The Company is listed on The Main Board of The Stock Exchange of Hong Kong Limited the ("stock Exchange") on 28 August 2002,The Company is an investment holding company under Chapter 21 of the Rules Governing the Listing of Securities on the Main Board of the Stock Exchange (the "Listing Rules"). Its principal investment objective is to achieve medium-term capital appreciation by investing in listed and unlisted companies mainly in Hong Kong and the People's Republic of China ("PRC").

2009 annual result financial review

For the year ended 31 December 2009, the Company recorded a total revenue of HK$10,800,751 (2008: HK$17,951,507). This decrease was attributable to the decrease in the gain on disposal of financial assets at fair value through profit or loss and the dividend income.

Profit for the year and attributable to owners of the Company in 2009 was HK$30,739,249 while the loss for the corresponding period of 2008 was HK$28,164,843. The increase in profit for the year was mainly due to gain on fair value change of investment and disposal of available-for- sale investments.

At 31 December 2009, the Company held listed equity securities in Hong Kong in the fair value of HK$34,089,600.

Investment portfolio review

On 7 June 2010, the Company jointly announced with China Trends Holdings Limited (“China Trends”, Stock Code: 8171.HK) that, Dooda Innovation (China) Technology Development Limited (“Dooda China”, an investment in the PRC made by China Innovation through Dooda Innovation Limited), Boss (China) Information Systems Limited (“Boss China”, a subsidiary of China Trends) and Huizhou TCL Lighting Appliance Technology Limited* (“Huizhou TCL”, a subsidiary of TCL Corporation (000100.SZ)) entered into a stratregic cooperation agreement, to establish a strategic cooperation on R&D, production, sales and distribution of energy-saving LED products under CEM business model to achieve the mutual sharing on resources.

On 30 April 2010, the Company entered into the termination agreement with Kenon Holdings Limited (“Kenon Holdings”), to terminate the framework agreement with C.G.E. (HK) Co., Limited (“CGE”) with immediate effect. The reason for termination is due to the uncertainty on the mode and terms of cooperation, as such, termination of the framework agreement for the time being will provide flexibility to the parties on seeking further cooperation while the reorganization of share capital in CGE is still being carried out by the proposed vendor.

On 27 November 2009, the Company completed the acquisition on 60% of the issued share capital of Dooda Innovation Limited (formerly known as Join Oriental) at a consideration of HK$40 million by the issue of 800,000,000 consideration shares at an issue price of HK$0.05. Dooda Innovation was incorporated in Hong Kong, upon the completion of the Reorganization, Dooda Innovation will be engaged in the production of products applying the new LED lighting technology with a focus on industrial design in order to improve the human-machine interface and quality of civil and military dual-used products. The Company holds 600 shares in Dooda Innovation, representing 60% (with voting rights withdrawn) interest in the issued share capital of Dooda Innovation.

On 25 November 2009, the Company entered into a Framework Agreement with Kenon Holdings Limited (“Kenon Holdings”, a company incorporated in the British Virgin Islands), to which the Company intends to acquire a great portion of the issued share capital of CGE, with the voting right to be withdrawn, at a consideration of not exceeding HK$23,000,000, which is currently expected to be satisfied by the issue of convertible bonds by the Company. CGE is a company incorporated in Hong Kong with limited liability and holds the entire equity interest in Creative Galaxy Electric (Shenzhen) Co., Ltd., a company established in the PRC. It mainly engages in research and development, production and sales of various series of the civil and military dual-application of LED and LCD backlight power supply, built-in power supply related optoelectronic products, electronic devices and provision of related technical services.

On 8 May 2009, the Company entered into the Acquisition Agreement with China Seed International Limited(「China Seed」，a company incorporated in the British Virgin Islands). to which the Company has conditionally agreed to purchase 31% of the issued share capital of Topsun (with voting rights withdrawn) for an aggregate consideration of HK$20 million to be satisfied by the issue of 400,000,000 Consideration Shares at an issue price of HK$0.05. Topsun was incorporated in Hong Kong, upon completion of the Reorganization, new energy batteries will become its main products. These batteries have the characteristics of high capacity, fully sealed and maintenance-free, and are substantially used in tanks, submarines and barracks as well as civil vehicles and construction.

On 21 May 2008, the Company entered into the Cooperation Framework Agreement with Beijing Guanhua, to which the Company shall invest in Beijing Guanhua subject to the fulfillment of certain conditions. On 21 August of the same year, the Company has engaged Beijing Xinghua Accounting Firm Co., Ltd. to conduct a due diligence on Beijing Guanhua. The Directors believe that it is in the interest of the shareholders of the Company to invest in北京冠華天視數碼科技有限公司(「北京冠華天視」), a subsidiary of Beijing Guanhua. Specific negotiation in connection with the possible investment in北京冠華天視 is currently underway between the Company and Beijing Guanhua. Beijing Guanhua is a civil and military dual-use multi-media system integration enterprise registered in the PRC, and has developed into a diversified enterprise with businesses covering from military publication system and surveillance system, television broadcasting system and network design, research and development of software, repair and maintenance of equipments to product dealership etc. Following preliminary review, Beijing Guanhua satisfies the requirements to be listed as an A-Share in the PRC.

