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For the People’s Republic of China

China Strategic Property Holdings Limited

Pre-IPO Investment Opportunity in

A Joint Venture with the City of Wenchang to manage the planning, preparation and sale process for 24.8 sq km of land on the tropical resort and retirement island

of Hainan

June 2008

INFORMATION MEMORANDUM

This document does not constitute a public offer or an invitation to subscribe for or purchase any securities The Directors of the Company accept responsibility for the contents of this document. This document has been issued on the condition that it must not be copied or given by any recipient to any other person other than a person authorized to conduct investment business under relevant local securities laws and regulations.

China Strategic Property Holdings Limited July2008 - 2 -

INFORMATION MEMORANDUM This document is important. If you are in any doubt about its contents you should consult your stockbroker, solicitor, accountant or other independent financial adviser authorised under relevant local securities laws and regulations. Investment in China Strategic Property Holdings Limited, an unquoted company, is speculative and involves a high degree of risk as well as opportunity for reward. This document contains information relating to the proposed Private Placement of Shares in China Strategic Property Holdings Limited (the “Company” or “CSPH”). To the best knowledge of the Directors of the Company the information contained in this document is in accordance with the facts and makes no omission likely to affect the importance of such information. . In subscribing, persons who acquire Shares in the Company under this Private Placement will be deemed to have requested performance on an execution only basis without advice (including advice as to whether the investment is suitable for any particular investor). This document is a Private Placement Information Memorandum issued by the Company and does not constitute a scheme or fund. ______________________________________________________________

China Strategic Property Holdings Limited

(Registered in British Virgin Islands No:1439608)

PRIVATE PLACEMENT OF UP TO 10,000,000 ORDINARY SHARES OF

GBP 0.40 EACH The issue is not underwritten and the Directors reserve the right not to allot any shares unless applications are received for a minimum of 100,000 Ordinary Shares. An investment in the Company may not be suitable for all recipients of this document. A prospective investor should consider carefully whether an investment in the Company is suitable for him/her/it in the light of his/her/its personal circumstances and the financial resources available to him/her.


Important Notice An investment in the Company involves a significant degree of risk and may not be suitable for all recipients of this confidential Private Placement Information Memorandum (“the Memorandum”). Prospective investors should consider carefully whether an investment in the Company is suitable for them in the light of their circumstances and the financial resources available to them. This Memorandum is provided solely for the use of prospective investors in connection with evaluating the Placement of Ordinary Shares in the Company. This Memorandum does not constitute an offer to sell or the solicitation of an offer to buy any securities or an offer to sell or the solicitation of an offer to buy any securities in circumstances in which such offer or solicitation is unlawful. The distribution of the Memorandum and the sale of Ordinary Shares in certain jurisdictions may be restricted by law. Persons into whose possession the Memorandum comes are required by the Company to inform themselves about and to observe any such restrictions. The Company reserves the right to reject any offer to purchase Ordinary Shares in whole or in part, for any reason. It also specifically reserves the right to determine or alter the Placement Price of Ordinary Shares and/or the timing of the allotment of such Ordinary Shares and/or the aggregate amount to be raised as set out in this Memorandum or otherwise. This Memorandum is personal to each recipient. Each recipient, by accepting delivery of this Memorandum, agrees to the foregoing. In making an investment decision, investors must rely on their own examination of the Company and the terms of the Placement, including the merits and risks involved. Potential investors should inform themselves as to the possible tax consequences, the legal requirements and any foreign exchange restrictions or exchange control requirements which they may encounter under the laws of the countries of their citizenship, residence or domicile and which might be relevant to the subscription, holding or disposal of the Ordinary Shares. Neither the delivery of this Memorandum, nor the potential subsequent offer, sale or delivery of any Ordinary Shares which the Company wishes to place pursuant to the Placement shall in any circumstances imply that the information contained herein concerning the Company is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Placement is correct at any time subsequent to the date indicated in the document containing the same. No person is or has been authorised in connection with the Placement to give any information or make any representation other than as contained in this Memorandum and, if given or made, such information or representation may not be relied upon as having been authorised by the Company. Neither this Memorandum nor the information contained in it nor any information or representations supplied or made in connection with the Placement shall form the basis of any contract.

