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China Meihua Biological Techno (CMBP)

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Tuesday 03 May, 2011

China Meihua Biological Techno

Trading Statement


                    CHINA MEIHUA BIOLOGICAL TECHNOLOGY PLC                     

                       ("China Meihua" or the "Company)                        

                               TRADING STATEMENT                               

The Directors of China Meihua present the Trading Statement for the three
months ended 30 March 2011. In accordance with Appendix 5 of the Plus Rules,
the Director's advise that this statement is not audited.

The Company confirms that the following material events, transactions and
developments took place during the relevant period:

(1) On 25 February 2011, the Company and its subsidiary Harbin Yinghua executed
an assignment with Ying Wei Limited ("Ying Wei") and Sunny Orient Limited
("Sunny Orient") the parent company of Ying Wei (the "Assignment"). Pursuant to
the Assignment, Harbin Yinghua assigned to Ying Wei all its rights under the
option agreement dated 23 October 2008 and made between (i) Harbin Yinghua; and
(ii) the shareholders of Harbin Meihua, in consideration of GBP1 (the "Original
Option Agreement"). To date, Harbin Yinghua has been unable to execute the
Option Agreement due to legal restrictions imposed by the PRC law. This right
has now been transferred to Ying Wei. The Assignment also provides that Sunny
Orient will, following exercise of the Option Agreement, and the subsequent
acquisition by Ying Wei of 95% of the entire issued share capital of Harbin
Meihua, immediately transfer Ying Wei (the new holding company of Harbin
Meihua) back to China Meihua, in consideration by the Company of the payment of
GBP517,000 and the issue to Sunny Orient of 10% of the equity of the Company,
being 6,300,000 Ordinary Shares in the China Meihua;

(2) Accordingly, as announced on 1 March 2011, China Meihua then acquired Ying
Wei Limited (the new holding company of Harbin Meihua Biological Technology
Joint Stock Co. Limited) in consideration of the Company paying GBP517,000 and
issuing to Sunny Orient 6,300,000 Ordinary Shares in the China Meihua (the
"Acquisition");

(3) As announced on 1 March 2011, the Company also issued 51.7million ordinary
shares at a price of 1p each to the existing shareholders in the Company, in
proportion to their existing holdings raising GBP517,000;

(4) As also announced on 1 March 2011, Ms Huiru Qi subscribed for 136,364
ordinary shares in the Company at a price of 22p per Ordinary Share to raise
GBP30,000 for working capital purposes; and

(5) As announced on 28 February 2011 the Company executed a loan agreement with
(i) Wenjuan Xiao and (ii) Fengxiang Lin (together the "Lenders") pursuant to
which it is agreed the Lenders will loan to the Company up to RMB 10million
which can be drawn down at any time (the "Loan"). No interest accrues on the
Loan but the Loan must be repaid in full on or before 28 February 2016.

The Directors believe that the Acquisition will enable China Meihua to further
exploit the market in which it operates; taking advantage of both synergy
benefits and Harbin Meihua's established reputation. The Directors also believe
this acquisition will be revenue enhancing.

During the relevant period the Company continued to incur losses but
endeavoured to further cut its cost base whilst exploring opportunities to grow
its market share and reach new customers.

CONTACT DETAILS:

China Meihua Biological Technology Hongwei Zhang           Tel: 0161 969 3540  
plc:                                                                           
                                                                               
WH Ireland Limited:                Katy Mitchell           Tel: 0161 819 8875  

 The Directors of China Meihua Biological Technology plc accept responsibility 
                            for this announcement.                             


                                                                                                                                                                                        

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