We believe our competitive strengths are as follows:-

Experienced Management Team and Strong Technical Expertise

We have a qualified and experienced management team and staff who possess strong technical capabilities. Most of our senior management possess degrees or senior technical qualifications and have prior experience in managing large corporations. Most of our staff have strong technical expertise and are professionally trained.

Our in-house research into biochemical wastewater treatment process was given a boost when the PRC and Wuhan City Science and Technology bureaus awarded us a total of RMB8 million in research grant, covering the cost of the "Dynamic Cyclic Active Sludge" project. It was a vote of confidence in our technological capabilities as Asia Water Technology is one of the only two water treatment companies in China to have been awarded such a grant.The "Dynamic Cyclic Active Sludge" project, when successfully developed and patented, will mean cost savings and better efficiency for future projects.

Good track record and goodwill

Due to our strong track record, we have obtained certificates for being a preferred supplier in relation to the provision of water treatment systems for power plants with capacity of 200 MW, 300 MW and 600 MW respectively. These certificates strengthen our ability to tender for projects by state-owned enterprises relating to the construction of power plants requiring those mentioned capacities. To date, we have secured over 200 water treatment systems projects for power plants with a capacity of 300 MW and above.

Provision of comprehensive and integrated systems

As our customers are mainly in the power generation industry and usually require both water purification treatment systems as well as automated control systems, our ability to provide an integrated system for water treatment and control systems is one of our main competitive strengths. We are able to procure equipment, design, install and commission water purification treatment systems, as well as procure, install and commission standard equipment for wastewater treatment systems. We are also able to design and implement automated control systems.

Experience in large-scale projects

We have been involved in several large-scale projects, such as water purification treatment systems for power plants. For instance, we had undertaken projects for Shanghai Waigaoqiao Power Plant Project, which involved a power plant with a generating capacity of 900MW. In October 2004, we were awarded a contract to provide condensate water treatment system services for the Huaneng Yuhuan Power Plant Project with a power generating capacity of 4 X 1000MW, which was at the time of the Latest Practicable Date, the power plant with the largest capacity in the PRC. Such expertise and experience give us a track record which smaller players are not able to build up and therefore give us a competitive edge over them when tendering for larger projects .

In May 2005, we secured our biggest wastewater treatment project in Hanxi, Hubei Province, worth RMB193 million. The procurement, installation and commissioning of the wastewater treatment system of this mega municipal wastewater treatment plant is expected to treat up to 400,000 tonnes of water daily for the city government, serving up to 600,000 people.

In August 2005, we won a contract worth RMB18.6 million to design and install a water purification treatment system for a nuclear power plant in Shenzhen. This deal is significant as it signifies our technological edge in arguably, the most stringent niche of water purification. In addition, nuclear power plants are expected to be the future in power generation in China.

Extensive sales and marketing coverage

As at the Latest Practicable Date, we have a team of 27 sales and marketing personnel providing us with extensive sales and marketing coverage, enabling us to raise our corporate profile and increase awareness of our products and services among potential customers. Our sales and marketing coverage extends to seven major regions in the PRC, namely Huabei, Dongbei, Huadong, Xinan, Huazhong, Huanan and Xibei region.

Asia Water is also looking beyond China for expansion. In May, we clinched our first water treatment project in Australia in the state of Queensland. Valued at RMB4.4 million, Asia Water will be responsible for the design, manufacture and supply of a condensate water treatment system for Kogan Creek Powerplant Project in Queensland, Australia. This proves our technological competency in the global arena.

Good relationship with foreign technology partners

Our directors and senior management have enjoyed a close working relationship with our foreign technology partners for many years. We believe that such good relations with our foreign partners, such as Christ-Kennicott Water Technology Ltd, General Electric (Shanghai) Co., Ltd, and Seghers Keppel Technology Group NV give us a competitive edge as we are kept informed of the new technologies available in foreign markets and is also a mark of our ability to meet international standards in the provision of our services.