Major Shareholder:

• Mr. Pang Baogen ¡V 37.5% interest

Company Subsidiaries:

• Baoye Construction (PRC) (99.0%): Engaged in the construction business
• Baoye Curtain Wall (PRC) (83.1%): Engaged in the construction business
• Concrete Company (PRC) (51.5%): Engaged in the building materials business
• Building Materials Industrialization Research (PRC)(90.0%): Engaged in the building materials business

The Group is one of the leading privately owned construction group in the PRC. According to ¡§China Large construction Enterprises 2001¡¨ published by the National Bureau of Statistics in 2001, the Company ranked eight among ¡§Top Most Profitable construction companies in the PRC¡¨ in 2000, with the first seven all being State-owned enterprises. The Group is principally engaged in the (1) the undertaking and implementation of construction projects; (2) research and development, production and sale of building materials; and (3) real estate development.

During the track Record Period, the Group completed 369 projects including 145 public buildings (such as office buildings, hotels and schools), 137residential developments, 41 industrial plants and 46 infrastructure projects. The Directors believe that the construction business has established a solid business foundation in Zhejiang Province and Shanghai Municipality. Currently, the construction business is primarily conducted by Baoye construction Baoye Construction, which has 10 representative offices in Shaoxing City and Ningbo City, all within Zhejiang Provinces, and in Shanghai Municipality and Wuhan City, Hubei Provinces, respectively.

The major building materials produced and sold by the Group include ready-mixed concrete, concrete piles, concrete ducts, large roofing sheathing and fire proof materials. The real estate development projects that the Group has completed are mainly located in Shaoxing City, Zhejiang Province, the location of the Group's headquarters. Since March 2002, the Group started to expand its real estate development business ot other region, including Hefei city, Anhui Province and Shanghai Municipality which the Group believes have growth potential.

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

• The Group has obtained a number of operation qualification and awards which enable the Group to generate business opportunities and enhance its ability to win contract tenders;
• The Group has been implementing stringent quality and cost control policies;
• The Group has established long term relationships with its project manager;
• The Group employs an experienced and efficient management team;
• The Group has successfully established a solid business foundation in Zhejiang Province, one of the most economically developed and fast-growing areas in the PRC;
• The Group has adopted a vertical integration strategy, which is likely to create synergies for each of its business segments; and
• The Group is situated in a factorable geographical location which facilities its delivery o building materials products.

• The Group's business operation will be adversely affected should it fail to extend, renew or maintain any relevant licenses or permits before their expiration;
• The Group's operations rely on certain key personnel;
• The Group's results of operations may very significantly from period to period, and the Group cannot assure that the rapid growth during the Track Record Period can be maintained in the future;
• The Group may be penalized as a result of the arrangement in relation to the establishment and capital increase of Baoye Construction
• A significant portion of the Group's turnover from the construction business is derived from variation orders initiated by project owners voluntarily.
• The Group will face increasingly intense market competition.

The Group plans to further invest approximately RM41 million to establish two concrete brick production lines with an estimated annual capacity of approximately 400,000 cubic meters in the Building Materials Industrialization Park, covering an estimated gross floor area of 6540 sq.m. The Director intends to import the key equipment and machinery from the United States.

The Group plans to further invest approximately RMB32 mi8llion to establish a steel structure production lines with an estimated annual capacity of approximately 10,000 tonnes and a sandwich board production line with an estimated annual capacity of approximately 200,000sq.m in the Building Materials Industrialization Park, covering an estimated gross floor area of 32,762 sq.m the Director intend to source the key equipment and machinery in the PRC.

The Group plans to further invest approximately RMB24 million to establish a curtain wall production line with an estimated annual capacity of approximately 400,00 sq.m in the Building Materials Industrialization Park, covering an estimated gross floor area of 17,025 sq.m. The Directors intend to import the key equipment and machinery from Germany and Switzerland or other countries in the future.

The Group plans to further invest approximately RMB14 million to establish a production line to manufacture wooden doors, with an estimated annual capacity of approximately 75,000 wooden doors in the Building Materials Industrialization Park, covering an estimated gross floor area of 21,032 sq.m The Director intend to source the equipment and machinery mainly in the PRC.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$258 million (based on the offer price HK$1.62 per share). The Group at present intends to apply the net proceeds as follows: