*New Progress in ST Danhua Reorganization Will Demon Stocks Become Phoenix

Sina Finance News Danhua has finally made new progress in restructuring* ST Danhua (000498) disclosed on the 25th that on December 22, 2007, the mayor's executive office meeting of Dandong Municipal Government discussed and approved the relevant matters concerning the cooperation between Dalian Honglin Investment Holding Group Co., Ltd. and Dandong Chemical Fiber (Group) Co., Ltd. in restructuring * ST Danhua.

According to the announcement, the basic idea of this restructuring is that Honglin Investment will become the actual controller of the company by acquiring the equity of * ST Danhua; Honglin Investment plans to replace Danhua Group with high-quality assets to repay the debt owed by major shareholders of the company; Honglin Investment guarantees that the registered place of the listed company after the reorganization will remain unchanged, and it will still be registered in Dandong City, Liaoning Province* ST Danhua plans to sell chemical fiber assets and liabilities to a third party.

Since this year, * ST Danhua has been affected by the news of restructuring, and has been one of the big monster stocks in the year. In November this year, the monster stock * ST Danhua once showed its prototype and suffered the eighth consecutive decline limit, reaching the lowest recent low of 4.68 yuan. However, since then, due to the large purchase of Everbright Securities, the market has speculated that * ST Danhua has finally shown signs of rebound. Recently, the stock has become active again, and has been closed at the trading limit for three consecutive trading days.

According to the company's previous announcement, the company's performance in 2007 will suffer substantial losses. According to the listing rules of Shenzhen Stock Exchange, * ST Danhua may be suspended from listing. It remains to be seen whether the stock will become a phoenix due to reorganization. (Wang Yuanping)