Major Shareholder:

• Mr. Tang Li Min ¡V 59.48% interest

The Company is principally engaged in the manufacture and sale of universal joints for automobiles. It has three main product categories, comprising cardan universal joints, wing bearing universal joints and differential spiders, with over 80 major models and specifications.

According to the statistics released by the Transmission Shaft Committee of CAAM, it was estimated that in 2002, the Company ranked second in term of sales volume among eight manufacturers of universal joints in the PRC as per the study of the Transmission shaft Committee of CAAM, and such eight manufacturers in aggregate accounted for approximately 98% of the total sales volume of universal joints in the PRC in 2002.

The Company has built up a customer base in the PRC covering 19 provinces and autonomous regions. The Company's products are distributed through its own sales force to transmission shaft factories as well as automobile repair factories in the PRC. In January 2003, the Company began to sell its products directly to overseas customers in counties and regions including the United Kingdom, Taiwan, South Korea, India, Iran, Singapore and Israel.

The production facilities of the company are primarily located in Yanzunqiao Town, Shaoxing County, Zhejiang Province of the PRC with an aggregate site area of approximately 60,739 sq.m and an aggregate gross floor area of approximately 15,626 sq.m. Fixed assets and equipment owned by the Company are primarily production equipment for forging, lathing, heat treatment and grinding of universal joints.

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

• Market lead of the industry
• Experienced management team
• Strong emphasis quality control
• Extensive customer base in the PRC
• Enhanced brand image and market recognition

• Relationship between Shaoxing Group and the Company;
• Reliance on a principal product category;
• Risks associated with research and development;
• Increase in trade receivable;
• Competition

The principal business objectives of the company are to enhance ¡§Zhanwang¡¨ as a leading brand name in the PRC automotive parts and components market and become a major player in the global market for the procurement and supply of universal joints.

The Company will strive towards the expansion of production capacity for universal j0oints by increasing investments in both equipment and other fixed assets. In February 2004, the company will start to implement technical renovation projects for the universal joint production lines, for which approximately RMB20 million is expected to be required for completion. In addition, the Company attends to renovate its bottleneck craftsmanship to further expand its production capacity.

The Company will run a parallel system that encompasses both in house research and development and collaborative arrangement with external partners for the development of products. The Company intends to recruit more experienced research and development personnel and more training and learning opportunities will be provided to the research and development staff in order to establish a strong research and development team.

The Company has obtained the ISO9002:QS9000:1998 Quality System Certification. On this basis, the Company will continue to strengthen its quality management, strive to enhance its product quality and reduce production costs of its products. The Directors believe that high product quality and relatively low production costs will be the key to substantially increase the market competitiveness of its products.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$21.51 million (based on the offer price HK$1.33 per share). The Group at present intends to apply the net proceeds as follows: