Hanwei Executes Binding Agreements to Complete Deta Acquisition

Hanwei Energy Services Corp. announced that it has entered into binding purchase and sale agreements for the acquisition of the 99 percent equity interest in Daqing Deta Electric Co. Ltd. (“Deta”). The agreements will now be filed with the Chinese authorities to process the transfer of the 99 percent equity interest in Deta to Hanwei’s 100 percent owned subsidiary, Hanwei Wind Power Equipment (Daqing) Co., Ltd. (“Hanwei Wind”), which, subject to satisfaction of customary conditions precedents, is expected to be completed in less than one month.

Following the acquisition of Deta, Hanwei will own 1.5 MW turbine and blade technology licenses, and will have an agreement to provide 1,200 MW of wind power equipment (turbines, blades and towers) over a 5-year period (2008 to 2012), with 200-250 MW of wind power equipment manufactured and sold each year at a price fixed at the time of such annual contract. The Company estimates the total value of the annual contracts to be approximately RMB 8.4 billion ($1.2 billion) to be executed from 2008 and 2012. Pursuant to the 1,200 MW contract, Deta has signed a manufacturing agreement for the first 200 MW of wind power equipment for delivery in 2008 and 2009. For future annual manufacturing contracts contemplated to be signed from 2009 through 2012, the purchase price will be negotiated based on the market price of the same type of products. In addition, pursuant to the agreement, the land and buildings that now host Hanwei’s wind power manufacturing facility in Daqing will be transferred to Hanwei Wind.

Under the purchase agreements, Hanwei will make a cash payment of RMB 100 million ($14.7 million) within 5 business days after closing and a cash payment of RMB 60 million ($8.8 million) after receiving title to the land and buildings, subject to Hanwei receiving funding, but no later than March 31, 2009, and payments of RMB 431 million ($63.2 million), subject to earn out provisions, to be paid over a five year period from 2008 to 2012. The earn out provisions will be comprised of cash payments of RMB 131 million ($19.2 million), subject to the execution of annual sales agreements of 250 MW contracts in 2009 to 2012 and share payments of RMB 300 million ($44.0 million), based on a share price of $5.30, subject to Deta achieving certain performance targets. The 1,200 MW agreement provides a right of first refusal for Deta to provide all future wind power equipment for wind farms that Deta’s existing customer owns or controls. In return, Deta has granted its existing customer a right of first refusal to purchase, at market prices, all additional wind power equipment manufactured by Deta.

In connection with the completion of the acquisition the Company will prepare and file a business acquisition report containing customary financial disclosure. Hanwei has arranged debt facilities to fund the acquisition and support the working capital requirements of the wind power business.

Prior to the completion of the purchase and sale agreements, Hanwei Wind and Deta were engaged in integrating the management teams and making preparations to provide wind power equipment under Deta’s 200 MW contract. The Company has improved its ability to produce wind power equipment by recruiting senior management with experience and expertise in the wind power business, building relationships and negotiating agreements with turbine component suppliers, and developing improved blade manufacturing processes and design using Deta’s licensed technology. Hanwei plans to complete the remaining portion of its initial contract with Deta (signed in May 2007) to provide 30 MW of turbines and blades, and commence deliveries under Deta’s 200 MW contract in the third and fourth quarters of 2008.

Hanwei also announced that the first two of five Aerodyn Energiesysteme GmbH (“Aerodyn”) aeroBlade 1.5 wind blade moulds have been installed at the Company’s wind power facility in Daqing, China. Commissioning is underway and the 37.5 meter blade moulds are expected to be operational in early September, 2008. Hanwei entered into a licensing agreement with Aerodyne in February 2008 whereby Hanwei was granted a non-exclusive right to produce two versions of Aerodyn’s aeroBlade 1.5. The Agreement provides Hanwei with the moulds, technical know-how, specifications, and support to produce the 37.5 meter and 40.3 meter versions of the 1.5 MW blades and market them under the Hanwei brand.

In addition to the Aerodyne blade moulds, Hanwei has re-commissioned and put back into operation a 34 meter blade mould, based on the technology licensed by Deta, which will be transferred to Hanwei after the Deta acquisition is completed.

“We have worked diligently during the acquisition process to recruit an experienced management team, integrate our business with Deta’s, and address our supply chain and manufacturing needs in order to create an operational platform with the necessary scale to address the requirements of new wind power business,” stated Fulai Lang, President and CEO of Hanwei. “The China market for wind power equipment was more than 3,000 MW or $3 billion in 2007 and has been growing at 100 percent per year for the last two years based on strong government support and increasing demand for energy in China. Hanwei is now well positioned to achieve its goal of becoming a leading wind power company in China. After starting the wind power business in 2007, we expect that wind power will be our largest source of revenues and profits in 2008 and for at least the next three years.”

Hanwei Energy Services Corp. provides high value products and services for the energy sector in China and the Asia region. Hanwei serves its major energy customers through manufacturing facilities in China, producing products for the oil, coal power and wind power industries. Hanwei is focusing on providing products and services that address the growing need for improved energy efficiency and environmental protection in China and the Asia region. www.hanweienergy.com