Harbin Electric has common stock placement

Harbin Electric, Inc., a market leader in customized linear motors, motor / controller automation systems, automobile specialty micro-motors, and other special motors, yesterday announced that it has successfully placed 3,500,000 of its common stock at a price of $14.13 per share with certain institutional investors pursuant to a Securities Purchase Agreement dated June 24, 2008.

The gross proceeds from this private placement amounts to $49,455,000. The funds are expected to be used by the Company for working capital and general corporate purposes, including the financing of the recently announced acquisition of an industrial rotary motor business. The Company expects to sign the definitive acquisition agreement within the next 10 business days and complete the acquisition as soon as practically possible.

"We are very pleased to have successfully raised equity capital from a high-quality group of institutional investors despite difficult and volatile market conditions." Mr. Tianfu Yang, Chairman and CEO of Harbin Electric said. "Our ability to attract new sophisticated institutional investors reflects these investors' recognition of our leadership position in the electric motor industry, particularly in specialty electric motors, their faith in our strategic vision and execution as well as their confidence in our ability to continuously deliver growth and create shareholder value."

William Blair & Company, L.L.C. and ROTH Capital Partners, L.L.C. acted as the Company's placement agents. Harbin Electric has agreed to file a registration statement with the the Securities and Exchange Commission covering the resale by the investors of the privately placed common stock.