Chairman's Message

Dear business partners and friends,

Happy New Year of the Rabbit!

I am happy to share with you our results and achievements in 2010 and our prospects for 2011 and onwards.

Operation Highlights
2010 was another rewarding year for Print-Rite. Despite the overhang of raw material cost hike, RMB appreciation, and increase in labor cost, we still managed to achieve positive sales growth. Though margin was inevitably compressed, it still stood at a satisfactory level. This result would not be achieved without the support from every one of you. On behalf of our board, I would like to thank you all of your efforts rendered to Print-Rite in the past year.

2010 also marked an important milestone of Print-Rite. We acquired AEG Shanghai – a renowned OPC drum manufacturer, in early 2010. This acquisition has put Print-Rite in a unique position to become a fully vertical integrated aftermarket laser printer consumables player in the world. Coupling with our continuous investment in new product development and innovation, we believe all these investments will help sustain our growth momentum in the years to come.

Awards and Recognition

Social Responsibility
Print-Rite is always putting the social responsibility to an important place of the company development, to operate in coordination with the safety, environmental protection, public welfare etc., and achieved the broad recognition.

In the areas of environmental protection and the social responsibility, we achieved: the Bronze Awards of the 2009 and 2010 Hong Kong Awards for Environmental Excellence (Manufacturing Sector), the Hong Kong Outstanding Corporate Citizenship Award 2010--Silver Award in the Manufacturing Sector Category, Hong Kong Awards for Industries: Productivity and Quality Award, the Capital Entrepreneur Green Enterprise Awards 2010 and the Zhuhai Public Welfare Star in 2010.

Innovation and IP Management
In the areas of technological innovation and the intellectual property, we are named one of the pioneers in the National Enterprise and Public Institution for Intellectual Property Management, Print-Rite is the Winner of the China Print Consumables Industry Innovation Enterprise Diamond Award, and Print-Rite is a pilot enterprise for the Guangdong Province Academicians and Experts; our laser printer cartridges, inkjet printer cartridges, and ribbon products were all recognized as Guangdong Province Independent Innovation Products.

Branding
In branding, we became the first brand to achieve government procurement for environment-friendly consumables, Top 100 Taxation Contribution Enterprise of Zhuhai in 2009, Guangdong Province Famous-brand Enterprise, and were listed as Famous-brand Export Enterprise 2009-2011 which is highly regarded by the government. Also, we achieved the China Computer Industry Development Achievement Award.

Knowledge Management
In the areas of knowledge management, we achieved the Hong Kong Most Admired Knowledge Enterprise (MAKE) Award 2010, and the Outstanding Knowledge Management Project Award 2010.

Strategy
Print-Rite is a major player in the printer consumables industry both in PRC and worldwide. We own a comprehensive supply chain with economy of scale. We are aiming for a new operational model - Fine and Simple. We'll do this gradually by keeping our present advantages, by realizing and staying on top of the transformations in the industry: by being market-oriented and innovation-motivated; by developing the core manufacturing techniques while expanding subcontracting collaborations; by shifting to high-end and upstream products gradually, and by making Print-Rite a leader in the printer consumable industry while focusing on our high value added products and services, and core competences.

Innovation and Intellectual Property are the cores of our development strategy. Innovation is not only the goal, but also the motivation of our continued transformations and upgrades. We have applied for 1392 independent patents thus far, and we are in first place in the global consumables industry both in quantity and in quality of our patents. Our goal is to apply for 5000 patents by 2020.

Environmental Protection
This year is the first year of the 12th five-year-plan implementation cycle of the China government. The subjects of focus will be energy conservation, environmental protection and sustainable development. These happen to be the same goals that Print-Rite has. For 2011, our project for laser supplies remanufacturing industrialization was approved, and we have become the first enterprise authorized to implement recycle and remanufacturing pilot services for the office equipment category and the only enterprise in Guangdong province granted by the Ministry of Industry and Information Technology of PRC.

Prospects
Let us look at the future, opportunities and challenges at the same time. With the development of private Chinese domestic companies, the advantages of Hong Kong-invested companies are not as advantageous these days, especially in labor intensive industries. Additionally, the appreciation of the RMB, the price-hike of raw materials, the basic wage increase and the taxation increase means we are working in a disadvantaged environment.

However, any disadvantaged factors can be shifted to opportunities to accelerate the growth of our company. Just like the outstanding performance in the economic crisis of 2008-2009, Print-Rite is confident we can change the current crisis into opportunities, and turning the pressure into initiative. Today, our transformation and upgrade plan which started in 2007, is developing well. Print-Rite is stepping away from being a labor intensive enterprise to become a knowledge intensive business service instead.

Print-Rite will enter the fast lane of transformation and advance to lead the industry under your continuous care and support. I look forward an even more successful future through everyone's innovations, explorations and efforts.


Arnald Ho
Chairman
Print-Rite Holdings Ltd.