<PAGE>

                 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                  FORM 10-QSB

[X]  Quarterly Report Under Section 13 or 15(d) of the 
     Securities Exchange Act of 1934

     For the quarterly period ended June 30, 1998
                                    -------------

[ ]  Transition Report Under Section 13 or 15(d) of the
     Securities Exchange Act of 1934

     For the transition period from _________ to _________

                            Commission file number:  0-8128
                                                     ------

                                FREMONT CORPORATION
-------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

         Delaware                                          76-0402886
-------------------------------                     ---------------------------
(State or other jurisdiction of                          (I.R.S. Employer 
incorporation or organization)                        Identification Number)

                         9454 Wilshire Boulevard, 6th Floor 
                           Beverly Hills, California 90212
-------------------------------------------------------------------------------
                       (Address of principal executive offices)

Issuer's telephone number, including area code:  (310) 358-1006
                                                 --------------

                                  Not applicable
-------------------------------------------------------------------------------
                (Former name, former address and former fiscal year, 
                            if changed since last report.)

     Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 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 [ ] 

     As of June 30, 1998, the issuer had 5,861,639 shares of common stock 
issued and outstanding.

Transitional Small Business Disclosure Format:  Yes [ ]  No [X]

                                       1

<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES

                                        INDEX

PART 1.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets (Unaudited) -
              December 31, 1997 and June 30, 1998

              Condensed Consolidated Statements of Operations
              (Unaudited) - Three Months and Six Months Ended
              June 30, 1997 and 1998

              Condensed Consolidated Statements of Cash Flows
              (Unaudited) - Six Months Ended June 30, 1997 and 1998

              Notes to Condensed Consolidated Financial
              Statements (Unaudited) - Six Months Ended June 30,
              1997 and 1998

     Item 2.  Management's Discussion and Analysis or Plan of
              Operation


PART II.  OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES

                                       2

<PAGE>


                         FREMONT CORPORATION AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                               (Amounts in thousands,  
                     except number of shares and per share data)


<TABLE>
<CAPTION>

                           December 31, 1997    June 30, 1998
                           -----------------  ------------------
                             RMB       USD       RMB      USD
                           -------    ------   -------   ------
<S>                         <C>        <C>      <C>      <C>
ASSETS

Current assets:
  Cash and cash 
   equivalents               5,016       604     3,875      467
  Accounts receivable,
   net                      72,600     8,747    91,430   11,016
  Inventories (Note 2)      64,117     7,725    66,153    7,970
  Due from SCH               8,338     1,005    12,760    1,537
  Due from Easy Keen
   (Note 5)                 17,370     2,093    16,191    1,951
  Prepayments and 
   other current assets     21,017     2,532    13,188    1,589
                           -------    ------   -------   ------
    Total current assets   188,458    22,706   203,597   24,530
                           -------    ------   -------   ------

Property, plant and
 equipment                 163,826    19,737   164,452   19,814
Less accumulated
 depreciation              (31,291)   (3,770)  (36,037)  (4,342)
                           -------    ------   -------   ------
                           132,535    15,967   128,415   15,472
                           -------    ------   -------   ------

Rental deposit to SCH       22,800     2,747    21,400    2,578
Goodwill, net               35,811     4,315    35,321    4,256
Other long-term assets       6,631       799     6,526      786
                           -------    ------   -------   ------
    Total assets           386,235    46,534   395,259   47,622
                           -------    ------   -------   ------
                           -------    ------   -------   ------

</TABLE>

                                  (continued)

                                       3
<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(continued)
                               (Amounts in thousands,  
                     except number of shares and per share data)

<TABLE>
<CAPTION>
                           December 31, 1997    June 30, 1998
                           -----------------  ------------------
                             RMB       USD       RMB      USD
                           -------    ------   -------   ------
<S>                         <C>        <C>      <C>      <C>
LIABILITIES AND 
SHAREHOLDERS' EQUITY

Current liabilities:
  Short-term borrowings     75,041     9,041    73,752    8,886
  Accounts payable          32,662     3,935    36,627    4,413
  Accrued expenses and
   other liabilities        49,312     5,941    53,506    6,446
  Taxes payable             12,839     1,547    14,246    1,716
  Finance lease 
   obligations, current
   portion                   8,246       994     8,246      994
                           -------    ------   -------   ------
    Total current 
     liabilities           178,100    21,458   186,377   22,455

Finance lease
 obligations, 
 non-current portion         2,363       284     1,655      199
Long-term bank loans         6,100       735     6,600      795
Loan from MTE (Note 3)      33,280     4,010    33,280    4,010
Other long-term payables     3,350       403     3,585      432
                           -------    ------   -------   ------
    Total liabilities      223,193    26,890   231,497   27,891
                           -------    ------   -------   ------

Minority interests          11,103     1,338    11,382    1,372
                           -------    ------   -------   ------
</TABLE>

                                   (continued)

                                       4

<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(continued)
                               (Amounts in thousands,  
                     except number of shares and per share data)

<TABLE>
<CAPTION>

                           December 31, 1997     June 30, 1998
                           -----------------   ------------------
                             RMB       USD        RMB      USD
                           -------    ------    -------   ------
<S>                        <C>        <C>       <C>       <C>

LIABILITIES AND 
SHAREHOLDERS' EQUITY

Shareholders' equity:
 Common stock, par value
  US$ .001 per share;
  authorized - 
  100,000,000 shares;
  issued and 
  outstanding -
  5,861,639 shares at
  December 31, 1997 and
  June 30, 1998                 49         6        49        6
 Additional paid-in 
  capital                  118,134    14,233   118,134   14,233
 Dedicated capital          11,785     1,420    11,785    1,420
 Retained earnings          21,971     2,647    22,412    2,700
                           -------    ------   -------   ------
    Total shareholders'
     equity                151,939    18,306   152,380   18,359
                           -------    ------   -------   ------
    Total liabilities
     and shareholders'  
     equity                386,235    46,534   395,259   47,622
                           -------    ------   -------   ------
                           -------    ------   -------   ------

</TABLE>

                            See accompanying notes to 
                   condensed consolidated financial statements.

