Future Plans

To increase our marketing efforts

To enhance our long-term growth and to capitalise on the rapidly expanding data storage industryry, we intend to increase our marketing efforts for products under our in-house brands including "AGVA" and products for our OEM and corporate customers.

For products under in-house brands including "AGVA" as well as products manufactured for our corporate customers, we intend to focus principally in Asia, including Japan, South Korea, Taiwan, Hong Kong and the PRC and the US to build up brand awareness. We penetrated the Japanese and the PRC markets in 2000, and sales in these markets have increased substantially.

For products manufactured for OEM customers, we will target both large and established OEMs as well as emerging OEMs which we identified to have growth potential in Europe and the US. Our manufacturing faclity and capablities enable us to provide for and meet the needs of OEMs of all sizes.

To further develop our business in Europe

We believe that there is tremendous potential in the European market as reflected by its performance as our fastest growing region for the past three financial years. Although we have been operating in Europe for the last few years, it is a relatively new market for our Group territorially given that our link to Europe has come predominantly from our sales to the Hama Group, one of our OEM customers. We intend to use our experience in Europe to secure more business from our existing OEM customers in countries like Germany and France by increasing our competitiveness whle concurrently raising our profile to attract new OEM customers for our products across the continent. We may evaluate the commercial viability of establishing joint ventures or strategic alliances with European partners while considering avenues to increase our distribution channels in the region.

To further develop our business in the US and South America

Our sales to South America started in FY2003. We see strong potential in the US and South America markets for both our own brand and products for OEM customers as they are relatively new markets for our Group. To increase our customer base, we intend to increase the number of distribution channels as well as diversify our customer base to include new OEM customers and customers who bundle our products and their products together for sale and retail chains. We believe that the increased market share will allow us to benefit from greater cost economies as we increase the scale of business. We intend to expand our distribution network and our network of customers in the US and South America through organic growth, and also through potential mergers and acquisitions. We may also look at joint ventures or strategic alliance with US partners. In addition, we also intend to intensify our marketing efforts in the US and South America.

To further develop our business in Japan

We see potential in the Japanese market. Currently, there are no major players in the Japanese market for media storage products and thus poised demand for our "AGVA" brand quality lifestyle-oriented products. Our strategy is to penetrate the Japanese market through broad-based distributors and importers. We intend to tap into their existing network to establish our presence in Japan. In addition, we intend to take part in selected fairs to promote our products. Localisation, particularly on colour, packaging and design, will be our key initiatives to expand our customer base. In addition, we believe that such positioning will allow us to command moderate pricing and there by protect our margin erosion.

To further develop our business in the PRC

We have currently procured orders for our products under our brand name "AGVA" from Carrefour and Parkson in the PRC and we intend to target more of such hypermarkets in the PRC to reach out to more end-consumers. We believe that there is a continual demand for our "AGVA" brand quality lifestyle-oriented products. To achieve our aim in the PRC, we have set up marketing offices in Shanghai. Our plan is to set up offices close to potential custommers in the PRC. To strengthen our product development capabilities and consistently manufacture innovative proroducts of high quality standards

Our product development team continually researches and develops innovative products with consumer requirements in mind. All suggestions and feedback from our customers and end-consumers are analysed and adopted where feasible to ensure that we are kept abreast of the fashion trends and market requirements. We intend to strengthen and enlarge our product development team by hiring experienced professionals in product design. In addition, in order to provide our customers with better product designs which satisfy their specific functional requirements and which suit their customised usage, we further intend to strengthen our product design capabilities. This will be achieved by investing in technology and equipment which will enhance our current capabilities and efficiency. By strengthening our product design capabilities, our customers will benefit from a shorter time-to-market. With increasingly shorter product life cycles, a shorter time-to-market will enable our customers to remain competitive in their respective markets. We will also further develop and maintain close relationships with equipment manufacturers/suppliers and our customers' product design engineers to stay in tandem with the customers' present and future needs.

To complement our product development capabilities, our manufacturing facility in Dongguan adopts a Total Quality Management System from product design to delivery in accordance with the IS09001 requirements to enable our Company to deliver high quality standards from the planning stage right through to the final product. All our products are subjected to rigorous quality tests as required by our customers. We will continue to implement cost-effective quality control measures to upkeep our reputation as a manufacturer of quality innovative products.

To strengthen our supply chain management system

We believe that our ability to provide a complete one-stop manufacturing solution to our customers is one of the primary reasons for the increase in repeat orders for our products. To maintain our competitiveness, we intend to further enhance the integration of our supply chain management system by upgrading our information technology infrastructure. Currently, our supply chain management system encompasses market research, design, modification, prototyping, manufacturing, packaging, labeling, price-tagging and delivery of products. With the upgraded information technology infrastructure, we could further integrate functions such as product development, marketing, customer services, order management, suppliers and materials management to our existing supply chain management system. We believe that the enhanced supply chain management system will allow us to have better planning and control on our operations. The upgraded supply chain management system also includes the ability to track and trace order fulfilment, update customers on time of delivery and uphold our manufacturing flexibility.