Industry Leader Facing Increased Costs

Background:
The company, a leader in the camera and optical components industry with a monthly production of 16 mln optical lens, has been awarded the 'Famous Trademark in China' and the 'China Top Brand' awards.

Investment highlights:
1. the company and the Institute of Modern Optics of Nankai University have jointly cooperated in the research of high-tech optical technology.
2. Following an internal technology reform and integration, precision processing of metal has become a new point of profit growth for the company and revenue from its precision processing business made the company RMB 62,524,200 in 2007.

Risk reminder:
1. The increase of operational costs of the company is mainly attributable to the appreciation of the RMB and inflation.
As the core products of the company are exported and the continuous upward spiral of water and power tariffs leaves little margin for profit, the company’s production cost and other expenses have increased.
2. Due to competition in the optical lens and components market, the price of the company’s products may have to be reduced, as such the company will derive its profit from high-tech products.


Source: www.topcj.com

Date: 5 Aug 2008

CN01/FL/JL/BT/KM