On the 15^th May, the RMB and USD Dollar exchange rate declining below 8, international trade friction increasing greatly, the global price of petroleum rising continuously, these bad condition put the export oriented corporation into inferior position.

At the same time, labor cost rising greatly because of labor resource shortage, the shortage of coal, electric power, oil and transportation, high pressure of enterprise environment protection, state 6 articles, these macro-control policies will increase the cost of reproduction and restrict the improvement of export processing ability.

The inaugurators of Guangbo Group is very clear that we are not just to be a giant processing workshop but to be a famous brand on the world. If so, we will compete with international famous brand on core technology. Then we have to keep innovating continuously. When Guangbo Group hold 2006 midyear economy conference, we make new request for the development in the second half of this year and in the future.

Reviewing for the first half year of 2006

Zhejiang Guangbo Group 2006 midyear economy conference was held on 8^th July. Board chairman Wangliping, General manager Wangjunping, the higher level leaders and hundreds of middle level leaders attended this conference.

In the first half of this year, with associated effort of all our employees, our company developed rapidly and got income RMB 1.11 billion. By the present work accomplished report, we can carry out the target stipulated last year.

Traditional stationery industry research ability was strengthened in the first half of this year. By establishing Guangbo stationery research center, importing 1 set of KBA, 1 set of Heidelberg printing machine, and 1 set of automatic sewing machine from Italy, it increases the technology content of traditional stationery product and expedites product update rate. The superior quality settles stable base for the sales of our company. Our company not only keeps the original market share, but also develops Africa and Middle East market that increases global market share greatly. In the time, successive distribution channel model in domestic market is formed gradually by extending regional agency. Powerful brand support, credible quality assurance and superior research team make Guangbo Group be the concessionary dealer of Olympic Game in Beijing 2008. It means Guangbo Goup has made another firm step on the way of multi industry and brand globalization. 

In the 1^st half of this year, Guangbo digital company has developed 6 mega pixel auto focus, 3 time optical zoom digital camera lens by cooperating with Zhejiang university electronic optics graduate school that improved self innovation ability of our company. We build our Guangbo digital brand through attending some of exhibition including Dubai street show, Canton Fair, American PMA digital exhibition, Hongkong electronic and Ningbo home appliance fair. At the same time, Guangbo Nano material corporation has passed inspection and acceptance of medium and small-sized enterprise innovation fund and awarded as provincial and municipal high and new tech enterprise. It encourages the development of Nano material corporation greatly.

Coexistence of opportunities and challenges in the 2^nd half of this year

After summarizing the performance of 1^st half of this year, the leaders of our company make out “2-3-5” strategy program when we face value increase from industry transfer and transition from extension economy to intensive economy in Ningbo. “2” refers to cultivate 2 core industries: traditional stationery and high technology industry. “3” is to do OEM first, then to build own brand, finally we will export our own brand to abroad. “5” is our 5-year plan. In late 5 year till to 2010, the production and sale value of our group will reach to RMB 5 billion through industry structure adjustment, traditional stationery exportation, cultivating high technology industry and importing international and multi-functional talents.

First, in order to carry out this target, Guangbo Group will focus on self-innovation and self -research and development. We not only have established Guangbo academy unified with Guangbo Digital research center, Guangbo Nano research center and Guangbo stationery research center, but also injected energy to our Group research center by establishing Shenzhen research center and applying local talents and traffic.

Second, we support digital company in developing new product, establish senior research organization, extend developing of electronic digital product and award some research personnel. Guangbo digital company plans to develop 9 different models of digital camera with multi function and high pixel. At the same time we are applying our company as national high and new technology enterprise positively. It will help digital company be the most profit accrued company in our Group.

Third, we will expand local stationery market by taking the chance of being the concessionary distributor of Olympic Game.

Fourth, in order to get out of anti dumping situation, we plan to build manufacturing base in Thailand.

In addition, in the 2^nd half of 2006, Guangbo Sunshine Garden estate was sold well by developing service facilities of estate. It settles stable base for the 2^nd and 3^rd phrase of Guangbo Sunshine garden estate. We believe we can realize our “2-3-5 strategy” by associated effort of our employees.