-3x Short China Regulatory News (CHNS)

China Shoto plc

("China Shoto" or "the Company")

Pre-Close Trading Update

China Shoto plc (AIM: CHNS), a leading Chinese battery producer and the largest supplier of back-up batteries to China's three major telecommunications operators, today provides a trading update for the year ended 31 December 2010. Further to the announcements made during the year, the Company has experienced some challenging trading conditions. In particular a substantial decrease in the levels of investment made by the three major Chinese telecom operators is expected to adversely affect the Company's financial performance for the year ended 31 December 2010. The unusually high spending in 2009 was fuelled partially by an economic stimulus package from the Chinese Government.

As a result of reduced levels of spending by the three major Chinese telecom operators, competition has increased and contributed to gross profit margins declining when compared to the year ended 31 December 2009. As expected, the Company's trading performance did improve during the second half of the year; however the Board estimates that net profit for the year ended 31 December 2010 will decrease by approximately 30% when compared on a year-on-year basis to the previous financial year.