                                       5

<PAGE>
                         FREMONT CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                (Amounts in thousands,
                     except number of shares and per share data)

<TABLE>
<CAPTION>
                                  Three Months Ended June 30,
                               ---------------------------------
                                 1997              1998        
                               ---------   ---------------------
                                  RMB         RMB         USD
                               ---------   ---------   ---------
<S>                               <C>         <C>          <C>
Sales
 - to related companies            5,430       6,242         752
 - to others                      41,548      29,570       3,563
                                  ------      ------       -----
                                  46,978      35,812       4,315
                                  ------      ------       -----
Cost of goods sold 
 - purchases from related
    companies                      3,884       6,577         793
 - others                         33,483      21,093       2,541
                                  ------      ------       -----
                                  37,367      27,670       3,334
                                  ------      ------       -----
Gross profit                       9,611       8,142         981
Selling, general and
  administrative expenses          4,439       7,004         844
Less:  Shared by SCH                (979)     (1,074)       (129)
Interest expense, net              2,818       2,033         245
Other expense, net                   405          43           5
                                  ------      ------       -----
  Income before income taxes       2,928         136          16
Provision for income taxes          (675)       (523)        (63)
                                  ------      ------       -----
  Income (loss) before
   minority interests              2,253        (387)        (47)
Minority interests                   657        (584)        (70)
                                  ------      ------       -----
  Net income (loss)                2,910        (971)       (117)
                                  ------      ------       -----
                                  ------      ------       -----

Net income (loss) per
  common share (Note 6):
  -Basic                             .50        (.17)       (.02)
                                  ------      ------       -----
                                  ------      ------       -----
  -Diluted                           .49        (.17)       (.02)
                                  ------      ------       -----
                                  ------      ------       -----

</TABLE>

                            See accompanying notes to
                   condensed consolidated financial statements.

                                       6

<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                (Amounts in thousands,
                     except number of shares and per share data)

<TABLE>
<CAPTION>

                                   Six Months Ended June 30,
                               ---------------------------------
                                 1997              1998        
                               ---------   ---------------------
                                  RMB         RMB         USD
                               ---------   ---------   ---------
<S>                               <C>        <C>           <C>
Sales
 - to related companies           12,947       8,975       1,081
 - to others                      78,246      58,906       7,097
                                  ------      ------       -----
                                  91,193      67,881       8,178
                                  ------      ------       -----
Cost of goods sold 
 - purchases from related
    companies                      7,143       8,193         987
 - others                         63,654      43,291       5,216
                                  ------      ------       -----
                                  70,797      51,484       6,203
                                  ------      ------       -----
Gross profit                      20,396      16,397       1,975
Selling, general and
  administrative expenses          9,446      13,956       1,681
Less:  Shared by SCH              (2,277)     (3,562)       (429)
Interest expense, net              5,274       4,707         567
Other expense, net                   452          53           6
                                  ------      ------       -----
  Income before income taxes       7,501       1,243         150
Provision for income taxes        (1,175)       (523)        (63)
                                  ------      ------       -----
  Income before minority 
   interests                       6,326         720          87
Minority interests                   975        (279)        (34)
                                  ------      ------       -----
  Net income                       7,301         441          53
                                  ------      ------       -----
                                  ------      ------       -----

Net income per common
  share (Note 6):
  -Basic                            1.25         .08         .01
                                  ------      ------       -----
                                  ------      ------       -----
  -Diluted                          1.24         .08         .01
                                  ------      ------       -----
                                  ------      ------       -----

</TABLE>

                              See accompanying notes to
                     condensed consolidated financial statements.

                                         7
<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                (Amounts in thousands)

<TABLE>
<CAPTION>
                                   Six Months Ended June 30,
                               ---------------------------------
                                 1997              1998        
                               ---------   ---------------------
                                  RMB         RMB         USD
                               ---------   ---------   ---------
<S>                                <C>        <C>           <C>
Cash flows from operating 
 activities:
 Net income (loss)                 7,301         441          53
  Adjustments to reconcile
   net income (loss) to net
   cash provided by (used in)
   operating activities:
    Depreciation                   5,094       4,746         572
    Amortization                     732         733          88
    Minority interests              (975)        279          34
    Provision for bad debts                    2,000         241
    Rental expense offset
     against rental deposit
     to SCH                        1,400       1,400         169
    Changes in operating 
     assets and liabilities:
     (Increase) decrease in -
      Accounts receivable        (12,172)    (20,830)     (2,510)
      Inventories                  1,245      (2,036)       (245)
      Due from SCH                 3,169      (4,422)       (533)
      Due from Easy Keen           5,743       1,179         142
      Prepayments and other
       current assets               (701)      7,829         943
      Other long-term assets        (886)       (138)        (17)
     Increase (decrease) in -
      Accounts payable           (15,712)      3,965         478
      Accrued expenses and 
       other liabilities          (3,474)      4,194         505
      Taxes payable               (1,631)      1,407         170
      Other long-term
       payables                       69         235          28
                                  ------      ------      ------
       Net cash provided by
        (used in) operating
        activities               (10,798)        982         118
                                  ------      ------      ------
</TABLE>


                                     (continued)

                                        8

<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 
                                     (continued)
                                (Amounts in thousands)

<TABLE>
<CAPTION>

                                   Six Months Ended June 30,
                               ---------------------------------
                                 1997              1998        
                               ---------   ---------------------
                                  RMB         RMB         USD
                               ---------   ---------   ---------
<S>                               <C>          <C>          <C>
Cash flows from investing
 activities:
  Additions to property, 
   plant and equipment            (2,180)       (626)        (75)
                                  ------      ------      ------
       Net cash used in 
        investing activities      (2,180)       (626)        (75)
                                  ------      ------      ------

Cash flows from financing
 activities:
  Net proceeds from
   (repayments of)
   short-term borrowings          19,000      (1,289)       (155)
  Net proceeds from 
   long-term bank loans                          500          60
  Payments of finance
   lease obligations              (4,444)       (708)        (85)
  Exercise of warrants,
   net of costs                      224
                                  ------      ------      ------ 
      Net cash provided by
       (used in) financing
       activities                 14,780      (1,497)       (180)
                                  ------      ------      ------

Cash and cash equivalents:
  Net increase (decrease)          1,802      (1,141)       (137)
  At beginning of period           4,806       5,016         604
                                  ------      ------      ------ 
  At end of period                 6,608       3,875         467
                                  ------      ------      ------ 
                                  ------      ------      ------ 
</TABLE>

                              See accompanying notes to 
                     condensed consolidated financial statements.

                                         9

<PAGE>

                         FREMONT CORPORATION AND SUBSIDIARIES
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                        SIX MONTHS ENDED JUNE 30, 1997 AND 1998


1.  ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION - Fremont Corporation, a Delaware corporation (the "Company"), 
was incorporated in the State of Utah on April 22, 1955, as Fremont Uranium 
Corporation.  As of July 1, 1993, the Company reincorporated in the State of 
Delaware and changed its name to Fremont Corporation.

REVERSE ACQUISITION - From 1989 through April 28, 1995, the Company was 
engaged in acquiring interests in oil and natural gas properties and in 
seeking potential acquisition or merger opportunities.  The Company entered 
into a Share Exchange Agreement dated as of March 23, 1995, and as amended on 
March 30, 1995, with Million Treasure Enterprises Limited ("MTE") and Winfill 
Holdings International Limited ("Winfill"), both of which are British Virgin 
Islands corporations.  Pursuant to the Share Exchange Agreement, on April 28, 
1995, the Company acquired from MTE 41,000 shares of common stock of Winfill, 
representing all of the issued and outstanding capital stock of Winfill, in 
exchange for the issuance of 4,760,000 shares of the Company's common stock, 
together with a warrant which allows MTE and/or its designee to receive up to 
2,000,000 shares of Class B common stock in exchange for an equivalent number 
of shares of common stock.  The terms of the Class B common stock are 
identical to that of the common stock (which will be designated Class A 
common stock) except that the holder thereof will be entitled to three votes 
per share.  The warrant can be exercised after the Company's Certificate of 
Incorporation is amended to authorize the Class B common stock.  

     Immediately prior to this transaction, after a 1-for-100 reverse stock 
split effective April 28, 1995, the Company had a total of 842,639 shares of 
common stock issued and outstanding, including 770,000 shares issued to 
certain consultants in conjunction with the reverse acquisition which were 
valued at RMB 6,405,000 and charged to operations.  The 4,760,000 shares of 
common stock represented approximately 85% of the outstanding shares of 
common stock of the Company, after all shares were issued and the 1-for-100 
reverse stock split was effected as set forth in the Share Exchange 
Agreement.  All common share and per share data in the accompanying condensed 
consolidated financial statements have been restated to reflect this reverse 
stock split.

     Pursuant to the terms of the Share Exchange Agreement, the Company 
transferred to Joseph W. Petrov, the Company's former president and 
controlling shareholder, all of its operating

                                      10

<PAGE>

assets existing immediately subsequent to the closing of the previously 
described transaction (excluding the shares of Winfill) in exchange for the 
assumption by Mr. Petrov of all of the liabilities of the Company as of the 
closing and the delivery of a release of all obligations owed by the Company 
to an affiliate of Mr. Petrov.  In addition, at the closing, each member of 
the Company's Board of Directors resigned, and was replaced by 
representatives of MTE and Winfill.

     South China Bicycles Winfill Limited ("SCBW") is a Sino-foreign joint 
venture formed to engage in the design, manufacture and marketing of 
bicycles, bicycle parts and components and steel tubes.  Winfill owns a 98% 
equity interest in SCBW and South China Bicycles Company (Holdings) Limited 
("SCH"), a state-owned enterprise incorporated in the People's Republic of 
China, owns the remaining 2% equity interest in SCBW.  Winfill and SCH formed 
SCBW effective July 1, 1994, to acquire and operate the bicycle, bicycle 
parts and components and steel tube manufacturing operations of SCH at a 
consideration of RMB 152,076,000.  Except for a 69% interest in South China 
Bicycles Co. Ltd. ("SCB"), SCBW owns 100% interests in its principal 
operating subsidiaries, all of which are organized in the People's Republic 
of China.  The factory operations of SCBW's subsidiaries are located at 
several sites in Zhaoqing City, Guangdong Province, People's Republic of 
China.  SCB owns a 99.99% interest in Fogance Industries Limited, which is 
the Hong Kong-based overseas purchasing and sales agent for the Company.  For 
accounting purposes, the transaction has been treated as a recapitalization 
of Winfill with Winfill as the acquiror (reverse acquisition).  The 
consolidated financial statements have been prepared in accordance with 
generally accepted accounting principles in the United States of America.  

     The 31% minority interest in SCB is owned by a company whose president 
is a director of the Company.  The director is also a shareholder of Hong 
Kong Easy Keen Industries Ltd. ("Easy Keen") and of MTE, the controlling 
shareholder of the Company.  The Company conducts a substantial portion of 
its sales and purchases through related parties (SCH and Easy Keen), and has 
additional significant continuing transactions with such related parties.  
Sales to related companies are for both domestic and export purposes.  

FOREIGN CURRENCY TRANSLATION - In preparing the consolidated financial 
statements, the financial statements of the Company are measured using 
Renminbi ("RMB") as the functional currency.  All foreign currency 
transactions are translated into RMB using the applicable floating rates of 
exchange as quoted by the People's Bank of China prevailing at the date of 
the transactions.  Monetary assets and liabilities denominated in foreign 
currencies are translated into RMB using the applicable exchange rates 
prevailing at the balance sheet dates.  The resulting exchange gains or 
losses are recorded in the consolidated statements of 

                                      11

<PAGE>

operations for the periods in which they occur.

     The Company's share capital is denominated in United States dollars 
("USD" or "US$") and the reporting currency is the RMB.  For financial 
reporting purposes, the USD share capital amounts have been translated into 
RMB at the applicable rates prevailing on the transaction dates.

     Translation of amounts from RMB into USD for the convenience of the 
reader has been made at the noon buying rate in New York City for cable 
transfers in foreign currencies as certified for customs purposes by the 
Federal Reserve Bank of New York on June 30, 1998 of US$1.00 = RMB 8.3.  No 
representation is made that the RMB amounts could have been, or could be, 
converted into USD at that rate or at any other certain rate.  

BASIS OF PRESENTATION - The accompanying consolidated financial statements 
are unaudited but, in the opinion of management of the Company, contain all 
adjustments necessary to present fairly the financial position at June 30, 
1998, the results of operations for the three months and six months ended 
June 30, 1997 and 1998, and the changes in cash flows for the six months 
ended June 30, 1997 and 1998.  These adjustments are of a normal recurring 
nature.  The consolidated balance sheet as of December 31, 1997 is derived 
from the Company's audited financial statements.  The accompanying 
consolidated financial statements include the operations of the Company and 
its subsidiaries.  All significant intercompany accounts and transactions 
have been eliminated in consolidation.

     Certain information and footnote disclosures normally included in 
financial statements that have been prepared in accordance with generally 
accepted accounting principles have been condensed or omitted pursuant to the 
rules and regulations of the Securities and Exchange Commission, although 
management of the Company believes that the disclosures contained in these 
financial statements are adequate to make the information presented therein 
not misleading.  For further information, refer to the consolidated financial 
statements and notes thereto included in the Company's Annual Report on Form 
10-KSB for the fiscal year ended December 31, 1997, as filed with the 
Securities and Exchange Commission.

     The results of operations for the three months and six months ended June 
30, 1998 are not necessarily indicative of the results of operations to be 
expected for the full fiscal year ending December 31, 1998.

     Certain prior period amounts have been reclassified to conform with the 
current year presentation.

                                      12

<PAGE>

2.  INVENTORIES

     Inventories consisted of the following at December 31, 1997 and June 30, 
1998:

<TABLE>
<CAPTION>

                     December 31, 1997         June 30, 1998
                   ---------------------   ---------------------
                      RMB         USD         RMB         USD
                   ----------  ---------   ----------  ---------
<S>                <C>         <C>         <C>         <C>
Raw materials      33,498,000  4,036,000   27,688,000  3,336,000
Work-in-progress    7,330,000    883,000    8,962,000  1,080,000
Finished goods     23,289,000  2,806,000   29,503,000  3,554,000
                   ----------  ---------   ----------  ---------
                   64,117,000  7,725,000   66,153,000  7,970,000
                   ----------  ---------   ----------  ---------
                   ----------  ---------   ----------  ---------

</TABLE>

3.  LOAN FROM MTE

     The unsecured loan of RMB 33,280,000 from MTE, the parent company, is 
denominated in USD, bears no interest, and has no fixed repayment terms.     

4.  CONSULTING CONTRACTS

     Pursuant to consulting service agreements dated August 1, 1997 and 
subsequent amendments, the Company engaged the services of two consultants to 
provide corporate and financial consulting services for a period of three 
years commencing January 1, 1998.  As consideration for their services, the 
Company agreed to issue to the consultants a total of 120,000 shares of 
common stock in 1998.  As of June 30, 1998, the shares of common stock had 
not been issued.

5.  DUE FROM EASY KEEN

     As of December 31, 1997 and June 30, 1998, RMB 17,370,000 and RMB 
16,191,000, respectively, was due from Easy Keen.  A director of the Company 
is also a shareholder of Easy Keen and MTE.  SCBW and Easy Keen have agreed 
to settle the net amount due SCBW by Easy Keen supplying raw materials of the 
same value during 1998, or otherwise by payment in cash.

6.  NET INCOME (LOSS) PER COMMON SHARE

     Effective December 31, 1997, the Company adopted Statement of Financial 
Accounting Standards No. 128, "Earnings Per Share" (SFAS 128), which requires 
the presentation of basic and diluted earnings per share.  Basic earnings per 
share are calculated by 

                                      13

<PAGE>

dividing net income (loss) by the weighted average number of common shares 
outstanding during the period.  Diluted earnings per share are calculated by 
dividing net income (loss) by the basic shares and all dilutive securities, 
but does not include the impact of potential common shares which would be 
anti-dilutive.  These dilutive securities were anti-dilutive in 1998. 

     Potentially dilutive securities outstanding at June 30, 1998 consist of 
a warrant entitling the holder to purchase 56,000 shares of common stock at 
US$2.50 per share through May 31, 2000. 

     Net income per share for the three months and six months ended June 30, 
1997 was restated as a result of SFAS 128, from RMB .49 and RMB 1.24 per 
share, respectively, to RMB .50 and RMB 1.25 per share, respectively.   

     The following tables present the components of basic and diluted 
earnings per share:


                                      14

<PAGE>
<TABLE>
<CAPTION>
                                Three Months Ended June 30,
                            ----------------------------------   
                               1997              1998
                            ---------   ----------------------
                               RMB         RMB          USD
                            ---------   ---------    --------- 
<S>                         <C>         <C>             <C>

Basic Earnings Per
Share Computation
-----------------
                            
Net income (loss)           2,910,000    (971,000)    (117,000)
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Weighted average
  common shares
  outstanding               5,831,639   5,861,639    5,861,639
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Net income (loss)
  per share - Basic               .50        (.17)        (.02)
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 


Diluted Earnings 
Per Share Computation
---------------------

Net income (loss)           2,910,000    (971,000)    (117,000)
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Weighted average 
  common shares
  outstanding               5,831,639   5,861,639    5,861,639 
Net shares 
  issuable upon
  exercise of
  warrants                     76,341
                            ---------   ---------    ---------
Diluted common
  shares outstanding        5,907,980   5,861,639    5,861,639
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 

Net income (loss)
  per share - Diluted             .49        (.17)        (.02) 
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 

</TABLE>

                                       15

<PAGE>
<TABLE>
<CAPTION>
                                 Six Months Ended June 30,   
                            ----------------------------------    
                               1997              1998
                            ---------   ----------------------
                               RMB         RMB          USD
                            ---------   ---------    --------- 
<S>                         <C>         <C>             <C>
Basic Earnings Per
Share Computation
-----------------
                            
Net income                  7,301,000     441,000       53,000
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Weighted average
  common shares
  outstanding               5,828,306   5,861,639    5,861,639
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Net income per
  share - Basic                  1.25         .08          .01
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 

Diluted Earnings 
Per Share Computation
---------------------

Net income                  7,301,000     441,000       53,000
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Weighted average 
  common shares
  outstanding               5,828,306   5,861,639    5,861,639 
Net shares 
  issuable upon
  exercise of
  warrants                     81,706
                            ---------   ---------    ---------   
Diluted common
  shares outstanding        5,910,012   5,861,639    5,861,639
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
Net income per
  share - Diluted                1.24         .08          .01 
                            ---------   ---------    --------- 
                            ---------   ---------    --------- 
</TABLE>
                                       16


<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

     This Quarterly Report on Form 10-QSB contains "forward-looking 
statements" within the meaning of the Federal securities laws.  These 
forward-looking statements include, among others, statements concerning the 
Company's expectations regarding sales trends, gross margin trends, the 
availability of short-term bank borrowings to fund operations and capital 
expenditures, the repayment of loans, facility expansion plans, and other 
statements of expectations, beliefs, future plans and strategies, anticipated 
events or trends, and similar expressions concerning matters that are not 
historical facts.  The forward-looking statements in the Quarterly Report on 
Form 10-QSB for the quarterly period ended June 30, 1998 are subject to risks 
and uncertainties that could cause actual results to differ materially from 
those results expressed in or implied by the statements contained herein. 


Overview:

     Effective April 28, 1995, the Company acquired Winfill.  Winfill owns a 
98% interest in SCBW, a Sino-foreign joint venture engaged in the design, 
manufacture and marketing of bicycles, bicycle parts and components, steel 
tubes, and exercise equipment.  Winfill commenced operations effective July 
1, 1994.  Except for a 69% interest in SCB, SCBW owns 100% interests in its 
principal operating subsidiaries, all of which are organized in the People's 
Republic of China.  The factory operations of SCBW's subsidiaries are located 
at several sites in Zhaoqing City, Guangdong Province, People's Republic of 
China. SCB owns a 99.99% interest in Fogance Industries Limited, which is the 
Hong Kong-based overseas purchasing and sales agent for the Company.        

     For accounting purposes, the transaction has been treated as a 
recapitalization of Winfill with Winfill as the acquiror (reverse 
acquisition). The consolidated financial statements include the accounts of 
Winfill and its majority owned and controlled subsidiaries.  

Consolidated Results of Operations - Three Months and Six Months Ended June 
30, 1997 and 1998:

Sales:

     Sales for the three months ended June 30, 1998 were RMB 35,812,000, as 
compared to RMB 46,978,000 for the three months ended June 30, 1997, a 
decrease of RMB 11,166,000 or 23.8%.

                                      17


<PAGE>

Sales to related companies for the three months ended June 30, 1998 were RMB 
6,242,000 or 17.4% of sales, as compared to RMB 5,430,000 or 11.6% of sales 
for the three months ended June 30, 1997, an increase of RMB 812,000 or 
15.0%.  Sales to unrelated companies for the three months ended June 30, 1998 
were RMB 29,570,000 or 82.6% of sales, as compared to RMB 41,548,000 or 88.4% 
of sales for the three months ended June 30, 1997, a decrease of RMB 
11,978,000 or 28.8%.    

     Sales for the six months ended June 30, 1998 were RMB 67,881,000, as 
compared to RMB 91,193,000 for the six months ended June 30, 1997, a decrease 
of RMB 23,312,000 or 25.6%.  Sales to related companies for the six months 
ended June 30, 1998 were RMB 8,975,000 or 13.2% of sales, as compared to RMB 
12,947,000 or 14.2% of sales for the six months ended June 30, 1997, a 
decrease of RMB 3,972,000 or 30.7%.  Sales to unrelated companies for the six 
months ended June 30, 1998 were RMB 58,906,000 or 86.8% of sales, as compared 
to RMB 78,246,000 or 85.8% of sales for the six months ended June 30, 1997, a 
decrease of RMB 19,340,000 or 24.7%.

     The Company conducts a substantial portion of its sales through related 
parties.  Sales to related companies are for both domestic and export 
purposes.

     For the three months ended June 30, 1998, PRC domestic sales were RMB 
16,688,000 or 46.6% of sales, and export sales were RMB 19,124,000 or 53.4% 
of sales.  For the three months ended June 30, 1997, PRC domestic sales were 
RMB 10,973,000 or 23.4% of sales, and export sales were RMB 36,005,000 or 
76.6% of sales.  For the three months ended June 30, 1998, sales of bicycles 
and bicycle parts were RMB 29,176,000 or 81.5% of sales, and sales of 
exercise equipment were RMB 6,636,000 or 18.5% of sales.  For the three 
months ended June 30, 1997, sales of bicycles and bicycles parts were RMB 
22,908,000 or 48.8% of sales, and sales of exercise equipment were RMB 
24,070,000 or 51.2% of sales.

     For the six months ended June 30, 1998, PRC domestic sales were RMB 
31,693,000 or 46.7% of sales, and export sales were RMB 36,188,000 or 53.3% 
of sales.  For the six months ended June 30, 1997, PRC domestic sales were 
RMB 23,345,000 or 25.6% of sales, and export sales were RMB 67,848,000 or 
74.4% of sales.  For the six months ended June 30, 1998, sales of bicycles 
and bicycle parts were RMB 47,278,000 or 69.6% of sales, and sales of 
exercise equipment were RMB 20,603,000 or 30.4% of sales.  For the six months 
ended June 30, 1997, sales of bicycles and bicycles parts were RMB 54,823,000 
or 60.1% of sales, and sales of exercise equipment were RMB 36,370,000 or 
39.9% of sales.
    
     SCBW began to manufacture an exercise equipment product line during 1996 
and a bicycle with an automatic transmission during 1997.  SCBW manufactures 
such products on a purchase order basis 

                                      18

<PAGE>

for original equipment manufacturers ("OEMs") that market their products in 
the United States under various brand names through infomercials, television 
home shopping networks and mass market retailers.  As a contract 
manufacturer, SCBW does not own any rights with respect to these products or 
the names under which they are marketed.        

     The decrease in sales in 1998 as compared to 1997 was primarily
attributable to the following factors:

ASIAN FINANCIAL CRISIS - During late 1997, the Company began to suffer from 
the effects of the Asian financial crisis.  Although China was not directly 
affected by the turmoil in South Korea and other Asian countries, the 
devaluation of currencies in those countries had the effect of undermining 
the competitiveness of China's basic steel, petrochemical and textile 
industries, and reducing one of the Company's main competitive advantages, 
its low labor cost.  Manufacturers in Taiwan, which represent the Company's 
primarily competition, have reduced their prices an average of 13% over the 
last several months, thus reducing demand for the Company's products and 
increasing pressures on the Company's revenues and gross margin.  Industrial 
production in China has decreased by one-third and retail sales have dropped 
by half in 1998 as compared to 1997. Exports, which are a critical part of 
the Chinese economy, are being negatively effected by these factors.  
Although the fiscal policy of the government of China has been to avoid a 
devaluation of its currency, there is growing speculation that China may not 
be able to avoid such an action.  In addition, as a result of the turmoil and 
uncertainty in the Chinese economy, short-term bank credit has been 
restricted by the central government of China. 
     
WORKING CAPITAL REQUIREMENTS - The completion of the new production facility 
at the end of 1995 substantially increased the Company's production capacity. 
However, the Company's ability to increase production is dependent on 
adequate working capital.  The Company has not been successful in completing 
an equity financing to provide the working capital necessary to support 
increased production levels at the new facility.  The Company's ability to 
utilize short-term bank debt to support its operations has been impaired as a 
result of the Asian financial crisis, as short-term bank debt is now subject 
to restrictions imposed by the central government of China.  As a result, 
during the latter part of 1997, the Company began to experience a shortage of 
working capital, which has caused the Company to decline orders that under 
normal conditions it would have accepted.  In addition, the Company's normal 
production cycle and its ability to provide timely shipments to customers was 
negatively impacted.  As a result of this working capital shortage, the 
Company has instituted a change in the way it acquires certain out-sourced 
parts.  The Company has arranged for certain customers to purchase, pay for 
and deliver specific

                                      19

<PAGE>

parts, such as bicycle pedals and derailleurs, to the Company's production 
facility that in the past the Company would have purchased directly from the 
manufacturer.  Sales of approximately RMB 24,188,000 and RMB 25,508,000 
during the three months and six months ended June 30, 1998, respectively, 
were recorded under this new policy. This policy allows the Company to 
maintain approximately the same level of unit sales, although at a lower 
aggregate value, and generate a higher gross margin while at the same time 
conserving working capital.  In addition, in order to remain competitive, 
during 1998 the Company began to grant extended credit terms to certain 
export accounts, which has also negatively impacted the Company's operating 
cash flow.  Accordingly, the Company expects that it will continue to 
experience working capital shortages during the remainder of 1998, which 
could have a material adverse effect on results of operations.  

DOMESTIC SALES OF PARTS - The Company is a major supplier of parts to other 
Chinese bicycle manufacturers which are significant exporters of finished 
bicycles to the United States.  The domestic sales of parts decreased in 1998 
as compared to 1997 as a result of the Asian financial crisis, which had the 
effect of reducing the export of finished bicycles from China to the United 
States.  

     As a result of the foregoing factors, the Company expects that sales and 
earnings will be reduced during the remainder of 1998 as compared to 1997.  

Gross Profit:

     Gross profit for the three months ended June 30, 1998 was RMB 8,142,000 
or 22.7% of sales, as compared to RMB 9,611,000 or 20.5% of sales for the 
three months ended June 30, 1997.  Gross profit for the six months ended June 
30, 1998 was RMB 16,397,000 or 24.2% of sales, as compared to RMB 20,396,000 
or 22.4% of sales for the six months ended June 30, 1997.

     The increase in gross profit as a percentage of sales in 1998 as 
compared to 1997 was a result of a higher percentage of sales with 
out-sourced parts, which generate a higher gross margin, and a reduction in 
employees and employee-related costs.

Selling, General and Administrative Expenses:

     Selling, general and administrative expenses for the three months ended 
June 30, 1998 increased by RMB 2,470,000 or 71.4%, to RMB 5,930,000 or 16.6% 
of sales, as compared to RMB 3,460,000 or 7.4% of sales for the three months 
ended June 30, 1997, net of amounts assumed by SCH.  Selling, general and 
administrative expenses for the six months ended June 30, 1998 increased by 
RMB 3,225,000 or 45.0%, to RMB 10,394,000 or 15.3% of sales, as

                                      20

<PAGE>

compared to RMB 7,169,000 or 7.9% of sales for the six months ended June 30, 
1997, net of amounts assumed by SCH.  During the three months and six months 
ended June 30, 1998, the Company recorded a provision for bad debts of RMB 
2,000,000.  No provision for bad debts was recorded during the three months 
and six months ended June 30, 1997. 

     Selling, general and administrative expenses increased as a percentage 
of sales in 1998 as compared to 1997 as a result of the provision for bad 
debts of RMB 2,000,000 for the three months and six months ended June 
30,1998, a government-mandated housing allowance to employees of 
approximately RMB 600,000 and RMB 1,200,000 for the three months and six 
months ended June 30, 1998, respectively, and a reduction in sales levels in 
1998 as compared to 1997. Selling, general and administrative expenses 
increased on an absolute basis in 1998 as compared to 1997 as a result of the 
provision for bad debts and the government-mandated housing allowance to 
employees. 
  
     Pursuant to a cost-sharing agreement between SCBW and SCH effective 
January 1, 1995, SCH agreed to bear 40% of certain selling, general and 
administrative expenses incurred by SCBW, which represents its share of 
management and selling activities incurred by SCBW on SCH's behalf.  For the 
three months ended June 30, 1998 and 1997, such amounts aggregated 
approximately RMB 1,074,000 and RMB 979,000, respectively.  For the six 
months ended June 30, 1998 and 1997, such amounts aggregated approximately 
RMB 3,562,000 and RMB 2,277,000, respectively. 
     
      
Interest Income and Interest Expense:

     Interest expense for the three months ended June 30, 1998 was RMB 
2,033,000 or 5.7% of sales, as compared to RMB 2,818,000 or 6.0% of sales for 
the three months ended June 30, 1997.  Interest expense for the six months 
ended June 30, 1998 was RMB 4,707,000 or 6.9% of sales, as compared to RMB 
5,274,000 or 5.8% of sales for the six months ended June 30, 1997.  Interest 
expense decreased in 1998 as compared to 1997 as a result of a reduction in 
short-term borrowings. The reduction in short-term borrowings was 
accomplished through an agreement between SCBW and SCH pursuant to which SCH 
assumed SCBW's short-term borrowings of RMB 49,997,000 effective October 1, 
1997, as settlement of amounts due SCBW by SCH.      

     Interest income for the three months and six months ended June 30, 1998 
and 1997 was not material.  During the year ended December 31, 1997, the 
Company recorded approximately RMB 3,400,000 of interest income on amounts 
due from SCH primarily for the purchase of goods, which was calculated at a 
rate of 8.0% per annum.  Due to the significant reduction in the balance due 
from SCH, the Company does not expect interest income from SCH to be material 
during 1998.  

                                      21



<PAGE>

Net Income (Loss):

     For the three months ended June 30, 1998, net loss was RMB 971,000 or 2.7%
of sales.  For the three months ended June 30, 1997, net income was RMB
2,910,000 or 6.2% of sales.  

     For the six months ended June 30, 1998, net income was RMB 441,000 or 0.9%
of sales.  For the six months ended June 30, 1997, net income was RMB 7,301,000
or 8.0% of sales.  


Consolidated Financial Condition - June 30, 1998:

     Liquidity and Capital Resources -

     For the six months ended June 30, 1998, the Company's operations 
provided cash resources of RMB 982,000, as compared to utilizing cash 
resources of RMB 10,798,000 for the six months ended June 30, 1997.  The most 
significant components of the cash provided by operations in 1998 were the 
decreases in prepayments and other current assets of RMB 7,829,000 and the 
increases in accounts payable of RMB 3,965,000 and accrued expenses and other 
liabilities of RMB 4,194,000, offset in part by the increases in net accounts 
receivable of RMB 18,830,000 and due from SCH of RMB 4,422,000.  The 25.9% 
increase in net accounts receivable between December 31, 1997 and June 30, 
1998 was primarily a result of extended credit terms that the Company began 
to grant to certain export accounts beginning in 1998. 

     Operating cash flow is adversely affected by the long collection cycle 
that is typical of Chinese companies that have a substantial proportion of 
their customers in China.  Accordingly, to the extent that the Company's 
business in China increases, the Company expects that its operating cash flow 
will be negatively impacted.

     The Company had working capital of RMB 17,220,000 at June 30, 1998, as 
compared to working capital of RMB 10,358,000 at December 31, 1997.  As a 
result, the Company's current ratio at June 30, 1998 was 1.09:1, as compared 
to 1.06:1 at December 31, 1997.  The most significant component of the 
increase in working capital was the increase in accounts receivable.  
     
     Except with regard to the initial transaction pursuant to which SCBW was 
organized and capitalized, the Company's primary method of financing its 
capital requirements has been borrowings.  Short-term borrowings consist 
primarily of bank loans, are unsecured, repayable within one year, have 
interest rates ranging from 7.63% to 21.6%, and have been utilized for 
working capital purposes and, prior to 1996, to finance the expansion of the 
production facility and the purchase of equipment.    

                                      22

<PAGE>

     During the six months ended June 30, 1998, short-term borrowings 
decreased by RMB 1,289,000, and long-term borrowings increased by RMB 
500,000.  As of June 30, 1998, short-term borrowings were RMB 73,752,000 and 
long-term borrowings were RMB 6,600,000.  

