<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549



                                   FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended September 30, 1996

     Commission file number 00028358
                            ---------------


[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY EXCHANGE
                         ACT OF 1934

     For the transition period from _____________ to ______________


                        CHINA CONTAINER HOLDINGS LIMITED
             (Exact Name of Registrant as Specified in Its Charter)

NEVADA                                  11-2243727
(State or Other Jurisdiction                 (IRS Employer Identification No.)
of Incorporation or Organization)

61, EAST GARDEN ROAD, YANGZHOU, JIANGSU, CHINA 225003
(Address of principal executive offices)

Registrant's Telephone Number, Including area code, (212) 629-7378

 
          Indicate by check mark whether the registrant:  (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 the number of shares outstanding of each of the issue's class of
common stock, as of the latest practical date.

     Common stock $0.001 par value; 25,000,273 shares outstanding at September
30, 1996.

<PAGE>
 
PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

               CHINA CONTAINER HOLDINGS LIMITED AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
     FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
               (Amounts in thousands, except for per share data)
<TABLE>
<CAPTION>
                                              Three months ended                    Nine months ended
                                                 September 30                          September 30
                                                 (Unaudited)                           (Unaudited)
                               Note  ------------------------------------  ------------------------------------
 
                                      1996                1995                  1996                  1995        
                                       US$                 US$                   US$                   US$        
<S>                               <C>               <C>                   <C>                   <C>               
NET SALES                                  6,483              18,067                72,800                66,636  
COST OF SALES                            ( 8,499)           ( 14,247)             ( 64,028)             ( 56,055) 
SELLING AND ADMINISTRA-                                                                                           
  TIVE EXPENSES                           (  761)           (    855)             (  2,912)             (  2,970) 
FINANCIAL EXPENSES, NET                 (    510)           (    664)             (  1,842)             (  1,826) 
OTHER INCOME, NET                             47                 240                    58                   595  
REORGANIZATION                                 -                   -                     -              (  2,052) 
  EXPENSES                               -------            --------              --------              --------  
                                                                                                                  
INCOME BEFORE INCOME                                                                                              
  TAXES                                   (3,240)              2,541                 4,076                 4,328  
INCOME TAXES                   3               2            (    288)             (    559)             (    678) 
                                         -------            --------              --------              --------  
                                          (3,238)              2,253                 3,517                 3,650  
SHARE OF NET INCOME/                                                                                              
  LOSSES) OF ASSOCIATED                                                                                           
  COMPANIES                                   33            (    195)                   18              (    548) 
                                         -------            --------              --------              --------  
INCOME BEFORE MINORITY                                                                                            
  INTERESTS                               (3,205)              2,058                 3,535                 3,102  
MINORITY INTERESTS                        (  332)           (    411)             (  2,699)             (  1,031) 
                                         -------            --------              --------              --------  
NET INCOME/<Loss>                         (3,537)              1,647                   836                 2,071  
                                         =======            ========              ========              ========  
NET INCOME/<Loss> PER COMMON                                                                                      
  SHARE                                    (0.14)               0.07                  0.03                  0.08  
                                         =======            ========              ========              ========  
WEIGHTED AVERAGE                                                                                                  
  NUMBER OF COMMON                                                                                                
  SHARES OUTSTANDING                      25,000              25,000                25,000                25,000  
                                         =======            ========              ========               ========  
</TABLE>

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

<PAGE>
 
               CHINA CONTAINER HOLDINGS LIMITED AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

                 AS OF DECEMBER 31, 1995 AND SEPTEMBER 30, 1996
                             (Amounts in thousands)
<TABLE>
<CAPTION>
 
                                                              September 30              
                                                              (unaudited)               December 31
                                                Note            (Note 1)                 (audited) 
                                                        ------------------------  ------------------------
                                                                  1996                      1995
                                                                  US$                       US$
 
ASSETS
<S>                                                     <C>                       <C>
 
CURRENT ASSETS                                                            4,224                     7,431
Cash and Cash equivalents                                                29,410                     7,642
Accounts receivable                                                       9,219                     9,996
Deposits and other receivables                                           32,307                    21,605
Inventories                                      4                           84                        84
Deferred income taxes                                                       925                     1,234
Amount due from associated companies                                      6,624                     3,757
Amount due from a related company                                       -------                    ------
 
 
TOTAL CURRENT ASSET                                                      82,793                    51,749
INTANGIBLE ASSETS                                                         2,058                       499
FIXED ASSETS                                                             14,569                     6,335
CONSTRUCTION IN PROGRESS                                                 10,905                     5,325
INTERESTS IN ASSOCIATED COMPANIES                                         2,849                     5,826
AMOUNTS DUE FROM RELATED COMPANIES                                          310                       670
OTHER ASSETS                                                                301                       901
                                                                        -------                    ------
TOTAL                                                                   113,785                    71,305
                                                                        =======                    ======
</TABLE>



The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

<PAGE>
 
               CHINA CONTAINER HOLDINGS LIMITED AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

                 AS OF DECEMBER 31, 1995 AND SEPTEMBER 30, 1996
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                   September 30             
                                                                   (unaudited)              December 31 
                                                                     (Note 1)                (audited)    
                                                               ---------------------  -----------------------
                                                                       1996                    1995
                                                                        US$                     US$
LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                            <C>                    <C>
CURRENT LIABILITIES
Bank loans and overdrafts                                                    78,420                   48,175
Accounts payable                                                              6,701                    3,705
Accrued liabilities and other payables                                        5,453                    1,803
Income taxes payable                                                            328                      274
Deferred income taxes                                                           101                        0
Amount due to associated company                                                357                        -
Amount due to a related company                                                   -                    2,630
                                                                            -------                   ------
TOTAL CURRENT LIABILITIES                                                    91,360                   56,587
MINORITY INTERESTS                                                            9,850                    3,060
                                                                            -------                   ------
TOTAL LIABILITIES                                                           101,210                   59,647
                                                                            -------                   ------
SHAREHOLDERS' EQUITY
Share capital- shares of 100,000,000
 common stock of US$0.001 each and 5,000,000 preferred stock
  of US$0.01 each authorized; shares 25,000,273 common stock                 
  of US$0.001 each outstanding                                                   25                       25
Additional paid-in capital                                                    4,683                    4,683
Reserves                                                                      5,879                    5,879
Retained earnings                                                             1,988                    1,181
Currency translation adjustments                                                  -                  (   110)
                                                                                                      ------ 
TOTAL SHAREHOLDERS' EQUITY                                                   12,575                   11,658
                                                                            -------                   ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                  113,785                   71,305
                                                                            =======                   ======
</TABLE>



The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

                                  
<PAGE>
 
               CHINA CONTAINER HOLDINGS LIMITED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

              FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995 AND 1996

                             (Amounts in thousands)

<TABLE>
<CAPTION>
 
                                                                             Nine month ended
                                                                               September 30
                                                                               (unaudited)
 
                                                                         1996                1995
                                                                         US$                 US$
<S>                                                               <C>                 <C>
 
Net cash provided by (used in) operating activities                         (24,210)              2,335
 
CASH FLOWS USED IN INVESTING ACTIVITIES
Increase/decrease in fixed assets                                            (1,286)                  -
Increase in construction in progress                                        ( 7,956)            ( 4,387)
Advances to related companies                                                     -             ( 2,786)
Increase in long term receivables                                                 -             ( 1,212)

 
Net cash used in investing activities                                        (9,242)            ( 8,385)
 
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Dividends paid to minority interests
Dividends paid                                                                    -              (3,574)
Repayment of bank loans and overdrafts                                            -             (11,246)
Proceeds from bank loans and overdrafts                                      30,245              23,421
                                                                            -------             -------
Net cash provided by financing activities                                    30,245               8,601
                                                                            -------             -------
 
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                         (3,207)              2,551
 
Cash and cash equivalents, at beginning of period                             7,431               1,605
                                                                            -------             -------
Cash and cash equivalents, as end of period                                   4,224               4,156
                                                                            =======             =======
</TABLE>



The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.

