Major Shareholder:

• Mr. Chan King Hong, Edwin ¡V 21.2% interest
• Mr. Stanley Chan ¡V 21.2% interest
• Ms. Rebecca Chan ¡V 13.63% interest
• Mr. Chan Woon Man ¡V 13.63% interest

Company Subsidiaries:

• Sun Ray Manufactory Ltd (100%): Manufacturing and trading of leather accessories
• Sze Cheik Leather Goods Factory (100%): Manufacturing and trading of leather accessories
• Elite Leatherware Company Ltd (100%): Trading of leather accessories
• Donguan Ngai Luen Leather Goods Company Ltd (100%): Manufacturing and trading of leather accessories

The Group is principally engaged in the design and manufacture of branded men's and ladies' leather accessories, including finished belts and small leather goods, such as wallets, key rings, and organizers. Products of the Group are manufactured on both OEM and ODM bases. The Group sells its merchandise to fashion apparel retailers based in Japan, the US, Hong Kong, Europe, and other countries. Many of these retailers operate large scale chain stores across their home countries and carry a broad portfolio of internationally and locally prestigious designer brands and private brands.

The Directors believe that the Group is one of the leading designers and manufacturers of leather accessories in Hong Kong and the Group's success is attributed to its dedication to high standards of quality control, manufacturing workmanship, fashion, marketable designs, and economies of scale in production. As at the Latest Practicable Date, the Group has maintained over 2,000 belt designs in its data bank.

The Group has recently expanded its production facilities and business exposure by relocating its processing plant to a larger premise to manufacture products for the international market, and has established a new production facility focusing on products for the PRC market. As a result of its recent expansions, the Group's two newly expanded production facilities in the PRC are expected to increase the Group's aggregate annual production capacity from approximately 3.6 million to approximately 10.8 million finished belts and small leather goods on a fully-equipped basis.

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

• Strong brand portfolio consisting of a broad array of prestigious designer brands and private brands across the world
• Established long business relationships with major suppliers, which enable stable supply of raw materials with good quality and shorter delivery schedules, and with major customers, which helps the Group to secure its product distribution
• More than two decades of practical experience in the leatherware industry and product development
• Ability to design products in response to the fashion trend, differentiating the Group from other leather accessories manufacturers in general
• Stringent quality control of the Group's products

• Reliance on key personnel
• Reliance on foreign sourcing
• Possibility of non-renewal of the Processing Agreement after its expiry
• Price fluctuation of raw materials and finished goods
• Reliance on the Japanese retial market and other major customers in Japan

The Group's business objective is to maintain its leading position as a leather accessories designer and manufacturer offering a wide range of quality merchandise to fashion apparel retailers around the world. In order to achieve the above objective and maintain its competitive edge in the domestic market, the Group intends to pursue the following strategies:

• Expand into PRC leather accessories market
• Horizontal diversification of product categories
• Vertical integration of raw material supply
• Market the Group's own brand name

The Directors believe that recent growth in the fashion accessories industry has resulted from: (i.) the trend towards more casual attire category; (ii.) increased consumer awareness of branded accessories as a fashion and lifestyle statement; and (iii.) a desire for change in accessories style. The Directors believe that pursuant to the tough retail economy after the financial crisis, which has resulted in recent consolidations in the fashion industry, fashion accessories retailers have increasingly chosen to consolidate their supply bases to a core group of companies that have the resources and expertise to meet the retailers' increasing demand. As such, the Directors believe that leveraging on its existing design and sourcing expertise with well-established manufacturing base, the Group is in a better position than its competitors to continue to capitalize on these market opportunities and trends.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$31.7 million (based on the offer price HK$0.60 per share). The Group at present intends to apply the net proceeds as follows: