Overview

With demand increasing for e-bikes due to their operating cost benefit, affordability and imposed regulations by local governments to reduce gasoline pollution in mid to large cities, the Company expects sales and volumes to continue to increase. With a 92% CAGR since 1998, and 68% CAGR since 2002, the Chinese e-bike market has grown to in excess of 21 million units sold per annum in 2007. While the market for e-bikes in China remains fragmented with approximately 2,000 regional producers, ZPP is well positioned as one of the top 20% which manufacture and sell higher end products similar to the Red Sea product line and with virtually no competition, the Company is a leader at the very
top end of the market with no competing product for its Blue Sea e-bikes due to the
proprietary battery technology.

Export sales will also fuel the Company's growth with a mid to long term target for 30% of revenues to be generated from export sales. Africa and the Middle East will continue to be primary targets for exports sales of Red Sea e-bikes, while Blue Sea e-bikes will be sold to North America and Europe.

In addition to being strategically positioned to be a leading global e-bike manufacturer and service provider, ZPP remains focused on exploring strategic growth opportunities in the growing fuel cell, battery technology and solar power sectors. ZPP will conduct all alternative power source business, including all products and services related to electric vehicles, fuel cells, solar power and wind power, with the full support of and no competition from Zongshen Industrial Group.