Confidentiality This Memorandum is submitted in connection with the Placement of the securities described herein and may not be reproduced or used for any other purpose. Each recipient of this Memorandum agrees that all the information contained herein is of a confidential nature, that he, she or it will treat such information in a confidential manner, and that he, she or it will not directly or indirectly, disclose or permit his, her or its agents or affiliates to disclose any such information without the prior written consent of the Company. If the recipient does not participate in this Placement, the recipient agrees to return this Memorandum, and any accompanying documentation, to the Company promptly.

Overseas Jurisdictions The Ordinary Shares to be issued by the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (“the Securities Act”), or under the securities laws of any state of the United States or under the relevant securities laws of Canada, Japan or any other jurisdiction and they may not be offered, sold, taken up or delivered directly or indirectly, in or into the United States, Canada, Japan or any other country, territory or jurisdiction where to do so may contravene local securities, laws or regulations, except pursuant to an exemption from, or any transaction not subject to, the registration requirements of the Securities Act or the relevant Canadian laws and regulations or any other applicable securities laws and regulations in any jurisdiction. Accordingly, this Memorandum should not be mailed or otherwise distributed or sent in or into the United States, Canada, Japan or any other jurisdiction where to do so would constitute a breach of any relevant legislation or regulation (unless the Company has confirmed that to do so would not be in breach of such relevant legislation or regulation). With regard to overseas jurisdictions generally, no action has been taken by the Company, which would permit a Placement of Ordinary Shares or the circulation or distribution of this Memorandum in any country or jurisdiction where the Company requires action for that purpose. Law may restrict the distribution of this Memorandum in other jurisdictions and therefore persons into whose possession this Memorandum comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdiction.

Investment in China Strategic Property Holdings Limited, an unquoted company, is speculative and involves a high degree of risk as well as opportunity for reward.


TABLE OF CONTENTS TABLE OF CONTENTS.......................................................................................... - 4 - DEFINITIONS.......................................................................................................... - 6 - STATISTICS- ASSUMING FULL SUBSCRIPTION..................................................7 EXECUTIVE SUMMARY ...........................................................................................8 TRANSACTION OUTLINE.........................................................................................9 COMPANY STRUCTURE .........................................................................................11 HAINAN ISLAND ......................................................................................................12 HAINAN’S INFRASTRUCTURE..............................................................................12 PROJECT OUTLINE ..................................................................................................13 THE DEVELOPMENT SITE......................................................................................13 THE BUSINESS STRATEGY....................................................................................15 FUTURE OPPORTUNITIES ......................................................................................16 FINANCING................................................................................................................16 INVESTMENT OPPORTUNITY ...............................................................................16 RISK FACTORS .........................................................................................................16 COMPANY VALUATION.........................................................................................17


MANAGEMENT, SECRETARY, ADDRESS AND ADVISERS

MANAGEMENT/DIRECTORS John Hung [to be appointed] John Ullmann Michael Kingshott [to be appointed]

Sin Boon Tong COMPANY SECRETARY Chartac Secretaries Limited REGISTERED OFFICE Portcullis Trustnet Chambers

Suite 3444 Road Town, Tortola, British Virgin Islands

CORRESPONDENCE ADDRESS Room 2804, 28th Floor, Shui On

Centre, 6-8 Harbour Road, Wanchai, Hong Kong

SOLICITORS Tanner De Witt AUDITORS Morison International Limited


DEFINITIONS “CSPH” China Strategic Property Holdings Limited “Directors” The directors of the Company “The Group” The Company and its exercised holdings in

the Group, CSPH “Investors” “JV” “Listco”

Persons who acquire Shares in the Company under the Placement A 70 year Joint Venture agreement between HYIC and City of Wenchang A company listed on the London AIM Market which has entered into the Share Exchange Agreement with CSPH

“Shares” “Share Exchange Agreement”

The ordinary shares of GBP 40p each in the Company An agreement dated 15 May 2008 under which Listco will acquire 100% of the issued share capital CSPH on the terms outlined herein

“Management” The Management of CSPH and the Group “Par Value” The nominal currency amount assigned to a

security by the issuer. For an equity security, par value is usually a very small amount that bears no relationship to its market price.

