FURTHER INVEST IN RESEARCH AND DEVELOPMENT

We believe in anticipating market trends and exploring new technological areas and products. In order to continuously keep up with developments in the industry, we intend to further invest in research and development. We believe in the potential of these key areas of development and will continue to focus our development efforts in these areas. Other areas which we are exploring include TFT-LCD televisions, smartcard applications, Wi-Fi and ultra-wide band technology. Although we cannot be certain that these technologies will gain widespread market acceptance, we are of the opinion that in the medium to long term, there is market potential for these technologies and we are willing to invest to develop reference designs or development kits for the manufacture of products based on these technologies.

INCREASE OUR MARKET SHARE IN PRC (INCLUDING HONG KONG)

Although PRC (including Hong Kong) has contributed approximately 61% of our Group's revenue for the first 6 months ended 30 June 2003, we are of the opinion that there is still immense untapped potential in the PRC market and we will further build on our network in the PRC market to increase our market share.

FURTHER PENETRATE THE INDIAN MARKET

We view the growing middle class and huge population in India as a market that possesses good growth potential.We have set up 7 representative offices in India to capitalise on its growth and will continue to focus on the Indian market. We plan to introduce our principals' products, build relationships with local customers and expand our geographical coverage to further penetrate the Indian market.

FURTHER STRENGTHEN OUR SOFTWARE CAPABILITIES

We have plans to strengthen our software capabilities in these areas by hiring staff with the relevant software development expertise and through partnerships with our principals and software firms. We target to enhance our software capabilities such that we will be able to customise software to our customers' specifications and optimise software for our customers' usage. An example of our on-going plans to strengthen our software capabilities is the setting up of our GSM laboratory in Shenzhen. This laboratory has been operational since July 2003 and is currently developing manmachine interface software for GSM telecommunication devices. Accordingly, we will continue to market our services to customers who wish to leverage on our technological expertise in the development of their products. FURTHER EXPAND OUR RANGE OF VALUE-ADDED SERVICES

We believe in adding value to our customers and building sustainable long-term business relationships. In this respect, we plan to expand our range of value-adding services. We intend to enhance our turnkey capabilities by hiring more experienced professionals with the relevant expertise. In addition to marketing our designs and products to customers, we will assist our customers in the identification and qualification of contract manufacturers.We will also leverage on our geographical network to assist our customers to market their products to new markets. We foresee that we will be increasingly involved in our customers' businesses and we aim to expand our involvement in the various parts of our customers' value chain.

EXPAND OUR GEOGRAPHICAL PRESENCE AND PRODUCT RANGE

In addition to trading and standard distribution, which involves the sourcing of components from principals and onward selling of components to end-users, we also provide various value-added services which include inventory management, warehousing, just-in-time delivery, stock buffering and technical support. As part of our value-added services, we assist our customers to market their products to new markets by leveraging on our geographical network. Our value-added services are provided with a view to developing long-term business relationships.

We are constantly exploring opportunities to increase our presence in the Asia region (except Taiwan). We intend to achieve this through various means including setting up subsidiaries or representative offices, forming joint ventures or acquiring other businesses. An increased presence will enable us to build closer links with our customers and provide prompt services to them. The Middle East and Indochina are examples of geographical areas which are of interest to us.

To meet the diverse needs of our customers, we will also secure additional principal lines to achieve an optimal product mix in terms of brands and types of electronic components. By providing a broader assortment of electronic components, we can serve a larger customer base and more industry segments.

We currently do not have plans to expand operations into the Taiwan market.