SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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 June 30, 1998

                                       OR

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

               For the transition period from ________to________.

                           Commission File No. 0-22049

                                 S.W. LAM, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Nevada                                           62-1563911
--------------------------------                --------------------------------
(State or other jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)

             Unit 25-32, 2nd Floor, Block B, Focal Industrial Centre
                       Man Lok Street, Hunghom, Hong Kong
             --------------------------------------------------------
                    (Address of principal executive offices)

                                 (852) 2766 3688
               --------------------------------------------------
              (Registrant's telephone number, including area code)


               --------------------------------------------------        
              (Former name, former address and formal 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 No X

     As of June 1, 1998,  12,800,000  shares of Common  Stock of the issuer were
outstanding.


<PAGE>

                         S.W. LAM, INC. AND SUBSIDIARIES

                                      INDEX



                                                                          Page
                                                                         Number
                                                                        --------

PART I - FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Consolidated Balance Sheets - June 30, 1998 and 
                  March 31, 1998.........................................     1

                  Consolidated Statements of Operations - For the 
                  three months ended June 30, 1998 and June 30, 1997.....     2

                  Consolidated Statements of Cash Flows - For the
                  three months ended June 30, 1998 and June 30, 1997.....     3

                  Notes to Consolidated Financial Statements.............     4

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations..............................     5

PART II - OTHER INFORMATION

         Item 6.  Exhibits and Reports on Form 8-K.......................     7

SIGNATURES...............................................................     8



<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

                         S.W. LAM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    (US$,000)
                                   (Unaudited)

                                                          March 31,     June 30,
ASSETS                                                      1998          1998
                                                          --------      --------
Current assets:
  Cash and cash equivalents                              $ 2,094        $ 4,608
  Accounts receivable, net                                10,248         10,101
  Inventory                                               13,077         13,834
  Prepayments and other current assets                       395          1,255
                                                          ------         ------
     Total current assets                                 25,814         29,798

Property, plant and equipment, and capital leases, net    19,853         20,337
                                                          ------         ------
     Total assets                                        $45,667        $50,135
                                                          ======         ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term bank borrowings                             $ 5,618        $ 9,017
  Long-term bank loans, current portion                      293            359
  Capital lease obligations, current portion               1,106          1,073
  Accounts payable                                         2,880          2,523
  Deposits from customers                                      -            191
  Accrued liabilities                                      4,880          4,631
  Convertible short term loan                             10,000              0
  Income tax payable                                       1,173          1,585
  Due to director                                          1,034            580
                                                          ------         ------
     Total current liabilities                            26,984         19,959

Long-term bank loans, non-current portion                  1,189          1,104
Capital lease obligations, non current portion             1,933          1,622
Deferred taxation                                          1,283          1,283
                                                          ------         ------
      Total liabilities                                   31,389         23,968
                                                          ------         ------
Stockholders' Equity:
  Preferred stock                                              0              0
  Common stock                                                13             13
  Additional paid-in capital                                 511            511
  Minority interest                                            0         10,000
  Retained earnings                                       13,628         15,491
  Cumulative translation adjustments                         126            152
                                                          ------         ------
     Total stockholders' equity                           14,278         26,167
                                                          ------         ------
     Total liabilities and stockholders' equity          $45,667        $50,135
                                                          ======         ======

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


                                       1
<PAGE>


                         S.W. LAM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (US$,000, except per share data)
                                   (Unaudited)

                                                     Three Months Ended June 30,
                                                     ---------------------------
                                                        1997              1998  
                                                     ----------       ----------
Revenues:
  Net sales                                          $ 12,352          $ 16,003
  Subcontracting fees                                   1,575               479
                                                      -------           -------
        Total revenues                                 13,927            16,482

Cost of sales and services                           (10,327)          (12,600)
                                                      -------           -------
        Gross profit                                    3,600             3,882

Selling, general and administrative expenses          (1,409)           (1,354)
                                                      -------           -------
        Operating income                                2,191             2,528
                                                      -------           -------
Other income (expense), net:
  Interest expenses                                     (529)             (338)
  Interest income                                           7                66
  Other income                                             61                20
                                                      -------           -------
        Total other income (expense), net               (461)             (252)
                                                      -------           -------
Income before income taxes                              1,730             2,276

Provision for income taxes                              (142)             (413)
                                                      -------           -------
Net income                                            $ 1,588           $ 1,863
                                                      =======           =======
Basic income per share                                $  0.12           $  0.15
                                                      =======           =======
Weighted average shares outstanding                12,800,000        12,800,000
                                                   ==========        ==========

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


                                       2
<PAGE>

                         S.W. LAM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (US$,000)
                                   (Unaudited)

<TABLE>
                                                                    Three Months Ended June 30,
                                                                    ---------------------------
                                                                       1997             1998   
                                                                    ----------        ---------
<S>                                                                <C>                <C>    

Cash flows from operating activities:
------------------------------------
Net income                                                            1,588             1,863
Adjustments to reconcile net income to net cash
    provided by operating activities -
    Depreciation of property, plant and equipment                       614               290
(Increase) Decrease in operating assets -
    Accounts receivable, net                                              1               147
    Inventories                                                     (2,417)             (757)
    Prepayments and other current assets                              (892)             (860)
    Due from a director                                               (204)             (454)
(Decrease) Increase in operating liabilities -
     Accounts payable                                                   609             (357)
     Deposits from customers                                          (925)               191
     Accrued liabilities                                                 26             (249)
     Income taxes payable                                               142               412
                                                                    --------         --------
     Net cash provided by operating activities                      (1,458)               226
                                                                    --------         --------     
Cash flows from investing activities:
-------------------------------------
Additions to property, plant and equipment                          (3,748)             (774)
                                                                    --------         --------
      Net cash used in investing activities                         (3,748)             (774)
                                                                    --------         --------
Cash flows from financing activities:
-------------------------------------
Net proceeds from issuance of preference share by a subsidiary            -            10,000
Net (decrease) increase in short-term bank borrowings                  (49)             3,399
Net (decrease) increase in convertible short-term loan               10,000          (10,000)
Additions of capital lease obligations                                  204             2,138
Repayment of capital element of capital lease obligations             (285)           (2,482)
Additions of long-term bank loans                                       388                 -
Repayment of long-term bank loans                                      (61)              (19)
                                                                    --------         --------
       Net cash provided by financing activities                     10,197             3,036
                                                                    --------         --------
Effect of exchange rate changes in cash                                   3                26
                                                                    --------         --------
Net increase in cash                                                  4,994             2,514
Cash and cash equivalents, as of beginning of period                     94             2,094
                                                                    --------         --------
Cash and cash equivalents, as of end of period                      $ 5,088           $ 4,608
                                                                    ========         ========
</TABLE>

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

                                       3
<PAGE>


                         S.W. LAM, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                  June 30, 1998

1.   INTERIM PRESENTATION

     The interim consolidated  financial statements are prepared pursuant to the
     requirements  for  reporting  on Form 10-Q.  These  statements  include the
     accounts of S.W. Lam,  Inc. and all of its wholly owned and majority  owned
     subsidiary  companies.  The March 31, 1998  balance  sheet data was derived
     from  audited  financial  statements  but does not include all  disclosures
     required by generally accepted accounting principles. The interim financial
     statements  and  notes  thereto  should  be read in  conjunction  with  the
     financial  statements and notes included in the Company's Form 10-K for the
     year ended  March 31,  1998.  In the  opinion of  management,  the  interim
     financial  statements  reflect all adjustments of a normal recurring nature
     necessary  for a fair  statement  of the results  for the  interim  periods
     presented.  The current period  results of operations  are not  necessarily
     indicative of results which  ultimately  will be reported for the full year
     ending March 31, 1999.

2.   CURRENCY PRESENTATION AND FOREIGN CURRENCY TRANSLATION

     The translation of the financial  statements of group companies into United
     States  Dollars is  performed  for balance  sheet  accounts  using  closing
     exchange  rates in effect at the  balance  sheet date and for  revenue  and
     expense accounts using average exchange rate during each reporting  period.
     The gains or losses resulting from translation are included in shareholders
     equity separately as cumulative translation adjustments.



