Acquisition

RNS Number:4253F
London Asia Chinese Private Equity
30 June 2006

30 June 2006

London Asia Chinese Private Equity Fund Limited

("LACPEF" or "the Fund")

Three new investments

LACPEF, the China focused investment fund, announces that it has committed to
make three new investments, for a total consideration of #6.9 million in cash.

The Fund is investing #1.9 million in China New Energy Ltd ("CNE"), a leading
turnkey provider of production equipment and technologies for ethanol production
in China; #2.9 million in China Synergy Real Estate Limited ("Synergy"), a
leading real estate services firm based in Beijing; and #2.1 million in China
Biofoods, a health food products company.

China New Energy:

CNE's core business is the supply of turnkey technology solutions for the
production of ethanol, edible alcohol and acetic acid from a range of
bio-resources, including corn, sugarcane, cassava and other bio-resources.

CNE has established itself as the leading brand in China, with an estimated 60%
share of the market for ethanol production equipment in China. The Company's
successful track record is key to growing the business and its leading
technology has been used in over 30 projects. CNE is supported by strong drivers
with the demand for ethanol, a fuel seen as an alternative to oil, still growing
and supported by a new legislative framework requiring 10% of all vehicle oil
consumption to be biofuel in 11 of China's Provinces.

For the year ended 31 December 2005 CNE reported profit after tax of #1.9m
(2004: #0.6m) on sales of #8.7m (2004: #3.1m). Based in Guangzhou, it was
founded in June 2002 as a spin-out from the Renewable Energy division of China's
Academy of Science, the leading Government funded centre in China for the
development of renewable energy technology.

CNE currently has 72 employees and following the investment from the fund, Simon
Littlewood and Victor Ng, managers of the Fund, will take a seat on the
Company's board.

China Synergy:

Synergy is the second largest real estate broker in the northern China market.
Founded 10 years ago in Beijing, China, the Company provides agency, consultancy
and conveyance services for property developers in China including international
property investors Carlyle Partners and Lehman Bros. The Company focuses on
deals with residential and commercial properties at the top end of the market,
and has advised on 60 projects.

Synergy was named as "Agency of the Year" in "New Real Estate", the industry
magazine, and in the Top 20 Real Estate Agencies in China" in 2005 by "SINA.com
".

For the year ended 31 December 2005 Synergy reported profit after tax of #2.1m
on turnover of #4.9m, up 58% and 38% respectively on 2004. Simon Littlewood
will be appointed to the Synergy Board following investment.

China Biofoods:

China Biofoods is based in Xuchang, Henan Province, the centre for farming
traditional Chinese medical herbs. It specialises in the production of highly
purified herb extract products which are then used to produce traditional
Chinese medicine, and as ingredients in functional foods.

The market for "Functional Foods" is expanding rapidly worldwide, especially in
China. "Functional Foods" are foods or dietary components that may provide a
health benefit beyond their basic nutritional value.

China Biofoods' core products are highly purified linolenic acids, Reshi
mushroom spore oil, and deodorized garlic oil. Linolenic acid, also known as
Vitamin F, is an essential fatty acid which is not produced by the body, and has
been proven to improve hair and skin, reduce blood pressure, help prevent
arthritis, lower cholesterol & triglycerides and reduce the risk of blood clots.
Reshi mushroom spore oil is broadly used in the health food industry as a
supplement and intermediate ingredient.

In 2005 China Biofoods reported revenues of #2.9m with profit after tax of
#1.2m. The Fund will appoint a representative to the China Biofoods Board
following investment.

Victor Ng, Director of LACPEF, commented: "All three companies presented at
London Asia's China Seminar in London earlier this month. There was strong
interest from investors as all three sectors are showing considerable growth on
the back of China's continued economic development. CNE is the leading player
in is field and has significant growth potential as China seeks to develop
renewable energy sources and reduce its reliance on expensive imported fossil
fuels. Synergy is taking advantage of the switch from public and subsidised
housing to the development of a private housing market in China, with the
Beijing market seeing additional impetus from the 2008 Olympics. China
Biofoods' products appeal to the increasingly affluent Chinese population, who
have more money to spend than in the past and are becoming more health
conscious, particularly as a result of the one child policy and the ageing of
the population"

Simon Littlewood, Director of LACPEF, added: "The Fund has now made five
investments, totalling #9.3 million. There is potential to make follow on
investments in those deals as the companies develop and we also have a number of
other deals which we expect to close in the near future."

For further information please visit www.londonasiafunds.com or contact:
John West/Matt Ridsdale Simon Littlewood Hugh Field
Tavistock Communications London Asia Capital plc Collins Stewart Limited
Tel: 020 7920 3150 Tel: 020 7355 7928 Tel: 020 7523 8000

This information is provided by RNS
The company news service from the London Stock Exchange
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