('China Shoto' or 'the Company')

 

 

 

China Shoto (AIM:CHNS), a leading Chinese producer of industrial batteries and power supply systems, is pleased to announce that the strong progress reported for the six months ended 30 June 2007 has continued into the second half of the financial year.

 

Revenues in the back-up battery business have continued to grow in excess of 50% compared to the prior year.  China Shoto is particularly pleased to have won a significant order for the Indian market, as previously announced.  Demand in the domestic telecoms sector remains a key driver of the business.  China Shoto is a market leader in this sector.

 

Revenues in the power type battery business are benefiting from the increase in capacity reported at the interim stage, with daily production capacity increasing from 18,000 units to 24,000 units.  The primary market for these batteries is the domestic electric bicycle market.  Revenues in this business are growing in excess of 40% compared to the prior year.

 

As stated in the interim results and in accordance with the Company's dividend policy, the Directors will be recommending a final dividend of 4.5 pence per share in cash for the year ending 31 December 2007.

 

The Company also announces that it has entered into an agreement to dispose of its 51 per cent interest in the turbine business ("FTD").  The transfer price of this disposal is RMB 8.0 million yuan and the dividend from this investment over the holding period was around RMB 3.9 million yuan (the total amount paid in acquiring the interest was RMB 10.08 million yuan). The Directors believe that, while FTD is a solid business, management time and resources are more profitably utilised in further expanding the rapidly growing core business.

 

The Directors of China Shoto are confident that the outturn for the current year will be in line with market expectations.  Furthermore, they believe that the Company is well positioned to continue its good growth during 2008 and beyond.