Minghua Group's Operating Subsidiary Applies For US$12,000,000 Chinese Government Loan

SHENZHEN, China, July 16 -- On July 1, 2003, Minghua Group International Holdings Limited's (BULLETIN BOARD: MGHA) indirect subsidiary, Shenzhen Minghua Environmental Protection Vehicle Co., Ltd. (Shenzhen Minghua), submitted an application with the Chinese government seeking 100,000,000 Chinese Yuan (approximately US$12,000,000) in loans to fund its operations, including funds for the manufacture of its hybrid vehicles. The Chinese government has established a technology fund to support high-tech projects and the high-tech industry. Shenzhen Minghua is eligible to apply for these long-term, low interest government loans because Shenzhen Minghua's hybrid vehicle (technically known as composite electric environmental protection vehicle for passengers) won a State Key New Product Certificate issued jointly by five Chinese governmental departments in July 2002 and was also listed as a fundamental project in the Shenzhen Industry Investment Plan by the Shenzhen Municipal Administration in 2002.

There can be no assurance that Shenzhen Minghua will be successful in receiving any loans from the Chinese government based on its application and the Chinese government has not indicated to Shenzhen Minghua that any loans would be forthcoming. If Shenzhen Minghua is successful in obtaining these loans from the Chinese government, it would use the proceeds of the loans to fund the manufacturing of its vehicles and its current research and development efforts.

Shenzhen Minghua is the owner of patented technology relating to hybrid vehicles powered by a combination of a combustion diesel engine and an electric power system. Shenzhen Minghua is initially focusing its efforts on the Chinese public transportation sector. Its hybrid vehicles consist of four models (coaches and mini-buses) that can be used in this sector. Shenzhen Minghua's indirect parent company, Minghua Group International Holdings Limited, is a public reporting company whose securities trade on the Over-the-Counter Bulletin Board under the symbol "MGHA".

The matters discussed in this news release contain forward-looking statements, including statements regarding the ability of Shenzhen Minghua to obtain financing from the Chinese government and statements regarding the use of any loan proceeds received from the Chinese government, which are subject to various risks, uncertainties and other factors that could cause actual results to vary materially from the results anticipated in such forward- looking statements. Such risks, uncertainties and other factors include the potential denial of Shenzhen Minghua's loan application because the lender may believe Shenzhen Minghua is not qualified or for any other reason, competition among high-tech companies for government loans, the ability of management to successfully persuade the lender that its technology should be funded instead of other technologies which may or may not be related, expected losses in the foreseeable future, and other risks detailed from time to time in Minghua Group International Holdings Limited's filings with the Securities and Exchange Commission. These forward-looking statements represent management's judgment as of the date of this release. Minghua Group International Holdings Limited disclaims any intent or obligation to update these forward-looking statements.