China’s accession to WTO presents before us both opportunities and challenges. A better economic environment and a huge market potential will attract more international capital and technology into China. In the face of more fierce and international competition, the Company is making every effort, drawing upon our leadership in R&D, our managerial expertise, and our good names in the market, to actively participate in international competition, to omni-faceted develop the market and to take the lead in the Chinese specialty paper market.

The company issued 60,000,000 A-shares 5 June 2003, and beginning 19 June 2003 company shares are traded at Shanghai Stock Exchange. Not only does the share issue help us raise capital from the capital market, but also it will increase our all-around capability in our business operations.

Thanks to the share issue we are able to streamline our product lines in a fast developing coated paper market; to materialize our operational philosophy of “market driven, innovation driven, and scale of economy driven”; to promote technical, institutional, and managerial innovations; to find equilibrium between expansion and scale of economy; and to allocate our resources in a most economical way;

Meanwhile the company has plan to extend its business operations to upstream and downstream areas, and form a value-added chain ranging from forest plantations, product R&D, and pulp and paper making, to paper converting and paper finishing. By diversifying our product range, we will become more cost effective and more competitive.