UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Schedule 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)

Liu Yuchuan

No.18, Zhong Guan Cun Dong Street

Haidian District, Beijing 100083

China

86-10-82600527

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. £

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

⁽¹⁾          Percentage calculated based on 57,608,833 shares of common stock outstanding as of September 30, 2013, as set forth in the Form 10-Q of the Company filed with the SEC on November 19, 2013.

⁽¹⁾          Percentage calculated based on 57,608,833 shares of common stock outstanding as of September 30, 2013, as set forth in the Form 10-Q of the Company filed with the SEC on November 19, 2013.

INTRODUCTORY NOTE

This amendment No. 2 to Schedule 13D (this “Amendment No. 2”) is filed with respect to Sino Gas International Holdings, Inc. (the “Company” or the “Issuer”) jointly by Mr. Liu Yuchuan and Eloten Group Ltd. (collectively referred to herein as the “Reporting Persons”) pursuant to their joint filing agreement, filed with amendment no. 1 to the Schedule 13D as Exhibit 7.01 and incorporated herein by reference.

This Amendment No. 2 amends and supplements the statement on the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on October 31, 2006, on behalf of Mr. Liu Yuchuan (as previously amended by amendment No. 1 to the Schedule 13D filed on May 8, 2012, on behalf of the Reporting Persons, the “Schedule 13D”).

Except as provided herein, this Amendment No. 2 does not modify any of the information previously reported on the Schedule 13D. Capitalized terms used but not defined herein have the meanings assigned to them in the Schedule 13D.

Item 2 of the Schedule 13D is hereby amended and replaced by the following:

This Amendment No. 2 is being filed jointly on behalf of the Reporting Persons. A Joint Filing Agreement among the Reporting Persons was filed with the Schedule 13D as Exhibit 7.01 and incorporated herein by reference. Information with respect to each of the Reporting Persons is given solely by such Reporting Person, and no Reporting Person assumes responsibility for the accuracy or completeness of the information concerning the other Reporting Persons, except as otherwise provided in Rule 13d-1(k) of the Act.

The Reporting Persons may be deemed to be a member of a “group,” within the meaning of Section 13(d)(3) of the Act and comprised of the Reporting Persons with respect to the transactions described in Item 3 and Item 4 of this Schedule 13D. Except as otherwise expressly set forth in this Amendment No. 2, each Reporting Person disclaims beneficial ownership of the shares of Common Stock beneficially owned by any other Reporting Person or any other person.

(a)-(c), (f)             Mr. Liu Yuchuan (“Mr. Liu”) is a citizen of the People’s Republic of China. Mr. Liu has been the Chairman, Chief Executive Officer and President of the Company since September 7, 2006, and has been the sole director of Eloten since December 11, 2003. The principal business address of Mr. Liu is No. 18, Zhong Guan Cun Dong Street, Haidian District, Beijing 100083, People’s Republic of China.

Eloten Group Ltd. (“Eloten”) is a company organized and existing under the laws of the British Virgin Islands. Mr. Liu and his wife hold 70% and 30%, respectively, of the issued and outstanding equity interests of Eloten. Mr. Liu is the sole director of Eloten. Mr. Liu’s wife does not have power to vote or direct the vote or to dispose or direct the disposition of the Common Stock owned by Eloten Group. The principal business of Eloten is holding shares of the Company on behalf of Mr. Liu and his wife. The principal business address of Eloten is c/o No. 18, Zhong Guan Cun Dong Street, Haidian District, Beijing 100083, People’s Republic of China.

(d)-(e)     During the last five years, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3 of the Schedule 13D is hereby amended and supplemented by adding the following at the end thereof:

It is anticipated that at the price per share of common stock of the Company (“Common Stock”) set forth in the Proposal (as described in Item 4 below), approximately US$26 million will be expended in acquiring the 51,084,659 shares of Common Stock not currently owned by Mr. Liu (the “Publicly Held Shares”).

It is anticipated that the funding for the acquisition of the Publicly Held Shares will be provided by equity financing provided by Mr. Liu and MSPEA (as defined below). It is also anticipated that Mr. Liu, certain affiliates and nominees of Mr. Liu, and other members of the Issuer’s management may roll over equity securities of the Issuer they own into the acquisition vehicle established by Mr. Liu and MSPEA.

Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following at the end thereof:

On December 8, 2013, Mr. Liu entered into a consortium agreement (the “Consortium Agreement”) with MSPEA Gas Holdings Limited (“MSPEA”), a vehicle controlled by Morgan Stanley Private Equity Asia IV, L.P. Under the Consortium Agreement, Mr. Liu and MSPEA agreed, among other things, (i) to jointly deliver a non-binding proposal (the “Proposal”) to the special committee of independent directors of the Company’s board of directors (the “Special Committee”) for the acquisition of the Publicly Held Shares, (ii) to deal exclusively with each other with respect to the transaction contemplated under the Proposal for a maximum of six (6) months after the date thereof, (iii) to conduct a joint assessment of the Company as promptly as reasonably practicable, and (iv) to use their reasonable best efforts to work together to structure, negotiate and do all things necessary or desirable, subject to the Company’s approval, to enter into the definitive agreements in respect of the transactions contemplated under the Proposal.

On December 8, 2013, Mr. Liu and MSPEA, on behalf of themselves, submitted the Proposal to the Special Committee. In the Proposal, Mr. Liu and MSPEA proposed to acquire, through an acquisition vehicle, all of the Publicly Held Shares for US$0.50 per share. The Proposal raised the consideration payable per share of Common Stock from US$0.48, as contemplated by the proposal letter submitted by Mr. Liu to the board of directors of the Company on April 28, 2012 (the “Original Proposal”), filed with amendment no. 1 to the Schedule 13D as Exhibit 7.02 and incorporated herein by reference. The Reporting Persons and MSPEA intend to finance the transactions contemplated under the Proposal through equity financing to be contributed by Mr. Liu and MSPEA and rollover financing to be provided by Mr. Liu, certain affiliates and nominees of Mr. Liu, and other members of the Company’s management.

The Proposal provides that it constitutes only a preliminary indication of Mr. Liu and MSPEA’s interest and does not constitute any binding commitment with respect to the proposed acquisition. Such a commitment will result only from the execution of definitive agreements and then will be on the terms provided in such documentation.

Any definitive agreement entered into in connection with the transactions contemplated under the Proposal is likely to be subject to customary closing conditions, including approval by the Company’s stockholders of the terms of such transactions, accuracy of the representations and warranties given by the parties to the merger agreement, compliance by each party to such agreement with its covenants thereunder, and the absence of a material adverse effect.

If the transactions contemplated under the Proposal are completed, the Common Stock would become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act and would no longer be quoted on the Over-the-Counter Bulletin Board.

References to the Consortium Agreement and the Proposal in this Amendment No. 2 are qualified in their entirety by reference to the Consortium Agreement and the Proposal, copies of which are attached hereto as Exhibits 7.03 and 7.04 and incorporated herein by reference in their entirety.

Except as indicated above, the Reporting Persons have no plans or proposals which relate to or would result in any of the actions specified in paragraphs (a) through (j) of Item 4 of the Schedule 13D. The Reporting Persons may, at any time and from time to time, formulate other purposes, plans or proposals regarding the Company, or any other actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) of Item 4 of the Schedule 13D.

Item 5 of the Schedule 13D is hereby amended and replaced by the following:

The responses of the Reporting Persons to Rows (7) through (11) of the cover page of this statement are incorporated herein by reference.

Mr. Liu has shared voting and dispositive power over 6,524,174 shares of Common Stock, which represent approximately 11.3% of the Company’s total shares of Common Stock.

Item 6 of the Schedule 13D is hereby amended and replaced by the following:

The descriptions of the principal terms of the Proposal and the Consortium Agreement under Item 4 are incorporated herein by reference in their entirety.

To the best knowledge of the Reporting Persons, except as provided herein, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons and between any of the Reporting Persons and any other person with respect to any securities of the Company, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies, or a pledge or contingency, the occurrence of which would give another person voting power over the securities of the Company.

SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 9, 2013

[Signature Page to Schedule 13D Amendment]

Execution Version

MSPEA GAS HOLDINGS LIMITED

190 Elgin Avenue
George Town, Grand Cayman, KY1-9005, Cayman Islands

December 8, 2013

Mr. Yuchuan Liu

c/o Sino Gas International Holdings, Inc.

c/o Beijing Zhong Ran Weiye Gas Co., Ltd

No. 18 Zhong Guan Cun Dong Street

Haidian District

Beijing, P.R. China

RE: Consortium Agreement

Dear Mr. Liu:

MSPEA Gas Holdings Limited ("MSPEA"), a vehicle controlled by Morgan Stanley Private Equity Asia IV, L.P., is interested in pursuing with you a possible acquisition (the "Transaction") of all outstanding shares of capital stock in Sino Gas International Holdings, Inc. (the "Company") through a special purpose vehicle ("Bidco") to be owned by MSPEA, you and your affiliates and nominees (together with you, the "Shareholder"). As a condition to the delivery of a preliminary non-binding proposal letter to the Company (the "Proposal Letter", the form of which is set forth in Exhibit A hereto) and to further our discussions relating to the Transaction, the Shareholder and MSPEA agree to the following:

1.          Certain Definitions.

"Competing Transaction" shall mean (i) any direct or indirect acquisition by any person or entity of 10% or more of the securities of the Company or any of its material subsidiaries or all or substantially all of its assets, and (ii) a recapitalization, restructuring, merger, consolidation or other business combination involving the Company or any of its material subsidiaries, in either case other than the Transaction.

"Representatives" shall mean, with respect to a person, such person's employees, directors, officers, partners, members, affiliates, agents, advisors (including but not limited to legal counsel, accountants, consultants and financial advisors), and any representatives of the foregoing. The Representatives shall include the Advisors as defined in Section 3(c).

"Shareholder's Shares" shall mean all capital stock in the Company owned by the Shareholder as of the date hereof either directly or indirectly.

2.           Commitment to the Consortium.

(a)          Within the term of this letter agreement and subject to Section 2(b), the Shareholder and MSPEA agree to deal exclusively with each other with respect to the Transaction or other related matters, and neither the Shareholder nor MSPEA will (and the Shareholder and MSPEA will cause Bidco and its and their Representatives not to), without the written consent of the other: (i) directly or indirectly initiate, solicit, encourage or otherwise engage in discussions, negotiations or related activities with any third party with respect to a Competing Transaction, (ii) provide any information to any third party with a view to the third party or any other third party pursuing or considering to pursue a Competing Transaction, (iii) enter into any written or oral agreement, arrangement or understanding (whether legally binding or not) regarding, do anything which is directly inconsistent with, or omit to do anything, which omission is directly inconsistent with, the Transaction as contemplated under this letter agreement or (iv) acquire any securities of the Company; provided that nothing in this letter agreement shall restrict or prevent you from conducting such activities in your capacity as Chief Executive Officer, Chairman or a member of the Board of Directors of the Company insofar as you take action in that connection other than in your capacity as a holder of securities of the Company.

(b)          The Shareholder agrees that, within the term of this letter agreement, it will not, and will not permit any of its Representatives to, directly or indirectly: (i) sell, offer to sell, give, pledge, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of, or enter into any agreement, arrangement or understanding to sell, any Shareholder's Shares ("Transfer"), or enter into any contract, option or other arrangement or understanding with respect to a Transfer or limitation on voting rights of the Shareholder's Shares, or any right, title or interest thereto or therein, (ii) deposit any Shareholder's Shares into a voting trust or grant any proxies or enter into a voting agreement, power of attorney or voting trust with respect to any Shareholder's Shares, (iii) take any action that would have the effect of preventing, disabling or delaying the Shareholder from performing its obligations under this letter agreement or (iv) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i), (ii) or (iii) of this Section 2(b). Notwithstanding the foregoing, you may make a Transfer to your spouse, siblings, parents, lineal descendants or antecedents or the estates of or trusts for the benefit of you or your spouse, siblings, parents or lineal descendants or antecedents; provided, that, in all cases, any such Transfer shall not relieve you of your obligation hereunder, and the transferee or other recipient executes a counterpart copy of this letter agreement and becomes bound thereby as was you.

