Forsythia Update

Taihua plc

("Taihua" or the "Company")

Forsythia Update

As confirmed in the Company's interim results for the period ended 30 June 2012 (announced on 25 September 2012), the Company has in place a ratified agreement to take control of a second forsythia plantation which will approximately double Taihua's potential harvest. Discussions have been ongoing regarding the cost structure of harvesting and maintenance before formal handover of the lease. 

Taihua confirms today that the discussions are continuing. Accordingly, whilst the board remains optimistic that transfer of the second forsythia plantation to Taihua should occur in due course, unfortunately, as harvest season has now commenced, the revenues and costs attaching to the forsythia harvest from this second plantation will not transfer to Taihua for this financial year. 

It is now expected that control of the Second Plantation will be effected at the start of 2013. Due to the delay, Taihua will enter into a supplement agreement with Qinyuan Forsythia Farmers' Cooperative whereby it has been agreed that Taihua can defer the payment of the upfront lease consideration under the proposed lease and the commencement of the 20-year lease period until control has passed to the Company.

Taihua confirms that its revenues and profit for the financial year ended December 2012 will, therefore, fall below current market expectations.

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