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We believe that the following are our competitive strengths:-

Strong emphasis on R&D

We have a R&D team which conducts R&D on Pipe Supports, Heat Pipes and Heat Pipe Exchangers, Waste Gas and Energy Recovery Systems and Pressure Vessels, and focuses on the design and improvement of these products. Our Executive Chairman, Mr Guo Hong Xin has accumulated extensive knowledge in respect of heat transfer technology.

We have an established track record for producing innovative and commercially viable products. Our R&D staff have developed about 10 patents as a result of our R&D efforts. These patents have been commercialised and adopted in our products.

We have an equity joint venture with Nanjing Chemical University Science and Technology Group Co., Ltd, which is a company established by Nanjing University of Technology. Nanjing University of Technology is well known for its research and development in heat pipes. We believe that our joint venture company, Nanjing Shengnuo, will benefit from the research and development capabilities of Nanjing University of Technology.

To tap into the expertise of external professionals and experts, we have entered into technology cooperation agreements with Jiangsu Polytechnic University in November 2003 and South East University of China in May 2004 to jointly conduct research on various environmental protection and energy saving products. Under these agreements, we cooperate extensively with those universities and are free to use the intellectual properties/technologies developed in our products.

We have built up strong brand names and have a strong customer base

Our Directors believe that we have established our "Sunpower" and "Shengnuo" as reputable brands in the industry we operate. Our reputation as a reliable solution provider is supported by our proprietary products.

We have a strong customer base, which include SINOPEC, CNPC, Shanghai SECCO Petrochemical Co., Ltd (a joint venture between BP and Shanghai Petrochemical), YPC-BASF Co., Ltd (a joint venture between Yangtze Petrochemical and BASF), PRAXAIR, Engineering Headquarter of Qinghai-Tibet Railway, Baosteel Shanghai Meishan (Group) Ltd, Benxi Iron & Steel Co., Ltd, Handan Iron & Steel Co., Ltd, Wuhan Iron & Steel Co., Ltd and Shoudu Iron & Steel Co.,Ltd.

We are a member of both SINOPEC materials supply network and CNPC first tier network. These memberships pre-qualify us to supply our products to companies in the SINOPEC and CNPC groups. Our Executive Directors believe that our memberships give us a significant advantage over other competitors which do not have such memberships.

We are a solutions provider

Our products are customer-focused and market oriented. In this respect, we focus on providing our customers with innovative solutions which incorporate our products. For example, the application of our Heat Pipes to stabilise permafrost was an innovative application of our Heat Pipes. Petrochemical projects, power plants, steel projects and chemical projects in the PRC are generally designed by design centres in the PRC.

As such, we focus our marketing efforts on design centres by highlighting the features of our products and how our products may be effectively incorporated into their design plans to achieve the technical requirements of their customers. We believe that the adoption of our solutions in the design plans increases the chance of customers' adopting of our products.

Familiarity with the PRC business environment and our industry in PRC

We have an experienced management team which is familiar with our business and understands our customers' needs and requirements. Our management team consists of mainly PRC nationals, namely Mr Guo Hong Xin, Mr Li Lai Suo and Mr Ma Ming, who have the relevant knowledge of and experience in the PRC market. Over the years, our management team has gained in-depth knowledge related to the petrochemical and metallurgy industries in the PRC. We are therefore able to grasp the market opportunities and provide customised products.