Major Shareholder:

• Ms. Lilly Huang ¡V 75.0% interest

Company Subsidiaries:

• Oriental New-Tech Ltd (100%): Trading and distribution of automotive spare parts and construction decorative hardware products
• Norstar Industrial Ltd (100%): Investment holdings, marketing, trading and distribution of automotive spare parts and construction decorative hardware products
• Perfect World Holdings Ltd (100%): Trading and distribution of automotive spare parts and construction decorative hardware products
• Beijing Norstar Automotive Industrial Inc. Manufacture and sale of automotive spare parts and construction decorative hardware hardware products.

The Group is engaged principally in the manufacture and sale of automotive spare parts. The Grop is also engaged in the manufacture and sale of construction decorative hardware products. The Group's products have successfully penetrated into the overseas markets of the United States, Canada and Europe.

The automotive spare parts manufactured by the Group mainly include brake plates and brake shoes, both being key components in the brake system of a motor vehicle. Currently, the Group in accordance with specifications prescribed by its customers produces all brake plates and brake shoes. the Group's products are used in the brake system of various types of motor vehicles including cars, passenger vans and trucks. Subject to customer demand, the Group may from time to time engage in the manufacture of other automotive spar parts such as hose brackets. To increase its competitiveness, the Group has, since early 2003, started to engaged in the trading and distribution of automotive spare parts such as universal joints and transmission shafts, all of which are sourced from independent third parties.

The construction decorative hardware products manufactured by the Group mainly include door hinges and door tracks. Certain of the construction decorative hardware products are designed, developed and manufactured by the Group, while others are manufactured in accordance with specification prescribed by its customers.

The Group currently carries on its manufacturing operations through Beijing Norstar, a sino-foreign equity joint venture established in the PRC in which the Group (although Norstar Industrial ) and Anhui Industries and Trade have an equity interest of 90% and 10%, respectively, Anhui Industries and Trade is a company established in the PRC which is jointly owned and managed by Mr. Zhou (who is a Director) and his spouse, Ms. Wu Li Ping. Beijing Norstar have a joint venture term of 25 years expiring on 10^th June 2022.

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

• High products quality
• Strong research and development capability
• Strict quality control
• Strong customer base
• Emphasis on customer service
• Cost advantage
• Wide product range
• Experienced management and technical staff

• Reliance on major customers;
• Reliance on major suppliers;
• Reliance on major sub-contractors
• Concentration on the US market
• High level of inventories and accounts receivable
• Trade and regulatory issues concerning the US market

The successful penetration of the Group's products in various overseas markets and the significant potential of these markets are both important factors in encouraging the Group accelerate the further development of its overseas sales. The United States and Canada are currently the largest overseas markets for the Group's automotive spare parts. The Directors envisage that these countries will continue to be the key overseas markets for the Group's automotive spare parts and the Group will continue to expand its sales in these markets. The Group also intends actively to develop new overseas markets for its automotive spare parts in Europe, South America and various Asian countries.

The Group intends to diversify into the manufacture of other key parts used in the brake system of a motor vehicle as well as other automotive spare parts, particularly high valued added products which require the use of high precision production techniques. This would allow the Group to offer a more comprehensive range of automotive spare parts and to provide more integrated services to its customer. The new products are expected to include suspension system parts. The Group also intends to start engaging in the manufacture of metallic moulds, which are required to be used in its production process for automotive spare parts.

The Group plans to purchase and install new equipment in order to improve the existing production facilities for automotive spare parts at its production base in Anhui Provinces, the PRC. The estimated total cost of such improvements is approximately RMB40 million. The Group intends that approximately RMB30 million of such cost will be financed from the net proceeds of the Share Offer and the balance will be financed from the Group's internal resources. It is expected that the installation of such additional equipment would increase the Group's production capacity by approximately 30% to 40%. The installation of a additional equipment is expected to be completed in the second half of 2003

To keep pace with market developments, to further raise the technical standards and competitive of its products and to provide an increased level of technical support to the sales and marketing of its products, the Group plans to further strengthen its research and development capability. The Group intends to establish research and development center in Beijing and other suitable locations.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$218.0 million (based on the offer price HK$1.20 per share). The Group at present intends to apply the net proceeds as follows: