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Euro Tech Holdings Company Limited Reports on Recent Developments

Posted on: Monday, 13 November 2006, 03:00 CST

HONG KONG, Nov. 13 /Xinhua-PRNewswire-FirstCall/ -- Euro Tech Holdings Company Limited today reported on recent developments.

Shanghai Euro Tech Environmental Engineering Company Ltd. is our newest wholly-owned subsidiary. It was formed under the laws of the People's Republic of China and is home to our environmental engineer department, that business and personnel having been transferred from another one of our subsidiaries, Euro Tech (Far East) Ltd.

Our newest subsidiary will focus on our water and waste water treatment engineering business and will be the center of our planned expansion into the air pollution control business.

Launch of our Total Organic Carbon Analyzer

In this month, we are going to launch our new Total Organic Carbon (TOC) analytical instrument which measures the degree of the pollution level of drinking water, ground water and waste water. Our TOC analyzer has been two and a half years in research, development and field testing of prototypes to customers. We intend to introduce the TOC analyzer at several trade shows before the end of 2006, to be held in Shanghai, Beijing and Guangzhou.

Equity Stake in Environmental Protection Business

In July of this year we announced a signing of a letter of intent with Zhejiang Jia Huan Electronic Co. Ltd., ("Jia Huan") to purchase a 20% equity interest in Jia Huan. Jia Huan has been in the environmental protection business since 1969 and is based in Jin Hua, Zhejiang, China. The proposed purchase price is US $2.5 million based upon a price/earnings ratio of 8 to 10 and subject to final negotiation.

The acquisition of an equity stake in Jia Huan is to be financed by our own internal resources and is subject to the negotiation of a definitive agreement, completion of our due diligence investigation of Jia Huan, its finances, operations, certain legal requirements, and local government approval. To date, we had an external valuation report done for Jia Huan, both legal and financial due diligence remain to be completed. We expect these last tasks to be completed in December 2006.

Waste Water Treatment JV

In July 2006, we announced that our majority owned subsidiary, PACT Asia Pacific Ltd. ("PACT") had entered into a letter of intent with Wuxi TONTAN Environmental Engineering Co., Ltd. ("TONT") in China, and PACT Engineering FZC ("PACTFZC"), a Middle Eastern water treatment company based in Dubai, to form a manufacturing joint venture ("JV") in China, whereby PACT will invest US$425,000 and have a 51% controlling interest of the joint venture, the shareholding of the other parties is 30% by TONT and 19% by PACTFZC. We are still waiting for the local government approval.

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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