Major Shareholder:

• Mr. Li Wei Bo ¡V 73.616% interest

Company Subsidiaries:

• Victory (100%): Investment holding and trading of paper products
• Nanjing Sanlong (48%): Printing and manufacturing of cigarette packages
• Victory Shenzhen (100): Printing and manufacturing of cigarette packages and laminated papers

The Group is a fast growing printer of cigarette packages and manufacturer of laminated papers for cigarette packages in the PRC in terms of sales revenue and net profit. The Group started to its first full year of operations in 2000 and within a short period three years. The Group, through Victory Shenzhen (it's wholly owned subsidiary), prints and manufactures high-quality cigarette packages in the PRC. The customers of Victory Shenzhen are mainly large state-owned cigarette manufacturers in the PRC, including our of the 36 key cigarette industrial enterprises identified and fostered by STMA.

The Group also manufactures laminated papers for cigarette packages through Victory Shenzhen. Laminated papers are the principal raw materials for the manufacturing of cigarette packages which, in general, account for more than 65% of the production costs. At present, Victory Shenzhen manufactures tow categories fo laminated papers, namely metabolized laminated papers and laser laminated papers, which are either consumed internally by Victory Shenzhen or sold to Nanjing Sanlong and other cigarette packages printers in the PRC for the printing and manufacturing of cigarette packages.

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

• In-depth knowledge of the cigarette industry and good relationship with cigarette manufacturers in the PRC
• Strategic relationship between Nanjing Sanlong and each of Nanjing cigarette Factory and Huaiyin Cigarette Factory
• Advanced technology know-how and expertise
• Synergy from vertical integration
• Good product quality

• Reliance on Nanjing Sanlong in respect of sales revenue
• Reliance on Nanjing Sanlong in respect of new profit contribution
• Dependence on key management staff
• Licenses and approvals in relation to the Group's printing business in the PRC
• Reliance on major suppliers
• Leased production plants of Victory Shenzhen

The Group's long term business objective is to become a market leader in the manufacturing and printing of cigarette packages only and does not have any plan to diversify its printings business to other products.

Victory Shenzhen will focus its sales and marketing efforts on large cigarette manufacturers in the PRC, especially state-owned manufacturing which are identified by STMA as the 36 key cigarette industrial enterprises and cigarette manufacturers which plan to launch new designs of packages for their cigarettes or new brands of cigarettes. Victory Shenzhen's primary target markets will be Guangdong Province, Yunnan Provinces, Hunan Province and Jiangxi Province of the PRC. The Directors believe that Victory Shenzhen will be able to achieve the economies of scale for sales of cigarette packages to large cigarette manufacturers with greater and more stable demands.

The existing production capacities of Victory Shenzhen will be further utilized to meet the expected increase in sales of cigarette packages and laminated papers to its existing and new customer. In the future, Victory Shenzhen will continually expand and upgrade its production facilities for the printing and/or manufacturing of cigarette packages and laminated papers in order to increase its production capacities, cost efficiency and profitability.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$153.0 million (based on the offer price HK$2.13 per shares). The Group at present intends to apply the net proceeds as follows: