LCP Lon.Asia China

RNS Number:2770J
London Asia Chinese Private Equity
21 September 2006



21 September 2006


London Asia Chinese Private Equity Fund Limited
("LACPEF" or "the Fund")


Two New Investments


LACPEF, the China focused investment fund, announces that it has made two new
investments for a total of #14.2 million, making seven investments since the
Fund closed on 15 March, with over #23 million of funds committed.



Canmake Business Ltd



Founded in 2001, Canmake Business Ltd ("Canmake") is a manufacturer of can-lids,
pull-tab ends, caps, closures and other metal packaging products serving the
fast growing Chinese beverage and food industries.  Canmake sells over 150
million lids a month.



Canmake generated profits of #4.2 million for the year ended 30 June 2006,
showing growth of over 60%.  The Fund has invested #4.9 million for a 20% stake.
Simon Littlewood has joined the Board of Canmake.



Commenting on the investment Reynold Wong, Chief Executive of Canmake said: "The
new investment strengthens our capital base, enabling us to scale up our sales
volumes and to expand the range of products we provide to our customers. We look
forward to working with London Asia to develop our business and position the
Company for a stock market listing."



Simon Littlewood, Director of LACPEF, said: "Canmake has an established position
in a fast growing market, with opportunities to expand into related products as
the market continues to develop in China on the back of rising prosperity and
shifts in consumer tastes."



Asia Water Technology



The Fund has acquired a 22% stake in Singapore listed Asia Water Technology ("
AWT" or "the Company"), for a total consideration of #9.3 million in cash.



AWT was founded in November 2002 and listed on Singapore's SESDAQ Stock Market
in March 2005 (Code: SI5GB).  It has a current market capitalisation of
approximately #48 million.



For the year ended 31 December 2005, AWT reported profit after tax of #2.6
million on sales of #26.2 million. For the half-year period ended 30 June 2006,
the Company saw profits attributable to shareholders increase by 34% to #1.4
million.  The net assets as at 30 June 2006 were #16.7 million.



Following the acquisition of the stake, which was acquired from one shareholder,
the Fund is now the largest shareholder in AWT. Simon Littlewood, Executive
Director of the Fund, has been appointed to the Company's board as Chairman of
the Investment Committee, responsible for new investments and capital
expenditure, as well as financing.  Victor Ng, Fund Executive Director, is an
existing director of AWT and Chairman of the Remuneration Committee.



AWT is a specialist water treatment company, offering total engineering
solutions for both water purification and waste water treatments systems.  It
has also invested in Build-Operate-Transfer ("BOT") projects for water supply
and waste water treatment plants, working primarily with clients in the power
generation and municipal water supplying and waste water treatment industries in
China.



In late August 2006, Zhou Shengxian, head of the State Environmental Protection
Administration, announced that China is to launch a giant water pollution
control project to address the fact that per capita water resources in China are
only one third of the world's average.  This will be the country's largest
environment related scientific research project in terms of investment. China
has 21% of the world's population, but only 7% of the world's water supply, and
this summer has seen the worst droughts in 50 years.



Other key factors driving AWT's growth include:



*         statistics from the Chinese Government show that among 660 cities
nationwide, 364 cities are still threatened by the supply of adequate clean
water and 297 cities have not yet established qualified waste water treatment
facilities;

*         according to China's tenth 'Five Year Plan', by 2010 additional water
supplying capacity of 40 billion cubic meters will be built;

*         The State Council has planned that at least 60% of Chinese cities
should have waste water treatment facilities ready by 2010, which means more
than 1,500 municipal waste water treatment plants will be built in the next five
years;

*         ninety per cent of waterways flowing through China's cities and 75% of
the country's lakes are polluted; and

*         more than 300 million of China's rural population do not have access
to clean potable water.



Mr Hanguang Huang, Chief Executive of AWT, said: "AWT is a small company
operating in a huge market. We have many more projects than funds available, and
we look forward to working with London Asia and the funds it manages to enable
us to expand our business rapidly and take advantage of the huge number of
opportunities in our sector, where we have recognised expertise.  We hope the
relationship will not only bring us additional sources of finance, but also
access to the latest technology in the sector from around the world through
London Asia's international network."



Simon Littlewood, Director of LACPEF, said: "This is an excellent opportunity to
invest in a fast growing business in a sector with massive long term growth
potential, as China seeks to address major issues with the supply and treatment
of its water and waste. The Chinese Government has recognised the need to
address the efficient treatment of waste water, to curb its water shortages, and
to supply its growing cities with clean, safe water.  The Fund has the
opportunity to get in at the beginning of the Company's anticipated rapid
growth."





For further information please visit www.londonasiafunds.com or contact:

John West/Matt Ridsdale      Stephen Lucas               Hugh Field
Tavistock Communications     London Asia Capital plc     Collins Stewart Limited
Tel: 020 7920 3150           Tel: 020 7355 7928          Tel: 020 7523 8000





About Canmake Business Ltd

Founded in 2001, Canmake currently has monthly sales averaging over 150 million
lids, with a total of nearly 2 billion lids and caps delivered to its customers
in 2005.



The canned food and beverage market in China is seeing considerable growth as a
result of rising prosperity and a shift in consumption patterns.  Only 11
billion beverage cans are consumed annually by a population of over 1.3 billion
in China, with an average consumption of 8 cans per capita per year, against 400
cans per capita in the US, 140 in Japan, and 67 in South Korea.  The annual
consumption of canned food in China is only 1.5kg per head - the annual
consumption of the USA is 90kg per capita, Europe is 50kg, Japan is 23kg and the
world average is 8kg per capita.





About Asia Water

Asia Water is engaged in:

*         providing total engineering solutions for water purification, water
supply and waste water treatment projects as a general EPC contractor. Since
incorporation, Asia Water has signed over 200 water purification contracts for
power plants and 5 municipal water supply and treatment contracts, with total
contract value exceeding RMB 2 billion.

*         managing and operating municipal water supply and waste water
treatment plants on a "BOT" basis. Currently, Asia Water is operating two
municipal water supply plants and three waste water treatment plants.



For additional information, see www.asiawatertech.com




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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