     SCBW is considered by the government of China as an important component 
of the bicycle production and exporting base of China, and has been 
designated for continuing financial support by the Zhaoqing Branch of the 
Bank of China.  SCBW has utilized borrowings from the Bank of China to 
support increases in production and sales, and to finance the expansion of 
the production facility and to purchase equipment.  Pursuant to guidelines 
issued by the government of China, SCBW increased its short-term borrowings 
during 1995, 1996 and 1997 from the Bank of China with loans having 
maturities ranging from one to two months. The working capital loans that the 
Bank of China makes to SCBW are renewed so long as SCBW's production and 
business operations continue to meet certain operating and financial 
criteria.  Management believes that the Bank of China will continue to renew 
SCBW's existing borrowings, however increases to SCBW's borrowing base, 
although granted in the past, are now subject to restrictions imposed by the 
central government of China. 

     In connection with the formation of SCBW as a Sino-foreign joint venture 
between SCH and Winfill in June 1994, Winfill issued a note payable to MTE 
for USD 5,000,000.  MTE assigned USD 1,000,000 of such note to a third party, 
which is included in accrued expenses and other liabilities in the 
consolidated balance sheets at December 31, 1997 and June 30, 1998, and which 
became due and payable on June 30, 1998, at which time it became a demand 
note.  The USD 4,000,000 note payable to MTE is unsecured, bears no interest, 
has no fixed repayment terms, and is expected to remain outstanding for the 
indefinite future.  There have been no payments on this note, which is 
presented as loan from MTE of RMB 33,280,000 in the consolidated balance 
sheets at December 31, 1997 and June 30, 1998.   

     Additions to property, plant and equipment totalled RMB 626,000 during 
the six months ended June 30, 1998.  SCBW does not expect to make any major 
capital expenditures during 1998, and had no capital expenditure commitments 
outstanding at June 30, 1998.

     An important factor in the Company's ability to increase production 
levels is the timely availability of sufficient operating capital at a 
reasonable cost. As previously discussed, during the latter part of 1997, the 
Company began to experience working capital shortages as it attempted to 
expand production at the new production complex, which has hampered the 
Company's ability to increase sales, and which has negatively impacted the

                                      23

<PAGE>
Company's normal production cycle and its ability to provide timely shipments 
to customers.      

     The Company believes that its cash flow provided by operations, combined
with short-term and long-term borrowings, will be sufficient to support
operations at current levels.  However, in order to increase sales and fully
utilize the expanded production capacity of the new production complex, the
Company will require operating capital substantially in excess of that available
from domestic Chinese sources.  As a result of the Company's existing capital
structure and reliance on borrowings, such additional operating capital would
most likely be in the form of a long-term debt or equity investment.  The
Company is continuing to explore various financing alternatives, but to date has
been unsuccessful in arranging a financing, and there can be no assurances that
the Company will be successful in completing such a financing in the future.  

     Inflation and Currency Matters - 

     Foreign operations are subject to certain risks inherent in conducting
business abroad, including price and currency exchange controls, and
fluctuations in the relative value of currencies.  

     In recent years, the Chinese economy has experienced periods of rapid
economic growth as well as high rates of inflation, which in turn has resulted
in the periodic adoption by the Chinese government of various corrective
measures designed to regulate growth and contain inflation.  During the year
ended December 31, 1996, the general inflation rate in China was in excess of
10% on an annualized basis.  Since 1993, the Chinese government has implemented
an economic program designed to control inflation, which has resulted in the
tightening of working capital available to Chinese business enterprises.  The
recent Asian financial crisis has resulted in a general reduction in domestic
production and sales, and a general tightening of credit, throughout China.  The
success of the Company depends in substantial part on the continued growth and
development of the Chinese economy.

     A substantial portion of the Company's revenues are denominated in RMB.  As
a result, devaluation of the RMB against the USD would adversely affect the
Company's financial performance when measured in USD.  Although prior to 1994
the RMB experienced significant devaluation against the USD, the RMB has
remained fairly stable since then. 

     The continuing negative impact of the Asian financial crisis on the
Company's operations, with respect to both Chinese domestic sales and export
sales, could have a material adverse effect on the Company's results of
operations, financial condition and cash flows.  Should the central government
of China

                                      24

<PAGE>

decide to devalue the Chinese currency, the Company believes that such an 
action would have a positive impact on operations by stimulating export 
sales, which are denominated in USD.  As of June 30, 1998, the Company's only 
USD-denominated debt, which would be more expensive to repay in the event of 
a devaluation, are the capital lease obligations of RMB 9,901,000 and the MTE 
loan of RMB 33,280,000.  However, MTE is the Company's parent, owning 
approximately 80% of the Company's outstanding common stock, and the loan is 
not currently scheduled for repayment.  

Year 2000 Issue:

     The Year 2000 Issue is the result of computer programs being written 
using two digits rather than four digits to define the applicable year.  
Computer programs that have sensitive software may recognize a date using 
"00" as the year 1900 rather than the year 2000.  This could result in a 
system failure or miscalculations causing disruptions of operations, 
including, among other things, a temporary inability to process transactions, 
send invoices or engage in similar normal business activities.  Based on a 
recent internal assessment, the Company does not anticipate that the cost of 
any needed modifications will have a material effect on results of 
operations.  

                                      25

<PAGE>


                             PART II.  OTHER INFORMATION



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          27   Financial Data Schedule (electronic filing only)

     (b)  Reports on Form 8-K - Three Months Ended June 30,
          1998:  None



                                       26

<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.



                                        FREMONT CORPORATION
                                        -------------------
                                            (Registrant)



Date:  August 12, 1998             By:  /s/ WINSTON WU
                                        ---------------------------- 
                                        Winston Wu (Wu Fa Pei)
                                        President
                                         (Duly Authorized Officer)



Date:  August 12, 1998             By:  /s/ EDWARD DING
                                        ---------------------------- 
                                        Edward Ding (Ding Yuehua)
                                        Vice President and Chief
                                         Financial Officer
                                         (Principal Financial
                                          Officer)



                                      27