Major Shareholder:

• Newcourt Trustees ¡V 75.0% interest schedule

Company Subsidiaries:

• Dongguan Lee & Man (100%): Manufacture of containerboard
• Jiangsu Lee & Man Paper (100%): Manufacture of containerboard
• Evergreen Trading (100%): Raw materials sourcing
• Lee Kwok (100%): OCC sourcing and treasury functions
• Wang Kei (100%): Marketing and exports

The Group is one of the largest producers of containerboard in China in terms of production capacity and production volume and specializes in the production of linerboard and corrugating medium. The Group's linerboard and corrugating medium are divided in a range of grades with different specifications customized for different industrial and consumer packaging purposes. As of the Latest Practicable Date, all of the Group's sales were to corrugation producers of cardboard boxes.

China's containerboard consumption is concentrated in the Pearl River Delta region which accounted for more than half of China's consumption of containerboard in 2002. The Yangtze River Delta region also hosts a concentration of export oriented manufacturing industries which generally require corrugated boxes for packaging. The Group's existing production facilities are strategically located in Dongguan in the Peal River Delta region and new production facilities are being established in Changshu in the Yangtze River Delta region. Accordingly, the Directors believe that as the Group's production facilities are located near its principal customer. The Group generally incurs lower transportation costs and time in its delivery of containerboard to its customers than manufacturers from other regions of China or overseas.

The Group's products target mid to high-end containerboard markets. The Group's production facilities at the Dongguan Factory include, among others, its own power generation, water supply and wastewater treatment facilities, its own pier and over 80,000m of storage area. As of the Latest Practicable Date, the Group operated four paper mahcnes (paper machines 1 to 4) at the Dongguan Factory. Pearl machines 1 to 3 have a total production capacity of approximately 280,000 MT per year. Paper machine 4 commenced operation in October 2002 and increased the total production capacity of the Group to approximately 650,000 MT per year.

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

• Its established market position and potential for further expansion.
• Its ¡§first mover¡¨ advantages.
• Its strategic location and proximity to customers
• Its integrated production facilities.
• Quality customized products, product range and market knowledge.
• Its computerized management information system.
• Its environmentally friendly operations.
• Its wide raw materials sourcing base.

• Reliance on business in Guangdong province
• Reliance key management personnel
• Reliance on major suppliers
• Sustainability of net profit margin
• Seasonably of demand
• Implementations of business plans

As part of its strategy for growth and in order to take advantage of the growing demand for containerboard from the industrial cities in the Yangtze River Delta region in China, the Group commenced the Changshu Project ¡V a three year expansion plan involving approximately 600,000m of land, for new paper machines, power plants and water supply and wastewater treatment facilities. Jiangsu Lee & Man was established on 28 May August 2003, approximately 12% of the Group's customer were located in the Yangtze River Delta region.

The Group currently plans to install three containerboard paper machines and one duplex white board paper machines in four phases at its planned production site in Changshu over three years. These will be the fifth, sixth, seventh and eighth paper machines (paper machines 5 to 8) owned and operated by the Group, with paper machines 5 to 7 producing linerboard, paper machine 6 producing corrugating medium and paper machine 8 producing white board. The planned aggregate annual production capacity of these four paper machines is approximately 550,000 MT of linerboard, 350,000 MT of corrugating medium and 400,000 MT of white board.

In addition to increasing the production of high grade linerboard and corrugating medium to capture a greater proportion of high grade containerboard demand in China currently being met by imports, the Group also plans to produce more medium grade linerboard to capture more market share from existing smaller mills which make this grade. The Group also plans to diversify its product range into wider range of different grades, such as high grade corrugating medium, to take advantage of the current shortage of domestically produced high grade corrugating medium in China. as part of the Changshu Project, the Directors also plan to extend the Group's product range to include white board in three years time through the installation of paper machine 8.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$704 million (based on the offer price HK$3.92 per share). The Group at present intends to apply the net proceeds as follows: