95% and 5% respectively of the share capital of Jiaozuo Huilong. Jiaozuo Huilong is principally engaged in the re-development of old city centres and completed three property developments in Jiaozuo from 1996 to 2003. The first of the three property developments, Jiaozuo Huilong Area, a residential development, commenced development work in December 1996 and was completed in December 1999. The second property development, Jiaozuo Commercial Street, a commercial development, commenced development work in July 2001 and was completed in September 2003 while the third property development, Jiaozuo Huilong Garden, a residential development, commenced development work in December 2002 and was completed in December 2003.

Jiaozuo Huizhong was set up in 2001 by Mr Ma Xiu Hai and Ms Li Yan Ling (both as nominees for Ms Feng Li) to undertake property management services for the three projects developed by Jiazuo Huilong. As at the Latest Practicable Date, the property management has been taken over by the residents' committees of the respective developments.

As at the Latest Practicable Date, Jiaozuo Huilong and Jiaozuo Huizhong have ceased business operations. Ms Feng Li and Mr Guo Yinghui have given their undertakings to our Company that Jiaozuo Huilong and Jiaozuo Huizhong will not undertake any similar activities that are in competition to the interests of our Group.