“Placement” The private placement of up to 10,000,000

ordinary shares of GBP 0.40 each in the Company

“PRC” The Peoples Republic of China “RMB” RenMinBi - the currency of the PRC – USD

1.00 = RMB 7.0, GBP 1.00 = RMB 14.0 “GBP” Great British Pounds – the currency of the

United Kingdom of Great Britain

STATISTICS- ASSUMING FULL SUBSCRIPTION Placement Price Per Share GBP 0.40 Par Value of CSPH Ordinary Shares GBP 0.01 Number of Shares in Issue as of January 2008 50,000,000 Number of Shares in Issue after Placement (Stage 1) 60,000,000 Market Capitalization at the Placement Price (Stage 1) GBP 24,000,000 Number of Shares subject to the Placement 10,000,000 Proportion of enlarged issued share capital subject to the Placement

16.6%

Gross Proceeds receivable by the Company pursuant tPlacement (Stage 1)

GBP 4,000,000

STRICTLY PRIVATE & CONFIDENTIAL

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EXECUTIVE SUMMARY

• CSPH THROUGH A PRC SUBSIDIARY COMPANY IS THE CONTROLLING SHAREHOLDER IN A 70:30 JV WITH CITY OF WENCHANG

• THE JV HAS BEEN FORMED TO MANAGE AND FUND THE PLANNING, PREPARATION AND SALE PROCESS FOR 24.8 SQ KM OF LAND INCLUDING 11 KM OF BEACH PROVIDED BY THE CITY OF WENCHANG

• PREPARATIONS FOR SUBMISSION OF THE APPLICATION FOR THE MASTER PLAN ARE WELL ADVANCED AND CONSENT SHOULD BE RECEIVED WITHIN 6 MONTHS

• CSPH HAS ENTERED INTO A SHARE EXCHANGE AGREEMENT TO REVERSE INTO A LONDON AIM LISTED COMPANY (LISTCO) UPON RECEIPT OF PLANNING AT AN AGREED FLOOR PRICE FOR CSPH SHAREHOLDERS

• LISTCO HAS SECURED FURTHER INVESTMENT OF UP TO £7.5 MILLION FOR JV TO COMPLETE NECESSARY LAND PREPARATIONS

• JV WILL THEN PREPARE AND PARCEL LAND FOR SALE TO

DEVELOPERS/OPERATORS

• WITH THE BENEFIT OF PLANNING CONSENT THE LAND VALUE HAS BEEN ESTIMATED AT OVER £250 MILLION AND ALL NET PROFITS WILL BE DISTRIBUTED 70:30 TO JV PARTNERS

• VALUES ARE SUPPORTED BY MULTIPLE GROWTH FACTORS IN CHINESE ECONOMY AND TOURIST INDUSTRY

• PROJECT EXECUTION IS SUPPORTED BY A HIGH QUALITY PROFESSIONAL TEAM


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TRANSACTION OUTLINE China Strategic Property Holdings Limited (“CSPH”) has, through its 90%-owned PRC subsidiary (Hainan HYIC Industry Co. Ltd – “HYIC”), signed a 70 year agreement with the City of Wenchang, as part of the Hainan Government initiative to invest and develop a Residential Community alongside major Sports, Tourist and Retirement Resort Facilities on the North East coast of Hainan Island in the People’s Republic of China. Wenchang is Hainan’s second largest city, after the provincial capital Haikou