On 19 June 2008, the Company entered into a Cooperation Framework Agreement with China Opto-Electro Industries Co., Ltd (“COEI”), a wholly-owned subsidiary of CNGC (中國兵器工業集團，「中國兵器」), and China Trends Holdings limited (“China Trends”, stock code: 08171.HK , formerly known as QUASAR Communication Technology Holdings Limited), to which China Innovation and China Trends have been granted a first right of refusal to acquire not more than 30% equity interests or not more than 30 million shares in COEI under the capital restructuring of COEI. The two companies have also agreed to contribute to COEI the first right of refusal to invest in SMOTL (New LED Lighting Project), Yunnan Tianda (New Solar Energy Project) and NNWO (New Media LCD Project), which have been granted a first right of refusal to invest from CNGC and participated in the share restructuring by the three parties before, to avoid potential competition.

On 5 November 2007, the Company has entered into the Agreement with Beijing Heifeng Aviation, pursuant to which the Company will invest in Beijing Heifeng Aviation subject to the fulfillment of certain conditions. On 7 May 2008, as certain conditions under the Agreement have not been fulfilled and completed, the Company is working to explore different means of cooperation other than acquisition with the shareholder(s)of Beijing Heifeng Aviation. Beijing Heifeng Aviation is engaged in the research, development, manufacturing and sale of unmanned aircrafts in the PRC for military and civil uses.

On 22 October 2007, the Company has entered into the Co-operation Memorandum with CITIC Investment Holdings Limited (“CITIC Investment”), the investment arm of CITIC Group, for the establishment of a strategic alliance in co-investment in the PRC. Further to it on 1 January 2008, the Company and CITIC Investment entered into an agreement to jointly establish the Steering Committee for co-investments in the military industry in the PRC under the strategic alliance formed by CITIC Investment and the Company for the purposes of identifying co- investment targets and facilitating the process of such investments through the guidance of the committee members.

During the six months ended 30 June 2009, the Company continued to hold investments in three unlisted companies namely Jinan LuGu (HK) Technology Development Limited ("Jinan LuGu"), SNG Hong Kong Limited ("SNG") and Takenaka Investment Company Limited ("Takenaka") of which the carrying value of the investment portfolio amounting to HK$28,624,725.

Jinan LuGu is incorporated in Hong Kong and principally engaged in investment holding. As at 30 June 2009, Jinan LuGu indirectly held 59.5% interest in a company incorporated in the PRC of which its principal activity is manufacturing and trading of 陶瓷微電路基板 (Ceramic Microcircuit Substrates), 微電路模塊 (Microcircuit Modules), 陶瓷電子元（組）件 (Ceramic Electronic Apparatus Parts (Discreteness)). The Company holds 250 ordinary shares in Jinan LuGu, representing 25% interest in the issued share capital of Jinan LuGu. No dividend was received during the period (2008: nil) under review.

SNG is incorporated in Hong Kong and principally engaged in investment holding. As at 30 June 2009, SNG indirectly held 38.5% interest in a company incorporated in the PRC, of which its principal activity is manufacturing and trading of 發光二極管芯片 (LED Chips). The Company holds 3,750 ordinary shares in SNG, representing 30% interest in the issued share capital of SNG. No dividend was received during the period (2008: nil) under review.

Takenaka is incorporated in British Virgin Islands and principally engaged in investment holding. As at 30 June 2009, Takenaka indirectly held 19.5% interest in a company incorporated in the PRC, of which the principal activity is manufacture and distribution of copper foils for civil and military uses. The Company holds 30 ordinary shares in Takenaka, representing 30% interest in the issued share capital of Takenaka and has contributed its shareholders’ loan in the amount of HK$23,575,500 in Takenaka. No dividend was received during the period (2008: nil) under review.

On 3 October 2008, the Company entered into a legally binding agreement with Morgan Strategic Limited (“MSL”), a company incorporated in the British Virgin Islands, pursuant to which the Company committed to acquire convertible note with face value of HK$40,000,000 from MSL. The convertible note will mature on the fifth anniversary date from the first payment requisition notice issued by MSL to the Company with an interest rate of 5% per annum. In accordance with the terms and conditions of the agreement, upon maturity of the convertible note, the Company has the right to convert the convertible note to an equity interest of 80% of the then issued share capital of MSL, excluding the voting right of the respective shares. As at 30 June 2009, an aggregate of HK$21,000,000 was paid by the Company as requested by MSL and the balance of HK$19,000,000 was presented as other payable in the condensed statement of financial position.

On 2 March 2009, the Company entered into a subscription agreement with Moral Glory Limited (“MGL”), a company incorporated in Hong Kong, pursuant to which the Company committed to acquired convertible note with face value of HK$50,000,000 from MGL. The convertible note will mature on the fifth anniversary date from the first payment requisition notice issued by MGL to the Company. The total interest to be charged is composed of a fixed rate interest of 1% per annum on the principal and a participating interest of 50% on the annual post tax profit of MGL and its subsidiary of which the participating interest will be capped at no more than 59% on the principal per annum. In accordance with the terms and conditions of the agreement, upon maturity of the convertible note, the Company has the right to convert the convertible note to an equity interest of 90% of the then issued share capital of MGL, excluding the voting right of the respective shares. As at 30 June 2009, the acquisition has not been completed which is subject to the fulfilling of those prerequisites stated in the agreement and a refundable deposit of HK$2,500,000 had been paid by the Company pursuant to the agreements signed between the Company and MGL.