The economic growth in China has generated large energy demand, and as a result, business opportunities present throughout the entire value chain from finding the resources to distribution and conversion. With a connection in China's energy industry developed back in the late 1980's, Sinolink Worldwide Holdings Ltd. (Stock Code:1168.HK, "The Company") have always been actively searching for opportunities in the field, and investing and growing the business from small to substantial.

By acquiring a small power plant in northeastern Shenzhen, Guangdong province in 1995, the Company made its first adventure into the power generation industry. The plant then only had an old 70MW capacity oil-fired engine, but we viewed it an excellent entry point: small acquisition cost, but great location with a lot of area for future expansion. Over the past years, we have gradually materialized our vision, grown the site to a 665MW state-of-the-art oil-fired peak load power plant supplying the Shenzhen power market. The operation has become a publicly listed company named Enerchina Holdings Ltd. (Stock Code:622.HK, "Enerchina Holdings") since 2002; meanwhile, the plant is in process to further expand by doubling its capacity.

In 1998, the Company sensed an emerging trend in Chinese cities of using gas as primary household fuel. We started delving into the gas distribution industry and established a company named Panva Gas Holdings Ltd. (Stock Code:1083.HK, "Panva Gas"). Panva Gas began with acquiring state-owned LPG distribution companies across China and transforming them into local market leaders. From 2001, Panva Gas continued to leverage its unique business model of acquisition and integration, and further extended into city pipeline connection and distribution. Today, Panva Gas is a publicly listed company, operating in over 40 Chinese cities, and serving more than 3 million households.

Nowadays, two strong forces have shaken up and are revolutionizing the energy demand/supply structure in China. On one hand, the sky-rocketing oil price has led to wide-spread oil/power shortage and brought great inflationary pressure to the Chinese economy; on the other hand, pollution caused by low-efficiency environment-unfriendly manufacturing and driving has reached its limit in many large Chinese cities. We believe there are opportunities more than ever in China's energy & utility sector, and in particular in the areas of improving energy consumption efficiency, developing cleaner alternative fuel, and building infrastructure to more effectively bring supply to consumption.

With our energy portfolio expanding, the Company becomes better equipped with funds and credibility. By 2007, Enerchina Holdings plans to convert its power generation to using natural gas instead of heavy oil, thereby increasing efficiency and reducing environmental impact. Panva Gas will continue to build distribution network and bring clean fuel to more households in China. In addition, the Company is undertaking a major endeavor to convert coal, the oldest yet most polluting energy source in China, into cleaner, more efficient alternative energy and chemical products (coal gasification).

Compared with many well-established corporations in this field, the Company still has a short operating history. Along the Company's growth path, we have primarily evaluated and selected each project on individual basis. Now with a number of more developed product lines, we shall evaluate future project development from a portfolio perspective. For the next 5-10 years, an important focus of the Company's strategy will be integration and partnership.

- INTEGRATION: Identify business opportunities that can compliment the existing business lines and fill in the missing links. Our goal is to establish a well-integrated value chain extending from upstream resource production (such as coal gasification) to downstream end-product distribution (such as city gas distribution), which can significantly save intermediate costs and enhance the value of each operating unit.

- PARTNERSHIP: Form strategic partnership through alliance, merger and acquisition to strengthen our business competitiveness. During the last few years, and likely the next 3-5 years, the sector is in a high-growth mood following the industry restructuring and productivity liberalization in China. Eventually energy & utility business competes on scale and efficiency, and joining forces with complimentary business partners would help us stay on top of the game.