(c)          Subject to Section 2(a), the Shareholder will, and will cause its Representatives to, immediately cease and terminate any existing activities, discussions and negotiations in connection with any Competing Transaction other than with MSPEA or its affiliates. During the term of this letter agreement, the Shareholder shall promptly provide MSPEA notice of any unsolicited offer or proposal received in relation to any Competing Transaction, including the terms of any such offer or proposal, and any written communications with respect thereto, which it may receive in its capacity as a holder of securities in the Company.

3.          Process.

(a)          Upon signing of this letter agreement, MSPEA and you will promptly deliver the Proposal Letter to the Special Committee of Independent Directors of the Board of Directors of the Company. You shall prepare and file a Schedule 13D amendment with the U.S. Securities and Exchange Commission to disclose the execution of this letter agreement and the delivery of the Proposal Letter.

(b)          Within the term of this letter agreement and as permitted by the Board of Directors of the Company, MSPEA and the Shareholder shall as promptly as reasonably practicable conduct a joint assessment of the Company, and shall in good faith and with mutual cooperation use their reasonable best efforts to work together to structure, negotiate and do all things necessary or desirable, subject to the Company's approval, to enter into the definitive agreements in respect of the Transaction (the "Definitive Agreements"). This letter agreement does not constitute any binding commitment with respect to a Transaction. Such a commitment will result only from the execution of Definitive Agreements, and then will be on the terms provided in such documentation. The Shareholder shall cooperate with MSPEA in performing due diligence, securing debt (as applicable) and equity financing, and structuring and negotiating the Transaction, including establishing appropriate vehicles for the purpose of the Transaction; provided, however, that in no event will either party hereto be obligated without such party's consent to enter into or otherwise be a party to any Definitive Agreements.

(c)          Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) is acting as legal advisor to the buyer consortium (the "Consortium") established hereunder by MSPEA and the Shareholder in connection with the Transaction. Any other advisors, including any financial advisor (if applicable) (collectively with Skadden, the "Advisors") shall be selected by MSPEA.

4.          Confidentiality. Each of MSPEA and the Shareholder shall, and shall direct its Representatives to, keep this letter agreement and the Transaction confidential and shall not make any public statement or announcement concerning or disclose to any third party the fact that discussions or negotiations are taking place concerning the Transaction or any of the terms, conditions or other facts with respect thereto, including the status thereof, other than as mutually agreed in writing by MSPEA and the Shareholder or as required by applicable laws, rules or regulations. Each of MSPEA and the Shareholder will coordinate in good faith all press releases and other public relation matters relating to the Transaction. Notwithstanding the forgoing, MSPEA may disclose this letter agreement or the status of negotiations between the parties with respect to the Transaction to any investors in any of its affiliates and to its funding sources who need to receive and consider such information for the purpose of financing the Transaction.

5.          Certain Fees and Expenses.

(a)          If the Transaction is not eventually consummated, and there has been no breach by either MSPEA or the Shareholder of this letter agreement, the parties agree: (i) to share, ratably based on such party's planned equity participation in the Transaction, fees and out-of-pocket expenses payable by them in connection with the Transaction incurred prior to the termination of this letter agreement, (A) excluding any fees and expenses incurred before the Renewed Proposal, and (B) including fees and expenses incurred in the defense, pursuit or settlement of any disputes or litigation relating to the Transaction (whether incurred prior to the termination of this letter agreement or not); and (ii) that MSPEA shall pay all fees and out-of-pocket expenses incurred in connection with the due diligence process.

(b)          Upon consummation of the Transaction, Bidco shall reimburse each party hereto for all fees and out-of-pocket expenses incurred by them in connection with the Transaction.

(c)          Each of the Shareholder and MSPEA shall share, ratably based on such party's planned equity participation in the Transaction, any termination, topping, break-up or other fees or amounts (including amounts paid in settlement of any dispute or litigation relating to the Transaction) payable by the Company or Bidco (or one or more of its affiliates or designees), net of the expenses required to be borne by them pursuant to Section 5(a).