                                       4
<PAGE>

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

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the Securities Act of 1933 and Section 21E of Securities Exchange
Act of 1934.  Statements  contained  herein which are not  historical  facts are
forward-looking  statements that involve risks and uncertainties.  All phases of
the Company's  operations  are subject to a number of  uncertainties,  risks and
other influences.  Therefore,  the actual results of the future events described
in such  forward-looking  statements  in this Form 10-Q could differ  materially
from those stated in such  forward-looking  statements.  Among the factors which
could  cause  the  actual  results  to  differ  materially  are  the  risks  and
uncertainties described both in this Form 10-Q and the risks,  uncertainties and
other factors set forth from time to time in the Company's other public reports,
filings and public  statements.  Many of these factors are beyond the control of
the Company,  any of which, or a combination of which,  could materially  affect
the  results  of  the  Company's  operations  and  whether  the  forward-looking
statements made by the company ultimately prove to be accurate.

Results Of Operations

     The following table sets forth,  for the periods  indicated,  certain items
from the  Consolidated  Statements  of  Operations  expressed as a percentage of
total revenues.

                                          Three Months Ended June 30,
                                          ---------------------------
                                            1997               1998   
                                          --------           -------- 
Net sales                                   88.7%             97.1%
Subcontracting fees                         11.3               2.9
 Total revenues                            100.0             100.0
Cost of sales                               74.2              76.4
Gross profit                                25.8              23.6
Operating expenses                          10.1               8.2
Income from operations                      15.7              15.3
Other income (expense), net                  3.3               1.5
Income before income taxes                  12.4              13.8
Income taxes                                 1.0               2.5
Net income                                  11.4              11.3

Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997

     Revenues and Gross Profit. Total revenues increased $2.6 million, or 18.3%,
to $16.5 million for the three months ended June 30, 1998 from $13.9 million for
the three months ended June 30, 1997. Sales of Company products were up 29.6% to
$16 million during the current period  compared to $12.4 million during the same
period in the prior fiscal year.  Subcontracting fees decreased by 69.6% to $0.5
million in the current  period from $1.6  million  during the same period in the
prior fiscal year.

     The increase in sales for the period was  attributable to the  introduction
of new products and increased marketing efforts.  The decrease in subcontracting
fees  for  the  period  was  attributable  to  increased  concentration  on  the
manufacturing  of  products  designed  by  the  Group  as  opposed  to  products
manufactured  on a  subcontract  basis in order to raise the Group's  brand name
recognition.


                                       5
<PAGE>

     Geographically, within Southeast Asia (including Hong Kong and the PRC) the
Company's  sales  increased 8% to $8 million  during the three months ended June
30,  1998 from $7.4  million  during the same  period in the prior  year.  Sales
within Southeast Asia accounted for 50% of total sales during the current period
as compared to 60% during the same  period in the prior year.  Sales  within the
region were adversely impacted by continuing economic weakness in Southeast Asia
during the period,  which  weakness was offset by increased  marketing  efforts.
Sales in Hong Kong  declined  approximately  31% to $1.4  million  for the three
months  ended June 30,  1998 from $2.1  million for the same period of the prior
year.  Sales in the PRC were up during the three  months ended June 30, 1998 due
to stable economic conditions relative to the region,  increasing  approximately
30% to $3.7  million for the three  months ended June 30, 1998 from $2.8 million
in the same period of the prior year.  Sales in  Southeast  Asia (not  including
Hong Kong and the PRC) during the three  months ended June 30, 1998 were also up
due to increases in orders by existing customers, increasing 16% to $2.9 million
for the three months ended June 30, 1998 from $2.5 million in the same period of
the prior year.

     Outside of Asia (in the United  States,  Europe and the Middle  East),  the
Company  experienced a 61.9%  increase in sales with these sales  accounting for
50% of total sales in the three months ended June 30, 1998 as compared to 40% of
total sales in the same period of the prior year.  The increase in sales outside
of Asia was driven by  increased  marketing  efforts and strong  product  demand
which accompanied strong economic  conditions in those regions.  Sales in Europe
increased  approximately  245.5% to $3.8 million for the three months ended June
30, 1998 from $1.1  million in the same  period of the prior year.  Sales in the
Middle East were down during the three months  ended June 30,  1998,  decreasing
approximately  5% to $1.8  million  from $1.9  million in the same period of the
prior  year.  Sales in the United  States  increased  approximately  20% to $2.4
million  during the three months ended June 30, 1998 from $2 million in the same
period of the prior year.

