Major Shareholder:

• Ms. Cheung Yuk Shan, Shirley ¡V 55.53% interest

Company Subsidiary:

• Sau San Tong Beauty Figure Limited (100%): Product and market research, marketing , promotion and sale of health and beauty products
• Sau San tong Healthy Trim Institute (TST) Limited (100%): Operation of a slimming centre in Tsim Sha Tsui, Hong Kong
• Sau San Tong Healthy Trim Institute (Causeway Bay) Limited (100%): Operation of a slimming centre in Causeway Bay, Hong Kong
• Sau San Tong Management Limited (100%): Provision of management services to the Group companies
• SST Advertising Agency Limited (100%): Provision of advertising agency services to the Group companies

The Group is principally engaged in the health and beauty business of (I) the sale of a range of health and beauty products; and (II) the provision of a wide range of health and beauty services with emphasis on weight management at its slimming centres. The health and beauty products marketed and sold by the Group under the trademark "Sau San Tong" can be classified into 4 main categories, namely, breast enhancement pills, body slimming pills, skin beauty pills and diet teabags. The Group also entered into a master agreement with Pure Herbs as the sole agent for the distribution of its product under the trademark in Hong Kong on 4^th April 2003.

The slimming centres, which are also operated under the trademark "Sau San Tong", provide services such as whole and partial body slimming, weight management, body treatment services and facial treatment services to its customers. The Group also offers a range of skin-care and hair-care products under the brand of " Dr. Alan Ong" on a consignment basis at its slimming centres exclusively in Hong Kong. Currently, the Group operates 3 slimming centre at various locations in Hong Kong.

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

• Ms. Cheung's strong marketing skill in using advertising as the main medium. The Group's success in achieving market recognition and selecting celebrities as spokespersons of the Group who receive extensive media coverage in Hong Kong is mainly attributable to Ms. Cheung's expertise in leveraging her connection with the media and the public recognition of her performing career;
• Its sliming centre satisfies both the physical and psychological needs of its customers by providing a wide range of slimming services with professional advice from doctors, registered Chinese medicine practitioners, dietitian, health and beauty consultants and hypnotherapists;
• The strong market recognition of the trademark "Sau San Tong"; and
• The provision of better services to its customers including its free after-sale consultation service provided by registered Chinese medicine practitioners to customers of the Group's health and beauty products from time to time and subject to such conditions as the Group may consider appropriate.

• None of the products of the Group has obtained any patent registration. It is possible that other manufacturers or distributors may manufacturer or distribute imitation products which may compete directly with those of the Group;
• Gross profit margin of the new health and beauty products are relatively lower;
• The Group has a limited operating history upon which its performance may be evaluated;
• Reliance on Ms. Cheung and Lucky Fresh.

The Group will increase efforts and resources in the research and development of new health and beauty products through Lucky Fresh. On the other hand, the Group will continue to expand its geographical coverage of its health and beauty products in Hong Kong and into other markets such as cities in Guangdong province of the PRC. To expand its health and beauty products in the local market, the Group intends to set up a maximum of 10 self-owned counters in a personal care products retailer chain in Hong Kong.

The Director will continue to explore potential location to set up slimming centres in Hong Kong under the trademark "Sau San Tong" and provide a wide range of health and beauty services. The Group is carrying out feasibility studies and intends to set up similar slimming centres in the PRC either by operating under its own management or through co-operating with PRC parties. Moreover, the Group also performs feasibility studies to explore the possibilities to set up similar slimming centres in Taiwan through its internal resources.

The Directors intends to implement a series of strategies, such as advertising in printed media, television, radio and other media and participating in public function including charity events, to promote the corporate image of the Group and its products and services in Hong Kong, the PRC and Taiwan. Also, the Group will continue to improve the quality of services at its retailers and slimming centres.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$17.5 million (based on the offer price HK$0.25 per share). The Group at present intends to apply the net proceeds as follows: