I. Company Profile

Founded in 1997 and headquartered in Chenghai District, Shantou, Guangdong Huawei Toys Craft Co., Ltd. is a hi-tech and export-oriented joint-stock company specializing in the R&D, manufacturing, and marketing of a wide range of toys as well as the promotion of comic and animation culture. We have a registered capital of RMB 66 million and fixed asset investment of RMB 200 million. We boast a garden-like industrial park with a total land area of about 66,667m2 and a building area of 100,000 m2 at initial stage. Our industrial park is self-contained with all the R&D, manufacturing, living and entertainment facilities and is capable of accommodating 6,000 employees. At present, we have a total number of 3,000 employees, among which the management and senior technical talents account for 15 percent of total employees. Till now, we have developed 6 major product line-ups including plastic toys, craft gifts, comic & animation products, intelligent products, models and baby carriages. We boast an annual throughput of 60 million sets of toys and an annual output of RMB 800 million.

II. Market Development

We have always adhered to the “Market-oriented and customer-centered” principle. Since our inception in 1997, we have persistently carried out the development strategy of “Vigorously exploring international market, building up a famous brand and exploring domestic market”. With a network of branch/regional offices set up worldwide, we export our products to a lot of countries and regions including Europe, USA and Middle East, and constantly increase our brand influence. We have always been seeking an active cooperation with multinational corporations and now we become the strategic cooperation partner of many international toy industry giants or world-famous companies such as Disney Inc., Giochi Preziosi Inc. (Italian), Top toys Inc., and Sindy. In the meantime, we have been constantly dedicated to the development of domestic market. By leveraging the experience that we have learned from overseas market and the acute insight into industrial development trend, we vigorously forge strategic cooperation with CCTV Animation Co., Ltd. and Yulang Cultural Development (Shenzhen) Co., Ltd., to make full use of our advantages to develop comic & animation products characteristic of China, inaugurate a new development era of China’s toy industry and offer customers with endless new toys.

III. Quality Management

We have committed ourselves to the continual improvement of quality management and engaged foreign experts from a British Quality Assurance Company as our quality improvement consultants to guide our internal quality management. We make vigorous efforts to promote ISO9001:2000 quality management system within our company. In October 2004, we successfully passed the ISO9001:2000 quality management system certification. We take pride in our sound quality management process and sufficient resource configurations. We energetically keep pace with the up-to-the-minute toy standards released in China, EU and USA. In March 2006, our electric toys acquired the first 3C certificate in China’ toy industry. In April 2006, we successfully passed the hazardous substance control review conducted by certificate authority.

By sticking to the principle of “Prevention First, Continual Improvement”, we make vigorous effects to perform product quality management and establish several sets of product quality control processes to ensure sufficient and stable process capability and meet the requirements of standards and customers. We boast a sound Quality Control Dept. and a team of high-caliber QC talents, and attach great importance to cultivate their quality awareness, skills and capabilities. We have at all times abided by the ISO9001:2000 quality management system, ISO8124 Toy Safety Requirements, GB6675-2003 Technical Specifications of Toy Safety, and engaged foreign experts from a British Quality Assurance Company to guide our internal quality management so as to ensure the quality of our products can fully comply with the quality standards in international market.

IV. R&D and Process Management

We have set up the Product Development Dept., Molding Development Dept. and Industrial Engineering Dept. in the R&D Center. Since 2002, we have maintained an annual R&D investment of over RMB 20 million. We have introduced over 200 professional technicians with Bachelor's and Master’s degrees from Guangzhou, Shenzhen and Dongguan. We have also conducted operation with national science institutions to set up product R&D center, and have acquired over 50 patents in recent years. At present, our electric toys contain two major line-ups of electric dolls and remote control cars, with over 100 different models. Fully complying with EU WEEE & ROHS directive, our products cater to the entertainment and intelligence-oriented needs of children and teenagers in different age strata.

We boast over 150 sets of manufacturing equipment with value per set up to RMB 100,000, 50 assembly lines and one imported automatic fuel injection assembly line. We adopt the MRP system to perform material control. By adopting the pull production management, we can ensure smooth production process and enhance the assembly line balancing rate. We also set up quality improvement team to constantly improve the process quality control. We attach great importance to the skill trainings of employees so as to continually improve their quality awareness and improvement awareness.

V. Environment Protection & Social Responsibility

We weave the environment-friendly concept into all of our processes from product concept through design, manufacturing, packaging, marketing to the disposal after end of product service life; comply with environment management laws, regulations and standards; abide by EU WEEE & ROHS directive and establish applicable work procedures and standards. Since 2005, we have successfully passed ISO14001:2004 environment management system certification, ICTI Code of Business Practice (ICTI-COBP) and ROHS certification in succession.

The tenet “Full of Compassion for Others and Concerned About Social” is a common quality of all our employees and also part of our corporate culture. In the past decade, we have donated over RMB 8 million successively for Project Hope and poverty families under the leadership of Guo Zhuocai.

The present Huawei, high-spirited and vigorous, is carrying out the next-five-year development strategy. Underpinned by international standard management system, we will further build up a “Down-to-earth, progressive, studious, innovative and efficient” team to forge a world-famous brand and perform innovative management, with excellent performance management mode as the core. We will strive to become one of the most successful companies integrating comic & animation culture, toy innovation, terminal chain and hi-tech within three to five years, so as to create more values for customers, employees and shareholders, and make more contributions to build up a harmonious enterprise, community and society.