Zhuhai Xinguang Group Co., Ltd. Acquisition Report

1. Acquisition Report of Zhuhai Xinguang Group Co., Ltd.

Listed Company Name: Zhuhai Xinguang Group Co., Ltd.
Listing Location: Shenzhen Stock Exchange
Stock Abbreviation: ST Xinguang
Stock Code: 000405
Acquirer Name: Heyuan Pufuda Industrial Co., Ltd.
Address: Huajia Industrial Zone, Heyuan City
Contact Address: 10th Floor, Maiket Center, 63 Maiket Avenue, Huizhou
Contact Number: 0752-2119623
Date of Signing: November 21, 2003

2. Acquirer Declaration

1. The acquirer has prepared this report in accordance with the Securities Law, the Measures for the Administration of the Acquisition of Listed Companies, and relevant laws and regulations.
2. This report fully discloses the shares held and controlled by the acquirer (including shareholders, controlling persons, and concerted actors) in Zhuhai Xinguang Group Co., Ltd. As of the signing date, the acquirer holds no other shares in the company.
3. The acquirer has obtained necessary authorizations and approvals for signing this report, and its execution does not violate any provisions of its articles of association or internal rules.
4. According to current laws and regulations, this acquisition does not involve the transfer of state-owned shares and does not require approval from the State-owned Assets Supervision and Administration Commission. This acquisition does not involve any obligations for a tender offer or other legal obligations.
5. This acquisition is based on the information contained in this report. No other person has been authorized to provide information not listed in this report or to explain or interpret this report.

3. Special Risk Warning

1. Heyuan Pufuda Industrial Co., Ltd. plans to control 29% of Zhuhai Xinguang Group Co., Ltd., which is under pledge from December 30, 2002, to June 30, 2004. Therefore, ST Xinguang has the risk of an uncertain actual controller.
2. According to ST Xinguang's third-quarter report announced on October 31, 2003, ST Xinguang incurred a loss of 5,127,416.20 RMB in the first three quarters, with a loss per share of -0.015 RMB. Therefore, ST Xinguang faces the risk of delisting.

4. Table of Contents

1. Introduction of the Acquirer … 1-1
2. Shareholding Situation of the Acquirer … 2-1
3. Trading of Listed Shares in the Last Six Months … 3-1
4. Major Transactions with the Listed Company … 4-1
5. Source of Funds … 5-1
6. Future Plans … 6-1
7. Impact Analysis on the Listed Company … 7-1
8. Financial Information of the Acquirer … 8-1
9. Other Significant Matters … 9-1
10. Documents for Reference … 10-1

5. Definitions

Pufuda Industrial (Acquirer): Heyuan Pufuda Industrial Co., Ltd.
ST Xinguang (or Listed Company): Zhuhai Xinguang Group Co., Ltd.
Dongfang Caifu (Transferor): Shenzhen Dongfang Caifu Investment Co., Ltd.
Shenzhen Luyou: Shenzhen Luyou Industrial Development Co., Ltd.
Maiket Textile: Maiket Group Textile Co., Ltd.
Maiket Nanjing: Maiket Textile Nanjing Co., Ltd.
China Securities Regulatory Commission: China Securities Regulatory Commission

6. Introduction of the Acquirer

1. Basic Information of the Acquirer
   Company Name: Heyuan Pufuda Industrial Co., Ltd.
   Registered Address: Huajia Industrial Zone, Heyuan City
   Registered Capital: 10 million RMB
   Established: August 10, 1998
   Business License Registration Number: 4416001600129
   Legal Person Code: 70792296-5
   Company Type: Limited Liability Company
   Economic Nature: Private
   Operating Period: Indefinite
   Business Scope: Production, processing, and sales of textiles, pure polyester sewing thread; computer technology services; research and development of scientific and technological products; property management
   Legal Representative: Tao Yuxin
   Shareholders: Tao Yuxin, Hu Wanlan
   Contact: 0752-2119623
   Postal Code: 516001

2. Ownership Situation and Shareholder Introduction

   1. Ownership Situation of the Acquirer
      | Shareholder | Shareholding Percentage |
      |-------------|------------------------|
      | Tao Yuxin | 90% |
      | Hu Wanlan | 10% |

3. Introduction of Shareholders

   • Tao Yuxin, male, 41 years old, graduate degree. Chairman of Maiket Textile and legal representative of Pufuda Industrial since 1998.
   • Hu Wanlan, female, 42 years old. Factory manager of Maiket Group Textile Co., Ltd. since 1998.