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Richina Pacific AGM Spotlights China

Richina Pacific’s Future In Developing Real Estate And Financial Services In China

Statement based on comments made by Richina Pacific Limited’s Chairman, John Walker, at today’s annual meeting in Auckland

Richina Pacific’s future will be based on developing its significant real estate and operating assets in Shanghai, a city quickly establishing itself as the commercial capital of China, and on China-based financial services.

At today’s annual meeting in Auckland, Chairman John Walker told shareholders that the value of Richina Pacific’s 46 parcels of land, more than 100 buildings and 1.5 million square feet of gross floor area was not yet fully reflected in the balance sheet.

He said developing the Company’s property assets was a long-term value proposition.

“We will work with world-class architectural firms, property developers, construction firms and contractors in managing and developing these assets. We will also draw on the experience of Mainzeal,” Richina Pacific’s New Zealand construction company.

As a first step in maximising the value of the assets, Richina Pacific is considering developing over the next two to four years a destination hotel in Zhouzhuang, one of China’s most famous water towns on the outskirts of Shanghai, which attracts 20 million visitors a year, and a boutique hotel in downtown Shanghai.

“These are sizeable projects requiring significant funding,” he said.

Shareholders were told that in the first quarter of the current financial year, always the seasonal low period, Richina Pacific had recorded a loss of US$335,000 compared to last year’s profit of US$138,000.

Revenues at US$105 million were in line with last year’s US$107 million.

“Operational and management actions that have been taken over the past year will result in improved operating performance over the year, and we expect respectable results for the full year,” Mr Walker stated. (For the 2005 financial year, Richina Pacific recorded a record profit attributable to shareholders of US$10.3 million on revenues of US$504.6 million.)

Mr Walker told shareholders that Richina Pacific was now a complex global business, employing some 9,700 employees, with 9,200 of them being in China.

“Richina Pacific is currently in very solid financial, managerial and operational positions, and our prospects have never been brighter.”

Mr Walker said the company’s financial services operations would revolve around merchant banking, financial activities permitted through its China Holding Company, and taking advantage of the financial services needs that currently exist in China.

The Company has moved its corporate administrative office from Singapore to the lower cost centre of Kuala Lumpur, Malaysia, and anticipates over time making significant cost savings from the relocation.

At the annual meeting, the Rt. Hon. Jenny Shipley and Singapore-based Suet Fern Lee were re-elected directors.


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