SOURCE: S3 Investment Company

S3 Investment Company

February 11, 2009 09:45 ET

S3 Investment Company Discusses Outlook for China's Construction Industry in Preparation for Close of Next Redwood Capital Reverse Merger

DANVILLE, CA--(Marketwire - February 11, 2009) - S3 Investment Company, Inc. (PINKSHEETS: SIVC) today discussed the outlook for future construction in China, particularly the projected growth in certain sectors, as the company prepares for the close of the next reverse merger involving its wholly owned Redwood Capital subsidiary. Redwood Capital has targeted a listing on the TSX Venture Exchange for the client, which operates in China's construction industry.

While overall growth in China's economy has slowed, it still maintains positive growth, at a time when the economies of the United States and many other developed nations are in recession. Similarly, while there has been a slowdown in construction in China, especially in the largest urban centers, the growth in Tier 2 and Tier 3 cities is projected to grow at a faster rate.

China has more than 300 cities classified as Tier 2, 120 of them with populations of over 1 million, and another 1,200 Tier 3 cities. Middle class income continues to rise in these cities, and the tier 2 cities now represent approximately 88% of China's gross domestic product. Due to the continued growth of middle class incomes in Tier 2 and Tier 3 cities, these areas have also become the focus for many large international companies, which spurs further economic development in these cities.

"The next Redwood Capital client that we are preparing for close is a construction firm, and its focus is in the Tier 2 and Tier 3 cities, which are seeing very strong growth rates despite the global economic crisis," said Jim Bickel, CEO of S3 Investments, Inc. "Much of the slowdown in construction in China has been in the Tier 1 cities, which were somewhat overbuilt during the latest period of rapid economic expansion in China. The opportunities in Tier 2 and Tier 3 cities are still significant, and we believe that Redwood Capital's client is extremely well-positioned to take advantage in these growing markets."

China's government launched a $586 billion stimulus package in November 2008, and more recently, China's State Council implemented policies that are expected to encourage more residential building in the country.

"All signs point to continued positive economic activity in China's construction sector, and we look forward to the close of this Redwood Capital transaction and a bright future for our client in the North American public markets," Mr. Bickel added.

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About S3 Investment Company

S3 Investment Company, Inc. (http://www.s3investments.com) and its wholly owned Redwood Capital subsidiary are focused on assisting private Chinese companies in accessing the North American capital markets by utilizing a network of investment banking relationships to achieve reverse merger transactions. For more information, please visit http://www.redwoodcapinc.com.

Any statements contained herein related to future events are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on forward-looking statements. S3 Investment Company, Inc. undertakes no obligation to update any such statements to reflect actual events.

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