TRADING UPDATE

    RNS Number : 6546I
  Natsun Holdings Limited
  21 November 2008
   

 For Immediate Release  21 November 2008


    NATSUN HOLDINGS LIMITED 
    ("Natsun", Group", or "the Company")

    TRADING UPDATE

    Natsun Holdings Limited (AIM: NTS), the integrated worsted fabric and garment producer, announces a trading update in advance to its
year end 31 December 2008.

    At the time of the Interim results for the six months ended 30 June 2008, announced on 29 September 2008, the Board concluded that the
challenges faced by the Company in the first half of the year had continued into the third quarter. Whilst Natsun has continued to take
measures to alleviate pressures experienced over this period, it is now apparent that trading in the fourth calendar quarter, which
historically has generated a significant proportion of its profits, has continued to deteriorate. This has been evidenced by the Company
recording a small net loss in the month of October. 

    Key factors which have accelerated this downturn in trading include continued cost pressures arising from wool costs, the appreciation
of the Renminibi (RMB) against the dollar, Euro and pound sterling, together with greater economic uncertainty.  This has resulted in a
sudden slow down in demand for fabric which represents over 75% of Group's revenues plus a significant pressure on the Company's margins.
However Natsun has experienced continued sales growth through its joint venture partner Berwin, one of the largest suit distributors in the
UK.

    Due to the above, the Directors believe that the Company is likely to be no better than break even for the full year ending December
2008. Furthermore, due to the reduced level of trading and continued challenges currently being experienced by the Company, the Directors do
not expect to see any significant recovery in its financial performance during 2009.

Natsun continues to be supported by the Nanshan Group, a related company, to which it has an unsecured loan facility only due for repayment
from June 2011. 

    Natsun will give a further update of its full year numbers at the time of its preliminary results announcement.

For further information please contact:

    
 EVOLUTION SECURITIES LIMITED(Nominated adviser)  Tel No: +44 (0) 20 7071 4300
 Bobbie Hilliam                                                               
                                                                              
 EVOLUTION SECURITIES CHINA LIMITED(Financial      Tel No: +44 (0)20 7220 4850
 adviser and broker)
 Barry SaintEsther Lee                                                        
                                                                              
 BUCHANAN COMMUNICATIONS                           Tel No: +44 (0)20 7466 5000
 Lisa BaderoonMary-Jane Johnson                                               



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