Major Shareholder:

• Mr. Yang Yirong ¡V 48.32% interest
• Shanghai Alliances Ltd ¡V 5.33% interest

Company Subsidiaries:

• Xiamen Hoozyn(100%): Research and development of the chemicals
• Xiamen Sinotek (100%): Manufacturing and sale of the chemicals
• Xiamen Sinoloon (100%): Investment holding and trading of fine chemicals
• Sino Bright (100%): Trading of the chemicals
• Rich Success Tech Co(100%): Research and development of the chemicals
• Xiamen Doingcom (100%): Manufacturing and sale of the chemicals

The Group is engaged principally in the research and development, production and sale of fine chemical products of functional ingredients and intermediates for application in pharmaceutical industry healthcare industry and personal care industry. The Group ¡¥s fine chemical products are broadly categorized into three main product groups, namely (1) chiral pharmaceuticals raw materials and pharmaceutical intermediates, (2) natural pharmaceutical raw materials and (3) aroma chemicals. These fine chemical products are principally derived from botanic essential oils.

The Group's products are mainly used as functional ingredients or intermediates in the production of a variety of pharmaceuticals, healthcare products, personal care products, cosmetics and household products. Chiral pharmaceuticals raw materials and pharmaceutical intermediates are principally used in the production of chiral pharmaceuticals, Natural pharmaceutical chemicals are broadly used as ingredients in flavor and fragrance products which are applied in a wide range of personal care and household products.

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

• The Group's management team has extensive management experience in the fine chemicals industry which enable the Group to respond quickly to changes in market demands and preferences.
• The Group has established a solid and diversified customer base with over 100 customer, including trading companies and manufacturers which use the Group's products as raw materials in their manufacturing process.
• The Group has adopted ISO9001 quality control measures throughout the production process.
• The Group has, over the years, accumulated various production technologies and techniques, with which the Group is well positioned to develop raw products in a timely manner and adjust to its product mix in accordance with market demands.
• Collaborations with some of the leading academic and research and institutes in the PRC including Xiamna University, Nanjing University.
• Extensive downstream applications of the Group's products

• Reliance on top five customers
• Reliance on major suppliers
• Reliance on key management
• High degree of dependency on the PRC market
• Preferential tax treatment
• Repayment of special purpose subsidies

The Directors believe that, as the general public become increasingly aware of the importance of personal healthcare and environmental protection, demand for various pharmaceutical and personal care products base don botanic e4ssentail oils is likely to increase. The Group's products, though has a wide range of applications, are mainly used in the pharmaceuticals, healthcare and personal care industries, where a gradual growth in demand is expected in the future.

The Group will complete the expansion of the existing production facilities of Haicang Plant by the third quarter of 2004. In view of the current utilization level, the Directors intend to expand the Group's existing product facilities in order to increase the maximum annual processing volume of botanic essential oils form the current 9500 metric tonnes to 11,000 metric undertake technical improvement of the existing production facilities and new equipment will be acquired and installed at the Haicang Plant.

The Group will set up a logistics support centre in Rotterdam, the Netherlands in the second quarter of 2004. The Directors believe that the setting up of logistics support centre in Rotterdam, the transportation and logistics hub of Europe, will enable the Group to strengthen its logistics services in the European market and enhance the Group's position in competing with other overseas competitors.

The Group will make further investments in acquiring advanced facilities and recruiting additional professionals, for enhancement and improvement of its R&D capability and scale. The availability of sophisticated ancillary facilities will enhance the core R&D activities of the Group, and also allow the Group to commercialize the results of its R&D in a more efficient manner.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$119.5 million (based on the offer price HK$1.38 per share). The Group at present intends to apply the net proceeds as follows: