On July 31 and August 1, 2008, You Lei, General Manager of SCC, presided over the briefings on the business situation as of the first half of 2008 respectively in the training room on the fifth floor of Nanshan factory andin the theater of Longgang factory; SCC's management and technical personnel at and above the director level and all Party members attended the meeting.

At the briefing, General Manager You elaborated SCC's overall business situation as of the first half of 2008 from three aspects, includingthe external environment facing SCC, the overall business and key work of SCC, and the winter of Huawei, andproposed the forecast.

When analyzing the external environment, General Manager You pointed out: Affected by the prices of crude oil and copper, CPI and other factors, the prices of the raw materials for SCC's products have generally risen; SCC faces growing uncertainties in the market, which have a temporary impact on production orders. The reform of the taxation system and the implementation of the new labor law also have a certain impact on production costs. Meanwhile, the competitors from the same industry, such as MEIYA and SYE, continue to increase project investment and expand production capacity, thus intensifying the market competition. Having been confronted with complex external environment, in the first half of this year, SCC's business had a year-on-year growth of 14.1%; SCC's output value had a year-on-year growth of 24.4%, realizing a steady growth.

Subsequently, General Manager You elaborated SCC's current key from five aspects, including customer satisfaction, business growth, capability improvement,Factory II's reaching target output, and new product development. In the first half of this year, with joint efforts ofSCC's all employees, there was no complaint on reliability; however, there were stillinadequacies in terms of delivery. The departments made collaborative efforts, developed five key strategic customers, and made contact with 18 new customers, to further strengthen market promotion. The KM/OA system was officially connected on-line; the internal administration was optimized. Currently at the stage of reaching target output, Factory II should make all-round efforts to advance the work. The production lines should strengthen the development of new products, so as to meet ever-growing needs of the order for new products. General Manager You also fully analyzed the challenges and inadequacies in various aspects, including soaring costs, delivery, rejection and failure to reach the target output value, difficulties facing Factory II, and customer examination. He cautioned that SCC's all employees should, on the basis of hard work, remain sober-minded, earnestly implement the crisis consciousness across the whole company, be alert to dangers even in times of safety, take the industry benchmarking enterprise as an example, soberly respond to external changeable market environment, actively improve the level of production management, and in the process of production and operation in the second half of this year, continue to sum up experience, overcome difficulties, intensify efforts to seize orders, speed up the development of new products, reduce the rejection rate, improve the rate of on-time delivery, and strengthen the consciousness of controlling costs, so as to ensure the achievement of the sales target and total profit of this year.

　  At the Q & A session after the briefing, the employees present at the meeting raised many questions closely related to production, management, and corporate culture to General Manager You. General Manager You answered them one by one.