Key features of the transaction are summarized as follows:

o Hainan Island is a province of the Peoples Republic of China. It enjoys a tropical climate and is easily accessible by air and ferry from the mainland. Consequently, it has become a major resort and retirement destination

o HYIC has entered into a joint venture with the city of Wenchang to fund and manage the preparation for sale of land to create a resort and residential development on a 24.8sq km site on the north side of the island. The site includes 11 km of beachfront

o This opportunity has been created by HYIC over a 2 year period and at a cost to date in excess of £1,500,000

o HYIC is responsible for structuring the overall development transaction including the formulation of the Master Plan and for the funding of basic infrastructure to enable the site to be parceled and auctioned for sale to developers/operators

o Wenchang will be responsible for site clearance including the relocation of farmers with costs paid from the project (all fully costed)

o Net profits from sale of the land parcels will be split 70:30 between HYIC and the city of Wenchang, respectively

o The real estate services firm CB Richard Ellis has examined the proposals and has indicated a net value of the development rights, following approval of the Master Plan, in excess of £250 million and whilst this is a preliminary figure and with appropriate caveats it does provide an indication of the potential value of the project.

Listco Arrangements

• On 15 May 2008 CSPH entered into a Share Exchange Agreement with Listco to provide an early exit/liquidity to CSPH shareholders

• Under the terms of the Share Exchange Agreement and upon formal consent to the Master Plan, Listco will acquire 100% of the share capital of CSPH at 40p per share with consideration to be by way of the issue of new shares in Listco

• Contemporaneously with the reversal, Listco will raise up to £7.5 million in new shares and upon completion of both of these events, CSPH shareholders will hold no less than 75% of the issued share capital of Listco at the agreed price of 40p per share

It is intended that the £4 million proposed funding defined herein will be used as follows:

o To pay up the registered capital of HYIC which is required by Provincial Government as evidence of means before the Master Plan for the project can be submitted for approval

o Immediately thereafter HYIC will submit the final and already extensively negotiated concept plan to Wenchang and Hainan Provincial Government – a process which can be completed within 1 month

o Upon acceptance of the final concept plan HYIC will complete the formal Master Plan for approval by the same bodies – a process which should take a further 3months

o The site is then ready for development and the vital infrastructure works can be commenced to allow for the land to be parceled and sold by public auction

o Prior to approval of the Master Plan - £1,000,000 of the funds raised will be available to cover legal and other professional fees associated with the Master Plan process and the remaining funds of £1,100,000 will cover HYIC’s operating costs at for up to one year in case of need with £1.9 million available towards the final costs of the infrastructure and other essential


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works required to prepare the land for sale, with the remainder of that funding requirement met by Listco as outlined above.

o Upon completion of the reversal into Listco, the further £3.5 million becomes available and the project is then fully funded through to the first land sales and is then cash positive from sale proceeds

o The real estate services firm CB Richard Ellis has examined the proposals and has indicated a net value of the development rights following approval of the Master Plan at in excess of £250 million equating to a share value of ca. 180p per share for CSPH shareholders

The project concept is supported by a number of growth drivers: Tourism is one of the fastest growing sectors in China and has been booming since 2005 in inbound, outbound and domestic markets, with tourism income accounting for over 11% of total GDP. The explosive development has been stimulated by newly opened international destinations, considerably improved domestic transportation and infrastructure, and by the energetic economic development and stable social environment in the PRC. The PRC’s steady economic expansion has greatly benefited Chinese travel and tourism, especially domestic tourism:

• More travel services are available at affordable prices, • growing disposable income, and • the strong promotion from central and municipal governments, have all contributed to the

healthy development of tourism in the PRC. Furthermore, tourism was listed as one of the PRC economy’s key strategic growth points by the State Council in 1998. After six years of development, tourism income accounted for 5% of the total GDP in 2004, 6% in 2005 and leaping to 11.8% in 2006. This has created employment opportunities for more than 40 million; 5% of the total employment in China. With the international tourism industry generally beginning a renewed expansion, tourism in China will further benefit, particularly due to the stable economic and social environment.

The standard of resorts and number of local tourist destinations are both increasing, but so are the numbers of tourists. As the developers try and keep up with the growing demand the PRC Government is actively encouraging the development of world class resorts in the PRC.

