Major Shareholder:

• Mr. Wang Chia Chin - 34.08% interest
• Mrs. Ko su Mei (the spouse of Mr. Wang Chia Chin) - 30.75% interest

Company Subsidiaries

• Sky Hawk Shenzhen (PRC) (100%): Manufacture of computer peripherals
• Newton Investments (100%): Trading of computer peripherals
• San Hawk (96%): Trading of computer peripherals
• Eagle Lord (100%): Property holdings
• Glory Trading (100%): Trading of computer peripherals

The Group is principally engaged in the manufacture and distribution of medium to premium PC peripherals, networking products and computer accessories. The Group's principal products are either manufactured for various manufacturers on OEM basis of sold under the brandnames SKY HAWK, EAGLE and SKY LINK.

PC peripherals manufactured by the Group mainly include PC chassis, multimedia speaker, keyboard, mouse and power supply for PC. Networking products manufactured by the Group mainly include IPC chassis, server chassis, power supply for network system, Ethernet switch and Ups. Computer accessories manufactured by the Group mainly include CPU fan, hard disk cooling kits, data cable, computer data switch and multi-port USB hub.

Since the establishment of the Group in 1992, peripherals have been the major products f the Group. During the Track Record, PC peripherals accounted for over 70% of the turnover of the Group. To diversify its product mix, the Group commenced to develop and manufacture networking products in October 1999.

The Group commenced to deliver its IPC networking severs barebone system to the markets in August 2001. The IPC networking server barebone system of the Group is a skeleton of a network system and principally comprises server cabinet, fast Ethernet switch, KVM switch, IPC chassis, Ups, redundant power supply, hot swap mobile rack, patch panel and cable connectors.

The Directors have noted from public information that there are very few manufacturers of PC peripherals and networking products in the PRC which offer aluminum alloyed products for sale. Hence, the Directors believe that the Group is one of the leading manufacturers of PC peripherals and networking products in the PRC with the use of aluminum alloy. Aluminum has the features of being light, corrosive resistant and highly thermal conductive, which contains a large market potential.

The Directors consider that the PRC computer market is at the infancy stage ad there is a vast business opportunity for the sales of computer peripherals and networking products in the PRC. The Group intends to develop the PRC computer peripheral and networking products market. Having taken into account the Group's plating technology and expertise in the computer peripherals and networking products market as well as its one-stop production and assembly line, the Directors consider that the Group is competitive as compared with other manufacturers of computer peripherals and networking products,

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

• the Group has established its brandnames namely, SKY HAWK, EGALE and SKY LINK, in the medium to premium market of PC peripherals, networking products and computer accessories;
• the Group is one of the very manufacturers of PC peripherals and networking products in the PRC with the use of aluminum alloy;
• the Group has strong research and development ability which allows it to develop plating technology. Patent applications in resect of its own plating technology has been submitted to the relevant PRC authority in June 2001 and is pending approval;
• the Group has one-stop production and assembly lines which comprise comprehensive production facilities and skillful employees for the manufacture of various basic assembly components such as speakers, transformers and cable lines in order to capture additional production premium as compared with those manufacturers which have to source basic components from other suppliers;
• the Group has a comprehensive product range to enable its customers to source major PC peripherals and networking products at one-stop. It is believed that this enhances the Group's competitiveness and the loyalty of the Group's customers; and
• the Group has successfully commenced to develop its IPC networking server barebone system market and OEM business.

• The production costs of the Group may fluctuate from time to time which could adversely affect the profitability of the Group.
• Although the Group constantly monitors the creditworthiness of its customers, there is no assurance that the Group will not encounter difficulty in the collection of trade receivables in the future. In such event, the Group may be exposed to the risk of having a significant amount of doubtful debts and as such, the business, the capital and the profitability of the Group would be adversely affected.
• There is no assurance that these authorized dealer will continue to distribute the Group's products in the future, in view of the high volume of orders receivables from its authorized dealers, any sudden cessation of, or substantial reduction in these orders may have an adverse impact on the business and profitability of its Group.
• The Potential competition, which will affect the demand for the Group¡¦s products, may adversely affect the profitability of the Group.

The Directors intend to expand the Group's existing research and development team. It is the present plan of the Group that the Group will (a) increase the number of professionals to enhance the existing research and development effort in its networking products in order to accelerate the development and production of new products to match changing technologies; (b) purchase and install testing equipment to enhance the quality of its networking products with a vie to creating industrial standard and to differentiate its products.

The Directors intend to expand the existing and to establish new sales and marketing channels for the Group. It is the present intention of the Group to establish new sales and marketing channels in each of the major provinces and municipalities in the PRC to develop the PRC computer peripherals and networking products market. The Group also intends to expand its sales and marketing team in Taipei.

The Directors intend to purchase and install SMD and AI line of production to enhance the automation and mechanization of production facilities of the Group.

The Directors intend establish a network system assembly production centre to provide a total solution to its customers. It is planned that the Group will in accordance with customers requirements, assemble customized network systems with the Group's networking products such as its IPC networking server barebone systems.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$38 million (based on the offer price HK$0.5 per share). The Group at present intends to apply the net proceeds as follows: