Dear friends,
　　It was another successful year for CHC in 2006 in its history. The encouraging progress we made in the past year further firms our confidence in developing CHC into a first-class company.
　　In 2006, CHC carried out the strategy of capital operation and project construction, so it achieved record performance in business. In 2006,sales reached RMB 16 billion ,which increased by 60%,total assets reached to 20.9 RMB billion, increasing by 70% and profit reached to RMB 600 million increasing by 33%.At the same time ,the main industries of CHC show a good development，key reforms advanced steadily，scientific and technological innovation, management innovation and international cooperation have obtained new progress .
　　In 2006, CHC obtained a remarkable achievement in energy saving and consume reducing in production devices by strengthening management. CHC abides by law and regulations issued by State Council; it operates safely and minimizes the negative impact on environment.
　　Project construction performed fast and steadily. CHC directly managed 28 newly or technological innovation projects ,with a total investment of RMB 2.1 billion．The projects were hoped to bring about a fundamental change for the development of CHC in the 11th Five-Year Plan period.
　　Scientific research and technological innovation was made many achievements．The independent innovation ability of 17 technological enterprises is further intensified and the industrialization process of technology talent is speed up
.In 2006,162 research projects are arranged, most of which are in the state-level or ministry-level. 66 patents related with chem.-industry are applied in 2006．35 projects are checked upon completion and over 10 projects are awarded by national authorities. A number of research results with independent property rights as hydrogen peroxide-carbon black．fluorine rubber and etranuoroethylene，acetic acid，coating，rubber and tyre have realized industrialization with certain scale，and continually enhanced CHC’s integrated competitiveness.
　　The company aggressively expanded its overseas business by foreign trade and technical service .In 2006, the value of export and import was US$300 million. The export scale of such products as barium and strontium salts, rubber machinery，carbon black，special chemical products was further expanded；Technology and complete equipment of hydrogen peroxide，carbon black，radial tyre and soda etc.have exported to the overseas market successfully.
　　In the next strategic stage, we will capitalize the opportunities, accelerate the pace and enhance the quality of growth to achieve the sustainable development.
　　By adjusting and optimizing the industrial structure and speeding up the development of main businesses, CHC will become a first-class chemical company in its field.