The funds raised in this offering are intended to be used to repay the company's bank loans. The total amount of bank loans to be repaid is 365.85 million yuan. As of December 31, 2007, the issuer's owners' equity attributable to the parent company was 436 million yuan, and the weighted average return on net assets belonging to common shareholders of the parent company in 2007 was 12.74%. It is expected that the company's net assets will increase significantly after this issuance, and the company will face the risk of a decline in return on net assets.