HISTORY AND DEVELOPMENT

In preparation for the Listing, we were established as a joint stock limited company under PRC law on 10 September 2004 through sole promotion by the Group Corporation.

CPT Plant (formerly known as Shaanxi Color Picture Tube Plant) was a state-owned enterprise established in August 1978~. It was the first CPT manufacturer in the PRC. The Group Corporation (formerly known as IRICO Electronics Group Corporation) was established in July 1989 with CPT Plant as its core entity.  The Group Corporation is a sizeable state-owned enterprise under the direct supervision and  administration of SASAC, which performs its duties as a capital contributor designated by the StateCouncil.

As of the Effective Date, The Group Corporation is a conglomerate, which was principally engaged in the manufacture of CPTs and CPT components as well as packaging, engineering and trading services. According to statistics published in October 2003 by the PRC Industries Enterprises News Release Centre under the State Statistics

Bureau of the PRC, the Group Corporation ranked 152nd among the Top Five Hundred Enterprises  Nationwide in 2002.

A champion with sound

backgroun

　　Colour television set, the major bridge for cultural linkages and information propagation, is one of the most important inventions in the 20th century, where CPT is its core technological component.

IRICO Group Electronics Co., Ltd. ("IRICO") is the first CPT manufacturer in China and one of the global leading manufacturers of CPTs and CPT components. According to China Center of Information Industry Development (CCID), CPTs sold by us in 2003

accounted for about 20% of those sold by domestic CPT manufacturers, demonstrating our pioneering position in the industry.

Thanks to over 20 years' operating experience,

strengths in talents, management and technologies and

long-standing customer relationship, we have been

maintaining a leading position in the domestic CPT

industry.

Diversified products with

competitive strength

IRICO owns the largest manufacturing and ancillary CPT

capacities in the domestic industry. Its core products

comprise CPT varieties from 14" to 29", as well as

most of CPT components including glass bulbs, electron

guns, shadow masks and their frames, deflection yokes,

low-spectrum powder and phosphors.

With our major production base situated in Xianyang city,

Shaanxi Province, we also established plants in Xi'an,

Kunshan, Zhuhai and Zhongshan. Currently we own 7 CPT

production lines with another two under construction. In

2003, 11.5 million CPTs were produced from our facilities,

the largest CPT production base in China.

According to China Electronic Industry Yearbook 2003,

we ranked first in the domestic CPT industry on five

indexes including production and sales volumes, sales

revenue, and aggregated profit and taxation.

Focus on cost control

through vertical integration

Mass production

Capitalising on the largest CPT production capacity in

China, we have effectively controlled and cut down

costs for production and procurement, thereby

achieving significant scale efficiency.

Industry structure with vertical integration

With an ancillary CPT component capacity of nearly

80%, we have established a vertical integration

structure with cost advantages. CPTs and almost all

CPT components are produced in the same city. The

physical proximity of facilities contributes to the

decreased transportation cost and our increasing

competitiveness.

High capacity utilisation ratio

After expansion or renovation for compatible purpose,

each production line for CPTs, CPT components and

materials is compatible with production of a variety of

products. Thus, the capacity utilisation ratio is improved

with the declined products costs.

Continuous improvements in

craftsmanship and materials

We put constant efforts to improve craftsmanship and

promote application of new materials, so as to improve

quality and lower costs.

Customer-oriented and

stable relationship

Through direct sales, IRICO has established over ten

years' sound relationship with renowned television

manufacturers including Changhong, TCL, Konka,

Skyworth and Hisense. We also take initiatives in

exploring overseas markets. The existing export markets

comprise more than 20 countries and regions such as

Turkey, Indonesia, Hong Kong and Russia.

Furthermore, we have set up a marketing team familiar

with CPTs and marketing know-how, thereby

maintaining a stable relationship with customers

through our quality products and services. We also tap

on market information to expand customer base for

more commercial opportunities.

Focusing on customers, IRICO is committed to

establishing a sound and comprehensive service system

and promoting its customer satisfaction program. For

years we have dispatched marketing and after-sales

staff for sales, collecting information and providing ondemand

services. In recent years, we have been

awarded the "Nationwide Winner for Implementing

Customer Satisfaction Program", "Nationwide

Customer Satisfaction Enterprise" and "Highest Honor

for Quality Management in China Electronic

Information Industry" by China Quality Association.

Improving ourselves to carve

out superior quality

By implementing strict production, management and

quality control, IRICO obtained the ISO9002

certification in 1994, being the first one in the domestic

CPT industry. In 2002, we passed the new standard of

ISO9001:2000 certification, laying a solid foundation

for stable product quality.

Our products have obtained a number of certifications

including the China Compulsory Certification, the UL

certification (U.S.A.), the CSA certification (Canada), the

JQA certification (Japan), the VDE certification (Germany)

and the BSI certification (Britain).

IRICO carries out Total Quality Control (TQC) activities

on a continuous basis. Over the last three years, we

have obtained 596 QC achievements, seven of which

were named as the state's excellent QC achievements.

To improve workflows and product quality, we

introduced the Six Sigma Management Methodology

(6SIGMA) in 2003, resulting in a significant economic

benefit. In addition, we improved the internal quality

information management system and established the

industrial quality tracking system. Such quality control

measures brought us the reputation of the

"Nationwide Customer Satisfaction Product" togethe

with substantial economic benefits.

Pioneering in science for

innovation

IRICO adopts flexible R&D strategies to upgrade its

technology and develop new products in an active

manner.

We attach great importance to deployment of technical

strengths and reinforcement of R&D capabilities. In our

technological centre, senior experts and professional

technicians are responsible for researches in production

line expansions, application study of existing products,

market development and technical supports, as well as

development of new display technologies and

products, aiming at a sustainable growth.

A number of achievements were made in fields such as

new product development, expansion of production

lines and technological improvement. In 2003, our

proprietary production technologies for 21" PF, 25" PF

and 29" PF high-definition CPTs and tri-colours

phosphors used in display tubes were honored the

awards of ''Superior Torch Project'' by the Ministry of

Technology of the PRC.