<PAGE>
 
               CHINA CONTAINER HOLDINGS LIMITED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

                             (Amounts in thousands)


1.   BASIS OF PRESENTATION

  The accompanying unaudited condensed consolidated financial statements have
  been prepared in accordance with generally accepted accounting principles for
  interim financial information and with the instruction to Form 10-Q and
  Article 10 of Regulation S-X.  Accordingly, they do not include all of the
  information and footnotes required by generally accepted accounting principles
  for complete financial statements.  In the opinion of Management, all
  adjustments (consisting of normal recurring accruals) considered necessary for
  a fair presentation have been included.  Operating results for the three and
  nine month periods ended September 30, 1996 are not necessarily indicative of
  the results that may be expected for the year ended December 31, 1996.  The
  unaudited condensed consolidated financial statements should be read in
  conjunction with the consolidated financial statements and footnotes thereto
  included in the Company's audited financial statements for the year ended
  December 31, 1995.

  The balance sheet at December 31, 1995 has been derived from the audited
  financial statements at that date but does not include all of the information
  and footnotes required by generally accepted accounting principles for
  complete financial statements.

2. PURCHASE OF YANGZHOU TONGLEE REEFER CONTAINERS COMPANY LIMITED

  On January 1, 1996, China Container's 80% subsidiary, TYC increased its
  shareholding in Yangzhou Tonglee Reefer Containers Company Limited ("Tonglee")
  from 50% to 51% for US$80.  Due to the acquisition of control by TYC, the
  results of Tonglee were consolidated into China Container since January 1,
  1996.

  The pro forma unaudited results of operations for the nine months ended
  September 30, 1995, assuming consummation of the purchase as of January 1,
  1995 are as follows:

 
                                    Nine months ended
                                         September 30
                                                 1995
                                    -----------------
                                                  US$

 
     Net sales                                 67,202
     Net income                                 2,067
     Net income per common share                 0.08
                                               ======

Tonglee is a Sino-foreign equity joint venture company governed by the Income
Tax Law of the People's Republic of China concerning Foreign Investment
Enterprises and various local income tax laws (the "Income Tax Laws").

<PAGE>
 
               CHINA CONTAINER HOLDINGS LIMITED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

                             (Amounts in thousands)


2. PURCHASE OF YANGZHOU TONGLEE REEFER CONTAINERS COMPANY LIMITED (continued)

  In the Yangzhou District, where Tonglee is located, the basic rate of
  income tax applicable to Tonglee exclusive of the local income tax is 24%.
  Tonglee's local income tax liability of 3% is exempted by the local tax
  authorities.  Pursuant to the Income Tax Laws, Tonglee was further exempted
  from income taxes for a period of two years commencing from the first
  profitable year (1996) and is entitled to a 50% tax exemption for the
  following three years.

3.   INCOME TAX

  A reconciliation of the effective income tax rates (excluding the
  reorganization expenses) with the statutory income tax rate in the PRC is as
  follows:

<TABLE>
<CAPTION>
 
                               Three months ended             Nine months ended
                                  September 30                  September 30
                                  (unaudited)                    (unaudited)
                              --------------------           -------------------
 
                                 1996        1995              1996         1995
<S>                             <C>         <C>              <C>           <C>         
Statutory PRC tax rate          (24.0%)      24.0%             24.0%        24.0%      
Tax holiday                     ( 3.7%)     (12.0%)           (15.0%)      (12.0%)     
Other Items                      20.3%       (0.7%)             4.7%        (3.6%)     
                                =====       =====            ======        =====       
                                    0%       11.3%             13.7%        15.6%      
</TABLE> 
 

4.   INVENTORIES
     Inventories comprise:
<TABLE> 
<CAPTION> 
                                                                   September 30         December 31
                                                                    (unaudited)          (audited)   
                                                                     ---------           ---------    
<S>                                                                  <C>                <C>          
                                                                          1996               1995    
                                                                           US$                US$    
   Raw materials                                                        16,723             16,828    
   Finished goods                                                       15,584              4,777    
                                                                        ------             ------    
                                                                        32,307             21,605    
                                                                        ======             ======    
</TABLE>

<PAGE>

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


OVERVIEW

     The Company is a Nevada corporation whose principal activity is the
management of the business of its indirectly held operating subsidiaries, which
manufacture international standard commercial freight containers in the People's
Republic of China.

