Trading Statement

China Shoto plc

("China Shoto" or "the Company")

Factory Closure & Trading Update

China Shoto plc, a leading Chinese battery producer and the largest supplier of back-up battery to China's telecommunication operators makes the following trading statement.

Factory closure of Yangzhou Zhenghe Power Supply Co. Ltd

The Board of the Company announces the closure of the factory operated by the Yangzhou Zhenghe Power Supply Co. Ltd ("Yangzhou Zhenghe"), in which the Company has a 59% interest. The factory accounts for approximately 3% of total production capacity. Human resources have been redeployed to minimize the decrease in battery production capacity. The Board have voluntarily made this decision as part of wider cost control measures and also to fulfill the Company's commitments to energy conservation and emission reduction as a National Environmentally Friendly Enterprise. The Company acquired Yangzhou Zhenghe in 2006 for a total consideration of £216,000. Following the cessation of production, the Company intends to sell the factory.

Current Trading

Since the statement made at the Company's AGM, trading conditions have remained challenging. The effect of lower levels of investment in infrastructure by China's major telecoms operators has been felt across the battery manufacturing industry. Consequently the Board anticipates the results for the 6 months ended 30 June to indicate a decline in revenue of approximately 11% and profitably of approximately 12% when compared against the same period in the previous financial year. The Board has implemented some successful cost control measures but has seen previously low taxation rates granted as a Foreign Investment Enterprise materially increase. The Company is actively seeking new markets for its products such as electric power, railways and electric bicycles. The Company also notes that in previous financial years, performance in the second half of the year has been betterthan that of the first six months.

The Company expects to release its Interim Results for the period ended 30 June 2010 by the end of September 2010.

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Forward looking statements

This announcement includes statements that are, or may be deemed to be, "forward looking statements". These forward looking statements can be identified by the use of forward looking terminology, including, but not limited to, the terms "believes", "estimates", "anticipates", "expects", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts.

By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward looking statements are not guarantees of future performance. The Company's actual results of operations, financial condition and liquidity may differ materially from the impression created by the forward looking statements contained in this announcement. In addition, even if the results of operations, financial condition, and liquidity are consistent with the forward looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause these differences include, but are not limited to: changes in the competitive framework in which the Company operates and its ability to retain market share; the Company's ability to generate growth or profitable growth; the Company's ability to generate sufficient cash to service its debt; the Company's ability to control its capital expenditure and other costs; significant changes in exchange rates, interest rates and tax rates; significant technological and market changes; future business combinations or dispositions; and general local and global economic, political, business, and market conditions. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

Other than in accordance with their legal or regulatory obligations, the Company does not undertake any obligation to update or revise publicly any forward looking statement, whether as a result of new information, future events or otherwise.