Listing Date:	30 June 2004
Offer Price:	HK$0.54 per share
Par Value:	RMB$0.10 each
No. of Shares under the offer :	55,560,000 shares
No. of Shares under Placing:	50,004,000 placing shares
No. of Share under Public Offer:	5,556,000 shares
Market Capitalization:	HK$30 million
Sponsor:	Shenyin Wanguo Capital (H.K.) Limited
Chairman:	Mr. Jiang Zi Qiang
Fund Raising	HK$30.0 million

Major Shareholder:

Huasheng Enterprises - 33.77% interest
Jiang Zhou - 7.04% interest
Shanghai APEX - 6.73% interest
Wang Zhi Yu - 7.51% interest
Shanghai Hede - 4.49% interest
Wang Liang Fa - 6.33% interest
Fuzhou Tung Shing - 4.49% interest

COMPANY OVERVIEW

The Company is principally engaged in the research and development, manufacture and sale of fire fighting equipment in the PRC. The Company's fire fighting equipment products include three main types, namely (i) fire extinguishers; (ii) fire extinguisher cylinders; and (iii) fire fighting accessory equipment. Fire extinguishers and fire fighting accessory equipment are used for fire fighting purposes. Fire extinguisher cylinders are used by customers as containers for fire extinguishers or other fire fighting equipment. Sale of the Company attributable to the above fire fighting equipment amounted to approximately RMB 39.23 million and RMB 421.91 million for each of the two year ended 31 December 2003 respectively, representing approximately86.59% and 88.70% of the Company's turnover during the same period.

Apart from fire fighting equipment, the Company also manufactures and sells pressure cylinders which are used by its customers for non-fire fighting equipment purposes. The Company also provides processing services which include phosphoric acid cleaning for and manufacture of pressure cylinders. Sales of other cylinders and provision of processing services amounted to approximately RMB 6.08 million and RMB 5.47 million for each of the two years ended 31 December 2003 respectively, representing approximately 13.41 and 11.30% of the Company's turnover during the same period.

COMPETITIVE ADVANTAGES

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

The Company has a wide array of fire extinguishers applicable to different circumstances.
Good product quality which is achieved through the adoption of quality management measures in compliance with the requirements under ISO9001: 2000 quality management system and as such the Company was awarded ISO9001: 2000 certification on 3 November 2003.
Advanced technology applied in the production process enhances the Quality of the Company's products. For example, the Company's CO2 fire extinguishers are designed to be functional at -40° C as compared to the normal -10° C which extends the applications of such fire extinguishers to extremely low temperature environments.
Good reputation of the Company's products helps to establish the client base for its "Pujiang" brand fire extinguishers which includes certain listed companies in the PRC.

RISK FACTORS

Reliance on Huasheng Enterprises
Renewal of Certificates of Product Type Approval for fire fighting equipment
Renewal of manufacturing license for pressure cylinders
Certifications for export of cylinders
Failure to pass quality test
Pledge of factory premises and land use rights
Failure to achieve its business objectives
Pledge of factory premises and land use rights
Failure to achieve its business objectives
Possible shortage in supply or price fluctuations of raw materials
Reliance on key management and personnel
Research and development
Reliance on the PRC market
Export sales
Exchange rate risk
Potential product liability
Infringement of intellectual property rights
Business competition with other subsidiaries of Huasheng Enterprises

FINANCIAL RECORD

¡@	Year ended 31st Dec 2002 (RMB'000)	Year ended 31st Dec 2003 (RMB'000)
Turnover	45,308	48,372
Profit before tax	12,857	8,861
Net profit	8,69	6,024
Total Assets	47,350	49,381
Total Liabilities	29,790	29,273
Total equities	17,560	20,108

FUTURE PLANS

To explore more business opportunities for the Company's existing products and to prepare for the launch of alloy steel fire extinguisher cylinders with capacities of between 10L and 20L, the Company intends to increase its sale through the PRC, mainly in Eastern China and other major cities of China, by expanding its sales and marketing programs and sales force. The sale and marketing programs of the Company include: (1) extending its geographical reach and expanding its distribution network by setting up representative offices in major provinces of the PRC including Jiangsu, Zhejiang and Shandong; (2) participating I major exhibitions and conducting seminars and trade shows thereby enhancing its brand name awareness; and (3) launching extensive advertising plan. The Company plans to increase its manpower in the sales and marketing department from 18 as at the Latest Practicable Date to approximately 26 by the end 2006.

In addition to the penetration into the fire fighting equipment market in the PRC, the Company will also focus on expanding into the fire extinguisher cylinder markets in the United States and European countries and fire-fighting equipment markets in other Asian Countries. The Company has been granted the German TUV Certificates for some of its pressure cylinders that enable such products to be sold in the European Union.

Furthermore, the Company was granted the U.S. DOT approval for some of its pressure cylinders on 30 December 2003 which enables these products to be sold in the United States. The Company has applied for its foreign trade license and should the Company be granted such licence it will be able to carry out he export business on its own.

The Company plans to invest HK$2.6 million for market expansion and penetration which will be finance by the proceeds from the Share Offer.

TURNOVER BREAKDOWN FOR THE YEAR ENDED 31 DECEMBER 2003

USE OF PROCEEDS

The net proceeds of the Share Offer, after deducting related expenses are estimated to amount to approximately HK$20 million (or RMB21.2 million). The Directors intend to apply such net proceeds as follow:

For purchase of new production facilities for alloy steel cylinders with capacities between 10L and 20L	50.0%
For research and development and procurement of production facilities for auto fire extinguishing system	10.0%
For purchase of DOT testing equipment	5.0%
For the expansion of the distribution network in the PRC and oversea	7.0%
For setting up an office in Hong Kong	0.2%
For the expansion of production capacity for fire fighting equipment and cylinders	20.0%
General working capital	7.0%

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