WLS HOLDINGS LIMITED
(Stock Code: 8021)

Major Shareholder:

• Mr. So Yu Shing, Francis - 53.826% interest
• Ms. Lai Yuen Mei, Rebecca - 16.494% interest

Company Subsidiaries:

• Wui Loong Consultancy Company Limited (100%): Providing consultancy services to main contractors in relation to calculating the design of MBMSs
• Wui Loong System Scaffolds Company Limited (100%): Metal scaffold and MBMSS
• Skylon International Limited (100%): Gondola rental
• Graceman Industrial Limited (100%): Manufacturing of plastic ties
• Wui Loong Holdings Company Limited (100%): Property holding
• Wui Loong Scaffolding Works Company Limited (100%): Bamboo scaffold
• Skyway Transport & Trading Company Limited (100%): Transportation of materials and finished goods for the Group internally

The Group is principally engaged in providing scaffolding for the following construction and building works in Hong Kong:

• construction works in respect of public housing;
• construction works in respect of private residential and commercial buildings;
• repairs, maintenance and renovation works in respect of public housing, private residential properties and commercial buildings; and
• landslip preventive and remedial works to slopes and retaining walls.

Scaffolding is a temporary structure erected during construction and building works in order to provide access and walkways for construction workers to work at height and to support materials and equipment. Scaffolding is necessary for most construction projects in Hong Kong. A system of scaffolds built with outer layers and inner layers will provide temporary safe working platforms for construction workers to carry out works above ground level.

During the Track Record Period, the Group has been mainly engaged in the erection of scaffolding for the construction works in respect of (a) public housing and (b) private residential properties and commercial buildings. The turnover of the Group attributable to these two categories of scaffolding works accounted for approximately 99.5% (about HK$124.5 million) and 99.7% (about HK$158.4 million) of the total turnover for the two years ended 30^th April, 2001 respectively.

The Group has developed MBMSS in about June 1999 and the Group is the proprietor of the patents granted for MBMSS by the Patents Registry of the Intellectual Property Department in Hong Kong under short-term patent registration number HK1024379 on 25th August, 2000 and standard patent number HK1033739 on the 9th November, 2001.

It is expected that the scaffolding industry in Hong Kong will have a promising growth in coming years and the Directors believe that the Group is capable of capitalizing not only on this growth to increase its market share locally but also to explore opportunities in the overseas markets in view of:

• its reputation in the provision of scaffolds and working platforms for building construction projects;

• its long term relationship with a broad base of customers, which include the major developers and construction companies; and

• its continuous efforts and resources put on research and development, which can be demonstrated by its success in patenting MBMSS.

Furthermore, the cost advantage of MBMSS as compared to metal scaffold and its higher reliability as compared to bamboo scaffold will strengthen the Group's ability in brand name promotion, in tapping the Hong Kong market and in expanding its business to overseas markets.

The Directors believe that the Group has the following competitive advantages:

• the Group's accumulated expertise and knowledge in traditional scaffolding erection gained from its years of operation;
• the advanced know-how and technical knowledge possessed by the Group and the ability to capitalise on its research and development, such as the patenting of MBMSS;
• its well-established goodwill in the construction industry and the resultant customer loyalty;
• the Group's well-established relationship with its suppliers in Hong Kong, the PRC, Korea and Japan; and
• its ability to provide substantial capital injection, its good track record at similar projects and its ability to provide job references when tendering for large scale development projects using scaffolding in the construction works.

• Reliance on major suppliers, key management, major customers and subcontractors to carry out scaffolding works,
• Risk of employment of illegal workers by independent subcontractors and non-performance or sub-standard performance by the Group,
• Compliance with ordinances and regulations and sufficiency of insurance coverage.

The Group will review and examine the existing metal scaffolding system used in Hong Kong and worldwide to identify areas for improvement and it intends to develop the Group's branded metal scaffolding system with better flexibility and attractive pricing to the customers; the Group will also plan to form a joint venture with a factory in the PRC for manufacturing metal scaffolds for the Group's own consumption purpose in order to reduce material costs.

In view of its market potentials, the Group plans to promote the use of gondolas in construction and renovator projects in Hong Kong through seminars and demonstrations. The Group plans to offer the service of renting temporary gondolas coupled with the services of providing skilled operators in order to teach workers the method to operate the gondolas. This is a supporting service for finishing works after dismantling the scaffold but before handing over the project by the main contractor to the developer. The Group will also spend effort in exploring the use of gondolas in the PRC and Asian markets.

The Group plans to develop the following new areas:

• the application of fibre reinforced plastic tube scaffold;
• cost saving devices which can speed up the erection and dismantling process to replace the traditional coupler for use in scaffolding works;
• bamboo scaffolding in the developing markets such as North Korea, India and
• Zambia; and
• the promotion of MBMSS to the Asian markets including Thailand, North Korea, Malaysia and Zambia.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$20 million (based on the offer price HK$0.38 per share). The Group at present intends to apply the net proceeds as follows: