In the coming years, the Group's operating target is to effectively reduce reliance on any single customer. The Company has secured various large international customers and will continue to explore new potential customers in 2006. The Directors expect that these new customers will provide the Group with significant growth opportunities in the future. The Directors believe that the Group's quality products and efficient production provide the platform to build a more extensive customer base and to expand the scale of operation of the Group.

In order to offer higher quality products, increase production capacity and quality, and increase the production scale, the Group will acquire new FPC solution equipment for the production of compact printed circuit board products for LCD and camera modules. Currently, the FPC products manufactured by the Group are mainly used in handsets components such as hinge flex, keyboards and side-key boards. It is expected that the Group's competitiveness in securing orders will be enhanced following the introduction of these products to expand the Group's product offerings.

The Directors anticipate that the more advanced and contemporary handsets will use more and more HDI PCB and rigid-flex and the demand of the Group's major customers for these products will also increase. Accordingly, in order to fulfill such expected demand and provide increasing value-added services to its customers, the Group will increase the acquisition of the HDI and rigid-flex production technology and equipment

To expand its one-stop services ranging from components to assembly and manufacturing to strive for more businesses from its existing customers and to secure new customers, the Group intends to expand the scale of production and scope of operations to the assembly of electronic component modules or supporting finished products.

In realising the aforementioned strategies, the Group has established Suzhou Intellicircuit Solution Technology Co., Ltd (蘇州佳茂科技有限公司) in late 2005 and Forever Jade Electronics (Suzhou) Co. , Ltd (佳永電子（蘇州）有限公司) in early 2006 for the production and assembly of high quality FPC, HDI PCB and rigid-flex.

The new production plant of Suzhou Intellicircuit is expected to start production in the first quarter of 2007. It will increase the acquisition of the HDI, TFT LCD and rigid-flex production technology and equipment. It is expected that at the beginning, it will mainly produce TFT LCD, HDI and rigid-flex products. The planned production capacity of TFT LCD and HDI in the new plant of Suzhou Intellicircuit is about 350,000 square feet per month. The new plant can supplement or solve the problem of the lack of PCB, HDI PCB and rigid-flex production capacity of the Group in the past. It can solve the bottle neck problem for the production of HDI and rigid-flex products. In addition, it can achieve new production of TFT LCD.

The Board considers that it is the Group's priority at this stage to expand and enhance the operations of its headquarter in Suzhou so as to strengthen the Group's competitiveness, to maintain and continue expanding its customer base.

Estimated time of completion

Prospective benefits

US$ 14,600,000 (HK$ 113,588,000)

Establishment of Suzhou Intellicircuit Solution Technology Co., Ltd. and procurement of new machinery

1st quarter of 2007

FPC

HDI
& Rigid-flex

COF