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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

11/30/07  WSP Holdings LTD                  F-1/A                  2:937                                    Capital Systems 01/FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-1/A       Amendment No. 3 to Form F-1                         HTML  4,326K 
 2: EX-1.1      Form of Underwriting Agreement                      HTML    186K 

As filed with the Securities and Exchange Commission on November 30, 2007

Registration No. 333-147351

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 3 TO
FORM F-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

WSP Holdings Limited
(Exact name of registrant as specified in its charter)

Not Applicable
(Translation of Registrant’s name into English)

Cayman Islands			3533			Not Applicable
(State or other jurisdiction of incorporation or organization)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification Number)

No.38 Zhujiang Road
Xinqu, Wuxi
Jiangsu Province
People’s Republic of China
(86 510) 8522-6351
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

CT Corporation System
111 Eighth Avenue
New York, New York 10011
(212) 664-1666
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David T. Zhang
Latham & Watkins LLP
41^st Floor, One Exchange Square
8 Connaught Place, Central
Hong Kong
(852) 2912-2503

Show-Mao Chen
Davis Polk & Wardwell
18^th Floor, The Hong Kong Club Building
3A Chater Road, Central
Hong Kong
(852) 2533-3300

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earliest effective registration statement for the same offering.    

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered (2) (3)			Amount to be registered						Proposed maximum offering price						Proposed maximum aggregate offering price (1)						Amount of registration fee
Ordinary shares, par value $0.0001 per share					57,500,000					$	6.25					$	359,375,000					$	11,033(4	)

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

Subject to completion, dated November     , 2007

Prospectus

25,000,000 American Depositary Shares

Representing 50,000,000 Ordinary Shares

WSP Holdings Limited

This is an initial public offering of American depositary shares, or ADSs, by WSP Holdings Limited. WSP Holdings is offering 25,000,000 ADSs. Each ADS represents two ordinary shares. The estimated initial public offering price is between $10.50 and $12.50 per ADS.

Prior to this offering, there has been no public market for the ADSs. Our ordinary shares have not been listed on any exchange. We have applied to list the ADSs on the New York Stock Exchange under the symbol ‘‘WH.’’

Per ADS

Total

Initial public offering price

$

$

Underwriting discounts and commissions

$

$

Proceeds to WSP Holdings, before expenses

$

$

WSP Holdings has granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase from WSP Holdings up to 3,750,000 additional ADSs.

Investing in our ADSs and ordinary shares involves a high degree of risk. See ‘‘Risk factors’’ beginning on page 11.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

JPMorgan

CIBC World Markets

Aseambankers Malaysia Berhad

First Shanghai Securities Limited

                , 2007

Table of contents

					Page
Prospectus summary					1
Risk factors					11
Corporate structure					33
Special note regarding forward-looking statements					40
Use of proceeds					42
Dilution					44
Dividend policy					46
Capitalization					47
Exchange rate information					48
Enforceability of civil liabilities					49
Recent Developments					51
Selected consolidated financial and operating data					56
Management’s discussion and analysis of financial condition and results of operations					59
Industry					89
Business					99
Regulation					120
Management					123
Principal shareholders					132
Related party transactions					134
Description of share capital					138
Description of American Depositary Shares					146
Shares eligible for future sale					156
Taxation					158
Underwriting					165
Expenses relating to this offering					171
Legal matters					172
Experts					172
Where you can find additional information					173
Index to consolidated financial statements and unaudited pro forma condensed consolidated financial information					F-1

You should rely only on the information contained in this prospectus. Neither we nor the underwriters have authorized anyone to provide you with information that is different from that contained in this prospectus. This prospectus may only be used where it is legal to offer and sell these securities. The information in this prospectus is only accurate as of the date of this prospectus.

i

Conventions that apply to this prospectus

Unless the context otherwise requires, in this prospectus,

•	‘‘we,’’ ‘‘us,’’ ‘‘our company,’’ ‘‘our’’ or ‘‘WSP Holdings’’ refers to WSP Holdings Limited, which, unless otherwise required under the context, includes its predecessor entities and its consolidated subsidiaries;

•	‘‘ADSs’’ refers to our American depositary shares, each of which represents      ordinary shares;

•	‘‘China’’ or ‘‘PRC’’ refers to the People’s Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong Kong and Macau;

•	‘‘Oil Country Tubular Goods,’’ or ‘‘OCTG,’’ refers to pipes and other tubular products used in the exploration, drilling and extraction of oil, gas and other hydrocarbon products. OCTG mainly consist of casing, tubing and drill pipes. Unless otherwise indicated, discussions relating to OCTG in this prospectus are limited to these three types of OCTG;

•	‘‘Production capacity’’ refers to the maximum production capacity that can be achieved at the optimal level of operations of a production line, calculated using an estimated product mix for such production line, which may differ from its actual product mix;

•	‘‘RMB’’ or ‘‘Renminbi’’ refers to the legal currency of China, ‘‘HK$’’ refers to the legal currency of Hong Kong, and ‘‘$,’’ ‘‘US$’’ or ‘‘U.S. dollars’’ refers to the legal currency of the United States; and

•	‘‘shares’’ or ‘‘ordinary shares’’ refers to our ordinary shares, par value $0.0001 per share.

Some names of companies given in this prospectus are translated or transliterated from Chinese if the original legal name is only in Chinese.

Unless the context otherwise requires, all translations from Renminbi amounts into U.S. dollars were made at the noon buying rate in New York, New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York, or the noon buying rate, on June 29, 2007, which was RMB 7.6120 to $1.00. We make no representation that the Renminbi amounts in this prospectus could have been or could be converted into U.S. dollars at any particular rate or at all. On November 29, 2007, the noon buying rate was RMB 7.3800 to $1.00.

ii

Prospectus summary

You should read the following summary together with the entire prospectus, including the more detailed information regarding us, the ADSs being sold in this offering, and our financial statements and related notes appearing elsewhere in this prospectus.

Overview

We are a leading Chinese manufacturer of seamless casing, tubing and drill pipes used for oil and natural gas exploration, drilling and extraction, which we refer to as Oil Country Tubular Goods, or OCTG. We sell our products in both the domestic and international markets. In China, we target sales of our products primarily at leading Chinese oil companies. In 2006, we were the third largest OCTG supplier to China National Petroleum Corporation, or CNPC, which, according to China Economics Yearbook 2006, accounted for approximately 59% of the oil output and 73% of the gas output in China in 2005. In addition, we are a major PRC exporter of seamless OCTG, accounting for over 15% of OCTG exports from China in 2006, according to a report by Preston Publishing Company, or Preston, an independent market research and consulting firm. We commissioned this report to provide us with industry data of the seamless OCTG market. In the international markets, we have established an extensive overseas customer base, covering oilfields in North America, the Middle East, Asia, Africa and Russia.

We offer a comprehensive range of seamless OCTG products to our customers. Our product portfolio can generally be divided into two categories:

•	API products, which are products manufactured according to the standards formulated by the American Petroleum Institute, or API; and

•	non-API products, which are products tailor-made to meet our customers’ specifications, and are generally manufactured to a higher standard than API products.

To offer our customers a one-stop-shop solution for their OCTG requirements for oil and gas drilling and extraction, we focus our research and development efforts on producing higher margin, higher value-added non-API products. We have developed six series of non-API products that are suitable for diverse, challenging drilling conditions, including deep or super-deep wells, high temperature, highly pressurized and highly corrosive conditions. For example, our non-API products have been used in wells with a depth of over 7,000 meters in Puguang gas fields in Sichuan Province, China. Sales of non-API products as a percentage of our net revenues increased from 5.1% in 2004 to 6.4% in 2005, 11.3% in 2006 and 28.8% in the six months ended June 30, 2007. For the same periods, sales of API products accounted for 82.4%, 80.8%, 81.6% and 64.2%, respectively, of our net revenues.

As of June 30, 2007, our key operating assets included eight threading lines and one drill pipe production line with an aggregate annual production capacity of approximately 572,000 tonnes of seamless OCTG. Our annual production capacity increased from 220,000 tonnes as of December 31, 2004 to 310,000 tonnes as of December 31, 2005 to 452,000 tonnes as of December 31, 2006. In addition, since 2006 we have acquired or constructed three production lines with an aggregate annual production capacity of 650,000 tonnes for the manufacturing of green pipes, which are semi-finished pipes that can be further processed into end-products. We plan to expand our manufacturing facilities by constructing a new drill pipe production line and a new threading line in Wuxi, China and a new threading line in Vancouver, Canada. We also

1

plan to establish a production facility in Houston, Texas, a joint venture with production lines in Saudi Arabia and additional production facilities in China.

We believe that we have a strong reputation in the OCTG industry in China and have been building a growing reputation internationally. We distinguish ourselves by the quality of our products, our customer-oriented research and development and technical capabilities, our competent and technical sales team, our experienced management team, our ability to timely meet customers’ production requirements, and the quality of our after-sales support. We provide our customers located in China with on-site support that includes engineering assistance to address technical difficulties that may arise during the installation or operation of our new products.

We have grown significantly since our inception in 1999. In 2004, 2005 and 2006, our net revenues were $128.5 million, $241.0 million and $366.5 million, respectively, representing a compound annual growth rate, or CAGR, of 68.9%. In the same periods, our net income was $6.5 million, $24.3 million and $58.9 million, respectively, representing a CAGR of 201.6%. For the six months ended June 30, 2007, our net revenues were $228.1 million and our net income was $36.8 million.

Our industry

We believe that we are well positioned to benefit from the growing demand for seamless OCTG, especially non-API products. This demand is being driven by the rapid growth of capital expenditures on oil and gas exploration, drilling and extraction. The combined capital expenditures on oil and gas exploration, drilling and production of China’s three largest domestic oil and gas exploration and production companies have grown at a CAGR of 21.6% between 2002 and 2006. Global rig count is also expected to increase at a CAGR of 5.3% between 2006 and 2010. This growth in capital expenditures is fundamentally driven by the increasing demand and expanding oil and gas markets. Between 1997 and 2006, China’s crude oil consumption grew at a CAGR of 6.6%, and gas consumption grew at a CAGR of 13.0%. China’s strong demand for oil and gas is expected to drive global oil and gas demand and, therefore, demand for seamless OCTG.

According to Preston, global seamless OCTG consumption is expected to grow from 8.9 million tonnes in 2006 to 11.8 million tonnes in 2010, representing a CAGR of approximately 7.3%. However, the global seamless OCTG price is expected to decrease from $1,876 per tonne in 2006 to $1,712 per tonne in 2010. The consumption of non-API products, which are more technology-intensive and of higher quality than API products, is expected to increase at an even higher CAGR during the same period. According to Preston, China will remain a net exporter of seamless OCTG products from 2006 to 2010. However, China will remain a net importer of non-API OCTG during the same period, presenting us with opportunities for import substitution.

Our strengths

We believe that the following strengths enable us to capture opportunities in the rapidly growing seamless OCTG industry and to compete effectively in the Chinese and international markets:

•	dedication to OCTG manufacturing and comprehensive seamless OCTG product offerings;

•	strong customer-oriented research and development capabilities;

•	long-standing and strong customer relationships in China;

2

•	flexible and scalable production capacity responsive to market demands;

•	established long-term access to raw material supplies; and

•	experienced management team with extensive industry knowledge and strong track record.

Our strategy

Our goal is to become a global leader in the OCTG industry by delivering quality products and services. To achieve this goal, we plan to implement the following strategies:

•	broaden our geographical revenue base and build and enhance brand recognition, both domestically and internationally;

•	enhance our research and development capabilities in order to better capture the market potential of OCTG products;

•	expand our production capacity of seamless OCTG products to meet increasing demand in both domestic and overseas OCTG markets; and

•	continue to recruit and retain employees experienced in management, technology, sales and marketing.

Our challenges

We believe the following are some of the major risks and uncertainties that may materially affect our business, financial condition, results of operations and prospects:

•	declines in domestic and international oil and natural gas prices, or declines in domestic and international exploration, drilling and production activities;

•	increases in steel prices;

•	failure to maintain relationships with our large customers;

•	intense competition in the industry;

•	inability to implement our future expansion plans, in particular our plans for international expansion and overseas sales, or to manage our growth;

•	inability to retain services of members of our senior management team and other key personnel;

•	inability to obtain raw materials that meet our product quality standards on a timely basis; and

•	inability to continue developing our production technology or adopt new production technology.

In addition to the above risks and uncertainties, you should also consider the risks discussed in ‘‘Risk factors’’ and elsewhere in this prospectus.

Corporate structure and history

We are a holding company incorporated in the Cayman Islands and conduct substantially all of our operations through our subsidiaries in China. Wuxi Seamless Oil Pipes Company Limited, or WSP China, was initially set up as a Sino-foreign joint venture under PRC laws on November 17, 1999. WSP China underwent a series of corporate restructurings and, in August 2006, became a

3

wholly-owned subsidiary of First Space Holdings Limited, or FSHL, a company incorporated in the British Virgin Islands on June 12, 2006. In preparation for our initial public offering, WSP Holdings was incorporated in the Cayman Islands on November 16, 2006. WSP Holdings was owned 69.4% and 30.6% by Expert Master Holdings Limited, or EMH, and UMW China Ventures (L) Ltd., or UMW Ventures, respectively, at the time of its incorporation. EMH is wholly owned by Mr. Longhua Piao, or Mr. Piao, and UMW Ventures is a wholly-owned subsidiary of UMW Holdings Berhad, or UMW. On December 1, 2006, WSP Holdings acquired the entire share capital of FSHL from its shareholders through a share exchange and became the ultimate holding company of our businesses.

Our principal operating subsidiaries in China consist of WSP China, which designs, manufactures, processes and sells seamless OCTG, and Jiangsu Fanli Pipe Co., Ltd., or Jiangsu Fanli, which manufactures and sells green pipes. WSP China is a wholly-owned subsidiary of FSHL, and Jiangsu Fanli is a 70%-owned subsidiary of WSP China.

As an initial step of our overseas expansion, on January 16, 2007, we and three other investors established WSP Industries Canada Inc., or WSP Industries, a limited liability company incorporated in British Columbia. We hold a 70% equity interest in WSP Industries.

The following diagram illustrates our current corporate structure.

4

Corporate information

Our principal executive offices are located at No.38 Zhujiang Road, Xinqu, Wuxi, Jiangsu Province, People’s Republic of China. Our telephone number at this address is (86 510) 8522 6351 and our fax number is (86 510) 8522 6351. Our registered office is located at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KYI-1111, Cayman Islands. Our agent for service of process in the United States is CT Corporation System, located at 111 Eighth Avenue, New York, New York 10011.

You should direct all inquiries to us at the address and telephone number of our principal executive offices set forth above. Our website address is www.wsphl.com. The information contained on our website does not form part of this prospectus.

5

The offering

The offering		25,000,000 ADSs offered by WSP Holdings.

The ADSs		Each ADS represents two ordinary shares, par value $0.0001 per share. The ADSs are evidenced by American depositary receipts issued by the depositary.

ADSs outstanding immediately after the offering		25,000,000 ADSs

Ordinary shares outstanding immediately after the offering		200,000,000 ordinary shares

Use of proceeds		We intend to use the proceeds of this offering as follows:

		•	approximately $55 million for overseas expansion in Canada, the United States and the Middle East;

		•	approximately $50 million for capital expenditures and expansion and improvements of our production facilities in China;

		•	approximately $18.5 million for the full repayment of our loans from UMW ACE(L) Ltd., or UMW ACE, and approximately $34.8 million for the repayment of a portion of our bank borrowings from Agricultural Bank of China;

		•	an undetermined amount for strategic investment in and acquisitions of complementary businesses. At this time, we have not entered into advanced discussions or negotiations with respect to any potential acquisitions; and

		•	the balance of the proceeds for other working capital purposes.

		The foregoing represents our intentions to use and allocate the net proceeds of this offering based upon our present plans and business conditions.

Depositary		JPMorgan Chase Bank, N.A.

Risk factors		See ‘‘Risk factors’’ and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the ADSs.

Listing		We have applied to have our ADSs listed on the New York Stock Exchange. Our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system.

6

Proposed New York Stock Exchange symbol		WH

The number of ADSs and ordinary shares outstanding immediately after this offering excludes      ordinary shares reserved for future issuance under our 2007 share incentive plan. Unless otherwise indicated, all information in this prospectus assumes no exercise by the underwriters of their option to purchase up to 3,750,000 ADSs in this offering to cover over-allotments.

7

Summary consolidated financial and operating data

The following summary consolidated financial and operating data should be read in conjunction with our consolidated financial statements and notes to those consolidated financial statements included elsewhere in this prospectus and ‘‘Management’s discussion and analysis of financial condition and results of operations.’’ The summary consolidated statement of operations data for the years ended December 31, 2004, 2005 and 2006 are derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. The summary consolidated statement of operations data for the six months ended June 30, 2006 and 2007 and the summary consolidated balance sheet data as of June 30, 2007 are derived from our unaudited condensed consolidated financial statements, which are included elsewhere in this prospectus. Our audited and unaudited condensed consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Our historical results do not necessarily indicate the results that may be expected for any future periods.

8

			For the year ended December 31,																		For the six months ended June 30,
(in thousands, except for share and per share data)			2004						2005						2006						2006						2007
Consolidated income statement data
Net revenues				$	128,497					$	241,012					$	366,501					$	168,257					$	228,108
Cost of revenues					(116,943	)					(198,550	)					(281,106	)					(129,446	)					(168,803	)
Gross profit					11,554						42,462						85,395						38,811						59,305
Selling and marketing expenses					(1,032	)					(2,056	)					(4,102	)					(1,700	)					(3,083	)
General and administrative expenses					(2,243	)					(6,356	)					(9,799	)					(4,138	)					(5,932	)
Other operating income (expenses)					706						(499	)					(549	)					(246	)					1,122
Income from operations					8,985						33,551						70,945						32,727						51,412
Interest income (expense), net					(1,241	)					(1,901	)					(1,735	)					26						(4,490	)
Other income (expense)					(3	)					(86	)					4						—						—
Exchange differences					(32	)					741						357						270						(530	)
Income from continuing operations(1)					7,709						32,305						69,571						33,023						46,392
Provision for income taxes					(630	)					(4,198	)					(10,582	)					(5,027	)					(8,937	)
Earnings in equity investments					260						266						67						(101	)					—
Minority interest					—						47						(371	)					8						(618	)
Net income from continuing operations					7,339						28,420						58,685						27,903						36,837
Net income (expense) from discontinued operations					(862	)					(4,104	)					233						106						—
Net income					6,477						24,316						58,918						28,009						36,837
Earnings per share
Earnings per ordinary share:
Basic					0.07						0.27						0.40						0.20						0.25
Diluted					0.07						0.27						0.40						0.20						0.25
Weighted average ordinary shares outstanding:
Basic					86,447,932						91,315,420						145,954,406						141,898,503						150,000,000
Diluted					86,447,932						91,315,420						145,954,406						141,898,503						150,000,000

9

			For the year ended December 31,																		For the six months ended June 30,
			2004						2005						2006						2006						2007
Selected operating data
API net revenues (in thousands)				$	105,918					$	194,858					$	299,158					$	141,611					$	146,460
Sales volume (tonne)					143,139						203,359						288,116						143,531						135,853
Average selling price				$	740					$	958					$	1,038					$	987					$	1,078
Non-API net revenues (in thousands)				$	6,606					$	15,465					$	41,311					$	14,521					$	65,792
Sales volume (tonne)					7,820						11,069						22,910						6,923						42,624
Average selling price				$	845					$	1,397					$	1,803					$	2,098					$	1,544

The following table presents a summary of the balance sheet data as of June 30, 2007:

•	on an actual basis; and

•

on an as adjusted basis to give effect to (i) the issuance and sale of 50,000,000 ordinary shares in the form of ADSs by us in this offering, at an initial public offering price of $11.50 per ADS, which is the midpoint of the estimated range of the initial public offering price, after deducting underwriting discounts and commissions and estimated aggregate offering expenses payable by us and assuming no exercise of the underwriters’ over-allotment option and no other change to the number of ADSs sold by us as set forth on the cover page of this prospectus; and (ii) $18.5 million for the full repayment of our loans to UMW ACE and $34.8 million for the repayment of a portion of our bank borrowings from Agricultural Bank of China.

As of June 30, 2007 (in thousands)			Actual						As adjusted
Consolidated balance sheet data
Cash and cash equivalents				$	32,069					$	240,937
Restricted cash					91,499						91,499
Accounts and bills receivable, net					110,203						110,203
Advances to suppliers					17,911						17,911
Inventory					128,303						128,303
Total current assets					392,117						600,985
Property and equipment, net					170,867						170,867
Total assets					577,537						786,405
Accounts payable					195,970						195,970
Borrowings – due within one year					135,492						135,492
Total current liabilities					364,875						364,875
Borrowings – due after one year					71,024						17,724
Total liabilities					438,253						384,953
Minority interest					3,431						3,431
Total shareholders’ equity					135,853						398,021
Total liabilities, minority interest, and shareholders’ equity				$	577,537					$	786,405

10

Risk factors

You should consider carefully all of the information in this prospectus, including the risks and uncertainties described below and our consolidated financial statements and related notes, before making an investment in our ADSs. Any of the following risks could have a material adverse effect on our business, financial condition, results of operations or liquidity. In any such case, the market price of our ADSs could decline, and you may lose all or part of your investment.

Risks related to our business

Declines in domestic and international oil and natural gas prices, or domestic and international exploration, drilling and production activities, would adversely affect our profitability.

Demand for our OCTG products depends significantly on the number of domestic and worldwide oil and gas wells being drilled, completed and re-worked, as well as the depth and drilling conditions of these wells. The level of such drilling activities in turn depends on the level of capital spending by major oil and gas companies. A decline in domestic and worldwide oil and gas exploration, drilling and production activities would adversely affect our results of operations. Decreased demand for our products would be expected to result not only from periods of decreased capital spending and activities in exploration, drilling and production, but also from the resulting build up of customer inventory, as certain OCTG products associated with idle rigs such as tubing can be re-used on active rigs instead of new purchases.

Capital spending on OCTG used for oil and natural gas exploration, drilling and production activities is driven in part by the prevailing prices for oil and natural gas and the perceived stability and sustainability of those prices. Our revenues and net income have increased significantly in the past three years, due in part to increases in oil and natural gas prices, which have also reached historically high levels during this period. However, oil and natural gas prices have also been subject to significant volatility in recent years due to numerous factors beyond our control, including, but not limited to, changes in the supply and demand for oil and natural gas, market uncertainty, world events, regulatory control (including by the PRC government), political developments in petroleum producing regions and the price and availability of alternative energy sources. For more details on world oil and gas prices, see ‘‘Industry — Oil & gas market overview — Oil and gas prices.’’

We can provide no assurance that oil and natural gas prices will not decline from the historical highs reached in recent periods or that such prices will otherwise remain at sufficiently high levels to support demand for our products. Any declines in the price of oil and natural gas, even for a short period of time, may reduce or curtail expenditures by oil and gas companies in connection with exploration, drilling and production activities, which may result in lower sales volumes and prices for our products in the PRC and overseas and materially and adversely affect our results of operations and financial condition.

Our results of operations may be adversely affected by increases in steel prices.

Steel is the principal raw material for our products. Raw materials accounted for 91.2%, 91.5%, 86.1% and 81.3% of our cost of revenues in 2004, 2005, 2006 and the six months ended June 30, 2007, respectively. We currently purchase all of our steel in the PRC in the form of round steel billets and green pipes. Any price increase in steel could reduce our profit margin if we are unable to pass such increased costs on to our customers. Since the end of 2003, the price of steel has increased substantially due in part to increasing demand in the PRC resulting from rapid economic development, which significantly affected our gross margin in the first half of 2004 as

11

we were unable to increase our domestic sales prices until April 2004 to pass on the increases in costs to our customers. The price of steel has had, and will continue to have, a significant impact on our cost of revenues. If we are unable to manage our purchases of steel at prices acceptable to us or if the prices of steel increase significantly and we are not able to pass on all or part of any such price increases to our customers, our profit margins may decrease and our results of operations would be materially and adversely affected.

Our quarterly operating results may fluctuate and if we do not meet financial expectations of securities analysts or investors, the price of our ADSs will likely decline.

Our quarterly operating results may fluctuate as a result of a number of factors, many of which are beyond our control. Our net revenues have generally decreased in the first quarter and the third quarter of the year. Our customers tend to build up their inventories of our products during the fourth quarter in anticipation of the Chinese New Year holiday which generally takes place in late January or early February of the following year. In addition, business activities in China generally slow down in the first quarter of each year during the Chinese New Year period, which adversely affects our sales and results of operations during that period. Hot summer months may also impact the productivity of the employees working in our production facilities. The above-described seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. If we do not meet financial expectations of securities analysts or investors, the price of our ADSs may decline.

We depend on a limited number of customers, and any loss of these customers could materially and adversely affect our revenue and profitability.

Our customers include oil and gas companies in the PRC and abroad. Aggregate sales attributable to our five largest customers represented approximately 80.3%, 71.4%, 60.5% and 60.1% of our net revenues for the years ended December 31, 2004, 2005, 2006 and the six months ended June 30, 2007, respectively. We cannot assure you that we will be able to maintain or improve our relationships with these customers, or that we will be able to continue to supply products to these customers at current levels or at all. In addition, our business is affected by competition in the oil and gas industry, and any decline in our major customers’ businesses in these markets could lead to a decline in purchase orders from these customers. If any of our key customers were to substantially reduce the size or amount of the orders they place with us or were to terminate their business relationship with us entirely, we cannot assure you that we would be able to obtain orders from other customers to replace any such lost sales on comparable terms or at all. If any of these relationships were to be so altered and we were unable to obtain replacement orders, our business, results of operations and financial condition would be materially and adversely affected.

Our sales contracts typically have a term of less than six months and, as a result, customers may reduce their orders or terminate their relationships with us almost immediately.

Sales of our products are typically conducted either through purchase orders or sales contracts with a term less than six months. As a result, our customers may choose to terminate their relationship with us after completion of the shipment or expiration of the contract, as the case may be. Our customers are also not obligated in any way to continue placing orders with us at historical levels or at all. If any of our customers, particularly our key customers, were to materially reduce their orders with us or were to terminate entirely their business relationship with us with short notice, we might not have sufficient time to locate alternative customers and our business and results of operations could be materially and adversely affected.

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We cannot assure you that our products will pass the periodic inspection by API or the qualification process of potential customers, and our failure to pass such inspection or qualification will adversely affect our business prospects and results of operations.

We have obtained certificates from API to use the official API monogram on our products to demonstrate that our products meet the API standards. These certificates are subject to periodic inspections by API. Furthermore, our growth strategies include increasing our sales in the PRC domestic market, as well as expanding into international markets such as North America, the Middle East, Asia, Africa and Russia. It is standard industry practice that an OCTG manufacturer must first pass a qualification process to become an approved supplier of an oil and gas company before providing OCTG products to that company. We cannot assure you that we will be able to obtain the necessary certifications from API or approvals for new products from our existing customers or approvals from any new customers. Even if we can ultimately secure such approvals or certifications, we cannot assure you that such certifications and approvals can be obtained in a timely manner or can be maintained. In addition, even if we become an approved supplier of a company, it does not necessarily mean that we will receive purchase orders from that company. If we fail to become an approved supplier of our potential customers, or if we are unable to obtain or maintain such approval in a timely manner, or if we do not receive purchase orders from the oil and gas companies from which we received such approval, we may not be able to execute our expansion plans and our business prospects and results of operations may be materially and adversely affected.

If we are unable to compete effectively in the OCTG industry, our revenue and profits may decrease.

We face intense competition in the domestic and international markets in which we operate. Domestically, we face competition from a number of manufacturers that produce OCTG that are similar to ours. Our major domestic competitors, such as Tianjin Pipe (Group) Corporation, Shanghai Baosteel Group Corporation, and Pangang Group Chengdu Iron & Steel Co., Ltd, are mostly state-owned enterprises, which may have greater resources and brand recognition than we do. We also face competition from international manufacturers, such as Tenaris in Argentina, Vallourec & Mannesmann Tubes in France, TMK in Russia, Sumitomo and JFE in Japan, and U.S. Steel in the United States, who may have substantially greater resources and brand recognition than we do, especially with respect to the high-end products. Our major competitors may have longer operating history, larger customer base, stronger customer relationships, greater brand or name recognition and greater financial, technical, marketing and public relations resources than we do. Some of our competitors may also be better positioned to develop superior product features and technological innovations and able to better adapt to market trends than we are.

Our ability to compete depends on, among other things, high product quality, short lead-time, timely delivery, competitive pricing, range of product offerings and superior customer service and support. Increased competition may require us to reduce our prices or increase our costs and may have a material adverse effect on our financial condition and results of operations. Any decrease in the quality of our products or level of our service to our customers or any occurrence of a price war among our competitors and us may adversely affect our business and results of operations. If we are unable to remain competitive, we may not be able to increase or even maintain our current share of the OCTG market in China or overseas or continue to achieve our current level of profitability.

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We cannot assure you that we will be successful in implementing our future expansion plans, in particular our plans for international expansion and overseas sales, or in managing our growth.

A principal component of our future strategy is to continue to grow by expanding our production capacity and further developing our overseas sales. Our future growth will depend on a number of factors, including, but not limited to, our ability to manage expansion and overseas operations, obtain any required financing, achieve operational efficiencies, and secure sufficient access to raw materials. Some of these factors are beyond our control. As a result, we may not be able to successfully manage our growth or expand our operations, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, we may need to increase the number of our employees and enhance our operational and financial systems to handle the increased complexity and the expanded geographical coverage of our operations associated with our growth. We cannot assure you that we will be able to attract and retain qualified management staff and employees or that our current operational and financial systems and controls will be adequate to accommodate future growth. This could have a material adverse effect on our business, financial condition and results of operations.

We face risks associated with the marketing, distribution and sale of our products internationally, and if we are unable to manage these risks effectively, they could impair our ability to expand our business overseas.

Our international expansion targets are mature markets in terms of OCTG production. In order for us to succeed, we need to take significant market share away from the existing suppliers of seamless OCTG in these markets. We cannot assure you that we will be able to do so in these competitive markets.

Moreover, our plans for international expansion may be hindered by the following:

•	cultural differences and other difficulties in staffing and managing overseas operations;

•	inherent difficulties and delays in contract enforcement and collection of receivables through the use of foreign legal systems;

•	volatility in currency exchange rates;

•	the risk that foreign countries may impose withholding taxes (or otherwise tax our foreign income or place restrictions on repatriation of profit);

•	the risk of barriers, such as anti-dumping and other tariffs or other restrictions being imposed on foreign trade;

•	changes in the political, regulatory, or economic conditions in a foreign country or region; and

•	the burden of complying with foreign laws and regulations.

If we are unable to manage these risks effectively, our ability to conduct or expand our business overseas would be impaired, which may in turn materially and adversely affect our business, financial condition, results of operations and prospects.

Our business depends on our ability to attract and retain members of our senior management team and other key personnel.

Our future success is dependent on the efforts, performance and abilities of our key management team, particularly Mr. Piao, our chairman and chief executive officer. Mr. Piao founded our

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company and has approximately 13 years of relevant industry experience, including the past seven years as our chief executive officer. We do not maintain key man insurance on any of our management personnel. As the OCTG industry in the PRC continues to become more competitive, we expect the competition for management and other skilled personnel to intensify. Failure to attract and retain qualified employees or the loss of any member of our senior management may result in a loss of organizational focus, poor operating execution or an inability to identify and execute potential strategic initiatives such as overseas expansion and non-API product offerings. This could, in turn, materially and adversely affect our business, financial condition and results of operations.

Our business relies on our ability to retain and attract experienced sales staff and our ability to maintain and expand our existing sales networks both domestically and overseas.

Our experienced sales staff constitutes an essential part of our business. In the domestic PRC market, our sales staff possesses strong technical backgrounds in the OCTG industry, which enable them to provide and deliver on-site technical support to our customers. We rely on our four sales offices located in the Daqing, Changqing, Xinjiang and Sichuan oilfields to directly sell our products to major oilfields in the PRC. In addition to providing on-site services to our customers throughout the sales process, including after-sales support, our sales staff also helps us maintain good relationships with our customers. Internationally, we sell our products through our distributors and sales agents and rely on maintaining good relationships with them to sell our products. The loss of services of any of our experienced sales staff without timely replacement, the inability to attract and retain sales personnel, or the loss of any of our major distributors or sales agents may have an adverse effect on our business. If we are unable to maintain our existing sales network, our operations may be materially and adversely affected.

We depend on a limited number of suppliers for a majority of our raw material requirements, and interruption of raw material delivery could prevent us from delivering our products in a timely manner to our customers in the required quantities, and in turn result in order cancellations, decreased revenue and loss of market share.

Our operations depend on our ability to obtain adequate and quality supplies of our primary raw materials, namely round steel billets and green pipes, in a timely manner. If our suppliers fail to meet our quality standards or our quantity demands, our production and sales volume and our results of operation will be adversely affected. We currently expect to rely on two major suppliers to supply round billets to us with which we have entered into long-term arrangements. See ‘‘Business — Suppliers of raw materials.’’ However, we cannot guarantee our long-term arrangements with these two suppliers will provide us with a reliable supply of raw materials we need. If there is any supply shortage, we may be unable to deliver our products in a timely manner to our customers in the required quantities, which in turn could result in order cancellations, decreased revenue and loss of market share.

We may be unable to prevent possible resales or transfers of our products to countries, governments, entities, or persons targeted by United States economic sanctions, especially when we sell our products to distributors over which we have limited control.

The U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, administers certain laws and regulations, or U.S. Economic Sanctions Laws, that impose restrictions upon U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of U.S. Economic Sanctions Laws, or Sanctions Targets. U.S. persons are also generally prohibited from facilitating such activities or transactions. We will not use any proceeds from the

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sale of our ADSs to fund any activities or business with any Sanctions Targets with respect to which U.S. persons or, as appropriate, foreign entities owned or controlled by U.S. persons, are prohibited by U.S. Economic Sanctions Laws from conducting such activities or transacting such business. We sell our products in international markets primarily through independent non-U.S. distributors which are responsible for interacting with the end customers of our products. We sold indirectly a portion of our products to Sanctions Targets in the three years ended December 31, 2006 and in the six months ended June 30, 2007. In 2004, 2005, 2006 and the six months ended June 30, 2007, we did not have any direct sales to Sanctions Targets. To the best of our knowledge, in 2006 and the six months ended June 30, 2007, our indirect sales to Sanctions Targets, including Burma, Cuba, Sudan and Syria, accounted for approximately 9% and 6%, respectively, of our net revenues. While we believe that U.S. Economic Sanctions Laws under their current terms are not applicable to our activities, we have nonetheless decided to take measures to prevent any future sales of our products, either directly or indirectly, to Sanctions Targets. See ‘‘Management’s discussion and analysis of financial condition and results of operations — Internal control over distribution of our products.’’ However, we cannot assure you that our measures will be able to prevent all sales of our products, directly or indirectly, to Sanctions Targets in the future. We do not always know the end customers to whom our distributors resell our products, and our distributors may breach their covenant to us not to resell our products to Sanctions Targets. If such resales occur in the future, our reputation could be adversely affected, some of our U.S. investors may be required to sell their interests in our company under the laws of certain U.S. states or under internal investment policies or may decide for reputational reasons to sell such interests, and some U.S. institutional investors may forego the purchase of our ADSs, all of which could materially and adversely affect the value of our ADSs and your investment in us.

Protectionist measures such as initiation of anti-dumping and anti-subsidy proceedings and imposition of anti-dumping and/or countervailing duties by governments in our overseas markets could materially and adversely affect our export sales.

Anti-dumping and anti-subsidy proceedings have been initiated by some countries in relation to steel products, resulting in anti-dumping and/or countervailing duties being imposed by those countries on steel products. Those and other similar measures could trigger trade disputes in the international steel product markets that could adversely affect our exports.

The Canada Border Services Agency, or CBSA, initiated an investigation on August 13, 2007 on the alleged dumping and subsidizing of certain seamless carbon and alloy steel oil and gas well casings from China after receiving a complaint from TenarisAlgomaTubes Inc., a Canadian manufacturer of these goods. We were named as one of the 30 exporters of the goods from China subject to the investigation. The Canadian International Trade Tribunal, or CITT, has conducted a preliminary inquiry and determined, on October 12, 2007, that the evidence disclosed a reasonable indication that the alleged dumping and subsidizing of the goods has caused or is threatening to cause injury to the Canadian industry. On November 9, 2007, the CBSA made its preliminary determination that exports of carbon and alloy steel seamless oil and gas well casings were being dumped and were subsidized. These preliminary findings resulted in the imposition of a 44% preliminary duty on our products imported into Canada, which will adversely affect our sales in Canada. These preliminary findings also lead to final investigations being initiated by each body in which additional data will be gathered, information will be verified and the injury portion will be subject to a full adversarial hearing on the merits of the case. The final determinations are expected in March 2008. We and the other exporters are contesting these findings. In 2006 and for the six months ended June 30, 2007, products exported to Canada accounted for 4.1% and 0.6% of our net revenues, respectively. Should the CITT and

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CBSA make final determinations in favor of the complainant and impose definitive anti-dumping and countervailing duties on the subject goods, our sales in Canada of these goods may suffer and our export business to Canada may be materially and adversely affected.

In addition, there is no assurance that there will not be similar actions taken in the future in other countries against Chinese-made seamless OCTG products. For example, in March 2002, the U.S. government imposed certain quotas and tariffs on imports of a range of steel products. Although the United States lifted those tariffs in December 2003, there can be no assurance that the United States or other countries will not impose other quotas or tariffs. Furthermore, some U.S. producers of welded steel pipes have recently filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission alleging that exports of welded steel pipe products by Chinese companies into the United States were subsidized by the Chinese government. We do not currently produce any welded steel pipe products. If there is any such action filed against us in the future, even without merit, it will divert significant company resources and management’s attention and could have an adverse impact on the prices and sales of our OCTG products in such countries, which could adversely affect our business prospects and results of operations. If any judgment is entered into against us in such an action, we may be subject to fines and penalties and restrictions on sales activities, and our overseas sales would be materially and adversely affected.

If we are unable to continue developing our production technology or adopt new production technology, our business and prospects may be harmed.

The OCTG industry is competitive and the production technology underlying the industry is evolving. As customers’ needs, related technologies and market trends are subject to change, we cannot assure you that we will be able to correctly predict the trends in a timely manner. If we fail to correctly predict changes in the production technology or develop or adopt competitive technology on a timely basis, whether developed in-house or through license, we may not be able to respond effectively to competitive industry conditions and changing customer demands.

Responding and adapting to technological developments and changes in the OCTG industry, and the integration of new technologies or industry standards, may require substantial investment of resources, time and capital. Even if we implement such measures, there can be no assurance that we will succeed in adequately responding and adapting to such technological and industry developments. In the event that we are unable to respond successfully to technological and industry developments, our business, results of operations and competitiveness may be materially and adversely affected.

Failure to protect our intellectual property rights may materially and adversely affect our competitive position and operations and we may be exposed to infringement or misappropriation claims by third parties.

Our success is in part attributable to the technologies, know-how and other intellectual properties that we have developed or acquired. As of June 30, 2007, we had seven patents registered under our name and one pending patent application in China. We also have one PRC patent and three PRC patent applications granted to or applied under the names of our employees who invented the technologies covered by the patent or applications using our resources. We and the employees are in the process of transferring these patent and patent applications to our name without consideration. In addition, we had two trademarks in Colombia, one trademark in Hong Kong, one trademark in Saudi Arabia, one trademark in Kazakhstan and 27 pending trademark applications in China, Malaysia, United States, Canada and several other countries, as well as one registered domain name. Although we rely upon a

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combination of trade secrets, confidentiality policies, non-disclosure and other contractual arrangements, and patent and trademark laws to protect our intellectual property rights, there can be no assurance that the steps we have taken to protect our intellectual property rights are adequate to prevent or deter infringement or other misappropriation of our intellectual property. We may not be able to detect unauthorized uses or take appropriate and timely steps to enforce our intellectual property rights. Any significant infringement of our proprietary technologies and processes or our intellectual property rights could weaken our competitive position and have an adverse effect on our operations. To protect our intellectual property rights, we may have to commence legal proceedings against any misappropriation or infringement. However, there can be no assurance that we will prevail in such proceedings. Furthermore, as we only hold PRC patents, if third parties manufacture and sell products using our technology outside of the PRC in competition against us, we would not have a legal cause of action against them.

Furthermore, we may be subject to litigation involving claims of patent infringement or the violation of other intellectual property rights of third parties. The defense of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time-consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, to pay ongoing royalties, or to redesign our products or subject us to injunctions prohibiting the manufacture and sale of our products or the use of our technologies, which could materially and adversely affect our business, financial condition or results of operations. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase or use of our products until resolution of such litigation, which could adversely affect our business.

Failure to maintain an effective quality control system at our manufacturing facilities could have a material adverse effect on our business and operations.

The performance, quality and safety of our products are critical to the success of our business. These factors depend significantly on the effectiveness of our quality control systems, which in turn depend on a number of factors, including the design of our quality control systems, our quality-training program, and our ability to ensure that our employees adhere to the quality control policies and guidelines. Any significant failure or deterioration of our quality control systems could have a material adverse effect on our business reputation, results of operations and financial condition.

Significant product liability claims made against us, regardless of their success, could harm our business reputation, results of operations and financial condition.

Our oil and gas casing, tubing and drill pipe products are sold primarily for use in oil and gas exploration, drilling and extraction activities. These activities are subject to inherent risks, including well failures, line pipe leaks and fires, that could result in death, personal injury, property damage, pollution or loss of production, all of which could result in liability claims made against us. We typically offer warranties on our products for a period of up to one year. During the warranty period, faulty products are repaired or replaced by us, or returned to us. Actual defects or allegations of defects in our products may give rise to claims against us for losses and expose us to claims for damages. Any such claims, regardless of their merits, could cause us to incur significant costs, divert our management’s attention, harm our business reputation or cause significant disruption to our operations. Furthermore, we can provide no assurance that we will be able to successfully defend against such claims, and we do not have any product liability

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insurance covering our products, except insurance covering those products sold in North America. If any such claims were successful, we could be subject to substantial liabilities, which could materially and adversely affect our results of operations and our financial condition.

We may not be able to obtain the necessary PRC government authorization, land use rights certificate or the building ownership certificate for one of our properties.

We have not obtained PRC government authorization, land use rights certificate or building ownership certificate with respect to one of our warehouse facilities with a gross floor area of approximately 1,000 square meters. There is no assurance that we will be able to obtain PRC government authorization, land use rights certificate or building ownership certificate for this property. If we fail to obtain such authorization or certificates in a timely manner, or at all, we may be required to relocate this warehouse facility, which could materially and adversely affect our financial condition and results of operations.

If disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to deliver our products in a timely manner and our cost of revenues could increase.

We are highly dependent upon the transportation systems we use to ship our products, including train, truck and ocean shipping. We usually deliver our finished products to customers in China by train or by truck in circumstances requiring urgent delivery. Our deliveries made overseas are primarily made by ship. We have engaged a number of overseas shipping agents to transport our finished products overseas. The transportation network is potentially exposed to disruption from a variety of causes, including labor disputes or port strikes, acts of war or terrorism and natural disasters. For example, our net revenues declined in the third quarter of 2006 partly due to reduced export sales volume as a result of our inability to secure shipping on time for our products due to increased demand for overseas shipping in China. If our delivery times increase unexpectedly for these or any other reasons, our ability to deliver products on time could be materially and adversely affected and result in delayed or lost revenue.

Our growth strategies require significant capital investments and may require us to seek external financing, which may not be available on terms favorable to us.

Our business operations and growth strategies require substantial capital investments, the availability of which depends on our ability to generate cash flow from operations, borrow funds on satisfactory terms and raise funds in the capital markets. We plan to expand our manufacturing facilities by constructing a new threading line in each of Wuxi, China and Vancouver, Canada. We expect the threading line in Vancouver to commence production in the first half of 2008 and the threading line in Wuxi to commence production in September 2008. We plan to establish a production facility in Houston, Texas, a joint venture with production lines in Saudi Arabia and additional production facilities in China. We estimate our capital expenditures will be approximately $37.0 million and $46.8 million in 2007 and 2008, respectively. Our ability to arrange for financing to support our capital expenditures and the cost of such financing are dependent on numerous factors, including general economic and capital markets conditions, interest rates and credit availability from banks or other lenders, many of which are beyond our control. In addition, increases in interest rates or failure to obtain external financing on terms favorable to us will affect our financing costs and our results of operations.

As of June 30, 2007, our total bank and other borrowings amounted to $206.5 million. In the event we are unable to obtain extensions of these borrowings when they become due, or if we are unable to obtain sufficient alternative funding at reasonable terms to make repayments, we

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will have to repay these borrowings with cash generated by our operating activities. Our business might not generate sufficient cash flow from operations to repay these borrowings, some of which are secured by significant amounts of our assets. In addition, repaying these borrowings with cash generated by our operating activities will divert our financial resources from the requirements of our ongoing operations and future growth, and would have a material adverse effect on our business, financial condition and future prospects.

Our financial leverage may hamper our ability to expand and may materially affect our results of operations.

Our ability to make scheduled payments under our financing agreements and any future financing transactions and our ability to refinance our debts, if necessary, will depend, among other things, on our future operating performance. From time to time, we will be required to repay our short-term borrowings and, as a result, we may need to allocate a portion of our cash flow to service these obligations. This could impair our ability to make necessary capital expenditures, develop business opportunities or make strategic acquisitions.

As of December 31, 2006, we had net current liabilities of $11.1 million because we primarily used cash generated from our operations rather than long-term borrowings to finance our capital expenditures. As of June 30, 2007, we had net current assets of $27.2 million. We cannot assure you that our business will generate sufficient cash flow from operations in the future to service our debts and make necessary capital expenditures, in which case we may seek additional financing, dispose of certain assets or seek to refinance some or all of our debts. We cannot assure you that any of these alternatives can be implemented on satisfactory terms, if at all, or without breach of the terms and conditions of existing or future financing transactions. In the event that we are unable to meet our liabilities when they are due or if our creditors take legal action against us for payment, we may have to liquidate our long-term assets to repay our creditors. We may have difficulty converting our long-term assets into current assets in such a situation and may suffer losses upon the sale of our long-term assets. This would materially and adversely affect our operations and prevent us from successfully implementing our business strategy.

We have entered into guarantees in favor of various third parties for their bank borrowings and are subject to contingent liabilities, which may be beyond our control.

Commercial banks in the PRC often require bank borrowings to be secured by guarantees as a precondition for obtaining bank borrowings on terms more favorable to the borrower. In addition, bank loans may be unavailable unless the potential borrower is able to secure a guarantor. As such, we have entered into guarantee agreements with PRC commercial banks in favor of various third parties, including certain of our suppliers. Pursuant to these guarantee agreements, we are subject to contingent liabilities in the amount of $7.7 million as of June 30, 2007. The third party bank borrowings guaranteed by us have matured by the end of October 2007. We are exposed to default by any of these third party borrowers and cannot assure you that these third party borrowers will meet their repayment obligations on time or in full. See ‘‘Business — Proceedings’’ for legal proceedings relating to guarantees we provided for certain loans of Huayuan Jiangsu, an independent third party, which later defaulted on its loans. Any inability on the part of these third party borrowers to repay on time the amounts due to the bank may cause our financial performance and cash flow to be adversely affected.

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As a holding company, our ability to make distributions and other payments to our shareholders depend to a significant extent upon the distribution of earnings and other payments made by WSP China.

We declared a dividend of $15.0 million in January 2005, which was in turn contributed by our shareholders to increase the registered capital of WSP China. We declared dividends in the aggregate of $28.8 million in June and August 2006 and $32.5 million in October 2007. On November 30, 2006, our board of directors announced that it intends to approve an annual dividend up to 50% of our annual profits. However, our ability to distribute future dividends will be subject to various factors including, but not limited to, available cash and distributable reserves, investment requirements, and cash flow and working capital requirements. These factors depend on other factors that are beyond our control, including a possible economic downturn and delays in the payments made by customers. If we encounter any of these problems or others, we may not be able to declare and pay dividends in the future as currently planned.

Our ability to make distributions or other payments to our shareholders depends on payments from WSP China, whose ability to make such payments is subject to PRC regulations. Under PRC laws and accounting rules, dividends may be paid only out of distributable profits. Distributable profits with respect to WSP China refers to its after-tax profits as determined under PRC GAAP, less any recovery of accumulated losses and allocations to statutory funds that it is required to make. Any distributable profits that are not distributed in a given year are retained and are available for distribution in subsequent years. WSP China is required under PRC laws and regulations to allocate a portion of its annual after-tax profits, if any, to certain statutory reserves and funds prior to declaring and remitting dividends. For example, it is required to allocate 10% of its after-tax profit to statutory reserves until such reserves reach 50% of WSP China’s registered capital. Allocations to these statutory reserves and funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. The calculation of distributable profits of WSP China under PRC GAAP differs in many respects from the equivalent calculation under U.S. GAAP. As a result, WSP China may not be able to pay dividends in any given year to us if it does not have distributable profits as determined under PRC GAAP, even if we have profits for the relevant year as determined under U.S. GAAP. Accordingly, if we do not receive dividend distributions from WSP China, our liquidity, financial condition and ability to make dividend distributions will be materially and adversely affected.