As part of this ongoing policy, China Strategic Property Development Limited has, through HYIC, secured a Joint Venture Agreement with the City of Wenchang to manage the project for the planning and sale of land to develop the “China Yun Qing Hainan Olympic City Resort” Project as a major domestic and international tourist destination to meet the increasing demand of tourists visiting Hainan Island. The management team has substantial expertise & experience as illustrated by the biographies of the main board directors & senior management in particular: John Hung As former head of the Wharf Group, John has had direct experience in mega-

property development, hotel group, sports, tourism and golf complex development expertise.

Michael Kingshott

Considerable experience in property, shipping, terminal building, and a myriad of large conglomerate development experience.

Sin Boon Tong Malaysian Chinese and originate from Wenchang City, Hainan Island. He is based in Hong Kong, is a graduate engineer and has almost 30 years' experience in the various industries in trading and cross boarder work.

John Ullmann A chartered accountant who has been instrumental in attracting business opportunities in mainland China and elsewhere, John recently launched Asia Distribution Solutions Limited on the AIM market, together with Michael Kingshott.

The team is amply supported by a number of highly competent executives such as Paul Davis andIain Fidlin


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COMPANY STRUCTURE

83.4% 16.6% 100% 90% 10%

70% 30%

China Strategic Property Holdings

Limited (BVI)

Existing Shareholders

New Investors

South China Seas Development

Company Limited (BVI)

Local Hainan Shareholders

Hainan Yinghao Shiye Co Limited (Sino-Foreign Company)

City of Wenchang JV Agreement


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HAINAN ISLAND Widely referred to as the “Hawaii of the Orient”, Hainan largely remains undeveloped. You can still walk for miles on its white, pristine beaches, some of the most beautiful beaches in the world, and not run into another person. It's all here, on China's tropical paradise, bursting onto the international tourist scene, but still holding on to its ancient charm.

HAINAN’S INFRASTRUCTURE

Hainan Government is developing major infrastructure projects to stimulate economic development and improve accessibility and facilities for visitors. Recent projects include:

• Guangdong/Hainan railway ferry link • West Railway (Haikou/Sanya) • Haikou and Sanya airports • East and West expressways • Three major highways • Sanya International Cruise Terminal

Planned projects include:

• East railway (2009) • Haikou/Wenchang expressway (2010) • Wenchang Satellite Launch Centre (2010) • Tunnel link to mainland (after 2010)


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PROJECT OUTLINE The Project is a joint venture with the Municipal Government of Wenchang as part of the enhancement of the economic growth of Hainan’s second largest city, Wenchang. The site is located along the coastline territory at Yung-Tien Town at Seizing Tiger Cape with an area of 27,000 Mu (Chinese acres: 1 Hectare = 15 Mu), equating to 24.8 sq km.

The development proposals consist of the following:

• Luxury Oceanside Residential Villas and Apartments

• Retail shopping Malls

• Marina Complex including Hotels, Apartments and Retail Shops

• 6 Star Hotel Spa and Golf Course Resort

• Business Park

• Retirement Village incorporating Medical Centre and Rehabilitation Centre

• International Soccer, Tennis, Badminton and Table-tennis Sports Academy and Residential Park

• Olympic-standard Water Sports Centre

• Equestrian and horse racing centre

The development also provides for an option to develop a further 9,000 Mu, as an international motor racing circuit.

THE DEVELOPMENT SITE The development land is located 20 kilometers east of Haikou and includes 12 kilometers of white-sandy beaches. With easy access from the proposed coastal highway (already in an advanced stage of construction), the land will easily be reached by a short car ride from the provincial capital of Haikou, with its international airport. The sands of this North East shore are rarely crowded due to its undeveloped nature and offer peace, quiet, and seclusion. The blue waters are perfect for snorkelers and divers. In addition to its white sandy beaches, the Island is also known for its wildlife and beautiful unspoiled flora, natural hot spas, clean air and cultural diversity.

Preliminary view


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Modular Plan

Concept Plan drawn up by MAP architects and project designers


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THE BUSINESS STRATEGY CSPH (the “Business”) has been established whereby its principal activity will be investment through HYIC, in the preparation of the land, including appropriate planning consents, so that it can be parceled and sold for development within the context of the approved Master Plan. The Business’s operational strategy consists of two key components:

• The concept development and planning of the Yun Qing Olympic City and for this CSPH has assembled a team of world class architects, engineers and planners to achieve this: CBRE, ARUP and MAP.

• The achievement of the necessary planning approvals so that the land can be prepared for sale.

CSPH has the following key attributes, which will help ensure success:

• Good track record and strong management team

• An excellent concept which meets all of the requirements of both market demand and the Wenchang City and Hainan Province aspirations for the site.

• Strong growth drivers in terms of China’s ongoing economic expansion with a growing middle class, underpinned by accelerating trend towards better quality tourism services and the government’s massive infrastructure developments. These attributes are further supported the location of the development, specifically:

• Hainan is currently the No.1 vacation destination for Chinese People and fast becoming one of the most popular destinations for other Asian and international tourists.

• Hainan is fastest growing retirement destination in the PRC.

Good access from Mainland China and nearby tourist hubs (Hong Kong, Bangkok, etc).

History of Growth & Natural Progression

Please go to www.chinastrategicproperty.com for further information.


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FUTURE OPPORTUNITIES With a huge population, China represents one of the fastest growing property markets in the world. The industry has grown significantly during the past five years as the government has focused much of its economic-development efforts attracting inward investment and nurturing home-grown companies.

As a result of the relationships developed by CSPH in China, it will pursue similar/other opportunities in Hainan and elsewhere within the PRC and with the management and professional team it has assembled, it is well positioned to build a significant property/development business.

FINANCING Funding for this project to date has been provided by the directors and their associates. However, as the final submissions for approval of the Master Plan require CSPH to meet minimum capitalization requirements, the company now requires to raise funds through a private placement of shares. The funding proposed herein fully meets all capitalization requirements and together with the Share Exchange Agreement with Listco which provides a further £3.5 million, fully finances the project through to the sale of the underlying land.

INVESTMENT OPPORTUNITY CSPH is now seeking through a private placement of shares to raise £ 4 million to fund its minimal capitalization requirements and operating and professional costs to enable it to secure formal consent for the Master Plan and to prepare the underlying land for sale. The Share Exchange Agreement provides a contracted exit/liquidity for CSPH shareholders and the additional funding provided by Listco fully finances CSPH’s requirements through to the first land sales. This is a rare opportunity to invest in an early stage company with a contracted exit by way of reversal into a London AIM market listed company. The potential returns to investors are considerable.

RISK FACTORS The Directors consider the following risk factors to be the most significant to potential investors:

(a) The value of the Company's Shares may go down as well as up. Investors may therefore realize less than their original investment.

(b) The investment offered may not be suitable for all recipients of this document. Investors are accordingly advised to consult an independent adviser authorized under relevant local securities laws and regulations who specializes in investments of this kind before making any decision.


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(c) A prospective Investor should consider carefully whether an investment in the Company is suitable for him/her in the light of his/her personal circumstances and available financial resources.

(d) The shares are not listed on any Stock Exchange nor are they traded on AIM, OFEX, or any other investment market. An investment in the Shares carries a higher risk than an investment quoted on the London Stock Exchange or AIM and may therefore be difficult to realize. Notwithstanding arrangements with Listco there is no guarantee that the Shares will be admitted to trading or be exchanged for shares already traded on any recognized market.

(e) The market is at an early stage of development and may not grow as rapidly as anticipated. The Company's major competitors may have significantly greater financial resources than those available to the Company. There is no certainty that the Company will be able to achieve its projected levels of sales or profitability.

(f) The Company has a small management team. In the short term the loss of a key individual could adversely impact the Company's business.

COMPANY VALUATION Based upon CSPH forecast cash flows for the next 5 years, CSPH’s current valuation is approximately £2.20 per share, against the current placement price of 40p per share. Marketability CSPH’s business will be listed in accordance with the completion of the Share Exchange Agreement.

Dividend Policy

It is the intention that after completion of the Share Exchange Agreement Listco will distribute the net proceeds from the sale of land parcels if no other acceptable and viable land development projects are secured.

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