Milan, January 2007 -Hengdian Group Holdings ltd. (HG Holdings) announces the opening of their European subsidiary in Italy, "HG Europe s.r.l." located in Milan. This represents the company's first direct operational presence in the European market.

Hengdian Group (HG hereafter) is at the present one of the largest Chinese conglomerate,ranked 3rd in the "top IO national private enterprises", with a total yearly turnover exceeding 16.7 billion RMB (over 2 billion USD). The headquarter is based in Hengdian, Zhejiang Province (around 4 hrs. driving from Shanghai) and the group is composed by more than 60 subsidiary companies, with over 40,000 employees totally.

HG business is diversified in the following three main industries:
Electronics
Pharmaceuticals and Chemicals
Film and Entertainment

"Europe can offer a great opportunity to Hengdian Group, proven also by our recent fast and steady growth in this market" says Mr. Xu Yong' an, chairman of the group. "By our newly established organization we shall be in position to better serve our European partners and, in the medium term, to seriously study some direct investments. This is an important step but which is part of a wider strategy to aggressively expand Hengdian Group business globally".

Mr. Airaldo Piva, has accepted the position of Managing Director for HG Europe s.r.l.. Mr.Piva has over 15 years experience as senior management position with a big Japanese multinational group.

"We are happy that we could attract a capable and experienced manager like Mr.Piva to head our European operations" says Mr. Du Weiqun, the assistant of Mr. Xu Yong'an and also one of the board members of HG Europe. "His knowledge and familiarity with the local markets will be essential for the service to our European customers. To attract top talents from all over the world is part of the Hengdian Group corporate mission created by Mr. Xu Wenrong, the founder of the group.

"Opening a European office is an important move for all companies -Mr. Piva commented -but as far as I know, HG has been one of the first Chinese conglomerates who decided to set up their own subsidiary in Europe in order to mainly provide local services to multinational clients and leverage possible investment opportunities. Under this view, HG will be a kind of pioneer among other Chinese companies and I do expect that very soon other big Chinese groups will follow HG example".

At first, HG Europe shall be mainly focused on pharmaceuticals-chemical and electronics, sectors where HG has already an established position in the European market and gradually shall be supporting the local activities in the other industries.

HG is interested not only increasing the market position of their products in Europe but also to create new partnership and make agreements with European companies for the sales of their products and services to the Chinese market, which is one of world's fastest-growing consumer marketplace. To this direction, HG already created some stable collaboration with several European companies like Segafredo for the opening of coffee shops in Shanghai and with some leading brands in the fashion.

HG is also interested in promoting collaboration with European partners in the film and entertainment industry.

The new office is located at:
HG Europe s.r.l.
Via Murat, 17 20159 Milan Italy
Tel. + 39 02 45408.303
Fax. + 39 0245408.589
info@hg-europe.com