

Our Directors believe that in the medium term, the outlook for the optical disc industry is positive. This positive outlook is underpinned by strong worldwide demand for recordable optical media and the ongoing development of Blu-ray disc format, which in turn creates demand for the equipments and services of our Group. Our Directors believe that demand for recordable optical media is continued to be fuelled by the following factors:
- Personal computers with pre-installed recordable DVD drives
As more and more personal computers are sold with recordable DVD drives, consumption of recordable media is expected to substantially increase and usage is expected to become more broad-based.
- Declining recordable DVD drive prices
Recordable DVD drives are becoming increasingly affordable. With more and more personal computer users retrofitting these drives to their existing personal computer systems, the consumption of recordable media is expected to increase substantially.
- Declining recordable DVD media prices
The ongoing decline in recordable DVD drive prices has been mirrored by a price decline for DVDR media as well. As further capacity is added by DVDR media manufacturers such as our customers, and economies of scale are realised, the lower prices will in turn fuel the demand for recordable media.
- Growth in digital media applications
The media, home entertainment and consumer electronics industries are adopting digital formats for their offerings. Digital consumer electronics devices, such as digital music players, digital still cameras and digital video camcorders are all becoming increasingly popular. Songs, pictures and videos from these devices are normally downloaded to personal computers for processing, and are usually archived on recordable DVDR media. With this trend, the consumption of recordable media is expected to increase significantly.
Following by the Group's recent move into solar cell industry, the Directors believe that with Group's core technologies of thin-film and vacuum coating, and its strengths in process and automation technologies, the Group is committed to provide world class manufacturing equipment to hi-tech industrial sector and continue to create sustainable growth for the Group.