     The statements in this section relate to the operations and conditions of
the Company and its consolidated subsidiaries.


RESULTS OF OPERATIONS

Third Quarter of 1996 Compared With Third Quarter of 1995

          1. Sales decreased by 64.1% from US$18.1 million in the three months
ended September 30, 1995 to US$6.5 million in the three months ended September
30, 1996, and sales quantity decreased by 81.7% from 12,352 TEU in 1995 to 2,257
TEU in 1996. This was primarily due to the temporary shutdown for modernization
of the main production facilities at the Company's TY Container subsidiary
during the third quarter and start up problems at the Company's Tongsheng
subsidiary which came on line in May 1996, more than offsetting the
consolidation of the results of the Company's subsidiary which manufactures
refrigerated containers ("Reefer") following the Company's acquisition of
control of Reefer as at January 1, 1996.

          2. The gross profit margin decreased from 21.0% on net sales in the
third quarter of 1995 to a negative 30.8% in the third quarter of 1996 primarily
because (i) the average sales price per TEU dropped approximately 10% and 12%
for dry box containers and refrigerated containers, respectively, while the cost
of raw material remained essentially unchanged, and (ii) while the sale quantity
decreased significantly, the fixed assets are still allocated to production and
thus cause the unit cost to increase thereby decreasing the gross margin.

          3.  Selling and administrative expenses decreased by 11.1% from
US$900,000 in the third quarter of 1995 to US$800,000 in the third quarter of
1996, reflecting the decrease in sales over the same periods.


          4.  Financial expenses decreased by 28.6% from US$700,000 in the third
quarter of 1995 to US$500,000 in the third quarter of 1996, primarily because a 
higher percentage of the Company's outstanding bank loan for this period were 
utilized for construction in progress relating to the modernization of the 
production facilities and thus a significant portion of the interest thereon was
capitalized.

Nine Months Ended September 30, 1996 Compared With Nine Months Ended September
30, 1995

          1.  Sales increased by 9.3% from US$66.6 million in the nine months
ended September 30, 1995 to US$72.8 million in the nine months ended September
30, 1996, and sales quantity decreased by 14.9% from 29,566 TEU in 1995 to
25,148 TEU in 1996. This was
                                      -8-
<PAGE>

primarily due to the consolidation of the results of Reefer, which offset the
results of the third quarter of 1996.


          2. The gross profit margin decreased from 15.8% on net sales in 1995
to 12.0% in 1996 primarily because of the results of the third quarter.


FINANCIAL CONDITION

          1.  Accounts Receivable increased by 286.8% from US$7.6 million as at
December 31, 1995 to US$29.4 million as at September 30, 1996, primarily due to
the consolidation of the results of Reefer.

          2.  Inventories increased by 49.5% from US$21.6 million as at December
31, 1995 to US$32.3 million as at September 30, 1996, primarily due to an
increase in raw materials in anticipation of fourth quarter orders.

          3.  Accounts Payable increased by 81.1% from US$3.7 million as at
December 31, 1995 to US$6.7 million as at September 30, 1996, primarily due to
(i) the consolidation of the results of Reefer, (ii) an increase in the amount
of raw materials purchased, relating to the order from the PRC Railway Ministry,
and (iii) the lengthening of the average payment terms for amounts payable by
the Company to its suppliers.

          4.  Accrued Liabilities and other payables increased by 205.6% from
US$1.8 million as at December 31, 1995 to US$5.5 million as at September 30,
1996, primarily due to (i) the consolidation of the results of Reefer, (ii)
provision for sales commissions and (iii) provision for the payment of certain
non-salary employee benefits.

          5.  Cash and cash equivalents decreased by 43.2% from US$7.4 million
as at December 31, 1995 to US$4.2 million as at September 30, 1996, primarily
due to payments made to suppliers.

<PAGE>
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
 


PART II.  OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS
 
               None.


ITEM 2.   CHANGES IN SECURITIES

               None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

               None.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               None.