6.          Remedies. It is understood and agreed that monetary damages may not be a sufficient remedy for a breach of this letter agreement by any party hereto and that each party hereto shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy for any such breach by the other party. Such remedies shall not be deemed to be the exclusive remedies for a breach by a party of this letter agreement but shall be in addition to all other remedies available at law or equity to the other party hereto. Each of the parties hereto further agrees not to raise as a defense or objection to the request or granting of such relief that any breach of this letter agreement is or would be compensable by an award of monetary damages, and each party hereto agrees to waive any requirements for the securing or posting of any bond in connection with such remedy.

7.          Governing Law; Arbitration. This letter agreement and all matters arising out of or relating to this letter agreement shall be governed by and construed in accordance with the laws of Hong Kong, without reference to conflict of laws principles. Any dispute, controversy or claim arising out of or relating to this letter agreement, including the validity, invalidity, breach or termination thereof, shall be settled by arbitration in Hong Kong under the Hong Kong International Arbitration Centre Administered Arbitration Rules (the "Rules") in force when the notice of arbitration is submitted in accordance with these Rules. There shall be three arbitrators, one to be appointed by the claimant, one to be appointed by the respondent and the third to be appointed by the secretary general of the Hong Kong International Arbitration Centre. The arbitration proceedings shall be conducted in English.

8.          No Modification. No provision in this letter agreement can be waived, modified or amended except by written consent of the parties, which consent shall specifically refer to the provision to be waived, modified or amended and shall explicitly make such waiver, modification or amendment.

9.          No Waiver of Rights. It is understood and agreed that no failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

10.         Counterparts; Entire Agreement. This letter agreement may be signed and delivered by facsimile or portable document format via electronic mail and in one or more counterparts, each of which shall be deemed an original but all of which shall be deemed to constitute a single instrument. This letter agreement sets forth the entire agreement and understanding among the parties and supersedes all prior agreements, discussions and documents relating thereto. No party hereto will be entitled to punitive, exemplary, special, unforeseen, incidental, indirect or other consequential damages.

11.         Severability. If any provision of this letter agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this letter agreement, and such invalid provision shall be deemed deleted herefrom to the minimum extent necessary to cure such violation.

12.         Successors. This letter agreement shall inure to the benefit of, and be binding upon, the parties and their respective successors and assigns. Neither party may assign or transfer, directly or indirectly, its rights or obligations under this letter agreement without the prior written consent of the other except as provided herein. No assignment will relieve the assignor of its obligations hereunder.

13.         No Third Party Beneficiaries. Unless otherwise specifically provided herein, the parties hereto each agree and acknowledge that nothing herein expressed or implied is intended to confer upon or give any rights or remedies to persons who are not party to this letter agreement under or by reason of this letter agreement.

14.         Term. This letter agreement shall terminate upon the earlier of (i) the mutual written agreement by the parties, and (ii) the date six months after the date hereof; provided that Sections 4 through 13 shall survive any termination of this letter agreement.

[Signature Page to Follow]

Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this letter agreement shall become a binding agreement among you and MSPEA.

[Signature Page to Consortium Agreement]

Exhibit A

Proposal Letter

See Exhibit 7.04

Execution Version

MR. YUCHUAN LIU

MSPEA GAS HOLDINGS LIMITED

December 8, 2013

Special Committee of Independent Directors

The Board of Directors

Sino Gas International Holdings, Inc.

c/o Beijing Zhong Ran Weiye Gas Co., Ltd

No. 18 Zhong Guan Cun Dong Street

Haidian District

Beijing, P.R. China

Dear Sirs:

Reference is made to that Proposal Letter, dated and delivered to you by Mr. Yuchuan Liu on April 28, 2012 (the “Original Proposal”), in which Mr. Liu submitted to you a non-binding proposal to acquire all of the outstanding shares (the “Shares”) of Sino Gas International Holdings, Inc. (the “Company”) not owned by Mr. Liu in a going private transaction (the “Acquisition”). Mr. Liu and the undersigned MSPEA Gas Holdings Limited (“MSPEA”), a special purpose vehicle ultimately controlled by the private equity arm of Morgan Stanley, are pleased to submit this non-binding letter (the “Renewed Proposal”) to reaffirm and supplement the Original Proposal, whereby Mr. Liu and MSPEA will together effect the Acquisition.

