2008 passed by quickly, leaving a lasting impression on us all. Looking back, the memories are so clear. From disastrous snowstorms and the Sichuan Earthquake that shook not only the earth beneath our feet but the hearts of people around the world, to the realization of a century-long dream of hosting the Olympic Games in China, the celebration of three decades of Chinese reform, and the heart-wrenching Wall Street financial crisis that has affected us all: 2008 was a year that we will long remember.

The events of the past year challenged all three of our major industries. In addition to our foreign trade and export division facing numerous obstacles, financial investment shrunk substantially, and the real estate market remained stagnant. Yet despite these trying times, Youngor continues to prevail. We have been able to accomplish numerous feats thanks to the power of 50,000 employees working to move our company forward. The addition of Smart Shirts accelerated the pace of our internationalization effort, a set of refinements kept our real estate division afloat in spite of hard times, and by establishing Kaishi Investment Company we have facilitated the successful renovation of our industry. Having grown stronger after surviving 2008, we feel optimistic as we look forward to a prosperous future in which we expect the fast-growing domestic market to raise our industrial chain to great new heights.

The people of Youngor remain devoted to working hard in the face of difficulty, allowing us to continue to achieve success at the frontiers of each of our industries. We enjoy a peaceful life in the blessed Ningbo, where we work hard to achieve our goals.

2009 marks the 30th anniversary of China’s economic reform policy, as well as the 30th anniversary of Youngor’s entrepreneurship. While this is certainly a time for celebration, we remain keenly aware of the ensuing economic crisis striking the world today. The recent chilly spring reminds us that we must remain prepared to face obstacles of all kinds as they arise.

What then is the best course of action for us to pursue in order to ensure success for Youngor?

The 20th century writer Lu Xun once wrote: “The blood of the martyr may be served to nurture fearless grass; the frozen ground will soon be the bed for spring flowers.” If winter has arrived, can spring not be far behind?

We feel confident that Youngor will not only prosper, but in fact reach a new level of success as long as we make the proper adjustments to our business strategy. We cannot hesitate to capitalize on the strength of our industrial chain. We must hasten the rate of our new product development, adjust our international market deployment, and speed up the development of sales channels into the domestic market. In addition, we will focus on brand value evaluation, chain store management, internal cost management, and technological innovation. We are certain that by following this course of action, we will make Youngor stronger than ever.

Now that real estate has become Youngor’s mainstay industry, we plan on integrating our existing real estate companies in order to facilitate resource sharing. We will use the strength of Youngor’s capital to pave the way for our real estate development next year.

Youngor has grown from its experience in real estate investment over the past three years. We have gained insight from not only our successful endeavors, but from hard times as well. With the establishment of the Shanghai Vstone Capital Management Company, we now have a pool of talent available to serve our new industries.

A new year brings new challenges and new hopes. We believe Youngor’s 50,000 employees, acting under the strong leadership of our board of directors, will be able to handle any future obstacles, ushering in a new vision, a new dawn, and new opportunities.

Finally, we would like to wish all our colleagues and their families a prosperous and happy Lunar New Year!

                                                                              Chairman of Youngor Group: Li Rucheng
                                                                                                                    2009-01-01

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