The board of directors of Honghua Group Ltd. informed the shareholders of the company and potential investors that, based on the unaudited consolidated management accounts of the company and its subsidiaries and the information currently available, it is expected that the profit attributable to the shareholders of the company for the six-month period ended June 30, 2012, will increase significantly as compared to that for the corresponding period in 2011, primarily due to a substantial increase in the revenue of the sales of the group products.