Major Shareholder:

• Mr. Zhang Shuyang ¡V 62.25% interest
• Ms. Wu Lixia and Mr. Zhang Xuan Cheng ' 11.25% interest

Company Subsidiaries:

• World Express (100%): Trading of electronic products and TVs
• Kitking Global (100%): Supply of chassis, sourcing of raw materials and components for color television and investment holding
• Dragon Gain (100%): Manufacture and assembly of color television sets and other electronic components
• Crown Joint (100%): Trading of electronic consumer goods

As a one-stop solutions provider for the production of CTV and other audio-visual products, the Group specializes in the design, development and sale of TV chassis, materials requisition and assembling.

Since its establishment in 1993, the Group has positioned itself as a "NO BRAND" solutions provider. Customers of the Group are mainly manufacturers of audio-visual products and consumer electronics in the PRC, Hong Kong, India, Cuba, Russia, Germany and Australia. The Directors believe that the Group has developed a business platform to effectively utilize its expertise in technologies and logistics management mainly for CTV production. Leveraging on its research and development capabilities in the technology for CTV, the Group designs and develops printed circuitry board layout and control system software of CTV according to customers' requirements.

With its extensive sourcing database, the Group will purchase for its customers all the necessary parts and components both from overseas and the PRC for mass production. These raw materials and components, together with the circuitry board designed by the Group, will be systematically tested, sorted, packed and stored at the Group's warehouses and be delivered to locations designated by customers, in kits in completely knocked down format (CKD format). Alternatively, depending on customers' requirements, the Group will also partially or fully assembles the circuitry board, parts and components, and delivered to customers in kits in semi-knocked down format (SKD format) or completely built unit format (CBU format). Products assembling and testing are either carried out at the Group's Wuhu factory or other independent assemblers selected by the Group or designated by customers.

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

• The Group places strong emphasis on developing customers-oriented services and is capable of providing one-stop solutions, depending on the requirements of customers, including design and development of TV chassis, materials requisition and assembling. The Directors believe that the Group is able to offer different cost-effective solutions to match the business strategies of its customer.
• The Group has been focusing its resources primarily on the development of a single line of consumer electronics, that is, CTV sets. The Directors believe that the Group has been providing reliable and quality services and has established a market niche and market recognition in the PRC.
• The Group maintains an extensive sourcing database extending to over 200 suppliers in the PRC and overseas during the Track Record Period. The Directors believe that such sourcing database enables the Group to source the required raw materials and components to meet individual customer's need with flexibility and in a cost effective manner.
• The Directors believe that the Group has a strong R&D team which enables the Group to keep up in pace with the relatively shorter R&D and product cycles. In addition, the Group also works with several major overseas and domestic TV manufacturers and IC suppliers to develop new software and designs. The Directors believe that these R&D arrangements with major TV manufacturers enable the Group to launch designs and products to meet the changing needs of its customers and to remain competitive in the market.
• Over the years, the Directors believe that the Group has established solid business relationship with certain renowned home appliances and consumer electronics suppliers in the PRC, Asia and Europe as its customers such as Konka Group Co. Ltd., Panda Electronics Group Co. Ltd., Hisense Electrics Co., Ltd., Skyworth Multimedia International Ltd., NEC Viewtechnology Ltd., Videocon International Ltd., Grundig Intermedia GmbH, JSC "Videofon", etc.
• The management of the Group has extensive experience and expertise in the TV industry and, to the belief of the Directors, such experience and expertise are essential to and enable the Group to maintain the competitiveness of the Group in the market.

• Reliance on the PRC market
• Reliance on a single product category
• The Group's products may be replaced by other designs and inventions
• Seasonal fluctuation
• Outstanding receivables and long debtors' turnover periods
• Internal control procedures/ Tax liabilities of certain members of the Group/ Deferred tax assets of the Group
• Potential competition with Hangzhou Guoxin
• Reliance on key management
• Reliance on major customers
• Credit risks
• Limited insurance coverage
• Lack of experience in the German market
• Preferential tax treatment
• Dividend policy

The Group places strong emphasis on developing customer-oriented services and is capable of producing one-stop solutions, depending on the requirements of customers, including design and development of TV chassis, materials requisition and assembling. The Directors believe that the Group is able to offer different cost-effective solutions to fit the business strategy of individual customers. The Group will continue to work closely with the customers in order to better grasp the changes in the market demand.

The Directors believe that the Group's commitment in R&D for new products and enhancing existing products in a timely fashion is critical in maintaining the Group's competitiveness in the market. To further enhance its R&D capability, the Group intends to increase the number of engineers and technicians in the R&D teams in the PRC, acquire R&D facilities and to introduce new audio-visual products to both the local and overseas markets in order to meet the growing market demand in the PRC and overseas. In addition, the Group intends to continue to improve the quality of and enhance the quality of and enhance the functionality of its existing products in order to meet market demand.

The Group intends to expand the production capacity of its assembling plant at Wuhu in order to enhance the productivity of the market for CBU and SKD products. The Group will continue to invest in production equipment and other equipment for enhancing its production process.

The Group intends to expand its sales network by setting up additional sales offices in Europe, which will consist of sales and marketing staff to provide after sale services for the Group's overseas customers and to promote the Group's new products overseas. The Directors believe that the setting up of sales offices would enable the Group to better meet local demand and therefore boost sales of the Group's products. Meanwhile, the Group also intends to further expand the domestic market in the PRC in view of increasing personal income of the PRC's citizens. In addition, the Group will continue to participate in various trade exhibitions to increase the Group's reputation in the industry and to identify new business opportunities with new customers.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$99.5 million (based on the offer price HK$1.13 per share). The Group at present intends to apply the net proceeds as follows: