Shandong Linglong Rubber Co.

, LTD

Building For a Successful Future Proposal for a $US 100 Million Pre-IPO Recapitalization

By Grand Avenue Capital and Etech Securities, Inc.

Members NASD SIPC

November 20, 2005

Confidential Presentation to the Board of Directors of the Shandong Linglong Rubber Company, LTD
This document is for informational purposes only, and information is not intended to be complete. The statements of fact, information, and opinion contained in this document have been obtained, compiled, or arrived at in good faith from brief meetings with shareholders, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. This suggested proposals and comments and recommendations contained herein will be modified when and if confidential financial documents and forward-looking business plans of the Shandong Linglong Rubber Company have been reviewed by Etech Securities on a confidential basis and Etech Securities has been engaged as Shandong Linglong Rubber Companys investment banker.

Presentation Outline to Linglong Board of Directors

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Purpose of Investment Banking Engagement Proper capitalization Scope of Investment Banking Work Proposed Financing Strategy Timeline Example of Pre-IPO Recapitalization of Actual Project in Process (November, 2005) Valuation Parameters Prospective Investor Categories Elements of Engagement Agreement and Cost of Engagement Etech Responsibilities and Capabilities

 ()
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. (2005)

1.

Purpose of Investment Banking Engagement To provide valuation, financial analytical services and presentation materials in order to raise $100 million equity for growth capital from a strategic or financial investor.

2.

Proper capitalization
Etech Securities believes that a properly recapitalized balance sheet with an appropriate equity infusion can insure Linglongs continued profitable growth in its market, while providing an avenue for shareholder liquidity through an IPO at the appropriate time. An important element of the appropriate structure recognizes that continued infrastructure development cannot come entirely from debt or internally generated funds. Etech is prepared to raise the necessary equity capital from financial or strategic sources eager to invest in profitable manufacturing companies in China.

3.

Scope of Investment Banking Work Proposed

All necessary and appropriate investment banking activities to achieve a transaction that is acceptable to the shareholders on a best efforts basis, including: Preparation of a Confidential Investor Memorandum outlining the company, history, operations, financial analysis of performance, and forecast of financial proformas Valuation of the Company under various growth assumptions Design and execution of the marketing of the Investor Memorandum to approved strategic and financial investors Solicitation of financing proposals after thorough management screening, facility visits and interviews Negotiation of financing proposals and Letters of Intent Advice and recommendation to the board regarding the optimum private placement proposal received Supervision of due diligence process Assistance and overview of legal document review Closing of a transaction

4.

Financing Strategy
Etech Securities would evaluate several financing scenarios that would include, but not be limited to: 1. recapitalization involving new equity infusion involving $ US 100 million through private placement from strategic or financial investor 2. structuring of an offshore holding company which would initially be the recipient of the private placement, and ultimately is the IPO vehicle for the exit for the private placement investor providing offshore liquidity for the Chinese shareholders


1. 2.

5.

Timeline

6.

Example of Pre-IPO Recapitalization of Actual Project in Process

(November, 2005)

ELEMENTS
$US 140 million being raised for specialty chemical company in Chongqing

Shareholders are diverse: SOE, US, Saudi Arabia

Valuation of company matched shareholders expectations World-wide search of over 250 financially qualified private equity groups (US, HK, Singapore, Japan, UK) with over 40 responding initially positive and receiving financial materials.10 facility meetings with highly qualified investors, each with funds in excess of $US 1 billion Client limited Etech to only 3 strategic prospectsone in active discussions ETECH is selling only a substantial minority interest in effort to keep primary shareholder in control situation for financial consolidation purposes.

(2005)
25040( ) 10

7.

Valuation Parameters Etech has suggested that a value for Linglong would be in the range of 4-6 times EBITDA, adjusted for non-recurring expenses of the last 2 years. An Enterprise Valuation (debt plus equity) of 3.6 Billion RMB is possible based on EBITDA reported to Etech of: 200 million RMB after tax income 150 million RMB income taxes 160 million RMB depreciation 70 million RMB interest 580 million RMB EBITDA Valuation could be in the range: short and long term debt Equity value of business 3.6 billion RMB (1.3 billion RMB) 2.3 billion RMB

An 800 million RMB post-acquisition value could result in an equity participation on the part of the new investor of 25% to 40%. Etechs responsibility is to maximize shareholder value and minimize dilution. Note that the ultimate valuation is based on a thorough review of financials and assessment of Linglongs financial plan.Etech has had an opportunity to review neither at this time.


EBITDA() 36 EBITDA () 4.536 36 13 23

825%40%

8.

Prospective Investor Categories

Strategic Investors --- tire related companies not already in China, --- tire related companies in China already, interested in further consolidation opportunities. ---automotive parts companies manufacturing in China, or ( like WL Ross, moving auto parts businesses to China )

Financial Investors
(those with investment funds in excess of $US 1 Billion looking to make minority investments in Chinese manufacturing companies..particularly those with automotive interests)


WL Ross 10

Elements of Engagement Agreement and Cost of Engagement

Etech Investment Banking Proposed Engagement Etech Securities Investment Banking Division is competitive in cost, and is highly focused on value-added, consultative services to our clients. We are not deal-centric, focused on the transaction fee as some of our competitors are focused.
Exclusive engagement for 12 months Responsibility for raising $US 100 million Success fee (at closing of satisfactory transaction): 6.5% of transaction value Retainer: $300,000.50% at start of work (after execution of contract) and 50% when Investor Memorandum is complete Reasonable and customary travel (coach) expenses Warrants equal to 3% of the equity raised at a value equal to the investors value with a 5 year life


6.5% 301515 3%5

Focus of Etechs Financial Advisory Services:

Mergers, Acquisitions & Divestitures Corporate Finance (Recapitalizations) Corporate Valuations Equity / Mezzanine / Debt Placements

The individuals comprising Etech Securities have consulted in transactions having a total value in excess of $5 Billion. The Etech team members have over 125 years of business experience as owners, consultants and investment bankers.


()

125

Etech Securities Investment Bankers

highly skilled in orchestrating a confidential financing designed to create a competitive environment creative deal makers who maximize financial and non-financial objectives of our clients

have experience in a wide variety of industrial projects and have specific understanding of the automotive products (tires, etc) markets Etech Partners have owned / operated / managed companies to the companies we seek as clients. Very few investment bankers have operating experience and without access to their research departments, they have little understanding of their clients industries.

Etech Investment Banking Team

N. Jay Liang Chairman, CEO and President Jay Liang has successfully led the firm and acquired several stock brokerage firms. He has built Etech into the largest Chinese owned financial service provider in Southern California. Etech has purchased Hanmi Securities, a Korean broker dealer in Los Angeles. Mr. Liang is a recognized speaker with expertise in the areas of economy and stock market, and can be heard on many radio and television stations in Southern California.

Etech Investment Banking Team

Angel Y. Wang Co-Chairwoman Ms. Wang is one of the most successful leaders in the U.S. financial industry. She has built Etech into the largest Chinese owned financial service provider in Southern California. Very active in the financial industry, business communities, and even the political arena, Ms. Wang initiated and organized the World Capital Forum with the China Council of Promotion for International Trade (CCPIT) and the China Capital Association.

Etech Investment Banking Team

Thomas R. Korzenecki Principal Managing Director

Mr. Korzenecki has 14 years diversified operating and financial experience in the oil and chemical industry, with four years of merger, acquisition and divestiture work for ARCO and Occidental Petroleum. His responsibilities included divesting major assets in Europe and he was a key adviser in domestic acquisitions/divestitures involving businesses in the oil, gas, chemical, coal and food processing industries. He then initiated, financed and managed for 13 years four corporate acquisitions of manufacturing companies for his own account, one of which was involved in vulcanized rubber products. Since 1998, as a founding member of Grand Avenue Capital Partners, he has advised primarily private companies in the energy, engineered products, and a wide variety of manufacturing companies.

Etech Investment Banking Team

Michael Marevich
Managing Director

Mike Marevich has been involved in mergers and acquisitions most of his working career as a principal, agent and chief financial officer with this responsibility. For the last five years, he was Managing Director of Gardiner & Rauen, a boutique investment banking firm focusing on middle market, primarily private, transactions. Prior to this time, Mike was CFO of DSL Transportation Services, SVP/CFO for Hollytron (a $60 million revenue chain of electronics retail stores), and CFO for Millers Outpost/Millers for Kids. During his tenure the chain grew from 31 to 330 stores and revenues grew from $60 million to over $700 million. Mike was also a shareholder and president of Hinshaws Department Stores, with prior experience as Director of Operations of the Bullocks-Wilshire chain. Mike has a BS in Finance/Accounting and an MBA in Finance, both from U. of Southern California .

Etech Investment Banking Team

Theodore C. Nevins Executive Director Twenty-one years of trading, sales, and client management experience with debt and debtderivative products. Overseas responsibilities with Merrill Lynch, Lehman Brothers, and Bear Stearns in New York, Tokyo, and Hong Kong. Built Asias number one ranked business for Lehman Brothers Asia, Ltd. for U.S. Treasury bond Repo trading. Opened and managed Lehmans Tokyo Capital Markets department with two other colleagues. Credited with first time placements for Bear Stearns Asia, Ltd of Collateralized Bond Obligations into parts of Southeast Asia. Introduced and placed U.S. Mortgage Neutral Duration structures into Southeast Asia.

Etech Investment Banking Team

Bradford W. Allen Executive Director Mr. Allen has over twenty-five years of investment banking and private banking experience including mergers, acquisitions, public and private financings and individual and institutional fund management in the both the US and Asian markets. Mr. Allen spent four years residing in Hong Kong and was most recently Managing Director for Bear Stearns Asia prior to founding his own firm, Pacific Investment Advisors, in 2002. Pacific Investment Advisors is an investment advisory and consulting firm focused on capital raising for emerging market, small to mid-cap companies with an emphasis in Asia, in particular Hong Kong and China. The firm has completed numerous share placement transactions as well as private equity investments and joint ventures. The company has offices in Los Angeles, Hong Kong and Shanghai. Mr. Allen is the founder and Managing Director of the company.

Etech Investment Banking Team

Daniel L. De Tour Managing Director Daniel L. De Tour, Managing director of Etech Securities, Inc.Vice President of First Wilshire Securities. First Wilshire often ranks as one of the best performing U.S. money managers. He is a Member of the Investment Committee and is Managing Director of Capital Markets. First Wilshire Securities Management is operated by a group of experienced money manager professionals dedicated to the pursuit of superior performance for their equity accounts. As a stock market portfolio manager First Wilshire has often out performed market indicators like the Russell 2000 and the S&P 500. The history of First Wilshire discovering unique stocks is well known on Wall Street. Major media over the years has consulted the company for its market analysis and opinions. First Wilshire specializes in the management of equity, concentrating in the area of Small Capitalization and Emerging Companies.

Etech Investment Banking Team

Tom Wang Managing Director

Tom Wang became a member of the Board of Directors of Werke in December 2000. Mr. Wang is currently President of Shengyang Saiao Healthy Products Company, Ltd, U Mart and Meyyang International Group Corporation. Mr. Wang is also Vice-Chairman of Shengyang Municipal Commission of Foreign Economic Relations and Trade.