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Richina Pacific’s Profits Up 36% at Half Year

July 25, 2007


Richina Pacific’s Profits Up 36% at Half Year

Statement issued by Mr John L Walker, Chairman of Richina Pacific Limited

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Richina Pacific Limited announced today a first half net profit of US$4.9 million, 36% above the net profit of US$3.6 million reported for the first half of 2006.

Total revenue was US$210 million, compared with US$240 million in the first half of 2006.

Unlike in previous years, this record first half result was achieved with every division of RPL reporting an operating profit and in almost every case an improvement over the corresponding period in 2006.

Richina Industries reported the largest component of the profit at US$6.7 million, which included the best ever first half profit recorded at Shanghai Richina Leather Limited (SRL).

Richina Land reported a profit of US$2.1 million with New Zealand-based Mainzeal Construction making a positive contribution to that profit. Having completed the very challenging Auckland Vector Arena project, Mainzeal is once again on the path of sustainable and improving profitability under the capable management of its new Chief Operating Officer, Peter Gomm.

Rental income in Shanghai continues to grow, albeit at a slower rate than the general market as we still need to close out a number of long running leases signed some time ago before Richina Pacific purchased Shanghai Leather Co. Ltd. (SLC), which derives the bulk of the rental income.

Blue Zoo Beijing (BZB) has achieved an all time record operating profit of US$0.46 million, reflecting the buoyant tourism sector in Beijing leading up to the 2008 Olympics. We expect this uptrend to continue at BZB for the foreseeable future.

Richina Financial made a modest operating profit. However, the actual reported results for this sector are shown as a small loss of US$53,000 because it also absorbs all China-based overhead for the group. In any case, Richina Pacific is confident that this will be a major growth sector for RPL in the years to come.

Earnings per share were US3.26 cents per share for this first half compared to US2.39 cents per share at June 30, 2006 and US4.55 cents per share for the full year ending December 31, 2006.

Looking forward, Mr Walker confirmed the Board’s view that Richina Pacific should perform as well in the second half of 2007 as it did in the first half and therefore its overall profit for the year should comfortably exceed that of last year and be a record in the Company’s 11 years trading as Richina Pacific Limited.

Mr Walker stated that as a result of the efforts of the Board and management to restructure, reorganize and consolidate the operations of Richina Pacific, the Company is on a track of sustainable profitability and is experiencing its strongest financial and operating positions ever.


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