For the nine months ended 31 September 2007, the Group initiated proactive adjustment and remedial policies to stem out the deficiencies in the past. The Group’s production facilities were hence operated in high stability. The net profit for the three months ended 30 September 2007 recorded a substantial growth as compared to the same period last year. In September 2007, Chengdu Ko Yo Compound Fertilisers Co., Limited, the subsidiary of the Group, was accredited the award of “Asia 10 Most Innovative Brand Award” by “Asia Brand Ceremony Organizing Committee”. Mr. Li Weiruo, Chairman of the Group was also accredited as “Asia 10 Brand Innovative Personality Award”.

The National Development and Reform Commission of the PRC released “The Policy of Natural Gas Usage” on 30 August 2007. The policy clearly stated that the supply volume of natural gas must remain stable according to the current natural gas policy. In particular for the chemical fertilizer projects approved by the Government, the supply of natural gas must remain stable in long term. The policy also encourages optimization of natural gas efficiency by using advanced technology and facilities. For the urea manufacturers using natural gas as the key energy, the policy is beneficial in long-term natural gas supply and it provides the Group with favorable environment for future’s growth.

Mr Li Weiruo, Chairman of Ko Yo, said, “Our Group will speed up the construction of the urea plant at Dazhou City, Sichuan Province, the PRC, so as to accelerate our production, and to amplify our Group’s profit in future.”

Looking forward, in the aspect of technology and product research and development, the Group will not only continue the effort on the research of new BB fertilizer formula, slow release fertilizer and controlled release fertilizer as well as the specialized fertilizers for cash crops such as rapes, peanuts, garlic and onions which are cultivated in Sichuan Province and Shandong Province, the PRC, the Group will also undergo the preliminary research of producing compound fertilizer by extruding-prilling method. The method is a brand new technology to produce compound fertilizer and has been rapidly developed overseas in recent years. It is believed that the method will help enhance product quality of the Group.

Mr Li Weiruo, Chairman of Ko Yo, concluded, “With the help of national favorable policies and guaranteed natural gas and electricity supply, we will strive to meet the target of this year. Meanwhile, our Group will also strengthen the product marketing and research in Sichuan’s and Shandong’s key markets. This is to lay solid foundation for the operation in 2008 in order to enhance shareholders’ value.”

About Ko Yo Ecological Agrotech (Group) Limited (Stock Code: 8042)

Ko Yo Ecological Agrotech (Group) Limited is principally engaged in R&D and sales of chemical fertilizers, such as BB Fertilizers, urea, ammonium chloride, ammonium bicarbonate, and chemical products including sodium carbonate and ammonia. The Group’s four production bases are located in Sichuan and Shandong, which are awarded ISO9001: 2000 Quality Certifications and ISO 14000:1996 certificate in recognition of its achievement in attaining the standard for the Group’s environmental management system. The Group’s sales network covers 20 provinces and 4 autonomous regions and it has successfully explored the overseas market.

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