Major Shareholder:

• Mr. Wang Chuan-fu - 28.897% interest
• Mr. Lu Xiang-yang - 12.107% interest
• Management Shareholders - 16.966% interest

The Group is a leading rechargeable battery producer worldwide. The Group's customers include international and the PRC market leaders in the mobile phone or consumer electronic device markets, such as Motorola, Matsushita, Ericsson, Kyocera, UTStarcom, Philips, Techtronic, TCL, Bird, Zhongxing Telecom and Eastcom.

The Group is principally engaged in the research, development, manufacture and sale of Li-on batteries, NiCd batteries and NiMH batteries. The Group also designs and manufactures most of the equipment and machinery used in the own production and testing processes.

As at 30th April, 2002, the Group had a total workforce of about 15,400, together with the existing production equipment, rendered a daily production capacity of about 0.3 million units of Li-ion batteries and 2.0 million units of NiCd and NiMH batteries in aggregate. By combining its labour intensive production process and the capabilities to design and manufacture production and testing equipment and machinery, the Group is able to achieve a flexible production process at a low cost structure.

Among all applications for rechargeable batteries in 2001, application to mobile phones ranked number one and was followed by power tools, cordless phones and notebook computers in terms of cell volume. It is believed that Li-ion batteries have the highest growth potential in the industry, as Li-ion batteries are becoming the preferred choice of rechargeable batteries for portable electronic products.

Explosive growth of domestic wireless subscribers and accelerating product upgrade cycles has expedited progress in the PRC mobile phone industry. The PRC telecommunication market has entered into a high growth phase and this momentum is expected to continue due to the relatively low penetration rate.

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

• Strong research and development capabilities;
• Unique production process and methodologies;
• Solid customer foundation;
• Advanced and stringent quality control system;
• Market leader in the industry;
• Highly effective management team;

• New product cycles;
• Potential claims over defective products;
• Limited insurance coverage;
• Reliance research and development;
• Certification of battery products;

The Group is positioned to become a global power solution provider with a mission to become largest rechargeable battery producer and gradually diversify into other high growth areas which will leverage on the existing strengths of its rechargeable battery operation. Currently, the Group is planning to develop five main projects;

• Expansion of the production capacity and research and development of products in connection with Li-ion batteries, in particular, prismatic and cylindrical batteries and LIP batteries;
• Development and manufacture of chemical compounds used in producing Li-ion batteries;
• Research, development and production of rechargeable batteries for electric vehicles, inlcuding batteries for pure electric vehicles, hybrid electric vehicles and electric bicycles;
• Research, development and production of fuel cells and solar cells; and
• Research, development and production of display products for mobile phones, including monochrome and color STN-LCD panels and modules.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$1,348.9 million (based on the offer price HK$10.825 per share). The Group at present intends to apply the net proceeds as follows: