Major Shareholder:

• Mr. Shum Fong Chung ¡V 60.75% interest

Company Subsidiary:

• Traving Science (PRC)(100%): Energy efficiency consulting services

The Group is principally engaged in the design, management and implementation of EMS solutions, which include the provision of consultancy services for a variety of central air-conditioning retrofit projects including commercial buildings and public district heating systems in the PRC. The Group's EMS solutions adopt energy efficiency technologies and are aimed at improving the energy efficiency of the central air-conditioning systems in existing buildings and public district heating systems situated in the PRC through the Group's two EMS solutions, known as Savin 2000 I and Savin 2000 II.

Savin 2000 I mainly targets the central air-conditioning systems in commercial buildings such as hotels, offices, shopping malls, hospitals and airports in the PRC whereas Savin 2000 II is mainly used to reduce energy consumption of the public district heating systems in the PRC during cool and cold seasons.

With its team of central air-conditioning engineers and experienced energy service consultants who have an average of over 10 years of industry experience, the Group provides customers with EMS solutions which include engineering consultancy services on energy retrofit projects that are customized to match the needs of customers.

According to the 129 energy retrofit projects completed by the Group and their respective performance reports confirmed by the customers as at the Latest Practicable Date, the average energy saving in water pump systems of the central air-conditioning systems and in public district heating systems was approximately 59%.

The PRC expects to experience the greatest growth in energy demand among all nations. According to the statistics of IEA, the PRC is the country that experienced the strongest growth in total final consumption of energy in the world from 1973 to 1998. Statistics from the China Statistical Yearbook and the Energy Institute of the State Development Planning Commission also show that the primary energy consumption in the PRC has been growing rapidly and is expected to increase by more than two times by 2050.

On the other hand, energy efficiency in the PRC has greatly improved, as shown by the decrease in energy intensity since 1980s and the trend for energy efficiency is expected to grow stronger as the energy consumption per RMB10, 000 of GDP is expected to decrease by more than 10 times by 2050

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

• First mover advantage in the newly emerging and rapidly growing energy efficiency technologies market with a limited number of competitors in the PRC;
• Strong and dedicated professional management team that is capable of attracting committed employees;
• Strong research and development capabilities to develop energy efficiency technologies and to conduct continuous evaluation on energy efficiency performance;
• A well-established customer base covering various major cities in the PRC; and
• Strategic alliances with reputable research institutes in the PRC such as Tsinghua University for the development of energy efficiency technologies.

• Should the Group be unable to secure new contracts from its existing customers or find new customers to replace them, the Group's operations and financial conditions may be adversely affected.
• There can be no assurance that the Group will be able to retain Mr. Li's service in the future.
• If the Group cannot secure adequate number of contracts in the future, the Group's financial performance and profit growth may be adversely affected.
• If the unit price of electricity drops, the demand for the Group's EMS solutions may decrease, which may adversely affect the Group's business and profitability.

The Group intends to continue to emphasize on broadening the applications of its EMS solutions by marketing its Savin 2000 II to public district heating system retrofit projects, Savin 2000 III to energy retrofit projects on the industrial water circulation systems used in various manufacturing environment. The Group also intends to develop energy efficient products such as (domestic compressor-free air conditioners).

The Group intends to expand its market share to cover major cities in the 25 provinces in the PRC, such as Beijing, Shanghai and Dalian. The Directors believe that this will enable the Group to capitalize on the significant growth opportunities in these large and almost untapped markets. The Group intends to establish wholly-owned subsidiaries firstly in five of its key markets (Beijing, Dalian, Shanghai, Chongqing and Guangzhou) and then in other major cities in the PRC, Hong Kong and other southeast Asian countries.

The Group intends to capitalize on its direct sales network and knowledge about the local markets to identify potential customers for the Group's energy efficiency products as well as to promote cross-selling of new energy saving technologies such as VAV system and air-quality control technologies to customers. The Group also plans to improve its market penetration by establishing partnership arrangements with local system integrators of building automation systems and central air-conditioning system replacement contractors. The Group is still searching for suitable cooperative partners.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$76 million (based on the offer price HK$0.9 per share). The Group at present intends to apply the net proceeds as follows: