Major Shareholder:

• Dahe International ¡V 48.82% interest

Company Subsidiaries:

• Beijing Dahe Shuanghong (51.0%): Dissemination of outdoor advertising
• Nanjing Ultralon (90.0%): Franchising of poster printing
• Shanghai Dahe Yasi (90.0%): Dissemination of outdoor advertising
• Hanzhou Ultralon (99.0%): Dissemination of outdoor advertising
• Chengdu Ultralon (99.0%): Dissemination of outdoor advertising

The Group has commenced the provision of outdoor advertising services in the PRC since the establishment of its predecessors, Naning Dahe Digital in December 2000. Through rapid expansion of business and scope of services over the Track Record Period, the Group has grown to become an outdoor advertising service provider in the PRC by providing a full range of specialized outdoor advertising services which include design and production of outdoor advertisement and dissemination of them through renting out its outdoor advertising space in the PRC.

The Group provides its services through its outdoor advertising network in the PRC which comprises (1) an extensive services network comprising 15 branches, 14 of which are equipped with production and printing equipme4nt to fulfil the demand of the local customers, and 8 services centres, which are mainly responsible for liaising with its customers and providing after sales services to its existing customer, located in 23 major cities in the PRC staffed by over 900 full time employees; (2) outdoor advertising rights held by the Group for periods ranging from approximately one year to twenty years for an aggregate display area of approximately 45,000 sq.m. of outdoor advertising space for renting to customers, including billboards, light bridges and unipoles along major roads and highways located in major cities of the PRC, such as Nanjing, Shanghai, Beijing, Chengdu and Urumuqi, which were initially acquired by the Group in November 2002; (3) 14 production bases occupying the same premises with its branches with a total gross floor area of approximately 23,000 sq.m. And equipped with advanced printing and production facilities of an aggregate net book value approximately RMB90 million as at the Latest Practicable Date.

The Group's production bases are equipped with advanced printing and production facilities, including digital printers and super-wide format ink-jet printers to provide a wide range of outdoor advertisement production services to its customers. the Group currently employs over 900 full time employees to operate its outdoor advertising services network located in 23 major cities in the PRC, including Hangzhou, Beijing, Urumuqi, Kunming, Sian Chengdu, Shanghai, Wuhanm Hefei, Shenzhen, Shijiazhuang, Guangzhou, Nanchang, Yangzhou and Nanjing. Through its comprehensive scope of services and extensive serives network, the Group made sales to approximately 4,000 corporate customers in 2002, covering a wide range of industries including consumer products, telecommunication, home appliances, information technology, food and beverages, motor vehicles and petroleum.

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

• Unique business model of providing a wide range of outdoor advertising services;
• Extensive services network in the PRC;
• Advanced production facilities to meet customer's needs;
• Outstanding quality of products and services;
• Experienced management team;

• Leased properties
• Credit risks
• Sustainability of profit
• Expiration of tax concession and changes to tax rate
• Limited operating history of dissemination of outdoor advertising space by the Group
• The Group's new multi media system based advertising media may not be successful
• Limited control over the franchisees operations
• Significant future expansion may place strain on the Group

The Group plans to expand its outdoor advertising network in the PRC by acquiring approximately 82,000 sq.m. of additional outdoor advertising space in Jiangsu provinces, Beijing, Zhejiang province, Xinjiang, Shanghai, Hanzhou, Xian and Chengdu from governmental authorities and/or independent third parties at an average price of approximately RMB876 per sq.m.

The Group plans to produce and install in outdoor display areas its new multi-media system based advertising media which combines audio and visual systems and the Group's existing LED-display based electronic advertising media, in order to meet diversified customer's needs in the dynamic advertising industry.

The Group plans to upgrade its computer network infrastructure in order to enhance the overall operational efficiency of the Group and the communication with its customers. Also, the Group plans to expand its service network in the PRC by setting up additional branches and/or service centres in major cities in the PRC (e.g Tsingdao and Kinan). The Group will continue to franchise its poster printing operation in other developing cities in the PRC (e.g. cities in Shandong Province or Hebei Province)

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$101.5 million (based on the offer price HK$0.46 per share). The Group at present intends to apply the net proceeds as follows: