SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER 30, 2004.

or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO
      _______________.

                         COMMISSION FILE NUMBER 0-27436

                               COMTECH GROUP, INC.
             (Exact name of registrant as specified in its charter)

            MARYLAND                                            94-3171940
  (State or Other Jurisdiction of                           (I.R.S. Employer
  Incorporation or Organization)                            Identification No.)

                      ROOM 1001, TOWER C, SKYWORTH BUILDING
                            HIGH-TECH INDUSTRIAL PARK
                           NANSHAN, SHENZHEN 5180, PRC
           (Address of Principal Executive Offices including zip code)

                              011-86-755-267-43210
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes |X| No |_|

Indicate by check mark whether the registrant is an accelerated filer (as
defined on Rule 12B-2 of the Exchange Act). Yes |_| No |_|

There were 50,722,050 shares of the Registrant's Common Stock issued and
outstanding on November 15, 2004.
<PAGE>

                               COMTECH GROUP, INC.
                              INDEX TO FORM 10-Q/A

PART I.   FINANCIAL INFORMATION

          Item 1.  Condensed Financial Statements (unaudited)

          Condensed Consolidated Balance Sheets
                As of September 30, 2004 and December 31, 2003

          Condensed Consolidated Statements of Operations
                For the three and nine months ended September 30, 2004 and 2003

          Condensed Consolidated Statements of Cash Flows
                For the nine months ended September 30, 2004 and 2003

          Notes to Condensed Consolidated Financial Statements

          Item 2.  Management's Discussion and Analysis of Financial
                   Condition and Results of Operations

          Item 3.  Quantitative and Qualitative Disclosures About Market
                   Risk

          Item 4.  Controls and Procedures

PART II.  OTHER INFORMATION

          Item 6.  Exhibits

SIGNATURES
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1. Condensed financial statements (unaudited)

COMTECH GROUP INC. f/k/a TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
As of September 30, 2004 and December 2003

<TABLE>
<CAPTION>
                                                        Sep 30, 2004    Sep 30, 2004     Dec 31, 2003
                                                            US$'000         RMB'000        RMB'000
<S>                                                          <C>            <C>            <C>
ASSETS
Current assets:
Cash                                                          2,142          17,727         30,683
Trade accounts receivable, net of
allowance for doubtful accounts                              18,248         151,043         92,259
Bills receivable                                              4,209          34,843         13,306
Other trade receivables and prepaid
expenses                                                      1,081           8,940          2,297
Inventories                                                   2,746          22,732         18,350
                                                             ------         -------        -------
Total current assets                                         28,426         235,285        156,895
Property and equipment, net                                     384           3,180          2,961
Other assets                                                     41             344            344
                                                             ------         -------        -------
                                                                425           3,524          3,305
                                                             ------         -------        -------
TOTAL ASSETS                                                 28,851         238,809        160,200
                                                             ------         -------        -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable                                        6,918          57,269         44,564
Amount due to holding company                                    --              --         50,356
Amount due to other related party                               265           2,192          1,592
Bank loans                                                    8,757          72,482             --
Dividend payable                                                 --              --         41,387
Income tax payable                                              135           1,114            902
Accrued expenses and other
liabilities                                                   1,771          14,662          3,745
                                                             ------         -------        -------
Total current liabilities                                    17,846         147,719        142,546
                                                             ------         -------        -------
Minority interests                                              619           5,126             --
Shareholders' equity
Common stock and additional paid-in
capital                                                       4,693          38,844         14,083
Retained earnings                                             5,693          47,120          3,571
                                                             ------         -------        -------
Total shareholders' equity                                   10,386          85,964         17,654
                                                             ------         -------        -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY                                                       28,851         238,809        160,200
                                                             ======         =======        =======
</TABLE>


                                       3
<PAGE>

COMTECH GROUP INC. f/k/a TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the Three months ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                Sep 30, 2004     Sep 30, 2004      Sep 30, 2003
                                                  US$'000           RMB'000          RMB'000
<S>                                            <C>               <C>               <C>
Net revenue                                        17,808           147,403            96,243
Cost of revenue                                   (15,083)         (124,849)          (82,582)
                                               ----------        ----------        ----------
Gross profit                                        2,725            22,554            13,661
Selling, R&D, general and
administrative expenses                            (1,047)           (8,670)           (3,335)
                                               ----------        ----------        ----------
Income from operations                              1,678            13,884            10,326
Interest expense                                     (102)             (845)             (273)
Interest income                                        16               132                 3
                                               ----------        ----------        ----------
Income before income tax                            1,592            13,171            10,056
Income tax                                            (44)             (362)             (607)
                                               ----------        ----------        ----------
Income before minority interests                    1,548            12,809             9,449
Minority interests                                   (110)             (910)                0
                                               ----------        ----------        ----------
Net income                                          1,438            11,899             9,449
                                               ----------        ----------        ----------

                                                 US$               RMB               RMB
Earnings per share
- Basic                                              0.03              0.27              0.23
                                               ==========        ==========        ==========
- Diluted                                            0.03              0.27              0.23
                                               ==========        ==========        ==========
Weighted average number of ordinary
shares outstanding
- Basic                                        43,484,683        43,484,683        40,502,150
                                               ==========        ==========        ==========
- Diluted                                      43,957,041        43,957,041        40,502,150
                                               ==========        ==========        ==========
</TABLE>


                                       4
<PAGE>

COMTECH GROUP INC. f/k/a TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
For the nine months ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                Sep 30, 2004     Sep 30, 2004      Sep 30, 2003
                                                  US$'000           RMB'000          RMB'000
<S>                                             <C>               <C>               <C>
Net revenue                                         56,174           464,970           246,324
Cost of revenue                                    (47,742)         (395,171)         (210,290)
                                                ----------        ----------        ----------
Gross profit                                         8,432            69,799            36,034
Selling, R&D, general and
administrative expenses                             (2,402)          (19,886)          (11,836)
                                                ----------        ----------        ----------
Income from operations                               6,030            49,913            24,198
Interest expense                                      (202)           (1,669)             (500)
Interest income                                         19               159                34
                                                ----------        ----------        ----------
Income before income tax                             5,847            48,403            23,732
Income tax                                            (217)           (1,799)             (964)
                                                ----------        ----------        ----------
Income before minority interests                     5,630            46,604            22,768
Minority interests                                    (369)           (3,055)                0
                                                ----------        ----------        ----------
Net income                                           5,261            43,549            22,768
                                                ----------        ----------        ----------

                                                   US$               RMB               RMB
Earnings per share
- Basic                                               0.13              1.05              0.56
                                                ==========        ==========        ==========
- Diluted                                             0.13              1.05              0.56
                                                ==========        ==========        ==========
Weighted average number of ordinary
shares outstanding
- Basic                                         41,507,253        41,507,253        40,502,150
                                                ==========        ==========        ==========
- Diluted                                       41,666,436        41,666,436        40,502,150
                                                ==========        ==========        ==========
</TABLE>


                                       5
<PAGE>

COMTECH GROUP INC. f/k/a TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
For the Nine months ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                       Sep 30, 2004    Sep 30, 2004   Sep 30, 2003
                                                           US$'000      RMB'000         RMB'000
<S>                                                         <C>          <C>           <C>
Cash flows from operating activities:
 Net income                                                  5,261        43,549       22,768
Adjustment to reconcile net income to
 net cash (used in) provided by operating activities:
    Depreciation expense                                        88           728          319
    Minority interests                                         369         3,055           --
 Changes in operating assets and liabilities:
    Trade accounts receviable                               (6,481)      (53,642)     (39,633)
    Bills receivable                                        (2,602)      (21,537)      (1,917)
    Inventories                                               (325)       (2,693)       5,186
    Other trade receivables and prepaid expenses              (125)       (1,036)     (12,724)
    Amount due from other related party                         --            --          298
    Trade accounts payable                                     676         5,592       18,987
    Accrued expenses and other liabilities                     663         5,491       11,345
    Amount due to other related party                           72           600       (1,573)
    Income tax payable                                          26           212        2,408
                                                            ======       ======        ======
Net cash (used in) provided by operating activities         (2,378)      (19,681)       5,464
                                                            ======       ======        ======
Cash flows from investing activities:
 Net cash outflow from acquisition of a subsidiary            (109)         (906)          --
 Purchases of property and equipment                           (86)         (711)        (418)
 Increase in other assets                                       --            --         (300)
                                                            ======       ======        ======
Cash used in investing activities                             (195)       (1,617)         (718)
                                                            ======       ======        ======
Cash flows from financing activities:
 New bank loans                                              8,757        72,482           --
 Net cash inflow from share exchange transaction
 (net of transaction cost)                                   3,335        27,603           --
 Repayment of amount due to holding company                 (6,084)      (50,356)          --
 Payment of 2003 dividend                                   (5,000)      (41,387)          --
                                                            ======       ======        ======
Net cash provided by financing activities                    1,008         8,342           --
                                                            ======       ======        ======
Net (decrease) increase in cash and cash equivalents        (1,565)      (12,956)       4,746
Cash at beginning of the period                              3,707        30,683       12,194
                                                            ======       ======        ======
Cash at end of the period                                    2,142        17,727       16,940
                                                            ======       ======        ======
</TABLE>


                                       6
<PAGE>

COMTECH GROUP INC. f/k/a TRIDENT ROWAN GROUP, INC. and SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

NOTE 1 BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements of
Comtech Group, Inc. (formerly known as Trident Rowan Group, Inc., the "Company")
have been prepared in accordance with the instructions to Form 10-Q, and Rule
10-01 of Regulation S-X. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. For a summary of the
Company's accounting principles, and other footnote information, reference is
made to the Registrant's Audited Consolidated Financial Statements for the years
ended December 31, 2001, 2002 and 2003 included in Item 7(a)(1) of the Company's
Current Report on Form 8 K/A filed with the Securities and Exchange Commission
on September 23, 2004 (the "8-K/A"). The interim financial statements and notes
thereto should be read in conjunction with the financial statements and notes
included in the 8-K/A of the Company for the year ended December 31, 2003. All
adjustments necessary for the fair presentation of the results of operations for
the interim periods covered by this report have been included. All such
adjustments are of a normal and recurring nature. The results of operations for
the nine months ended September 30, 2004 are not necessarily indicative of the
operating results for the full year.

The consolidated financial statements are reported in Renminbi ("RMB") because
all of the Company's material operating entities are based in and operated
entirely within the People's Republic of China. The translation of RMB amounts
into U.S. dollar amounts is included solely for the convenience of the readers
of the financial statements and has been calculated at the rate of USD 1 to RMB
8.2773, the approximate exchange rate at September 30, 2004. Such translations
should not be construed as representations that the RMB amounts could be
converted into USD at that rate or any other rate.

NOTE 2 - SHARE EXCHANGE BETWEEN TRIDENT ROWAN GROUP, INC. AND COMTECH GROUP

On May 11, 2004, Comtech Group's original sole shareholder, Comtech Global
Investment Ltd., sold part of its shares to Purple Mountain Holding Ltd. and
Ren Investment Ltd., which then became the shareholders of Comtech Group.

On May 25, 2004, the Company entered into a Share Exchange Agreement (the
"Exchange Agreement") with Comtech Group, a privately owned Cayman Islands
company ("Comtech"), and Comtech's shareholders, Comtech Global Investment Ltd.,
Purple Mountain Holding Ltd., and Ren Investment Ltd.(collectively, the
"Shareholders"), pursuant to which the Company was to acquire all of the issued
and outstanding shares of stock of Comtech in exchange for the issuance in the
aggregate of 42,000,000 of the Company's shares of common stock to the
Shareholders. The transaction contemplated by the Exchange Agreement was
consummated on July 22, 2004. Pursuant to certain provisions in the Exchange
Agreement, the number of shares issued to the Shareholders was adjusted at
closing to 40,502,150 (the "Shares").


                                       7
<PAGE>

As a result of the transaction, Comtech became a wholly-owned subsidiary of the
Company and, upon the issuance of the Shares, the Shareholders owned
approximately 91.2% of all of the Company's issued and outstanding stock. The
Company currently has a total of 44,422,050 shares of Common Stock issued and
outstanding on a non-fully diluted basis as of September 30, 2004. The Company
then changed its name from Trident Rowan Group, Inc.("Trident") to Comtech
Group, Inc.

As of September 30, 2004, the ownership structure of the Company as a result of
the share exchange transaction it as follows:

<TABLE>
<CAPTION>
<S>                              <C>                                  <C>
                           -----------------------
                              Comtech Group Inc.                   --------------------------
                           (formerly known as Trident                    OAM S.P.A.
                            Rowen Group Inc.)         ------------          (a)
                                                                   (established in Italy)
                           (established in Maryland)               (non operating subsidiary)
                            -----------------------                --------------------------
                                     |
                                     |
                           -----------------------
                                Comtech Group

                           (established on April 26,
                          2002 In the Cayman Islands)
                           ------------------------
                                     |
                                     |
             --------------------------------------------------------
             |                                                       |
             |                                                       |
---------------------------------------              ------------------------------------
Comtech (China) Holding Limited                      Comtech (Hong Kong) Holding Limited
("Comtech China")                                   ("Comtech Holding")

(established on May 27, 2002                         (established on May 27, 2002 in BVI)
in the British Virginia Islands ("BVI"))             ------------------------------------
---------------------------------------                                           |
              |                                                                   |
              |                                                                   |
              --------------------------------------------------                  |
              |                    |                           |                  |
              |                    |                           |                  |
-------------------        -------------------       ---------------------       -------------------------
Shenzhen Comtech           Comtech Communication       Comtech Software          Comtech Intenational
International Limited      Technology (Shenzhen)     Technology (Shenzhen)        (Hong Kong) Limited
("Shenzhen Comtech")       Company Limited                Co. Ltd.               ("Comtech Hong Kong")
                           ("Comtech                 ("Comtech Software")
                           Communication")
    (established on            (established on           (established on             (established on
July 4, 1996 in the PRC)   July 23, 2002 in the PRC) 18 March 2004 in the PRC)   July 14, 2000 Hong Kong)
------------------------   ------------------------  ------------------------    -------------------------
          |
          |
------------------------
Shanghai E & T
System Co. Ltd.

("Shanghai E & T")
         (a)
   (established on
January 18, 2004 in the
PRC)
------------------------
</TABLE>

(a) The Company owns 98.6% shares in OAM S.P.A. and 60% shares in Shanghai E &
T.

The share exchange transaction was accounted for as a reverse acquisition in
which Comtech was deemed to be the accounting acquirer and Trident the legal
acquirer. Because Trident was a non-operating public shell company, no goodwill
has been recorded in connection with the transaction and the costs incurred in
connection with the transaction have been charged directly to equity.

As a result of the share exchange transaction, (i) the historical financial
statements of Trident for periods prior to the date of the transaction are no
longer presented; (ii) the historical financial statements of the Company for
periods prior to the date of the transaction are those of Comtech, as the
accounting acquirer; (iii) all references to the financial statements of the
Company apply to the historical financial statements of Comtech prior to the
transaction and the financial statements of the Company subsequent to the
transaction; and (iv) the number of shares of the Company has been restated
retroactively to reflect the share exchange ratio as at the date of the
transaction in a manner similar to a stock split.

Unaudited condensed consolidated statements of shareholders' equity for the nine
months ended September 30, 2004 are set forth below:


                                       8
<PAGE>
<TABLE>
<CAPTION>
                                                                  Additional
                                                                   paid-in   Accumulated
                                             Common Stock          capital     Profits       Total
                                             ------------          -------     -------       -----
                                    Number of Shares    Amount
                                                        RMB'000    RMB'000     RMB'000     RMB'000
<S>                                    <C>                <C>      <C>          <C>        <C>
Balance at January 1, 2004             40,502,150       3,352      10,731       3,571      17,654
(Note a)
Shares of stock held by Trident's       3,919,900         324          --          --         324
shareholders
Recapitalisation in connection
with the share exchange
transaction                                    --          --      24,089          --      24,089
Share compensation cost                        --          --         348          --         348
Net Income                                     --          --          --      43,549      43,549
                                       ----------------------------------------------------------
Balance at September 30, 2004
                                       44,422,050       3,676      35,168      47,120      85,964
                                       ==========================================================
Balance at September 30, 2004
(USD'000)                                                 444       4,249       5,693      10,386
                                                          =======================================
</TABLE>

Note a: Common stock issued and outstanding has been retroactively restated to
reflect the recapitalization which occurred as a result of the share exchange
transaction whereby the 10,000,000 shares of common stock of the accounting
acquirer were exchanged for 40,502,150 shares of Trident.

The assets and liabilities of Trident acquired under the share exchange
transaction are as follows:

Net assets acquired:                                    RMB'000
                                                        -------
      Cash                                               32,367
      Other trade receivables and prepaid expenses        2,853
      Accrued expenses and other liabilities             (5,126)
      Minority interests                                   (917)
                                                        -------
                                                         29,177
      Less: Transaction costs (note)                     (4,764)
                                                        -------
                                                         24,413
                                                        =======

Note:    In connection with the share exchange transaction with Trident, the
         Company has paid RMB1,324,000 (USD160,000) to a financial advisor under
         a service agreement and such amount has been included in the
         transaction costs as stated above. In addition, pursuant to the service
         agreement, the Company is required to issue warrants to the financial
         advisor to purchase 1,000,000 shares of common stock of the Company at
         an exercise price of USD1.5 per share, subject to the fact that
         Trident has cash assets of at least RMB41,387,000 (USD5 million).
         However, since the cash assets of Trident is less than RMB41,387,000
         (USD5 million) prior to the share exchange transaction, the Company has
         not issued any warrants to the financial advisor. The financial advisor
         is now requesting the issue of warrants and is currently under
         discussion with the Company. No final resolution has yet been reached.

      As a part of the share exchange transaction with Trident, the Company
assumed fully vested options issued by Trident to purchase 230,000 shares of the
Company's common stock with an exercise price of USD1.50 per share.
Additionally, the Company assumed 1,850,834 fully exercisable common stock
warrants. Each warrant represents the right to receive 1 share of the Company's
common stock, at an exercise price of USD1.50 per share for 968,903 common stock
warrants and USD1.25 per share for 881,931 common stock warrants. The options
and warrants assumed from Trident both expire on July 1, 2009.

      Comtech Group is a leading module design solutions provider in China
focused on the mobile handset and telecom equipment industries. Our team of
engineers works with leading manufacturers of mobile handset and telecom
equipment to design solutions that meet their need to provide state of the art
products to their customers. Our design solutions for mobile device products
include, LCD modules, camera modules, persistent storage modules, input/output
modules, sound system and power supply modules. In the telecom equipment
industry we currently target optical solutions, data communication solutions,
PSTN switching, and wireless base stations.

      Since Comtech began operations in 1995, it has evolved from a distribution
company to a customized design solution provider. Its client base has grown to
serve over 200 companies representing most of the large manufacturers in the
mobile handset and telecom equipment industries in China. Comtech's largest
customer in the mobile handset market is TCL Mobile Communication (HK) Company
Ltd., or TCL, one of China's largest domestic mobile handset manufacturers. Its
top two revenue producing customers from the telecom equipment industry have
been Zhongxing International (Hong Kong) Trading Co. Ltd. (ZTE) and Huawei
Technology Investment Co. Ltd., or Huawei, which are China's two largest telecom
equipment vendors.


                                       9
<PAGE>

      Comtech currently offers its clients over 500 design solutions and product
lines integrating components from many leading suppliers. Comtech's engineers
work with its customers' product development team to understand their needs for
each specific function module. Based on a customer's specific requirements,
Comtech's engineers provide a proposed customized module design solution. A
module design solution incorporates several components. If the customer accepts
the Comtech design, the customer agrees to purchase key specific components
outlined in Comtech's module design. Comtech purchases the specific components
from its suppliers.

      Comtech does not charge its customers an independent design fee. Instead,
it generates revenue through the sale of the specific components that are
incorporated in its module design. The price mark-up between the purchase price
and the selling price of such components compensate its design, technical
support and distribution services.

      Comtech's business model has proven to be profitable and sustainable
during our nine year operating history. It has had significant growth in both
revenues and profits since 1995. In 2003, Comtech had over $43 million in
revenues and $3.4 million in net income, which amounts to an increase of
approximately 72% and 209% respectively from $25 million in revenue and $1.1
million in profit in 2002. For the nine month period ended September 30, 2004,
Comtech had USD56.2 million in revenue and USD5.3 million in net income, which
amounts to an increase of approximately 89% and 91%, respectively, from USD29.8
million in revenue and USD2.8 million in net profit for the nine month period
ended September 30, 2003.


                                       10
<PAGE>

NOTE 3 - FINANCING ARRANGEMENTS

(a) Bank loans

On July 21, 2004, Comtech International (Hong Kong) Limited ("Comtech Hong
Kong"), a wholly-owned subsidiary of the Company, entered into a RMB33,109,000
(USD4,000,000) revolving credit facility (the "Facility") with the Bank of
Communications Hong Kong branch (the "Bank of Communication"). On September 14,
2004, the amount of the Facility was increased to RMB82,773,000 (USD10,000,000).
During August and September 2004, Comtech Hong Kong drew down approximately
RMB72,482,500 (USD8,757,000) under the Facility. These bank borrowings were
raised for general working capital purposes of the Company and RMB8,095,000
(USD978 thousand) of them were directly used for settlement of amount to Comtech
Global Investment Ltd. The Facility is secured by funds on deposit with the Bank
of Communication owned by Jeffrey Kang, the Company's principal shareholder and
Chief Executive Officer, in an amount equal to the borrowings. The facility
bears interest at the higher of LIBOR or 1.5% over the deposit rate, payable
monthly.

(b) Factoring arrangement

On August 24, 2004, Comtech Communication Technology (Shenzhen) Co.,
Ltd.("Comtech Communication"), a wholly-owned subsidiary of the Company, entered
into a factoring agreement (the "Agreement") with Guangdong Development Bank
Shenzhen branch (the "Guangdong Development Bank"). Pursuant to the Agreement,
accounts receivable from UT Starcom with the maximum amount of RMB30,000,000
(USD3,624,000) can be transferred to the Guangdong Development Bank with
recourse. An amount equal to 30% of the accounts receivable transferred is
secured by funds on deposit from Comtech Communication with the Guangdong
Development Bank. The factoring arrangement bears interest at the PRC official
loan interest rate as of September 30, 2004, payable monthly. On October 20,
2004, Comtech Communication transferred accounts receivable of approximately
RMB11,449,000 (USD1,381,000) under the Agreement.

NOTE 4 - SETTLEMENT OF AMOUNT DUE TO COMTECH GLOBAL INVESTMENT LTD.

The Company satisfied all of its outstanding obligations in the approximate
amount of RMB91,743,000 (USD10,238,000) to Comtech Global Investment Ltd., by
paying approximately RMB50,356,000 (USD6,084,000) of the amount due to holding
company and a RMB41,387,000 (USD5,000,000) dividend obligation during the nine
months ended September 30, 2004.

                                       11
<PAGE>

NOTE 5 - STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation using the intrinsic value
method in accordance with Accounting Principles Board ("APB") Opinion No.25,
"Accounting for Stock Issued to Employees", and its related interpretations.
Under this method, compensation cost for stock options, warrants and stock
awards is measured as the excess, if any, of the quoted market price of the
Company's common stock at the date of the grant over the amount an employee must
pay to acquire the stock.

At the board of directors' meeting held on August 3, 2004, the Company adopted
the Comtech Group, Inc. 2004 Stock Incentive Plan providing for the grant of
incentive and non-statutory stock options and the issuance of restricted stock
up to 5,000,000 shares of common stock, in the aggregate. The compensation costs
for the 420,000 options granted under the Company's share option plan for the
period ended September 30, 2004 are insignificant as calculated under APB
Opinion No. 25. The compensation costs for the 420,000 options granted under the
Company's stock option plan for the period ended September 30, 2004, had they
been accounted for using the fair value of awards at the grant date in
accordance with the method of Statement of Financial Accounting Standards
No.123, "Accounting for Stock-Based Compensation", the Company's net income and
earnings per share would have been as follows:

For the nine month period ended September 30, 2004:

                                                                 RMB'000
Net income, as reported                                           43,549
Less:  Stock based compensation costs under fair                    (389)
            value based method for all awards
Net income, pro forma                                             43,160
Earnings per share - basic        As reported                    RMB1.05
                                  Pro forma                      RMB1.04
Earnings per share - diluted      As reported                    RMB1.05
                                  Pro forma                      RMB1.04

For the three month period ended September 30, 2004:

                                                                 RMB'000
Net income, as reported                                           11,899
Less:  Stock based compensation costs under fair                    (389)
            value based method for all awards
Net income, pro forma                                             11,510
Earnings per share - basic        As reported                    RMB0.27
                                  Pro forma                      RMB0.26
Earnings per share - diluted      As reported                    RMB0.27
                                  Pro forma                      RMB0.26


                                       12
<PAGE>

The weighted average fair value of options granted during 2004 was USD1.17,
using the Black-Scholes option-pricing model based on the following assumptions:

Risk-free interest rate                                          4.25%
Expected life                                                    10 years
Expected volatility                                              59%
Expected dividend yield                                          --

NOTE 6 - EARNINGS PER SHARE

Basic earnings per share are computed by dividing net income by the weighted
average number of shares of common stock outstanding for the period. Diluted
earnings per share are computed by dividing net income by the sum of (a) the
weighted average number of shares of common stock outstanding during the period
and (b) the dilutive effect of potential common stock equivalents during the
period. As of September 30, 2004, the Company has (1) outstanding options
granted under the Company's 2004 Stock Incentive Plan to purchase an aggregate
of 420,000 shares of common stock with an exercise price of USD1.50 per share;
(2) fully vested outstanding options granted under Trident's prior option plans
to purchase an aggregate of 230,000 shares of common stock with an exercise
price of USD1.50 per share; and (3) outstanding warrants issued to purchase an
aggregate of 1,850,834 shares of common stock with an exercise price of USD1.50
per share for 968,903 common stock warrants and USD1.25 per share for 881,931
common stock warrants. The options issued under the 2004 plan vest in accordance
with the terms of the agreements entered into by the Company and the grantee of
the options. Of the 420,000 options, options for (1) 78, 750 shares vesting on
February 1, 2005 or vesting in equal monthly installments over the six months
from August 16, 2004 (2) the options for 236,250 shares vesting in equal monthly
installments over the period of 1.5 years from February 2, 2005 to August 1,
2006, and (3) the options for 105,000 shares vesting in equal monthly
installments over the period of 1 year from August 2, 2006 to August 1, 2007.
The options and warrants assumed from Trident both expire on July 1, 2009. All
outstanding options granted under Trident's prior option plans and warrants are
exercisable as of September 30, 2004.

The weighted average number of shares used for the computation of diluted
earnings per share is as follows:

                                         Nine month                 Three month
                                       period ended                period ended
                                       September 30                September 30
                                               2004                        2004
Weighted average number of shares
  outstanding - basic                    41,507,253                  43,484,683

Dilutive effect of stock options
  and warrants                              159,183                     472,358
                                         --------------------------------------

Weighted average number of shares
  outstanding - diluted                  41,666,436                  43,957,041
                                         =======================================


                                       13
<PAGE>

NOTE 7 - COMPREHENSIVE INCOME

Comprehensive income represents total non-shareholder changes in equity during a
period except those resulting from investments by and distributions to
shareholders. For the three and nine months ended September 30, 2004 and 2003,
comprehensive income is the same as net income.

NOTE 8 - MINORITY INTERESTS

Minority interests for the nine month periods ended September 30, 2004 represent
the 40% interests in Shanghai E & T and 1.4% interests in OAM S.P.A. held by the
minority shareholders.


NOTE 9 - SUBSEQUENT EVENTS

On October 26, 2004, the Company entered into definitive purchase agreements
(the "Purchase Agreements") for the sale of an aggregate of 6,300,000 shares
("Purchased Shares") of common stock to institutional and individual investors
for gross proceeds of approximately RMB91,257(USD11,025), before deducting a 6%
placement fee and other expenses of the offering. A closing was held on the
first 5,040,000 shares on October 27, 2004 (the "First Closing Date"). A second
closing on the balance of the shares occurred on November 5, 2004. Pursuant to
the Purchase Agreements, Comtech Group, Inc. has  agreed to prepare and file
with the SEC in no event later than 60 days following the First Closing Date, a
registration statement ("Registration Statement") on Form S-1, to enable the
resale of the Purchased Shares and use its best efforts to cause such
Registration Statement to be declared effective as promptly as possible after
filing, but in any event, within 120 days following the First Closing Date or,
in the event of a review of the Registration Statement by the SEC, within 180
days following the First Closing Date, and to remain continuously effective
until the earlier of (1) the second anniversary of the First Closing Date or (2)
the date on which all Purchased Shares have been sold thereunder. If the Company
fails to comply with certain timetable as described in the Purchase Agreements,
the Company will be subject to penalty provision as specified in the Purchase
Agreements.

Subsequent to the period end date, Comtech Group, Inc. granted 3,285,000 stock
options to its directors and employees under the Comtech Group, Inc. 2004 Stock
Incentive Plan at an exercise price of USD1.87 per share.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Portions of the discussion and analysis below contain certain "forward looking"
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, lack of adequate capital to continue operations, changes in currency
exchange rates, other factors discussed in the report as well as factors
discussed in other filings made with the Securities and Exchange Commission.

Although the Company believes that the assumptions underlying the forward
looking statements contained herein are reasonable, any of the assumptions could
prove inaccurate, and therefore, there can be no assurance that the forward
looking statements included herein will prove to be accurate.


                                       14
<PAGE>

THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2003

REVENUE

Details of revenue for the three month period ended September 30 are as follows:

                                                           2004         2003
                                                           ----         ----
                                                          RMB'000      RMB'000
                                                          -------      -------
Mobile handset components                                  82,625       36,633
Telecom equipment                                          63,693       57,698
Other                                                       1,085        1,912
                                                          --------------------
                                                          147,403       96,243

Revenue was RMB51,160 thousand or 53.2% higher than that of the same period of
the prior year. The increase was mainly attributed to the increase in revenues
from both mobile handset components and telecom equipment sales which increased
by RMB45,992 thousand or 125.5% and RMB5,995 or 10.4% respectively. The increase
in mobile handset components revenue was due to the fact that the demand for
mobile handsets has been growing in China and domestic mobile handset vendors
have continued to penetrate the market and capture additional market share. The
increase in telecom equipment revenue was attributed to growth in China's
telecom equipment industry driven by an increase in investment from telecom
operators.

GROSS MARGIN

Gross margin increased from RMB13,661 thousand or 14.2% in the third quarter of
2003 to RMB22,554 thousand or 15.3% in the same period of 2004. The increase was
principally due to the change in revenue mix, where revenues from mobile handset
components sales had a higher margin than those from telecom equipment. The
ratio of margin contribution from mobile handset components sales for the third
quarter of 2003 and 2004 were 43.5% and 61.0% respectively, representing an
increase of 17.5%. In terms of margin amount, the mobile handset sales
contribution increased by approximately RMB7,826 thousand.

SELLING, R&D, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, R&D, general and administrative expenses of RMB8,670 thousand were
RMB5,335 thousand or 160% higher than those of the same period last year. The
details of the expenses for the three month period ended September 30 are as
follows:


                                       15
<PAGE>

                                                2004        2003
                                                ----        ----
                                               RMB'000    RMB'000
                                               -------    -------
Selling expenses                                1,673        676
R&D expenses                                    3,481        225
General and administrative expenses             3,516      2,434
                                               -----------------
                                                8,670      3,335

The increase in the selling expenses by RMB997 thousand or 147.5% was mainly
attributed to the increase in marketing and business development expenses of
approximately RMB400 thousand. Other indirect selling expenses such as freight
charges and salesperson expenses contributed to the balance of the increase and
consistent with the same period of last year, they represented about one percent
of revenue.

R&D expenses increased by RMB3,256 thousand or 1,447.1%. The increase was
comprised of additional costs incurred in developing new product lines for
telecom equipment, handset and consumer electronics. (about RMB2.6 million) and
additional personnel costs associated with strengthening our engineering team
(about RMB600 thousand).

General and administrative expenses increased by RMB1,082 thousand or 44.5%. The
principal factor for the increase was additional corporate expenses of about
RMB1 million, which were incurred as a result of expanding our management team
and additional administrative expenses incurred as a result of the increased
operation of the Company and an increase in legal and other expenses.

