Major Shareholder:

• King's Chemical Products Inc ¡V 51.0% interest
• Mr. Yuen Sun Wah - 28.65% interest
• Mr. Ko Jack Lum - 15.50% interest

Company Subsidiaries:

• Manfield Coatings (100%): Investment holdings and manufacture and trading pf paints
• Shenzhen Pinefield (100%): Manufacture of paints and trading in petrochemical products.

The Group is engaged principally in the manufacture and sale of industrial coatings such as stoving enamels for metal, plastic coatings and air drying coatings, pad-printing inks, powder coatings, can coatings, special-pattern coatings and surface treatment agents and print removers. The Group's products are applied o a wide range of products such as die-casting toys, household products, motorcycles, kitchenware, ABS electrical appliances, plastic articles, candle and wax articles, cans and other metalwares.

All of the Group's products are sold under the Group's own brandname "Manfield", the Group's customers are mainly Hong Kong based or Taiwan based manufacturers with production operations in the PRC. The Directors believe that products of such Hong Kong based manufacturers are mainly distributed to customers in Europe and the US.

The Group is able to produce over 320 customized paint products and 210 color samples daily and is able to deliver the products to its customer within two to three days upon receipt of orders. The Group also provides technical advice in respect of its products to customers. The Group was awarded the ISO9001 certification by TUV Management Services GmbH in year 1997 and was granted the right and licensee to use the Hong Kong Q-mark by the federation of Hong Kong Industries in respect of certain otf its products in te year 2001

The Group's production activities are carried out through Shenzhen Pinefield at the Pinefield Factory in the PRC. The Pinefield Factory occupiers a piece of land with in area of approximately 25,000 sq.m and employs approximately 654 full time employees. It has an annual production capacity of approximately 12,000 tonnes of industrial coatings.

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

• Its adverse knowledge of and experience in the competitive in the properties and characteristics of a wide variety of paint products and in paint manufacturing;
• Its ability to provide technical advice and support to its customers;
• Its management's in-depth knowledge of and experience in the paint industry;
• Its ability to provide its customers with quality products at competitive prices with prompt delivery; and
• Its commitment in providing high quality after-sale services.

• Reliance on major customers;
• Reliance on major suppliers;
• Reliance on single production facilities;
• Limited insurance coverage;
• Competition;

In order to meet anticipated increasing orders and to consolidate its position in the industry, the Group plans to expand its manufacturing facilities in the PRC. The Group intends to build a factory extension adjacent to its present production premises at the Pinefield Factory. The Directors believe that with an increase in orders, the Group's manufacturing operations will enjoy increasing economies of scale.

The Directors are of the view that the demand for industrial coatings in the PRC will increase. Given its manufacturing presence in the PRC the Directors are of the view that the Group is well positioned to capture such increase in demand in the future, the Group proposes to set up a representative office in Shanghai, the PRC, to sell the Group's products and will target manufacturers of electrical appliances.

The Directors consider that one of the competitive edges of the Group is its technical knowledge in paint manufacturing. The Directors intend to enhance these capabilities throught the recruitment of experienced technical staff. The Group plans to increase the workforce its technical staff by approximately 15% of its current workforce in order to meet the expansion plans to the Group.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$28.0 million (based on the offer price HK$0.8 per share). The Group at present intends to apply the net proceeds as follows: