Dear My Fellow Shareholders and other Stakeholders:

The year 2011 hastily went by. This year, the US economy purpose of expected economic recovery was not achieved despite the implementation of the second round quantitative easing monetary policy. Furthermore, the problem of European debt crisis was still in its sixes and sevens situation and had even showed signs of further deterioration. Therefore, 2011 was actually a difficult year for the extremely opened economies like Hong Kong and Macau. However, as Hong Kong and Macau are supported by the strengths of Mainland China and benefited from its continuous stronger economic growth, hence, the economic performance of both Hong Kong and Macau are though difficult but still relatively sound when compared with other regions. As the different businesses of the Group are all focusing in Hong Kong and Macau, hence, it is inevitable that their performance were affected by the economic performance of the two regions.

PROPERTY INVESTMENT BUSINESS

In respect of the property investment business, other than the aforementioned objective economic impact arising from the international macroeconomic environment factors, both the governments in Hong Kong and Macau had launched a series of measures last year to combat the overheating property market and tightened the credit correspondingly. These policies had brought negative impact to the property markets. Such impact was apparent especially in the latter half year, with the overall performance of the property market obviously inferior to that in the past in terms of trading price or volume, in particular in the residential property market. As mentioned in the interim report of the Company, as the Group’s property portfolio is more focused on the commercial and retail markets, the impact that arose was relatively insignificant. However, owing to the lack lustre performance of the residential market which triggered the transfer of some funds to the commercial and retail property markets, and augmented by the observing and reluctant to sell attitude of vendors, hence, the price of relevant properties continued to maintain at a high level, which was also the main reason that the Group was unable to further acquire relevant properties in the market last year.

Looking forward into 2012, the economic situation is still not optimistic with the economic situation in Hong Kong and Macau still being affected by external factors. In addition, in the Fifth Session of the Eleventh National People’s Congress, in the state’s working report prepared by Premier Wen Jiabao, it was the first time to mention that the future economic growth of Mainland China will be maintained below the 8% level. This has implied that the economic growth of Mainland China will slow down moderately in the near future, in which it will directly affect the economic performance of both Hong Kong and Macau. As the business of the Group is property investment with the foundation established in Hong Kong and Macau, meanwhile, the relevant revenue is relatively stable. While the economy may slow down in the short run and is trying to seek the direction, we may identify more suitable investment opportunities therefrom. However, all the moves must be determined based on actual economic conditions that are going to develop, and the critical factors are whether the debt crisis in Europe could be soon properly and effectively managed, the real economic growth conditions in Mainland China and the credit policy of the financial systems.

FINANCIAL RELATED BUSINESS

During the past year, the Group strenuously investigated to expand into the financial related business, and as mentioned in our interim report, we hoped to expand the securities agency market in Macau. However, for various reasons, we were unable to achieve significant progress in developing the Macau market in the past year. However, as we are still in full confidence in this market, hence, we will strive to double our efforts in developing the Macau market in the coming year.

HEALTH AND BEAUTY BUSINESS

During the past year, one of the greatest challenges that affected our health and beauty business was the Minimum Wage Law implemented by the government which came into effect on 1 May 2011. After the implementation of the ordinance, the Company paid the minimum wage to all relevant employees according to the relevant requirements, in which it had undoubtedly led to an increase in operating costs. Nevertheless, as the Group had already been in full preparation on this, we adopted a series of counteracting measures in controlling other expenses and also on price adjustment, as a result of which the impact of minimum wage implementation was reduced to the minimum. Turnover and profit of this segment in 2011 only slightly decreased by 2.2% and 6.8% respectively as compared with that in 2010. Looking forward into 2012, one of the greatest challenge that we are facing is the expiration of the lease of our operating venue in early 2013. With the expected increase in rent, we must strive to work harder in our cost control works and develop new income source to maintain an on-going stable performance in this segment.

CORPORATE SOCIAL RESPONSIBILITY

During the past year, the Group continued to adhere to the two missions of caring for social groups and promoting environmental protection. We were being awarded as a “Caring Company” by the Hong Kong Council of Social Service for the third successive year and fully devoted ourselves to implement the works in “Energy-Saving” and “Exhaust Emission”. In the Hong Kong Award For Environmental Excellence in 2011, the Group was also awarded the Certification of the “Class of Excellence” for the two main categories in “Energy-Saving” and “Exhaust Emission”. Regardless of the economic situation in future, we will always endeavour to uphold a high standard of corporate social responsibility and endeavour to fulfill our corporate citizen obligations.

Finally, on behalf of the board, I would like to take this opportunity to express my heartfelt thanks to all staff and the management for their dedicated hard works and contributions to the Group in the past year, and I would also like to express my greatest gratitude to our shareholders, customers, business partners and other stakeholders for their support and trust. In the future days, we will do our best to continue to work with our partners to strive to develop the business of the Group for further development and sincerely hope that the management and staff will work under one mind and work together whole-heartedly in creating our promising future.

With my deepest and sincere regards,

TSANG Chiu Mo Samuel
Executive Chairman
Hong Kong
27 March 2012