China Sun Group Signs Contract for Lithium Iron Phosphate (LIP) of 470 Tons with Sai Er New Energy

Pursuant to the contract, China Sun will deliver a minimum of 470 tons of LIP to Sai Er New Energy throughout calendar year 2011. Specific delivery volumes for each month are as follows:

Jan. – Feb. 2011 25 Tons / Month

Mar. – Jun. 2011 30 Tons / Month

Jul. – Dec. 2011 50 Tons/ Month

Throughout the duration of the contract, China Sun will send Sai Er New Energy product research materials and offer technical engineering consultancy services in order to provide the customer with a complete end-to-end solution.

Separately, China Sun announced that it has sold 40 tons of LIP to Huanyu Power Source under the agreement previously reported on September 21, 2010. China Sun’s management currently believes that it will deliver 60 tons of LIP to Huanyu Power Source in total by the end of December 2010.

Huanyu Power Source Co., Ltd. began its main business of R&D, manufacture and distribution of replacement batteries in 1982. Huanyu has established a hi-tech industrial park engaged in the production of Nickel Cadmium, Nickel Hydrogen, Lithium ion and Lead Acid batteries, in more than 100 models with a daily capacity in excess of 2 million secondary batteries. Huanyu currently has more than 10,000 employees with 400 dedicated to research.

"We are very pleased to further extend our cooperation with Huanyu Power Source," commented Mr. Guosheng Fu, CEO of China Sun Group. "In our previous experience with this customer, we were able to prove our LIP production capabilities by providing a high quality product and excellent customer service, enabling us to win a second contract with one of their subsidiaries. Going forward, we are very excited about the growing market demand for LIP production, and we are ready to expand our production capacity in a very short time frame to satisfy this demand."

China Sun Group High-Tech Co. ("China Sun Group") produces anode materials used in lithium ion batteries. Through its wholly-owned operating subsidiary, Dalian Xinyang High-Tech Development Co. Ltd ("DLX"), the Company primarily produces cobaltosic oxide and lithium cobalt oxide. According to the China Battery Industry Association, DLX has the second largest cobalt series production capacity in the People’s Republic of China. Through its research and development division, DLX owns a proprietary series of nanometer technologies that supply state-of-the-art components for advanced lithium ion batteries. Leveraging its state-of-the-art technology, high-quality product line and scalable production capacity, the Company has recently diversified into the manufacture of LIP and plans to forward integrate to manufacture of power Li-ion batteries.

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