     Gross profits  increased by 7.8% to $3.9 million  during the current period
from $3.6 million  during the same period in the prior fiscal year. The increase
in gross profits was mainly attributable to the increase in net sales.

     Operating  Expenses.  Operating  expenses  totaled $1.35 million during the
current period,  down marginally from $1.4 million during the same period in the
prior  fiscal  year.  The decline in  operating  expenses  during the period was
primarily attributable to tight cost control exercised by management.

     Other Income (Expense), Net. Other expenses, net of other income, decreased
during the current  period to $252,000  from  $461,000 in the same period during
the prior  year.  The  decrease  in net other  expenses  was  attributable  to a
decrease in interest  expense of $191,000 and an increase in interest  income of
$59,000, which was partially offset by a decease in other income of $41,000. The
decrease in interest  expense is  attributable  to the maturity of a convertible
loan on March 19, 1998.

     Income Taxes. Income taxes increased by 191% to $413,000 during the current
period from $142,000  during the same period in the prior year.  The increase in
income taxes during the period was primarily  attributable  to increased  income
and  provision for a higher  effective  tax rate for the current  period in Hong
Kong pending the  resolution  of the Company's  offshore  claims with respect to
prior periods. 


                                       6
<PAGE>

Financial Condition, Liquidity and Capital Resources

     The Company had a cash balance of $4.6 million and working  capital of $9.8
at June 30,  1998  compared to a cash  balance of $2.1  million and a deficit in
working  capital of $1.2  million at March 31,  1998.  The  increase  in cash is
attributable  to a combination  of the income during the period and increases in
short-term bank borrowing.  The increase in working capital was  attributable to
restructuring  and  capitalization  of  the  convertible  note  into  redeemable
preferred share capital of a subsidiary of the Company.

     For the three  months  ended June 30, 1998 net cash  provided in  operating
activities  amounted to $0.2  million as compared to net cash used by  operating
activities of $1.5 million for the corresponding  period of the prior year. This
change  resulted  from a  combination  of  increased  net  income  and a smaller
increase in  inventories  during the current  period and an increase in customer
deposits  which was  partially  offset by  reductions  in  accounts  payable and
accrued liabilities.

     Net cash used in investing  activities decreased to $0.8 million during the
three months ended June 30, 1998 from $3.7 million during the three months ended
June 30, 1997.  This decrease was  attributable  to a decrease in acquisition of
machinery and equipment during the current period.

     Net cash provided by financing  activities  decreased to $3 million  during
the three months ended June 30, 1998 from $10.2 million  during the three months
ended June 30, 1997. This decrease was  attributable to the  contribution of the
convertible  loan of $USD 10 million  during prior year while such loan does not
reoccur during the three months ended June 30, 1998.

     At June 30,  1998,  the  Company  had long term debt  totaling  $4  million
compared to long term debt at March 31, 1998 of $4.4  million.  The  decrease in
long term debt was primarily  attributable  to the repayment of the principal of
the loan while no new long term bank loan was  acquired  during the three months
ended June 30, 1998 .

     Management  believes  that based on its current  financial  condition,  the
Company's  cash  and  working  capital  is  sufficient  to  meet  the  Company's
anticipated needs for at least the next twelve months.

                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

          27.1 Financial Data Schedule

     (b)  Reports on Form 8-K

          None 


                                       7
<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.

                                                    S.W. LAM, INC.


Dated:   January 27, 1999                  By: /s/ Lam Sai Wing   
                                               ----------------------------  
                                               Lam Sai Wing, President and
                                               Chief Executive Officer

Dated:   January 27, 1999                  By: /s/ Chan Yam Fai, Jane
                                               ----------------------------- 
                                               Chan Yam Fai, Jane
                                               Chief Financial Officer


                                       8