Item 5.  OTHER INFORMATION

          On September 12, 1996 China Container Holdings Limited issued the
following press release, the content of which has not been previously reported
in a report on Form 8-K:

          CHINA CONTAINER HOLDINGS LIMITED RECEIVES $52 MILLION ORDER
                             FOR CHINA'S RAILROADS

              FIRST ORDER EVER FOR CARGO CONTAINERS TO BE USED FOR
                 CHINA'S EXPANDED RAILWAY TRANSPORTATION SYSTEM
                                        
          Yangzhou, China, September 12, 1996 -- China Container Holdings
Limited (OTC: CCHL) announced today that it has received an order to produce
18,000 TEUs (20 foot equivalent unit, standard unit used in the container
industry) for the Railway Ministry of the People's Republic of China as part of
the government's program to containerize the country's expanding railroad
transportation infrastructure.  The order will be filled by CCHL's majority-
owned subsidiaries, Yangzhou Tongsheng Container Co. Ltd. and Yangzhou Tongyun
Container Company Ltd.

     The order for 18,000 TEUs is valued at $52 million, or $2,890 per unit, and
is scheduled to be delivered in its entirety by the end of November 1996.
Beihai Tonghai Container Company, a minority-owned CCHL subsidiary, also
received an order to produce 7,000 TEUs for the Railway Ministry at a cost of
$20.2 million.  Both orders from the Ministry provide for an 8-year payment
schedule.


<PAGE>
 
     "The opening up of China's railway transportation network to
containerization represents a whole new market for CCHL, and one that is
expected to grow substantially over the next decade as the government invests
heavily in modernizing the country's railway transportation network," commented
Mr. Cheung Sau Yung, President and CEO of China Container Holdings Limited.  "We
fully expect that this order will soon be followed by additional orders from the
Railway Ministry."

     The Company announced earlier this week that its revenues for the first six
months of 1996 had risen by 37% to $66.4 million from $48.4 million a year ago.
Net income for the 1996 six month period increased to a record $4.4 million, or
$0.18 per share, compared with $423,000, or $0.02 per share, for the first six
months of 1995

     China Container Holdings Limited is one of China's leading manufacturers of
dry freight and refrigerated "reefer" containers.  As a U.S. holding company,
CCHL is the majority owner of three container manufacturing facilities:
Yangzhou Tongyun Container Co. Ltd., Yangzhou Tongsheng Container Co. Ltd. and
Yangzhou Tonglee Reefer Container Co. Ltd.  These three operating container
ventures serve the nearby ports of Shanghai, Nanjing, Zhenjiang, Zhangjiagang,
Ningvo and Lianyungang, the largest delivery ports for goods exported from
China.  The combined container manufacturing capacity of CCHL's majority-owned
container companies is approximately 85,000 TEUs annually.  CCHL's exports the
majority of its production to container leasing and shipping companies located
outside of China, with approximately 75% of such sales to U.S.-based companies.
The Company also has minority interests in container-component production and
container transportation companies.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits
 
               3(i)  Articles of Incorporation of Registrant, filed August 8,
     1995 and Articles of Amendment thereto filed April 16, 1986 and May 15,
     1995.
 
               3(ii) By-laws of Registrant.
 
               27    Financial Data Schedule


          (b)  Reports on Form 8-K

               None.

<PAGE>
 
                                  SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                        CHINA CONTAINER HOLDINGS LIMITED


Date: November 7, 1997                  By: /s/ Ma Tieyi
                                            Ma Tieyi
                                            Secretary and Treasurer



<PAGE>
 
                       CHINA CONTAINER HOLDINGS LIMITED

                                 EXHIBIT INDEX

EXHIBIT NO.                      DESCRIPTION                           PAGE NO.

   3(i)              Articles of Incorporation of Registrant,
                     filed August 8, 1995 and Articles of Amendment
                     thereto filed April 16, 1986 and May 15,
                     1995, incorporated by reference to the
                     Registrant's Form 10 and Amendment No. 1
                     thereto.

  3(ii)              By-laws of Registrant, incorporated by
                     reference to the Registrant's Form 10 and
                     Amendment No. 1 thereto.

    27               Financial Data Schedule