INTEREST EXPENSE

Interest expense in the third quarter of 2004 amounted to RMB845 thousand as
compared to RMB273 thousand in the same period of 2003. The increase of RMB572
thousand or 209.5% was due to new bank loans totaling RMB72,482 thousand
obtained in August and September of 2004. The interest rate was overnight LIBOR
or 1.5% per annum above the deposit rate for the charged deposit, whichever is
the highest. No such loans were outstanding in 2003.

INTEREST INCOME

Interest income in third quarter of 2004 amounted to RMB132 thousand, compared
to RMB3 thousand in the same period of 2003. The increase was attributed to
higher net cash inflows generated from revenue and the resulting increase in
deposit balances.


                                       16
<PAGE>

INCOME TAX

The effective tax rate for the three months ended September 30, 2004 was 2.7%
compared to 6.0% for the comparable period in the prior year. The decrease in
the effective tax rate was mostly due to the Company's mix of subsidiaries'
earnings. More income was earned by the Company's subsidiaries with tax benefits
granted from the local tax authorities.

MINORITY INTERESTS

Minority interests comprises 40% of the outstanding shares in Shanghai E&T
System Co., Ltd. and 1.4% shares in OAM S.p.A..

NET INCOME

As a result of the above items, net income for the quarter ended September 30,
2004 was RMB11,899 thousand compared to net income of RMB9,449 thousand in the
corresponding period of 2003.

EARNINGS PER SHARE

The Company reported a basic per share earnings of RMB0.27 for the third quarter
of 2004 based on 43,484,683 outstanding weighted average shares and a diluted
per share earnings of RMB0.27 based on 43,957,041 outstanding weighted average
shares, compared to basic and diluted per share earnings of RMB0.23 for the same
period of 2003, based on 40,502,150 outstanding weighted average shares.

NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2003

REVENUE

Details of revenue for the nine month period ended September 30 are as follows:

                                              2004                2003
                                              ----                ----
                                             RMB'000             RMB'000
                                             -------             -------
Mobile handset components                    279,473              76,100
Telecom equipment                            179,327             167,188
Other                                          6,170               3,036
                                            -----------------------------
Total                                        464,970             246,324


                                       17
<PAGE>

Revenue was RMB218,646 thousand or 88.8% higher that that of the same period of
the prior year. The increase was mainly attributed to the increase in revenues
from both mobile handset components and telecom equipment sales, by RMB203,373
thousand or 267.2% and RMB12,139 or 7.3% respectively. The increase in mobile
handset components revenue was due to the fact that the demand for mobile
handsets has been growing in China and domestic mobile handset vendors have
continued to penetrate the market and capture market share. The increase in
telecom equipment revenue was attributed to growth in China's telecom equipment
industry driven by an increase in investment from telecom operators.
Contribution of mobile handset components revenue to total revenue increased
from RMB76,100 thousand or 30.9% to RMB279,473 thousand or 60.1%. Whereas
contribution of telecom equipment revenue to total revenue decreased from 67.9%
to 38.6%, though revenue amount slightly increased from RMB167,188 thousand to
RMB179,327 thousand.

GROSS MARGIN

Gross margin increased from RMB36,034 thousand or 14.6% in the first three
quarters of 2003 to RMB69,799 thousand or 15.0% in the same period of 2004. The
increase was principally due to the change in revenue mix, where revenues from
mobile handset components sales had a higher margin than those from telecom
equipment. The ratio of margin contribution from mobile handset sales for the
three quarters ended September 30, 2003 and 2004 were 33.8% and 66.5%
respectively, representing an increase of 32.7%. In terms of margin amount, the
mobile handset components sales contribution increased by approximately
RMB34,264 thousand.

SELLING, R&D, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, R&D, general and administrative expenses of RMB19,886 thousand were
RMB8,050 thousand or 68.0% higher than those of the same period last year. The
expenses for the nine month period ended September 30 are as follows:

                                           2004                2003
                                           ----                ----
                                          RMB'000             RMB'000
                                          -------             -------
Selling expenses                           6,059               1,913
R&D expenses                               5,613                 638
General and administrative expenses        8,214               9,285
                                          --------------------------
                                          19,886              11,836


                                       18
<PAGE>

The increase in the selling expenses by RMB4,146 thousand or 216.7% was mainly
attributed to the increase in marketing and business development expenses of
approximately RMB1.4 million for promoting new product lines and gaining larger
customer base. Other indirect selling expenses such as freight charges and
salesperson expenses contributed to the balance of the increase and consistent
with the same period of last year, they represented about one percent of
revenue.

R&D expenses increased by RMB4,975 thousand or 779.78%. The increase was
comprised of additional costs incurred in developing new product lines for
telecom equipment, handset and consumer electronics (about RMB2.6 million) and
additional personnel cost associated with strengthening our engineering team in
2004(about RMB2.4 million for the nine months ended September 30, 2004).

General and administrative expenses decreased by RMB1,071 thousand or 11.5%. The
decrease was attributable to the bad debt provision of RMB2 million recorded in
the nine months ended September 30, 2003, whereas no such provision was
additionally made in the same period of 2004. However, the decrease was offset
in part by additional corporate expenses of about RMB1 million in the first nine
months of 2004, which incurred as a result of our expanding management team and
additional administrative expenses incurred as a result of the increase of
operation of the Company and an increase in legal and other expenses.

INTEREST EXPENSE

Interest expense for the nine months ended September 30, 2004 amounted to
RMB1,669 thousand as compared to RMB500 thousand in the same period of 2003. The
increase of RMB1,169 thousand or 233.8% was due to new bank loans totaling
RMB72,482 thousand obtained in August and September of 2004. The interest rate
was overnight LIBOR or 1.5% per annum above the deposit rate for the charged
deposit, whichever is the highest. No such loans were outstanding in 2003.

INTEREST INCOME

Interest income for the nine months ended September 30, 2004 amounted to RMB159
thousand, compared to RMB34 thousand in the same period of 2003. The increase
was owing to higher net cash inflows generated from revenue and the resulting
increase in deposit balances.


                                       19
<PAGE>

INCOME TAX

The effective tax rate for the nine months ended September 30, 2004 was 3.7%
compared to 4.1% for the comparable period in the prior year. The decrease in
the effective tax rate was mostly due to the Company's mix of subsidiaries'
earnings. More income was earned in the subsidiaries with tax benefits granted
from their respective local tax authorities.

MINORITY INTERESTS

Minority interests comprises 40% of the outstanding shares in Shanghai E&T
System Co., Ltd. and 1.4% shares in OAM S.p.A..

NET INCOME

As a result of the above items, net income for the nine months ended September
30, 2004 was RMB43,549 thousand compared to a net income of RMB22,768 thousand
in the corresponding period of 2003.

EARNINGS PER SHARE

The Company reported a basic per share earnings of RMB1.05 for the first three
quarters ended September 30, 2004 based on 41,507,253 outstanding weighted
average shares and a diluted per share earnings of RMB1.05 based on 41,666,436
outstanding weighted average shares, compared to basic and diluted per share
earnings of RMB0.56 for the same period of 2003, based on 40,502,150 outstanding
weighted average shares.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed our operations primarily through a combination of
cash generated from sales, borrowings from shareholders and available credit
facilities. As of September 30, 2004, we had working capital of RMB88,542
thousand as compared with working capital of RMB14,349 thousand at December 31,
2003.

Operating activities used cash of RMB19,681 thousand for the nine months ended
September 30, 2004 compared to cash provided of RMB5,464 thousand in the
corresponding period of 2003, despite the contribution of net income for the
nine months ended September 30, 2004 of RMB43,549 thousand compared to a net
income of RMB22,768 thousand in the corresponding period of 2003. The decrease
in cash provided by operating activities as compared to the prior year is
primarily due to the increase in receivables of RMB76,215 thousand and
investments in inventories of RMB2,693 thousand, partially offset by the
increase in trade payables and accrued liabilities of RMB11,895 and increase in
minority interest of RMB3,055 thousand. Trade accounts receivable turnover
approximated 89 days for the nine months ended September 30, 2004 compared to
119 days for the comparable period in the prior year. Overall collections of
trade accounts receivables and credit quality of customers has improved. The
impact of the increase in trade accounts payable and inventory balances was
offset primarily by an increase in trade accounts payable balances associated
with the increased purchases of inventories. Investing activities used RMB1,617
thousand during the first three quarters of 2004, mainly for the purchase of
property and equipment, and for the acquisition of a 60% owned subsidiary,
Shanghai E&T System Co. Ltd.


                                       20
<PAGE>

Financing activities provided net cash inflow of RMB8,342 thousand during the
first three quarters of 2004. Cash was provided by new bank loans amounting to
RMB72,482 thousand and proceeds of RMB27,603 thousand obtained from Trident as a
result of the share exchange. These financing cash inflows were partially
off-set by repayment of amounts due to the holding company of RMB50,356 thousand
and the dividend payment for the prior year amounting to RMB41,387 thousand.

Our accounts payable cycle is shorter than our accounts receivable term.
Accordingly, additional working capital is needed to fund this time lag.

Apart from revenues from operations, our principal source of liquidity is our
USD10 million revolving credit facility with the Bank of Communications, Hong
Kong branch is used to fund our working capital needs. We are currently in the
process of negotiating an additional credit facility with another bank to fund
our working capital needs.

During the nine months ended September 30, 2004, we also entered into an
accounts receivable factoring agreement with Guangdong Development Bank Shenzhen
branch. Pursuant to the agreement, accounts receivable from UT Starcom, up to a
maximum amount of RMB30 million, can be transferred to the Bank with recourse.

Future Liquidity Needs

As of September 30, 2004, we had approximately RMB17,727 thousand in cash. On
October 27, 2004, we completed a private placement of 5.04 million shares of
Common Stock of aggregate proceeds of approximately USD8.8 million with a group
primarily consisting of institutional investors. We sold an additional 1.26
million shares of Common Stock for aggregate proceeds of approximately USD2.2
million in a second closing on November 5, 2004. We regularly reviews our cash
funding requirements and attempt to meet those requirements through a
combination of cash on hand, cash provided by operations, available borrowings
under bank lines of credit and possible future public or private equity
offerings. At times, we evaluate possible acquisitions of, or investments in,
businesses that are complementary to ours, which transactions may require the
use of cash. We believe that our cash, other liquid assets, operating cash
flows, credit arrangements, access to equity capital markets, taken together,
provide adequate resources to fund ongoing operating expenditures. In the event
that they do not, we may require additional funds in the future to support our
working capital requirements or for other purposes and may seek to raise such
additional funds through the sale of public or private equity as well as from
other sources.

Effects of Inflation

Our most liquid assets are cash, cash equivalents and short-term investment.
Because of their liquidity, these assets are not directly affected by inflation.
Because we intend to retain and continue to use our equipment, furniture and
fixtures and leasehold improvements, we believe that the incremental inflation
related to replacement costs of such items will not materially affect our
operations. However, the rate of inflation affects our expenses, such as those
for employee compensation and contract services, which could increase our level
of expenses and the rate at which we use our resources.

Critical Accounting Policies and Estimates

The methods, estimates and judgments we use in applying our accounting policies
have a significant impact on the results we report in our financial statements.
The U.S. Securities and Exchange Commission, or SEC, has defined critical
accounting policies as those that are most important to the portrayal of our
financial condition and results of operations and require us to make our most
difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. We have summarized below our
accounting policies that we believe are both important to the portrayal of our
financial results and involve the need to make estimates about the effect of
matters that are inherently uncertain.


                                       21
<PAGE>

         Allowance for bad and doubtful accounts - The Company maintains
allowances for its bad and doubtful accounts for estimated losses resulting from
the inability of its customers to make required payments. If the financial
condition of its customers changed, changes to these allowances may be required,
which would impact the Company's future operating results.

         Litigation - The Company records contingent liabilities relating to
litigation or other loss contingencies when it believes that the likelihood of
loss is probable and the amount of the loss can be reasonable be estimated.
Changes in judgments of outcome and estimated losses are recorded, as necessary,
in the period such changes are determined or become known. Any changes in
estimates would impact its future operating results.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Foreign Exchange Risk

Our functional currency is the RMB. Transactions in other currencies are
recorded in RMB at the rates of exchange prevailing when the transactions occur.
Monetary assets and liabilities denominated in other currencies are translated
into RMB at rates of exchange in effect at the balance sheet dates. Exchange
gains and losses are recorded in our statements of operations as a component of
current period earnings. We have experienced minimal foreign exchange gain and
losses to date. We believe that our exposure to foreign currency exchange rate
risk is not material and we do not currently engage in hedging activities to
reduce our exposure to exchange rate fluctuations.

The value of the RMB against the U.S. dollar and other currencies may fluctuate
and is affected by, among other things, changes in the China's political and
economic conditions. Since 1994, the conversion of Renminbi into foreign
currencies, including U.S. dollars, has been based on rates set by the People's
Bank of China, which are set daily based on the previous day's interbank foreign
exchange market rates and current exchange rates on the world financial markets.
Since 1994, the official exchange rate generally has been stable. However,
recently there has been increased political pressure on the Chinese government
to decouple the RMB from the USD. Because many of our customers are involved in
the export of goods, the appreciation of the RMB would make our customers
products more expensive to purchase, which may have an adverse impact on their
sales. A decrease in sales by our customers could have an adverse effect on our
operating results. In addition, the Company also has USD denominated debt and
therefore decoupling of RMB many affect the Company's financial performance in
the future.


                                       22
<PAGE>

Interest Rate Risk

We are exposed to interest rate risk arising from having short-term variable
rate obligations of RMB72,482,000 (USD8,757,000)as of September 30, 2004. Our
future interest expense would fluctuate in line with any change in LIBOR. For
example, if LIBOR increases by 1%, our payment obligation would increase by
approximately RMB725,000 (USD88,000) per annum. We do not have any derivative
financial instruments and believes our exposure to interest rate risk and other
relevant market risks is not material.

Inflation and Monetary Risk

Inflation in China has not had a material impact on our results of operations
in recent years. According to the National Bureau of Statistics of China, the
change in Consumer Price Index in China was 0.7%, -0.8% and 1.2% in 2001, 2002
and 2003, respectively.

However, following the 2.8% average change in the Consumer Price Index in China
in the first quarter of 2004 and a 3.8% change in the month of April 2004, the
PRC government has announced measures to restrict lending and investment in
China in order to reduce inflationary pressures in China's economy. The change
in the Consumer Price Index in China was 4.3% in October 2004, compared to
October 2003. The PRC government may introduce further measures intended to
reduce the inflation rate in China. Any such measures adopted by the PRC
government may not be successful in reducing or slowing the increase in China's
inflation rate.

Item 4. Controls and procedures

We maintain "disclosure controls and procedures," as such term is defined under
Exchange Act Rule 13a-15(e), that are designed to ensure that information
required to be disclosed in our Exchange Act reports is recorded, processed,
summarized, and reported within the time periods specified in the SEC's rules
and forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosures. In
designing and evaluating the disclosure controls and procedures, our management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives and in reaching a reasonable level of assurance our management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. We have carried out an
evaluation under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2004. Based upon their evaluation and subject to
the foregoing, the Chief Executive Officer and Chief Financial Officer concluded
that as of September 30, 2004 our disclosure controls and procedures were
effective at the reasonable assurance level in ensuring that material
information relating to us, is made known to the Chief Executive Officer and
Chief Financial Officer by others within our company during the period in which
this report was being prepared. There were no changes in our internal controls
or in other factors during the most recent quarter that has materially affected,
or is reasonably likely to materially affect, our internal controls over
financial reporting.


                                       23
<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The following legal proceedings were settled during the quarter ended September
30, 2004

Aprilia Claims under the Share Purchase Agreement; Payment by IMI; request for
Arbitration; Settlement

In 2000, Aprilia asserted various claims against Centerpoint relating to
Centerpoint's representations and warranties under the Share Purchase Agreement
(the "Alleged Claims") for the sale of its Moto Guzzi operations. In 2001, IMI,
the escrow agent under the Escrow Agreement, paid Euro3,931 thousand from the
escrow account to Aprilia in respect of the Alleged Claims. Centerpoint disputed
the Alleged Claims and requested arbitration. Centerpoint and Aprilia, in
October 2003, entered into an agreement to settle the matter with Aprilia,
paying Euro1,420,256 including Euro206,583 of legal fees. The right to 35% of
the net proceeds of this settlement is owned by Centerpoint (which is no longer
a related party of the Company at the time of the settlement).


                                       24
<PAGE>

IMI Fees - settled in June 2004

In connection with the sale of Moto Guzzi to Aprilia, IMI was paid Euro5,888
thousand in fees and expenses it claimed under its engagement letter with the
Company. The Company disputed the calculation of IMI's fees and on February 7,
2002 brought a suit in the Milan Court in Italy seeking reimbursement of
Euro4,527 thousand (approximately USD 5.7 million at 2003 year-end exchange
rates). The judge handling the lawsuit has heard the case several times in 2002
and 2003. On June 21, 2004, an out-of-court settlement was reached, with IMI
paying Euro700 thousand, of which the Company received Euro373 thousand.

Legal Action by TCMP 3 against Directors of Centerpoint - initiated in January
2004 and settled in July 2004

On January 16, 2004, a civil action was initiated by TCMP 3 Partners LLC in the
Chancery Court of Delaware against the former directors of Centerpoint accusing
them of wasting Centerpoint's assets in undertaking the Bion transaction. The
action was mutually settled in July 2004 with the Company paying USD 140,000 to
the Plaintiffs in return for a full release of all potential claims against the
Company, its directors, its representatives and other indemnified parties in
connection with the Bion transaction.

Legal action by Shenzhen Comtech against a customer

On September 14, 2004, a civil action was initiated by Shenzhen Comtech in the
Court of Beijing of China against a corporate customer claiming a total amount
of approximately RMB801 thousand, comprising outstanding accounts receivable
amounting to approximately RMB438 thousand, penalty for overdue accounts
receivable amounting to approximately RMB328 thousand and interest of
outstanding balance amounting to approximately RMB35 thousand. The action was
mutually settled on October 19, 2004 with the defendant paying RMB500 thousand
to the Shenzhen Comtech in return for a full release of all potential claims
against the defendant.


                                       25
<PAGE>

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds -
Information to be disclosed under this Item 2 was previously furnished in a
Current Report on Form 8-K filed with the Securities and Exchange Commission on
October 27, 2004.

Item 3. Defaults upon Senior Securities - None

Item 4. Submission of Matters to a Vote of Securities Holders

On October 12, 2004, the Company filed a definitive Information Statement on
Schedule 14C with the Securities and Exchange Commission. The Information
Statement was mailed to the Company's stockholders solely for the purpose of
informing the stockholders of the approval and consent by the Board of Directors
of the Company and at least two thirds of the Company's stockholders to amend
the Company's Articles of Incorporation to increase its authorized shares of
common stock from 50,000,000 to 200,000,000 shares. Of the 44,422,050 shares of
the Company issued and outstanding a vote of at least two-thirds, totaling
29,614,700 shares, was required to approve the amendment. The amendment received
the approval by written consent of holders owning 37,261,978 shares. The
amendment to the Articles of Incorporation was filed and effective with the
Secretary of State of Maryland on November 3, 2004. The Company did not solicit
proxies to vote at a stockholders' meeting with respect to the amendment.

Item 5. Other Information - None


                                       26
<PAGE>

Item  6. Exhibits

      (b)   Exhibits

      31    Rule 13a-14(A) Certifications.

      32    Section 1350 Certifications.


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<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       COMTECH GROUP, INC.

December 22, 2004                      By:  /s/ Jeffrey Kang
                                            ------------------------------------
                                                Jeffrey Kang
                                                Chief Executive Officer and
                                                Chairman of the Board

December 22, 2004                      By:  /s/ Hope Ni
                                            ------------------------------------
                                                Hope Ni
                                                Chief Financial Officer


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