Fujian Longxi Bearing Company Ltd. (China) confirmed it will pay a first-half dividend of 2 Yuan (USD $0.24) per 10 shares. The dividend is payable to shareholders of record October 28, 2002.

The eastern Chinese company has 150 million shares outstanding.

However, the company warned that its stock may trade lower and experience more volatility on news of a massive tax miscalculation. Instead of its previously calculated "preferential" 15% tax rate, Fujian Longxi is being taxed at 33%.

Recalculating underpayments for the first two quarters will result in additional tax payments of at least 3.61 million Yuan and significantly impact after-tax financial results, the company said.

Originally founded in 1958 as Fujian Longxi Bearing Factory, Fujian Longxi Bearing Corporation Ltd. has three subsidiaries: Fujian Yongan Bearing Co. Ltd., Fujian Jinduo Auto Steering-Gear Co. Ltd., and Zhangzhou No.2 Automobile Parts Factory.

The company's primary products are spherical plain bearings, tapered roller bearings, agricultural bearings, deep groove ball bearings and various automotive parts. Annual production capacity is approximately 10 million spherical plain bearings, 8 million sets of all other bearings and 120 thousand different auto parts.

Two months ago, Fujian Longxi launched an initial public offering of 50 million "A" shares at 6 Yuan each or 20 times trailing earnings. The company said it will use the proceeds to bolster bank loans funding its investment projects. Over the next few years, in five major projects, Fujian Longxi plans to invest over 365 million Yuan to upgrade production capacity and install advanced manufacturing technologies.