With the rapid economic integration between Hong Kong and the Mainland, Ng Fung Hong is well-placed to explore new investment opportunities. The management's vision of growth is expected to see the Group take bold strides into the 21^st century in its on-going commitment to strengthening its income base and creating a more solid growth base.

The Group's diversification plans will not only enable it to transform into a vertically-integrated food enterprise but also help it to maintain its position at the forefront of the industry. This blue print calls for expansion into the following FIVE areas:

• Will undergo further consolidation as the steady cash cow for the Group

• Will continue to invest in stock raising and meat processing with potential partners in the mainland to broaden its operation scale and production base.

• The CRC Shop chain of supermarkets will undergo expansion to 70 stores in Hong Kong and more than 300 in China by the year 2000.

• The Company has already obtained the operation services contract of Sheung Shui Slaughterhouse which is scheduled to commence operations in mid 1999. Market share will then be extended from 70% to over 99%. The operation will help further enhance cost effectiveness and strengthen our leading position in H.K.

• To further capitalise on its share of the abattoir business, Ng Fung Hong is looking for new operation contracts outside Hong Kong, which will involve a downstream movement from the livestock business to the processing of high quality western-style meat products.
  

• Ng Fung Hong has just completed the acquisition of the Minquan Winery. The Company will step up a series of measures to expand production capacity in a bid to capitalise on the growing popularity of wine in China. This includes the introduction of a foreign partner to help provide technological management and of an active marketing program. The operation will be further developed to include the production of fruit juice and beverages.

• Plans to further expand the fishing fleet and processing of value-added products of China International Fisheries Corp, a marine fishing and aquatic product processing operation in West Africa with a view to strengthening its earnings capabilities.

• New markets and new fishing grounds will also be developed.