We may not be successful in our future acquisitions and investments.

If we are presented with appropriate opportunities, we may acquire additional businesses or assets as part of our growth strategy. In May 2007, we signed a Memorandum of Understanding with Al Tuwairqi Contracting Establishment, or ATCE, a company based in Saudi Arabia and a member of the Al Tuwairqi Group. Under this Memorandum of Understanding, we agreed to invest in a 50% interest in a new joint venture with ATCE for the construction and operation of a seamless pipes manufacturing plant in Saudi Arabia. The joint venture is planned to have an annual production capacity of 750,000 tonnes of seamless pipes, with phase one expected to begin commercial operations in the fourth quarter of 2008 with an annual production capacity of 200,000 tonnes of seamless OCTG. We also plan to construct a production facility in Canada through our subsidiary WSP Industries, in the first half of 2008, a production facility in Houston, Texas and additional production facilities in China. Future acquisitions, investments and joint ventures may expose us to potential risks, and the success of our acquisitions, investments and joint ventures depend on a number of factors, including:

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•	our ability to identify suitable opportunities for acquisitions, investments or joint ventures;

•	whether we are able to reach an acquisition, investment or joint venture agreement on terms that are satisfactory to us;

•	the extent to which we are able to exercise control over the acquired company or business;

•	the economic, business or other strategic objectives and goals of the acquired company or business compared to those of our company;

•	the diversion of management attention and resources from our existing business;

•	our ability to finance the acquisition, investment or joint venture; and

•	our ability to integrate successfully the acquired company or business.

If we fail to make acquisitions or investments or form joint ventures that are strategically important to us, our growth and business prospects may be limited. If we encounter difficulties in integrating the business we acquired, our financial condition and results of operations may be materially and adversely affected.

There have been material weaknesses and deficiencies in our internal control over financial reporting and there remain areas of our internal and disclosure controls that require improvement. If we fail to establish or maintain an effective system of internal controls, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our ADSs may be adversely impacted.

We will be subject to reporting obligations under U.S. securities laws. The U.S. Securities and Exchange Commission, or the SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal control over financial reporting. In addition, an independent registered public accounting firm must audit and report on the effectiveness of the company’s internal control over financial reporting. These requirements will first apply to our annual report on Form 20-F for the fiscal year ending on December 31, 2008. Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future. 

Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in connection with the audits of our consolidated financial statements for the years ended December 31, 2004, 2005 and 2006, we and our auditors, an independent registered public accounting firm, have identified two material weaknesses in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board. The material weaknesses identified relate to (i) our inadequate accounting personnel with a good understanding of U.S. GAAP and SEC reporting requirements, and (ii) our lack of a comprehensive accounting policies and procedures manual. In addition, our auditors also identified a significant deficiency relating to the lack of certain accounting controls in Jiangsu Fanli. If we had performed a thorough assessment of our internal control over financial reporting or if our independent registered public accounting firm had performed an audit of our internal control over financial reporting, additional material weaknesses, significant deficiencies or control deficiencies might be identified.

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We are in the process of implementing measures to remedy these material weaknesses and significant deficiency to meet the deadline imposed by Section 404 of the Sarbanes-Oxley Act. If we fail to timely achieve and maintain the adequacy of our internal controls, our management may conclude that our internal control over financial reporting is not effective. Moreover, effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important to help prevent fraud. As a result, our failure to achieve and maintain effective internal control over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the market price of our ADSs.

Our business is substantially dependent on the continuing devotion of our chairman and chief executive officer, and our business may be materially and adversely affected if we lose his service.

Mr. Piao, our chairman and chief executive officer, is a director and controlling shareholder of several private companies, including Eastar Industries, Inc., Expert Master Holdings Limited, Huaian Longhua Real Estate Development Co., Ltd., Lianyungang Eastar Photonics Technologies Co., Ltd., Regalia Investments Holdings Ltd., WSP Canada Ltd., or WSPC, WSP Pipe LLC., Wuxi Huayi Investment Company Limited and Wuxi Longhua Steel Pipes Company Limited. We cannot assure you that Mr. Piao will be able to devote substantially all of his time to our business given his duties to other companies and the changing business environment that may demand more of his time outside of our company. For example, EMH recently completed a round of financing and loaned the money to Mr. Piao in relation to his purchase of a controlling equity interest in Cambodia Iron and Steel Mining Industry Group, an iron ore mining company, and Mr. Piao became a director of that company. In addition, although none of these companies currently engages in the production and sale of OCTG products, we cannot assure you that they will not enter into such business in the future. See ‘‘Management — Code of business conduct and ethics’’ for more details on our code of business conduct and ethics with respect to conflict of interests. If Mr. Piao is not able to devote a substantial amount of his time to our business, or if any dispute arises between Mr. Piao and us, we cannot assure you that we will be able to find a suitable replacement timely or at all, and our business may be adversely and materially affected.

Control or significant influence by our existing shareholders may limit your ability to affect the outcome of decisions requiring the approval of shareholders.

Expert Master Holdings Limited, or EMH, will own approximately 52.1% of our issued share capital immediately after this offering, assuming no exercise of the over-allotment option. Mr. Piao, our chairman and chief executive officer, is the sole shareholder of EMH, and has control over our business, including matters relating to our management and policies and certain matters requiring the approval of our shareholders, such as election of directors, approval of significant corporate transactions and the timing and distribution of dividends. Furthermore, our articles of association contain a quorum requirement of at least a majority of our total outstanding shares present in person or by proxy. EMH, with an aggregate shareholding sufficient to constitute a quorum, could approve by itself actions that require a majority vote at shareholder meetings, which may not be in the best interest of our other shareholders. Furthermore, UMW, which beneficially owns approximately 23.0% of our issued share capital immediately after this offering, assuming no exercise of the over-allotment option, will have significant influence over our business. For example, our vice chairman, Dato’ Dr. Abdul Halim bin Harun, was appointed by UMW. Furthermore, UMW is also one of our creditors. We have outstanding loans from UMW ACE, an affiliate of UMW, which we plan to repay using the net proceeds from this offering. To the extent the interests of EMH or UMW Ventures conflict with

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the interests of other shareholders, the interests of other shareholders may be disadvantaged and harmed. Moreover, we have in the past entered into related party transactions with the affiliates of EMH and UMW. After the initial public offering, we expect to continue to enter into related party transactions, subject, if applicable, to our audit committee’s review and approval.

We have limited insurance coverage in China.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited commercial insurance products. We have determined that balancing the risks of disruption or liability from our business, or the loss or damage to our property, including our facilities, equipment and office furniture, the cost of insuring for these risks on the one hand, and the difficulties associated with acquiring such insurance on commercially reasonable terms on the other hand, makes it impractical for us to have such insurance. As a result, we do not have any product liability, business disruption, or litigation insurance coverage for our operations in China, except for product liability insurance covering our products sold in North America. Any uninsured occurrence of loss or damage to property, litigation or business disruption may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our operating results. The occurrence of certain incidents including fire, severe weather, earthquake, war, flooding, power outages and the consequences resulting from them may not be covered adequately, or may not be covered at all, by our insurance policies. If we were to incur substantial liabilities that were not covered by our insurance, or if our business operations were interrupted for more than a short period of time, we could incur costs and losses that could materially and adversely affect our results of operations.

Risks related to doing business in China

The PRC’s economic, political and social conditions, as well as governmental policies, could affect the financial markets in China, our liquidity and access to capital and our ability to operate our business.

Substantially all of our business operations are conducted in China. Accordingly, our results of operations, financial condition and prospects are subject to a significant degree to economic, political and legal developments in China. China’s economy differs from the economies of developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the PRC economy has experienced significant growth in the past 30 years, growth has been uneven across different regions and among various economic sectors of China. The PRC government has implemented various measures to encourage economic development and guide the allocation of resources. Some of these measures benefit the overall PRC economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. More generally, if the business environment in China deteriorates from the perspective of domestic or international investors, our business in China may also be adversely affected.

Uncertainties with respect to the PRC legal system could materially and adversely affect us.

We conduct our business primarily through our subsidiaries and affiliated entities in China. PRC laws and regulations govern our operations in China. Our subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to wholly foreign-owned enterprises. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.

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Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their non-binding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China, regardless of outcome, may be protracted and result in substantial costs and diversion of resources and management attention.

Recent PRC regulations relating to offshore investment activities by PRC residents may increase our administrative burden and restrict our overseas and cross-border investment activity. If our shareholders who are PRC residents fail to make any required applications and filings under such regulations, we may be unable to distribute profits and may become subject to liability under PRC laws.

Regulations were recently promulgated by the PRC National Development and Reform Commission and the PRC State Administration of Foreign Exchange, or SAFE, that require registrations with, and approvals from, PRC government authorities in connection with direct or indirect offshore investment activities by PRC residents, including PRC individuals and PRC corporate entities. These regulations apply to our shareholders who are PRC residents and may also apply to certain of our offshore acquisitions as well.

In the event that a PRC shareholder with a direct or indirect stake in an offshore parent company fails to make the required SAFE registration, the PRC subsidiaries of that offshore parent company may be prohibited from making distributions of profit to the offshore parent and from paying the offshore parent proceeds from any reduction in capital, share transfer or liquidation in respect of the PRC subsidiaries. Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for foreign exchange evasion.

We have already notified our shareholders and the shareholders of the offshore entities in our corporate group who are PRC residents, urging them to make the necessary applications and filings as required under these regulations and the implementing rules or approval practices that may be established under these regulations. However, due to the lack of implementing rules and uncertainty concerning the reconciliation of the new regulations with other approval requirements, it remains unclear how these regulations, and any future legislation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. We intend to comply, and request that our shareholders who are subject to these regulations comply, with the relevant rules. However, we cannot provide any assurances that all of our shareholders who are PRC residents will comply with our request to make or obtain any applicable registration or approvals required by these regulations or other related legislation. The failure or inability of our PRC resident shareholders to receive any required approvals or make any required registrations may subject us to fines and legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, as a result of which our acquisition strategy and business operations and our ability to distribute profits to you could be materially and adversely affected.

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The approval of the China Securities Regulatory Commission, or the CSRC, may be required in connection with this offering under a recently adopted PRC regulation; any failure to obtain this approval, if required, could have a material adverse effect on our business and operating results and may also create uncertainties for this offering.

On August 8, 2006, six PRC regulatory agencies, namely, the PRC Ministry of Commerce, the State Assets Supervision and Administration Commission, or SASAC, the State Administration for Taxation, the State Administration for Industry and Commerce, the CSRC, and SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rule, which became effective on September 8, 2006. This New M&A Rule purports, among other things, to require offshore special purpose vehicles, or SPVs, formed for overseas listing purposes through acquisitions of PRC domestic companies directly or indirectly controlled by PRC companies or individuals, to obtain approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. On September 21, 2006, the CSRC published a notice on its official website specifying documents and materials required to be submitted by SPVs seeking CSRC approval of their overseas listings. While the application of the New M&A Rule remains unclear, we believe, based on the advice of our PRC counsel, Jingtian & Gongcheng, that CSRC approval is not applicable to us in the context of this offering because we completed our restructuring before September 8, 2006, the effective date of the New M&A Rule. However, as it is uncertain how the New M&A Rule will be interpreted or implemented, we cannot assure you that the relevant PRC government agency, including the CSRC, or PRC courts would reach the same conclusion as our PRC counsel. If the CSRC or other PRC regulatory agencies subsequently determine that we need to obtain CSRC’s approval for this offering, we may face sanctions by the CSRC or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from this offering into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering before settlement and delivery of the ADSs offered by this prospectus.

The New M&A Rule also established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex, including requirements in some instances that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. In the future, we may grow our business in part by acquiring complementary businesses. Complying with the requirements of the New M&A Rule to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

Restrictions on currency exchange may limit our ability to utilize our revenues effectively.

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive much of our revenues in Renminbi. Under our current structure, our income is primarily derived from dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made

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in foreign currencies without prior approval from the SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs.

Fluctuations in exchange rates could adversely affect our business as well as result in foreign currency exchange losses.

Our financial statements are expressed in U.S. dollars. The functional currency of WSP Holdings is U.S. dollars and the functional currency of our PRC operating subsidiaries is Renminbi. The change in value of the Renminbi against the U.S. dollar and other currencies is affected by, among other things, changes in China’s political and economic conditions. See ‘‘Management’s discussion and analysis of financial condition and results of operations — Quantitative and qualitative disclosure about market risks — Foreign currency risks’’ for a description of the recent PRC foreign exchange policy changes. A substantial portion of our sales is denominated in U.S. dollars and Renminbi, while substantially all of our costs and expenses are denominated in Renminbi. As a result, appreciation of Renminbi since July 2005 has increased, and further appreciation of Renminbi could further increase, our costs. If we were to increase our prices to compensate for the increased costs, we may decrease the market competitiveness of our products. This could result in a decrease in our international sales and materially and adversely affect our business.

In addition, as we rely entirely on dividends paid to us by WSP China, our operating subsidiary in the PRC, any significant revaluation of the Renminbi may have a material adverse effect on our financial condition and results of operations. The value of, and any dividends payable on, our ADSs in foreign currency terms will also be affected. For example, when converting the U.S. dollars we receive from this offering into Renminbi for our operations, any appreciation of the Renminbi against the U.S. dollar will decrease the Renminbi amount we receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, an appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.

There are only limited hedging transactions available in the PRC to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currencies because the regulations would limit our ability to hedge our exposure to foreign currency exchange losses.

Our business benefits from certain PRC government incentives, and expiration of, or changes to, these incentives could have a material adverse effect on our results of operations.

The PRC government has provided various incentives to foreign invested enterprises. As a foreign-invested enterprise and a high and new technology enterprise located in the Wuxi National High-Tech Industrial Development Zone, WSP China is subject to a foreign enterprise

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income tax, or FEIT, of 15%. Accordingly, in 2005, 2006 and the six months ended June 30, 2007, WSP China’s FEIT rate was 15%. In addition, WSP China enjoyed a five-year tax holiday that ended in 2004, pursuant to which it paid a FEIT at the rate of 7.5% in 2004. See ‘‘Management’s discussion and analysis of financial condition and results of operations — Taxation’’ for more details.

On March 16, 2007, the National People’s Congress passed the new ‘‘Enterprise Income Tax Law,’’ which will become effective on January 1, 2008. Under the new tax law, foreign invested enterprise, or FIE, and domestic companies are subject to a uniform income tax rate of 25%. The new tax law provides a five-year transition period starting from its effective date for those enterprises which were established prior to the passing of the new tax law and which were entitled to a preferential lower income tax rate under the then effective tax laws and regulations. The income tax rate of such enterprises will gradually transition to the uniform tax rate of 25% within the transition period in accordance with detailed rules to be promulgated by the PRC State Council. The new tax law provides only a framework of the enterprise tax provisions, leaving many details on the terms, as well as the interpretation and application of various provisions, unspecified.

According to the new tax law, entities that qualify as ‘‘high and new technology enterprises supported by the state’’ are expected to benefit from a reduced tax rate of 15% as compared to the uniform tax rate of 25%. However, as the definition of a ‘‘high and new technology enterprise supported by the state’’ under the new tax law has not been provided, there can be no assurance that WSP China will qualify as a high and new technology enterprise and benefit from such preferential tax rate. Our effective income tax rate will increase unless we are otherwise eligible for preferential treatment.

Furthermore, value-added tax, or VAT, in China is charged on sales based on the selling price of our products to customers at a general rate of 17%. We are deemed to have paid a 4% VAT tax based on the general rate minus a 13% VAT refund on export sales, which we are entitled to receive immediately upon filing the VAT returns. In July 2007, the PRC tax authorities have reduced such refund to 5% for certain steel products, which did not include seamless OCTG products. However, there is no assurance that the rate of refund for seamless OCTG products will not be reduced by the PRC tax authorities in the future, and a decrease of the refund will have a material adverse effect on our results of operations.

We may be treated as a resident enterprise for PRC tax purposes after the new Enterprise Income Tax Law becomes effective on January 1, 2008, which may subject us to PRC income tax for our income originated both within and outside the PRC and PRC income tax withholding for any dividends we pay to our non-PRC shareholders.

Under the new Enterprise Income Tax Law, enterprises established under the laws of non-PRC jurisdictions, but whose de facto management body is located in the PRC, may be treated as resident enterprises for PRC tax purposes. All of our management members reside in the PRC. Since the implementation rules to the new law have not been promulgated, it is currently unclear whether WSP Holdings would be treated as a resident enterprise. If we are treated as a resident enterprise for PRC tax purposes, our worldwide income will be subject to PRC income tax at the 25% uniform tax rate, which will include any dividend income we receive from our subsidairies, such as WSP China, unless such dividend income is otherwise exempted from our taxable income by the PRC State Council. If we are required to pay income tax for dividends we receive from our subsidiaries, it will materially and adversely affect our financial condition and results of operations.

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Moreover, unlike the current PRC tax law, which specifically exempts withholding tax on any dividends payable to non-PRC shareholders, the new Enterprise Income Tax Law provides that an income tax rate of 20% will be applicable to dividends payable to non-PRC shareholders that are derived from sources within the PRC, unless a tax treaty exists between the PRC and the relevant jurisdictions where such non-PRC shareholders reside and such treaty provides for a reduction or exemption of the relevant tax. We are a Cayman Islands holding company and substantially all of our income comes from dividends we receive from our subsidiaries, primarily from those located in the PRC. Since the new tax law has only been adopted recently, there is uncertainty as to how this new tax law will be implemented and whether the dividends we pay to our non-PRC shareholders will be subject to the 20% income tax. If we are required under the new tax law to withhold PRC income tax on such dividends, your investment in our ADSs may be materially and adversely affected.

We face risks related to health epidemics and other outbreaks, which could disrupt our operations.

Our business could be materially and adversely affected by the outbreak of avian flu or other epidemics. In recent years, there have been reports on the occurrences of avian flu in various parts of China, including a few confirmed human cases and deaths. Any recurrence of avian flu or other adverse public health developments in China or elsewhere may have a material and adverse effect on our business operations. For example, such recurrence may restrict our ability to travel or ship our products outside of China, or may require us to temporary close our manufacturing facilities. Such closures or travel or shipment restrictions would severely disrupt our business operations and adversely affect our results of operations. We have not adopted any written preventive measures or contingency plans to combat any future outbreak of avian flu or any other epidemic.

Risks related to the ADSs and this offering

There has been no public market for our ADSs prior to this offering, and you may not be able to resell our ADSs at or above the price you paid, or at all.

Prior to this initial public offering, there has been no public market for our ADSs. Following the offering, our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system. We have applied to list the ADSs on the New York Stock Exchange. If an active trading market for our ADSs does not develop after this offering, the market price and liquidity of our ADSs will be materially and adversely affected. The initial public offering price for our ADSs is determined by negotiations between the underwriters and us and may bear no relationship to the market price for our ADSs after this initial public offering. An active trading market for our ADSs may not develop and the market price of our ADSs may decline below the initial public offering price. Moreover, the market price for our ADSs may experience significant fluctuations due to industry events and market conditions that are beyond our control.

Because the initial public offering price is substantially higher than our net book value per ADS, you will incur immediate and substantial dilution.

The initial public offering price per ADS will be higher than the net tangible book value per ADS prior to this offering. As a result, when you purchase ADSs in this offering, you will experience immediate and substantial dilution of approximately $7.52 per ADS (assuming no exercise by the underwriters of options to acquire additional ADSs), representing the difference between our net book value per ADS as of June 30, 2007, after giving effect to this offering, and the initial public

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offering price of $11.50 per ADS, the midpoint of the estimated price range. In addition, you may experience further dilution to the extent that our ADSs are issued upon the exercise of share options.

Substantial future sales or perceived sales of our ADSs in the public market could cause the price of our ADSs to decline.

Sales of our ADSs in the public market after this offering, or the perception that these sales could occur, could cause the market price of our ADSs to decline. Upon completion of this offering, we will have      ADSs outstanding. All ADSs sold in this offering will be freely transferable without restriction or additional registration under the Securities Act of 1933, as amended, or the Securities Act. The remaining ordinary shares outstanding after this offering will be available for sale, upon the expiration of the 180-day lock-up period beginning from the date of this prospectus, subject to volume and other restrictions as applicable under Rule 144 and Rule 701 under the Securities Act. Any or all of these shares may be released prior to expiration of the lock-up period at the discretion of the joint lead underwriters. To the extent shares are released before the expiration of the lock-up period and these shares are sold into the market, the market price of our ADSs could decline.

You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote.

Except as described in this prospectus and in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attaching to the shares represented by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee to vote the shares represented by the ADSs. You may not receive voting materials in time to instruct the depositary to vote and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains, among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may be given or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on or before the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materially and adversely affect the rights of shareholders.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings and you may not receive cash dividends if it is impractical to make them available to you.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the United States unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. Also, under the deposit agreement, the depositary bank will not make rights available to you unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempted from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

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In addition, the depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is inequitable or impractical to make a distribution available to any holders of ADSs. For example, the depositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may decide not to distribute that property and you will not receive that distribution.

We are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than that under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.

Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Cayman Islands Companies Law and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands.

As a result of all of the above, public shareholders of our company may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or the controlling shareholder of our company than they would as shareholders of a U.S. public company.

Our management will have considerable discretion as to the use of the net proceeds to be received by us from this offering.

We have allocated a large portion of the net proceeds of this offering to be received by us for capacity expansions and general corporate purposes, including strategic investments and acquisitions. Although the use of proceeds represents the present intention of our management, our management will have considerable discretion in the application of the net proceeds received by us based on any subsequent event or development. We have not yet determined all of our anticipated expenditures and therefore cannot estimate the amounts to be used for acquisitions or other general corporate purposes. You will not have the opportunity, as part of your investment decision, to assess whether proceeds will be used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not directly improve profitability or increase our share price. The net proceeds from this offering may be placed in investments that do not produce income or that may lose value.

You may have difficulty enforcing judgments obtained against us.

We are a Cayman Islands company and most of our assets are located outside of the United States. Most of our current operations are conducted in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than the United States. A

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substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts. See ‘‘Enforceability of civil liabilities.’’

We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ADSs or ordinary shares.

We believe that we should not be treated as a passive foreign investment company, or PFIC, for our current taxable year ending December 31, 2007 or for the foreseeable future. However, we must make a separate determination each year as to whether we are a PFIC, and accordingly, even if we are not a PFIC for our current taxable year our PFIC status may change, for example, as a result of a decrease in our gross profit from the sale of our goods as a percentage of our gross income or as a result of fluctuations in our ordinary share price. A non-U.S. corporation will be considered a PFIC for any taxable year if either (1) at least 75% of its gross income is passive income or (2) at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income. If we were treated as a PFIC for any taxable year during which a U.S. person held an ADS or an ordinary share, certain adverse U.S. federal income tax consequences could apply to that U.S. person. See ‘‘Taxation — United States federal income taxation — Passive foreign investment company.’’

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Corporate structure

Our history and corporate structure

We are a holding company incorporated in the Cayman Islands and conduct substantially all of our operations through our subsidiaries in China. WSP China was initially established as a Sino-foreign joint venture on November 17, 1999. WSP China underwent a series of corporate transactions and became a wholly-owned subsidiary of FSHL on August 25, 2006. As a result, WSP China was converted into a wholly foreign-owned enterprise on September 4, 2006. In preparation for our initial public offering, WSP Holdings was incorporated in the Cayman Islands on November 16, 2006. WSP Holdings was owned 69.4% and 30.6% by EMH and UMW Ventures, respectively, since the time of its incorporation. EMH is wholly owned by Mr. Piao and UMW Ventures is a wholly-owned subsidiary of UMW. On December 1, 2006, WSP Holdings acquired the entire share capital of FSHL from EMH and UMW Ventures through a share swap and became the ultimate holding company of our businesses. UMW and its subsidiaries, UMW Ventures, UMW ACE and UMW Petropipe, are not independent third parties.

Our principal operating subsidiaries in China consist of WSP China, which designs, manufactures, processes and sells seamless OCTG products, and Jiangsu Fanli, which manufactures and sells green pipes. WSP China is a wholly-owned subsidiary of FSHL and Jiangsu Fanli is a 70%-owned subsidiary of WSP China.

As initial steps of our overseas expansion, on January 16, 2007, we established WSP Industries, a limited liability company incorporated in British Columbia in which we hold 70% equity interest.

The 2004 and 2006 transactions

The following chart illustrates our corporate structure after the 2004 transactions, but immediately before the 2006 transactions:

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Prior to the 2006 transactions, WSP China was owned 49% and 51%, respectively, by Wuxi Huayi Investment Company Limited, or Wuxi Huayi, and UMW ACE. Wuxi Huayi was owned by Mr. Piao and his family members, while UMW ACE was owned 51%, 40% and 9%, respectively, by UMW Petropipe, Hailong International (L) Ltd. and ACE Technologies (L) Ltd. As UMW Petropipe is a wholly-owned subsidiary of UMW, UMW held a 26.01% indirect interest in WSP China.

Prior to the 2006 transactions, our group comprised WSP China, WSP Heat Insulation Tubing Co., Ltd., or WSP Heat Insulation, Hailong Drill Pipe (Wuxi) Co., Ltd., or Hailong Drill Pipe and Jiangsu Fanli. In June 2004, Tangshan Huayi became part of our group but was subsequently wound up in December 2005.

The 2004 transactions

WSP China was established in the PRC on November 17, 1999 as a Sino-foreign joint venture with a registered capital of $1.2 million. At the time of its incorporation, WSP China was owned 50% by Daqing City Zhong Bang Jing Mao Company Limited, a company controlled by Mr. Piao, 25% by Jiangsu Xi Gang Group Company Limited and 25% by Mr. Changhe Li. Both Jiangsu Xi Gang Group Company Limited and Mr. Changhe Li are not related to Mr. Piao.

On March 27, 2003, Daqing City Zhong Bang Jing Mao Company Limited sold its 50% equity interests in WSP China to Wuxi De Qiang Chuangye Investment Company Limited (which later changed its name to ‘‘Wuxi Huayi Investment Company Limited,’’ or Wuxi Huayi), a company controlled by Mr. Piao. In addition, Jiangsu Xi Gang Group Company Limited transferred its 25% equity interests in WSP China to Wuxi Longhua Steel Pipes Company Limited, or Wuxi Longhua, a company also controlled by Mr. Piao.

On July 17, 2003, Mr. Changhe Li transferred his 25% equity interest in WSP China to King Partner Limited, a company unrelated to Mr. Piao. In addition, Wuxi Huayi transferred its 5% equity interest to Wuxi Hi-Tech Risk Investment Joint Stock Company Limited, a company unrelated to Mr. Piao, and 1% to Wuxi Quanhua Material Co., Ltd, or Quanhua Material, a company controlled by Mr. Piao’s brother.

On October 14, 2004, UMW ACE, Wuxi Longhua, King Partner Limited, Quanhua Material, Mr. Piao and WSP China entered into a master agreement, pursuant to which UMW ACE agreed to acquire an aggregate of 51% equity interest in WSP China from Wuxi Longhua, King Partner Limited and Quanhua Material. Under the master agreement, the vendor companies and Mr. Piao gave UMW ACE an irrevocable and unconditional profit guarantee for a stipulated audited profit after tax per annum of WSP China for each of the three fiscal years ended December 31, 2006.

On November 5, 2004, pursuant to the master agreement, UMW ACE entered into equity transfer agreements to acquire equity interest in WSP China from Wuxi Longhua (25%), King Partner Limited (25%) and Quanhua Material (1%). The transfers were completed on November 11, 2004, on which date the necessary governmental approvals were received. As a result, WSP China was held 51%, 44% and 5% by UMW ACE, Wuxi Huayi and Wuxi Hi-Tech Risk Investment Joint Stock Company Limited, respectively. Subsequently, Wuxi Hi-Tech Risk Investment Joint Stock Company Limited transferred its 5% equity interest in WSP China to Wuxi Huayi.

As a result of the 2004 transactions, the equity interests of WSP China were held 51% and 49% by UMW ACE and Wuxi Huayi, respectively.

The various changes in ownership interests set out above have been accounted for as transactions among shareholders with no push down of the investors’ basis into the financial statements of WSP China because we concluded that at the time of the November 2004 transactions Mr. Piao

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and UMW ACE were not a collaborative group for the purposes of EITF D-97, ‘‘Push Down Accounting.’’ Therefore the various changes in ownership interest had no effect on the financial statements of WSP China.

WSP Heat Insulation

WSP Heat Insulation was established in the PRC on November 10, 2004 as a limited liability company with a registered capital of RMB10 million. WSP Heat Insulation was owned 51% and 49% by WSP China and Mr. Changlin Zhu, respectively, at the time of its incorporation. Mr. Zhu was a director of WSP Heat Insulation.

Jiangsu Fanli

Jiangsu Fanli was established in the PRC on April 16, 2004 as a limited liability company with a registered capital of RMB10 million. In April 2006, the registered capital of Jiangsu Fanli was increased to RMB50 million and WSP China acquired 70% equity interest in Jiangsu Fanli by capital injection. The remaining equity interest was owned 24%, 4% and 2% by Mr. Cheng Huang, Mr. Xiang Huang and Mr. Jianming Gu, respectively, all of whom are independent third parties. A new business license was issued to Jiangsu Fanli in May 2006.

Hailong Drill Pipe

Hailong Drill Pipe was established in the PRC on August 30, 2005 as a limited liability company under the former name of Wuxi Seamless Drill Pipe Co., Ltd. with a registered capital of $3.6 million. At the time of incorporation, it was owned 51%, 40% and 9% by WSP China, Hailong International (L) Ltd. and Wuxi Huayi respectively. The scope of business of Hailong Drill Pipe includes research and development of drill pipe technology and production and sales of drill pipes and accessories. Hailong Drill Pipe commenced production in 2006. In January 2006, Wuxi Huayi transferred its 9% equity interest in Hailong Drill Pipe to Wuxi Wei Er De Technology Co., Ltd. and a new business license was issued to Hailong Drill Pipe in May 2006.

In September 2006, WSP China transferred its 51% equity interest in Hailong Drill Pipe to Shanghai Hailong Oil Equipments Company Limited, or Shanghai Hailong, for a consideration of RMB15.5 million, representing the net asset value of Hailong Drill Pipe as of July 31, 2006. Mr. Jun Zhang, a director and shareholder of Shanghai Hailong, was a director of WSP China until September 2006. Upon completion of the transfer, Hailong Drill Pipe ceased to be a subsidiary of WSP China and its name was changed to ‘‘Hailong Drill Pipe (Wuxi) Co., Ltd.’’ pursuant to a new business license issued in October 2006.

Tangshan Huayi Steel Co., Ltd.

Tangshan Huayi Steel Co., Ltd., or Tangshan Huayi, was established in the PRC on November 5, 2003 as a limited liability company with a registered capital of RMB10 million. Its scope of business included the production and distribution of steel related products. In April 2004, the registered capital of Tangshan Huayi was increased to RMB50 million, of which WSP China contributed RMB25.5 million, representing 51% equity interest of Tangshan Huayi. Mr. Yanhua Zhang, an independent third party, owned the remaining 49%. Pursuant to shareholders’ resolutions passed in January 2005, WSP China transferred 10.2% of its equity interest in Tangshan Huayi to Mr. Piao. Mr. Yanhua Zhang, however, failed to properly make the required capital investment, and the registered capital of Tangshan Huayi was reduced to RMB25.5 million. As a result, Tangshan Huayi was owned 80% and 20% by WSP China and Mr. Piao, respectively. Mr. Piao held the 20% equity interest on trust for WSP China. Thereafter, due to changes in the operating environment of the steel industry, unfavorable government policies

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and our ability to procure raw material from other sources, WSP China decided to cease the operation of Tangshan Huayi. Wuxi Longhua paid RMB18.9 million to the creditors of Tangshan Huayi to settle relevant debts on behalf of Tangshan Huayi. Pursuant to an assignment agreement dated December 10, 2005, Wuxi Longhua assigned to WSP China its creditor’s rights to Tangshan Huayi in connection with the foregoing payment for a consideration of RMB18.9 million. Tangshan Huayi was wound up in December 2005.

The 2006 transactions

The following chart illustrates our corporate structure after the completion of our recapitalization that took place between June 12 and December 1, 2006:

The overall substance of the 2006 transactions is that on December 1, 2006, WSP Holdings became the ultimate parent company of WSP China in a series of related and anticipated transactions involving the two continuing ultimate shareholders, Mr. Piao and UMW. Prior to the following series of transactions:

•	Mr. Piao held a 49% indirect interest in WSP China through Wuxi Huayi, an entity controlled by Mr. Piao;

•	UMW held a 26% indirect interest in WSP China through its 100% ownership of UMW Petropipe that held a 51% interest in UMW ACE, which in turn held a 51% interest in WSP China;

•	ACE Technologies Ltd. held a 4.6% indirect interest in WSP China through its 9% interest in UMW ACE; and

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•	Hailong International (L) Ltd. held a 20.4% indirect interest in WSP China through its 40% interest in UMW ACE.

After completion of the 2006 transactions:

•	UMW increased its indirect interest from 26% to 30.6% by acquiring the 9% interest in UMW ACE held by ACE Technologies Ltd.;

•	ACE Technologies Ltd. ceased to have any direct or indirect interest in WSP China or UMW ACE;

•	Mr. Piao increased his indirect interest in WSP China from 49% to 69.4% by paying $9.5 million to UMW ACE, through FSHL acting as a conduit, which in turn applied the $9.5 million to the benefit of Hailong International (L) Ltd, in exchange for its 20.4% indirect interest in WSP China; and

•	UMW ACE ceased to have direct or indirect interest in WSP China and Hailong, which was a shareholder of UWM ACE, ceased to have any indirect interest in WSP China.

•	UMW’s indirect interest in WSP China is now held through UMW Ventures, an indirect wholly-owned subsidiary of UMW.

The following 2006 transactions resulted in the continuity of ownership by Mr. Piao and UMW and continuity of management of WSP China. We also noted that Mr. Piao was the former controlling shareholder of WSP China prior to the sale of an ownership interest to UMW in November 2004. Because the same shareholder group had effective control of the combined entities before and after the transactions, the combination has been accounted for as if WSP China, rather than FSHL, was the accounting acquirer under paragraph 17 of Statement of Financial Accounting Standard (‘‘SFAS’’) No. 141, ‘‘Business Combination,’’ and therefore was accounted for as a recapitalization of WSP China with no step up in basis.

Our historical financial statements have therefore been presented as if we had owned WSP China for all periods presented with no change in basis for either WSP China, or WSP Holdings.

1.	On June 12, 2006, FSHL was incorporated as a shell company in the British Virgin Islands with one unpaid share.

2.

On or prior to August 18, 2006, EMH and UMW Ventures subscribed for an aggregate of 50,000 shares at $1 per share in FSHL and consequently FSHL was owned 69.4% and 30.6% by EMH and UMW Ventures, respectively. EMH is wholly owned by Mr. Piao and UMW Ventures is an indirect wholly owned subsidiary of UMW. FSHL was a newly formed entity that was intended to be used by the relevant parties as a vehicle to acquire their ownership interests in WSP China.

3.	On August 18, 2006, UMW Petropipe increased its indirect holding in UMW ACE to 60% from 51% by acquiring an additional 9% interest in UMW ACE from ACE Technologies Ltd. Following that transaction, there were two shareholders in UMW ACE: UMW Petropipe (wholly owned by UMW) holding 60% and Hailong International (L) Ltd holding 40%. As a result, UMW had a 30.6% indirect interest in WSP China.

4.	On August 18, 2006, Wuxi Huayi (controlled by Mr. Piao) and UMW ACE agreed to transfer their 49% and 51% equity interests in WSP China to FSHL for $22.7 million and $23.7 million, respectively. The share transfers were effected on August 25, 2006 and the relevant parties agreed that the payment of consideration would occur within three months from the date

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WSP China receives a new business license evidencing the transfers. The amounts of $22.7 million and $23.7 million, or $46.4 million in aggregate, were determined based on the $9.5 million that Mr. Piao had agreed to pay UMW ACE for the increase in his effective economic interest of 20.4%. However, as described below, the parties intended that these amounts would be subsequently capitalized as contributed capital and that the only substantive net monetary consideration involved in the transaction was the payment of $9.5 million by EMH, through FSHL acting as a conduit, to UMW ACE.

