Bonso Electronics (BNSO) has entered into a Letter of Intent with the Xincheng Industry Park in Xinxing to acquire about 100,000 square meters of land for future factory expansion.

Under the terms of the letter of intent the cost of the land is approximately US$760,000 with 30% due upon signing of the final contract which is expected to be before the end of October 2006, and the balance to be paid in 2007 when the land transfer is completed. Bonso will acquire the land under a 50 years lease that is expected to be renewable.

This new piece of land is more than triple the size of the land upon which the company's existing facilities are located in Shenzhen It is expected that the land transfer will be completed in 2007 and the first phase of construction of the new manufacturing facilities will be completed in 2009. The projected capital expenditure for the first phase of investment is approximately US$8 million.

Bonso Electronics designs, develops, manufactures, assembles and markets a comprehensive line of telecommunications products, electronic scales and weighing instruments and health care products. Bonso products are manufactured in China on behalf of customers primarily located in North America and Europe.