Under the Original Proposal, the US$0.48 offer price represented a premium of 50% to the Company’s closing price on April 26, 2012 (last closing price prior to the date of the Original Proposal), a premium of 54% to the volume-weighted average price during the last 30 trading days, a premium of 47% to the volume-weighted average price during the last 90 trading days, and a premium of 43% to the volume-weighted average price during the last 180 trading days. We thank the special committee of the board of directors (the “Special Committee”) of the Company and its advisor for considering and evaluating the Original Proposal. Under this Renewed Proposal, we are prepared to offer a price of US$0.50 in cash per Share. We believe that our offer will provide a very attractive opportunity to the Company’s shareholders.

The terms and conditions upon which we are prepared to pursue the Acquisition are set forth below. We are confident in our ability to consummate the Acquisition as outlined in this letter.

1. Buyer. Mr. Liu and MSPEA have entered into a letter agreement dated the date hereof (the “Consortium Agreement”), pursuant to which Mr. Liu and MSPEA will establish a buyer consortium (the “Consortium”) in connection with the Acquisition, form an acquisition vehicle for the purpose of pursuing the Acquisition, and work with each other on an exclusive basis in pursuing the Acquisition during the term of the Consortium Agreement.

2. Purchase Price. The consideration payable for the Shares acquired in the Acquisition will be US$0.50 per Share in cash, as compared to US$0.48 per Share in the Original Proposal.

3. Financing. We intend to finance the Acquisition with equity capital provided by Mr. Liu and MSPEA in the form of cash. Additionally, Mr. Liu and certain of his affiliates and other members of management of the Company will roll over their equity in the Company to the acquisition vehicle.

4. Due Diligence. We will be in a position to commence our due diligence for the Acquisition immediately upon receiving access to the relevant materials.

5. Definitive Agreements. We are prepared to negotiate and finalize definitive agreements (the “Definitive Agreements”) concurrently with our due diligence review. This proposal is subject to execution of the Definitive Agreements. These documents will include provisions typical for transactions of this type.

6. Confidentiality. Mr. Liu will, as required by law, promptly file a Schedule 13D amendment to disclose this letter and the Consortium Agreement, which filing shall amend Mr. Liu’s existing Schedule 13D. We are sure you will agree with us that it is in all of our interests to ensure that we proceed in a confidential manner, unless otherwise required by law, including the 13D requirements, until we have executed the Definitive Agreements or terminated our discussions.

7. About MSPEA. MSPEA is a vehicle controlled by Morgan Stanley Private Equity Asia IV, L.P., a fund managed by Morgan Stanley Private Equity Asia, the private equity arm of Morgan Stanley. Morgan Stanley Private Equity Asia is one of the leading private equity investors in Asia Pacific, having invested in the region for over 20 years. The team has invested approximately US$2.5 billion in Asia, primarily in highly structured minority investments and control buyouts in profitable, growth-oriented companies at attractive valuations with a significant majority of the investments sourced on a proprietary basis. Morgan Stanley Private Equity Asia has an experienced investment team led by senior professionals with extensive networks, in-depth market knowledge and the ability to apply international investment principals within each local context. Morgan Stanley Private Equity Asia has offices located in Hong Kong, Shanghai, Mumbai, Seoul, Tokyo and New York.

8. Process. We believe that the Acquisition will provide superior value to the Company’s stockholders. We recognize of course that the Special Committee will evaluate the proposed Acquisition independently before it can make its determination whether to recommend it. In considering the proposed Acquisition, you should be aware that we are interested only in acquiring the outstanding Shares that Mr. Liu and certain of his affiliates and other members of management who may choose to roll over their Shares do not already own, and that Mr. Liu does not intend to sell his stake in the Company to a third party.

9. Advisors. Skadden, Arps, Slate, Meagher & Flom LLP has been retained as legal advisor to the Consortium in connection with this proposal and the Acquisition.

10. No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to the Acquisition. Such a commitment will result only from the execution of Definitive Agreements, and then will be on the terms provided in such documentation.

[Signature Page to Follow]

In closing, each of us would like to personally express our commitment to working together to bring this Acquisition to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact the undersigned Mr. Liu at +86 10 8260 0526 or Kingsley Chan of MSPEA at +852 2239 1647. We look forward to speaking with you.

[Signature Page to Proposal Letter]