5.

On September 16, 2006, EMH signed a declaration of trust in favor of UMW Ventures pursuant to which EMH agreed to hold 20.4% out of its 69.4% interest in FSHL on trust for UMW Ventures for a period until UMW ACE received the consideration for its transfer of 51% interest in WSP China to FSHL. Pursuant to the trust, UMW Venture could direct EMH in writing on the vote as to 20.4% and, in the absence of such direction, voting was at the discretion of EMH. The trust was terminated on December 1, 2006 upon the payments to UMW ACE pursuant to the terms of the trust. As a result, EMH did not gain voting control of WSP China until December 1, 2006.

6.	On November 16, 2006, WSP Holdings was incorporated in the Cayman Islands and was owned 69.4% and 30.6% by EMH and UMW Ventures, respectively. WSP Holdings was established to ultimately hold our businesses.

7.

On December 1, 2006, EMH provided an interest-free term loan of $32.2 million to FSHL to finance its payment of the consideration in relation to its acquisition of the 69.4% equity interest in WSP China. Of this amount, $22.7 million was paid to Wuxi Huayi, which is controlled by Mr. Piao, in respect of its 49% interest in WSP China, and therefore the 22.7 million was effectively returned to Mr. Piao, and $9.5 million was paid through FSHL to UMW ACE as consideration for the increase of 20.4% in Mr. Piao’s indirect interest in WSP China. FSHL was a conduit through which Mr. Piao increased his ownership by 20.4%

8.

FSHL then issued a promissory note to UMW ACE in the amount of $14.2 million as the consideration for acquiring 30.6% equity interest it held in WSP China. This amount equaled the $23.7 million related to the 51% interest in WSP China held by UMW ACE less $9.5 million related to the acquisition of the 20.4% indirect interest held by Hailong International (L) Ltd. The promissory note was used because it can be easily assigned and the underlying loan can be subsequently capitalized.

9.	UMW ACE assigned the promissory note for $14.2 million to UMW Ventures on the same day.

10.	FSHL capitalized the amounts it owed to EMH ($32.2 million) and UMW Ventures ($14.2 million) under the interest-free term loan and the promissory note by issuing 1,000 shares to EMH and UMW Ventures, in the proportion of 69.4% and 30.6%, respectively.

11.

On December 1, 2006, WSP Holding acquired from EMH and UMW Ventures their shares in FSHL by way of share exchange in which WSP Holding issued 2,000 shares to EMH and UMW in proportion to their ownership interests in FSHL. Upon completion of the share exchange, WSP Holdings became the holding company of the group and EMH and UMW Ventures owned 69.4% and 30.6%, respectively, of the equity interests in WSP Holdings.

In order to finance FSHL’s payments to Wuxi Huayi and UMW ACE relating to its acquisition of WSP China, on December 1, 2006, EMH entered into the Exchangeable Bonds Subscription Agreement and Secured Notes Subscription Agreement with several subscribers. Pursuant to the Exchangeable Bonds Subscription Agreement, EMH issued to the subscribers exchangeable bonds in the aggregate principal amount of $20.0 million. The exchangeable bonds are exchangeable

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into our ordinary shares owned by EMH at the earlier of (i) six months after our initial public offering and (ii) such earlier date as may be permitted by the relevant stock exchange, at the exchange price equal to 105% of the initial public offering price per ordinary share.  Pursuant to the Secured Notes Subscription Agreement, EMH issued to the subscribers secured notes in the aggregate principal amount of $15.0 million, which bear a fixed interest rate and will mature on December 1, 2007. EMH mortgaged its shares in our company in favor of the subscribers of the exchangeable bonds and secured notes as first ranking security for the performance of its obligations under the bonds and notes. EMH issued the exchangeable bonds and secured notes for the purpose of funding the acquisition of WSP China by FSHL.

As indicated above, EMH used the funds to provide an interest-free loan of $32.2 million to FSHL for the purpose of financing its payments to Wuxi Huayi and UMW ACE. A consideration of $22.7 million was paid by FSHL to Wuxi Huayi, an entity controlled by Mr. Piao, and therefore the 22.7 million was effectively returned to Mr. Piao. Mr. Piao paid $9.5 million to UMW ACE, through FSHL acting as a conduit, for its acquisition of 20.4% indirect ownership in WSP China. EMH’s interest-free loan was capitalized into shares of FSHL.

Other transactions that affected our corporate structure

On January 16, 2007, WSP Industries was incorporated in Canada as a limited liability company. WSP Industries is owned 70% by FSHL and 10% each by Mr. Ling Li, Mr. Michael Liu and Mr. Larry Wang, respectively. Each of Mr. Ling Li, Mr. Michael Liu and Mr. Larry Wang is an independent third party. We plan to acquire, through WSP Industries, certain assets to be used in a threading line from Eastar Industries Inc., a company based in Vancouver, Canada and controlled by Mr. Piao, and to construct production facilities with an annual production capacity of 100,000 tonnes of seamless OCTG through WSP Industries. No formal agreement has been entered into with Eastar Industries Inc. as of the date of this prospectus.

On August 4, 2007, we entered into a shareholders agreement with Mr. Changlin Zhu to sell our 51% equity interest in WSP Heat Insulation for a cash consideration of $670,000. The transaction was completed on August 31, 2007.

On August 23, 2007, WSP Holdings increased its authorized capital to $50,000 by creating 500,000,000 ordinary shares, with par value of $0.0001 per share. On the same day, WSP Holdings issued 104,100,000 and 45,900,000 new shares to EMH and UMW, respectively, and repurchased 1,388 and 612 existing shares, with par value of HK$0.01 each, from EMH and UMW, respectively. Following the repurchase, WSP Holdings’ authorized capital of 38,000,000 ordinary shares, with par value of HK$0.01 each, were cancelled. Share and earnings per share data for all periods of WSP Holdings presented prior to the change in capital structure have been restated in this prospectus as if our current share capital structure existed throughout the relevant periods.

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Special note regarding forward-looking statements

We make ‘‘forward-looking statements’’ in the ‘‘Summary,’’ ‘‘Risk factors,’’ ‘‘Management’s discussion and analysis of financial condition and results of operations,’’ ‘‘Industry,’’ ‘‘Regulation’’ and ‘‘Business’’ sections and elsewhere throughout this prospectus. Whenever you read a statement that is not simply a statement of historical fact (such as when we describe what we ‘‘believe,’’ ‘‘expect,’’ ‘‘anticipate,’’ ‘‘project,’’ ‘‘predict’’ or ‘‘forecast’’ will occur, and other similar statements), you must remember that our expectations may not be correct, even though we believe that they are reasonable. These forward-looking statements include:

•	our growth strategies;

•	our future business development, financial condition and results of operations;

•	our timing of completion and the production capacity of our planned new production facilities and lines;

•	our ability to increase sales in the domestic or international markets;

•	competition in the seamless OCTG industry, both domestically and globally;

•	future demand for and supply of seamless OCTG products;

•	the expected growth of oil and gas prices and global rig count;

•	the expected trends in global and PRC seamless OCTG consumption and prices;

•	expected price movements for raw materials; and

•	expected challenges facing the OCTG industry as well as the oil and gas industry.

We do not guarantee that the transactions and events described in this prospectus will happen as described or that they will happen at all. You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation, beyond that required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even though our situation will change in the future.

Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties, many of which are beyond our control, and reflect future business decisions that are subject to change. Some of the assumptions, future results and levels of performance expressed or implied in the forward-looking statements we make inevitably will not materialize, and unanticipated events may occur which will affect our results. The ‘‘Risk factors’’ section of this prospectus describes the principal contingencies and uncertainties to which we believe we are subject.

This prospectus also contains data related to the oil and gas markets in several countries, including China. These market data, including market data from Preston, China Economics Yearbook, Energy Information Administration, or EIA, and BP Statistical Review of World Energy 2007, include projections that are based on a number of assumptions. The oil and gas markets may not grow at the rates projected by the market data, or at all. The failure of the markets to grow at the projected rates may materially and adversely affect our business and the market price of our ADSs. In addition, the rapidly changing nature of the oil and gas markets subjects any projections or estimates relating to the growth prospects or future condition of our market

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to significant uncertainties. If any one or more of the assumptions underlying the market data proves to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

You are able to obtain the publicly available data in this prospectus from the following sources.

Publicly available reports			Public source
China Economics Year Book			This report is available publicly for a nominal price. It can be purchased from different sources, including from the following webpage: http://www.hongkongbuy.com/book.asp?id=4420
Annual Reports of     Petrochina (1999-2006)			http://www.petrochina.com.cn/english/tzzgx/ndbg.htm
Annual Reports of Sinopec     (2001-2006)			http://english.sinopec.com/en-ir/en-companyreport/
Annual Reports of CNOOC     (2000-2006)			http://www.cnoocltd.com/en/Investment_Report.aspx?classid=327&w=bg
BP Statistical Review of     World Energy 2007			http://www.bp.com/statisticalreview
Energy Information     Administration (Annual     Energy Outlook 2007)			http://www.eia.doe.gov/oiaf/aeo/index.html
West Texas Intermediate			http://www.economagic.com/em-cgi/data.exe/var/west-texas-crude-long

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Use of proceeds

We estimate that we will receive net proceeds for this offering of approximately $262.2 million, after deducting estimated underwriting discounts, commissions and estimated offering expenses payable by us. For the purposes of estimating net proceeds, we are assuming an initial public offering price of $11.50 per ADS, the midpoint of the estimated range of the initial public offering price. A $1.00 increase (decrease) in the assumed public offering price of $11.50 per ADS would increase (decrease) the net proceeds to us from this offering by $23.3 million. We intend to use the net proceeds we receive from this offering as follows:

•	approximately $55 million for overseas expansion in Canada, the United States and the Middle East;

•	approximately $50 million for capital expenditures and expansion and improvements of our production facilities in China;

•	approximately $18.5 million for the full repayment of our loans from UMW ACE and $34.8 million for the repayment of a portion of our bank borrowings from Agricultural Bank of China;

•	an undetermined amount for strategic investment in and acquisitions of complementary businesses. At this time, we have not entered into advanced discussions or negotiations with respect to any potential acquisitions; and

•	the balance of the proceeds for other working capital purposes.

The details of our borrowings from UMW ACE and Agricultural Bank of China are as follows:

•

As of June 30, 2007, we had outstanding balance of loans from UMW ACE of $18.5 million. These loans were entered into in April, May and December 2005 and February 2006 and have a term of five years. These loans were used to finance the construction of our hot-rolling pipe line and threading line in Wuxi, China. These loans have a floating interest rate of SIBOR plus 2%. In 2005, 2006 and the six months ended June 30, 2007, the average interest rate for our long-term loan from UMW ACE was approximately 6.1%, 7.2% and 7.5%, respectively.

•

As of June 30, 2007, we had outstanding balance of bank borrowings from Agricultural Bank of China of $52.5 million. These loans were entered into in June 2007 and have a term of two years. These loans were used to refinance a portion of our existing long-term loans from UMW ACE. The interest rate for these loans is the benchmark interest rate for loans of the same maturity announced by the People’s Bank of China, or PBOC, less 10%, which initially was 6.075%. The interest rate will be adjusted every six months in accordance with the benchmark interest rate announced by the PBOC.

The foregoing represents our intentions to use and allocate the net proceeds of this offering based upon our present plans and business conditions. We have not yet determined all of our anticipated expenditures and therefore cannot estimate the amounts to be used for acquisitions or general corporate purposes. The amounts and timing of any expenditure will vary depending on the amount of cash generated by our operations, competitive and technological developments and the rate of growth, if any, of our business. Accordingly, our management will have significant discretion in the allocation of the net proceeds we will receive from this offering. Depending on future events and other changes in the business climate, we may determine at a later time to use the net proceeds for different purposes. Pending their use, we intend to invest

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the proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments.

We will not use any proceeds from the sale of our ADSs to fund any activities or business with any Sanctions Targets with respect to which U.S. persons or, as appropriate, foreign entities owned or controlled by U.S. persons, are prohibited by U.S. Economic Sanctions Laws from conducting such activities or transacting such business.

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Dilution

If you invest in our ADSs, your interest will be immediately diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS immediately after this offering. Dilution results from the fact that the initial public offering price per ordinary share is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares.

Our net tangible book value as of