Chairman   Statement （摘自2009年年报）

In 2009, the staff of AVIC Shenzhen exhibited great solidarity, pursued excellent operation, realized growth amidst the market downturn, and achieved promising results.
In 2009 Impacted by global financial crisis, all business segments of AVIC Shenzhen have encountered unprecedented difficulties. Under the strategic arrangements of AVIC and AVIC International, and with the enormous care and support from all segments of the society, AVIC Shenzhen conducted comprehensive analysis, made prompt decisions, and carried out a series of "excellent actions" to tackle the crisis, improve core competitiveness and meet operation targets. Thanks to the solidarity and dedication from all staff of AVIC Shenzhen, we have achieved a brilliant milestone together. In 2009, AVIC Shenzhen recorded an operating income of RMB18.8 billion, a 24.5% increase year-on-year while gross profit amounted to RMB610 million, a 36.7％ raise over the previous year. By the end of the year, the Company's total assets exceeded RMB36 billion, representing a growth of more than 30％ as compared with the previous year. Moreover, six enterprises under AVIC Shenzhen secured their places among the "Top 100 Shenzhen Enterprises in 2009".
During the year, all business segments of the Company were impacted by the financial crisis to various extents. Fortunately, our overall results remained stable. Among which, although the overall operating result of Tianma Company, as a consequence of the decline in the U.S. and European economics, did not meet the expectation as at the beginning of the year, Basically the Company has formed its strategic distribution in China. Shanghai Tianma TFT products achieved breakthroughs and their quality reached international leading standard. Chengdu Tianma and Wuhan Tianma TFT projects were successfully launched, while the acquisition of the fifth generation production line of TFT laid an essential foundation for Tianma to secure a leading position in small and medium size LCD market. Shennan Circuit aggressively expanded the market, continuously improved the customer structure, remarkably completed its sales and profit targets, and made significant breakthroughs in cost control. Fiyta concentrated its efforts on brand establishment and extension, product series enrichment, and sales and marketing, so that the sales of Fiyta watches were improved during the year. A fashion brand selling company in China officially commenced operation. The acquisition of Emile Chouriet was completed. Harmony World Watch Center accelerated its market expansion by increasing the number of its brand watch retail stores to more than 130 (including Henglianda). AVIC Real Estate completed its integration and recorded promising contracted sales. Property management business achieved a slight increase, and hotel business remained stable. Rainbow Department Store opened inter-regional chain stores and excavated its internal potential to realize a strong growth amidst the market downturn, with sales exceeding RMB10 billion in the year for the first time. Five new stores were opened during the year, with the total number of stores reaching 37. The business transformation of AVIC Shenzhen Commerce & Trading received sound results. Large amount trade with government made significant breakthroughs, and the Sri Lanka Project even secured the largest trade order since the establishment of Shenzhen Company. The development strategy of AVIC Resources further focused on business exploration in chemical industry, including potassium and phosphate related resource. Every project of AVIC Gongqing was in progress as scheduled. In addition, Guangdong International, Aero-Fasteners, CASTIC-SMP, Maiwei, and Shenrong Tianshi also achieved proven performances during the year.
In 2009, AVIC Shenzhen also made breakthroughs in mergers and acquisitions. It successfully acquired Chengdu Yaguang Electronics Co., Ltd, the fifth generation production line of TFT-LCD of Shanghai Guangdian NEC and Fenghua Bit. These newly acquired enterprises gradually became the additional profitability points for the Compnay. Fenghua Bit made a development beyond our expectation and became a core platform for AVIC military business. Shanghai AVIC Optoelectronics recovered its production and improved production capacity.
In 2009, AVIC Shenzhen, under its doctrine of "excellent operation", turned crisis into opportunities and reversed passive situations with active attitude. At the same time, the Company also hardened its skills, improved its management and accumulated its power in the year. The Company proactively reformed its operation management structure and workflow, improved decisive support from the Headquarter and business expansion capability, thereby gradually establishing a business management and control system that fits its features. In respect of management renovation, the Company, by closely centering on crisis tackling and cost reduction and through its efforts in every aspect, reduced its cost by almost RMB400 million as compared with its budget for the year. Meanwhile, our training program for management innovation became more systematic, the automatic training was realized. At the First Management Innovation Meeting held by Aviation Industry Corperation of China, AVIC Shenzhen was accredited with the "Special Achievement Award". In respect of human resource, the Company continued to promote leadership development program for senior management, therefore comprehensively establishing its management talent development system. In 2009, although confronting with a challenging environment, AVIC Shenzhen still propelled humanized management in a more in-depth manner and fulfilled its social responsibilities with more aggressive attitude, so as to fulfill the solemn commitments to our staff and the society. In the year, the Company awarded the "Best Employer in China for 2009" and the "Best Employer in Asia".
In 2010, AVIC Shenzhen, again, stood at a new starting point. The rapid recovery in domestic macro economy, supplemented by AVIC's overall strategy, will inject a powerful momentum for AVIC Shenzhen's business development. AVIC Shenzhen will fully exercise its energy and wisdom accumulated in the icy winter of 2009, cherish every opportunity and overcome any challenge encountered, so as to unseal a new round of development.
I hereby wish to express my highest respect and sincerest gratitude to all colleagues of the Company for their dedication and endeavor and to all superior leaders and all segments of the society for their supports to the Company's development over the past year.

Chairman ：吴光权