HUNG HSING ELECTRIC

Initially, the business consisted primarily of spare parts for electric fans, motor end-bells and rotors, fuel filters and similar parts for motorcycles, etc. In 1959, Hung Hsing began producing small quantities of electric fans. The acceptance of the product in the marketplace and the resulting demand necessitated expansion of our facilities and production capacity. With careful improvement of product and production techniques, Hung Hsing were producing over 10,000 fans per year by 1971, for the domestic Taiwan market. Smaller quantities were also being exported to the Philippines, The Middle East, and West Africa. Hung Hsing Iron Works became Hung Hsing Electric Co., Ltd. in 1980. Also, in 1980 Hung Hsing electric fans received USA Underwriters Laboratories (UL) Listing Approval. Our exports then expanded into North America, Argentina, Uruguay and South Africa. During this period, the annual production of electric fans exceeded 570,000. In 1989, our electric fans gained entry and acceptance in the highly demanding quality conscious Japan market; by 1997, our fan exports to Japan had reached 300,000 units. Building on our motor and electric fan technology, we expanded our product line in 1989 to include Air Purifiers. We presently produce over 500,000 Air Purifiers annually, with much of the product going to North America, Japan and Europe. Hung Hsing now is a leading manufacturer of Air Purifiers in Taiwan. The labor market realities and need for additional floor space led to expansion of production facilities. Kunshan Hung Hsing Electric Co., Ltd. in Kunshan (near Shanghai) was established in 1993. This brand new, spacious factory in China allowed far full vertical integration of our motor production...... die-casting, machining, shaft grinding, coil insertion, complete motor assembly and final testing. Production in the Kunshan factory started in February, 1994. In addition to motor production, Kunshan Hung Hsing has plastic molding capability using several precision quality molding machines. With all necessary support provided by Hung Hsing Taiwan, Kunshan Hung Hsing has become a new production base for complete manufacture of small household electric appliances in China. 2. MANAGEMENT PHILOSOPHY: