Honghua Group Ltd.,which registered in the Cayman Islands, manufactures drilling rigs, drilling parts and components, and offers drilling-related training as well as after-sales support services to the customers, Honghua Group Ltd. mainly do its business though its affiliate companies, including Sichuan Honghua Petroleum Equipment Co.,Ltd. registered in China, Chengdu Hongtian Electric Drive Engineering Co.,LTD. registered in China, Sichuan Honghua Youxin Petroleum Machinery Co.,Ltd. registered in China, Honghua International Co., Ltd. registered in China, Honghua America, LLC registered in USA, Honghua Golden Coast Equipment FZE registered in Dubai(UAE), and Egyptian Petroleum HH Rig Manufacturing Shareholder Co. incorporated in Egypt. To expand our global marketing platform to increase sales, we have established a company in Russion as our subsidiary while we also have established some branch offices in India , Pakistan , Indonesia and Uzbekistan .

As the principal affiliate company of Honghua Group Ltd., Sichuan Honghua Petroleum Equipment Co.,Ltd. was established in 1997, locating at the birthplace of Ancient Shu Culture of China , hometown of Sanxingdui, Guanghan City Sichuan Province of China . At the beginning, we were only a smaller land rig manufacturer. In the past ten years, we have obtained a great progress. According to “The Global Land Drilling Rig Manufacturing Market” published by Spears & Associates Inc. in June 2007, we are the second largest land rig manufacturer in the world in terms of revenue and sales volume.

We have many competitive advantages as follows:

We offer a large and diverse range of drilling equipment, together with support services
We offer our customers a comprehensive supply of customized drilling rigs and rig parts and components, as well as training and follow-up support services. Our diverse line of drilling rig products ranges from heavy 9,000-meter depth drilling rigs to light 1,000-meter depth drilling rigs and offshore drilling modules. We also realize earnings from the sale of rig parts and components, which are used either for replacement or refurbishment purposes in the existing drilling rig market, or sold to other drilling rig manufacturers. Our customer services include training at our main production facility in China and after-sales technical support admin istered at our customers' drilling sites by a team of experienced engineers

We are a low cost manufacturer of high-performance, quality land rigs
We believe that we provide high-performance, quality drilling rigs at a lower cost than our international competitors, allowing for increased price competitiveness and greater profit margins. We are able to maintain a low cost structure due to our highly-skilled yet low-cost labor force, our integrated approach to the manufacturing of rigs and rig parts and components, our proximity to a supply network of parts and components and raw materials, and our large scale of production. We produce rigs utilizing many of the world's leading rig technologies, such as those used in our digitally-controlled VFD rigs. We have implemented the ISO 9001 system to ensure effective quality control of our products. We believe that our integrated approach to the manufacturing of select parts and components and the manufacturing of rigs ensures a high level of quality and guarantees reliable delivery of rig orders, thus encouraging repeat business from existing customers.  

We have an established global marketing network
We have a diverse global marketing network that includes our overseas affiliates in Houston , Texas ( USA ), Cairo ( Egypt ) and Dubai (UAE), as well as our local distributor networks in other key drilling rig markets, such as Russia , Indonesia and Venezuela . Our subsidiary in Houston assembles and sells our drilling rigs and rig parts and components to drilling contractors based in North America and Latin America . We believe that this provides a sound base for further expansion in the North American and Latin American markets. In Egypt , We have formed a joint venture with three enterprises to increase our market share in Africa . Our subsidiary in Dubai serves our customers across the Middle East . In Russia , Indonesia and Venezuela , our close relationships with local distributors have helped us enhance our presence in the oil and gas drilling equipment markets within these countries.

We have strong R&D capabilities and a track record of developing successful new technologies
We are one of the leading developers of land rig technologies in China , and we have created a wide range of patented technologies and proprietary designs which enhance the function and performance of our rigs. We are strongly committed to strengthening the global competitiveness of our rigs and rig parts and components. We have focused on research and development, assembling a team headed by leading Chinese experts in the oil and gas equipment industry. As a result of our dedication to technological innovation, we have successfully developed globally-competitive products such as our digitally–controlled VFD rigs which, since being developed in 2001, have become our best selling rigs. More recently, we havedeveloped low-temperature tolerant rigs for the Russian market, trailer drilling rigs for the markets in the USA , the Middle East and India, and digitally controlled offshore drilling modules for the offshore drilling market.

We have an experienced and dedicated management team
We are able to quickly adapt to changing trends in the regional and global drilling markets because our top management and key technical personnel are major shareholders, who are involved in the everyday operations and have first-hand knowledge of the latest market developments through direct customer contact. All of these individuals have extensive experience in the drilling equipment industry; Chairman Zhang, in particular, has over 20 years of experience in the industry. Our strategic shareholder, COOS through its parent Company, CNOOC, actively supports and participates in our Company's marketing and product development for offshore drilling products. CNOOC, founded in 1982, is one of the largest state-owned oil companies in China , as well as China 's largest offshore oil and gas producer. It is authorized to cooperate with foreign partners for oil and gas exploitation in China 's offshore areas. CNOOC set up its principal office in Beijing , and the registered capital is 50 billion RMB.