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Euro Tech Holdings Company Limited Reports Letter of Intent Signed for Acquisition of 20% Equity Interest in Zhejiang Jia Huan Electronic Co. Ltd. In China

Posted on: Monday, 31 July 2006, 03:00 CDT

HONG KONG, July 31 /Xinhua-PRNewswire-FirstCall/ -- Euro Tech Holdings Company Limited today announced that it had recently entered into a letter of intent to acquire a 20% equity interest in Zhejiang Jia Huan Electronic Co. Ltd. ("Jia"), a long established company in environmental protection business based in Jin Hua, Zhejiang, China, for approximately US$2.5 million at a P/E ratio of 8 to 10, subject to final negotiation.

Jia, which recently has moved into its new and modern manufacturing facilities of about 35,000 square meters, has been in business since 1969. 95% of Jia's business is related to air pollution control and less than 5% is for water and wastewater treatment. Jia designs and manufactures automatic control system and electric voltage control equipment for the electrostatic precipitator which is a major air purification equipment for power plants, cement plants and incinerators to remove and collect dust and pollutants from the exhaust stacks.

Euro Tech believes that by securing an equity in Jia's business, Euro Tech has a platform to work on to diversify into Air Pollution Control business in China. As the economy of China is growing rapidly, more power plants are being built to match with the growth. There will be a steady and strong demand of air pollution control equipment for the new power plants and upgrading of the old power plants. Moreover, through Jia's business connection, Euro Tech believes that it can cooperate with Jia to supply more water and wastewater treatment equipment and systems to the power plant industry in China.

The acquisition of an equity stake in Jia is financed by internal resource and is subject to the negotiation of a definitive agreement, Euro Tech's due diligence investigation of Jia, its finances, operations, certain legal requirements, and local government approval, all to be accomplished in November, 2006.

Certain statements in this news release regarding the Company's expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company's offices and operations situated in Hong Kong and China, doing business in China, competing with Chinese manufactured products, competing with the Company's own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the "Risk Factor" discussions in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2005.

CONTACT: Euro Tech Holdings Company Limited, Hong Kong T.C. Leung, Chairman and CEO, or Jerry Wong, CFO Tel: +852-2814-0311 Fax: +852-2873-4887 Website: http://www.euro-tech.com/

Euro Tech Holdings Company Limited

CONTACT: T.C. Leung, or Jerry Wong, both of Euro Tech Holdings CompanyLimited, +852-2814-0311, or fax, +852-2873-4887

Web site: http://www.euro-tech.com/

Source: PRNewswire

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