Major Shareholder:

• Mr. Poon Sum and Mr. Poon Sau Tin ¡V 53.13% interest

Company Subsidiaries:

• Wing Shing Chemical (100%): Trading of paints and blended solvents.
• Hai Yue Chemicals (100%): Trading of chemical materials
• Wing Shing Colours (100%): Manufacture of plastic colorants
• WSCIL (100%): Trading of paints and blended solvents
• Wing Shing Chemicals Macao Commercial Co (100%) Trading of paints and blended solvents

The Group is principally engaged in (i.) the manufacture and sale of paints and blended solvents; (ii.) the manufacture and sale of plastic colorants; and (iii.) the trading of chemical materials.

The Group's products are sold under the Group's own brand names, namely ¡§WSC¡¨ and ¡§Colour-X¡¨. With the aid of its research and development team and advanced equipment, the Group tailor-makes the formulae of different paints and blended solvents to satisfy the specifications and requirements of different customers. The Group does not only market its products through its sales and marketing teams, which comprise 79 staff, but also engages four distribution agents to promote the Group's products in Hong Kong and three major cities in the PRC, namely Hefei, Suzhou, and Hangzhou.

The Group's products are principally sold to Hong Kong customers with production base in the Zhujiang Delta Region. For each of the three years ended March 31, 2002, approximately 99.2%, 99.5%, and 98.2%, respectively, of the Group's turnover were derived from Hong Kong customers, with the remaining balance from the PRC customers.

The Group's head office is located in Hong Kong where the Group has a workforce of 31 staff. The principal place of operation of the Group is located in Chang An, Dongguan, where the Group has a workforce of 564 staff. Currently, the Group's production activities are carried out through the Paints Factory Complex (production of paints and blended solvents), the Colorant Factory (production of plastic colorants), and the Processing Factory (processing of paints and blended solvents). Among these production facilities, the Paints Factory Complex is the Group's major production base, which is equipped with the majority of the Group's machinery and advanced instruments.

• Reliance on key personnel;
• Land use right of the land;
• Reliance on manufacture and sale of paints and blended solvent;
• Reliance on customers from the toy industry;
• Reliance on major suppliers;

The Group plans to broaden the range of its products to cover powder coating, kitchenware, and automotive finish and relevant touch-up products. As the first step to achieve such targets, the Group formed Kansai Chemicals in April 2002 with a strategic partner to commence its business in the manufacture and distribution of solvents for use in automotive repair paints and related products under the brand name of a Japanese paint manufacturer.

In order to further expand the production capacity of the Paints Factory Complex and to cater for the introduction of new production lines, the Group intends to free up a gross floor area of approximately 1,971 sq. m. in the Paints Factory Complex by moving the existing staff dormitory therein to a new staff dormitory in Chang An, Dongguan. Construction of such a new staff dormitory commenced in October 2001 and is expected to be completed by the end of 2002.

The Group will increase its involvement in its research and development and also offer products with better quality and environmentally friendly features. Apart from investing directly in its research and development, the Group intends to cooperate with educational institutions and chemical specialists to develop new products of superior quality and environmentally friendly features.

The Group intends to set up service points in various regions in the PRC in order to maximise market penetration, transportation logistics, and overall customer service. The service points will be able to respond to the needs of the customers in various regions and provide prompt and consistent service.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$23.1 million (based on the offer price HK$0.5 per share). The Group at present intends to apply the net proceeds as follows: