**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-Q**




x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      quarterly period ended: March 31, 2007




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. 333-120807**




**CHINA
      PREMIUM LIFESTYLE ENTERPRISE, INC.**


(Exact
      name of Registrant as specified in its charter)


**Nevada**
            
            **11-3718650**(State
                or other jurisdiction of incorporation or
            
            (IRS
                Employer Identificationorganization)
            
            No.)10/F,
                Wo Kee Hong Building585-609
                Castle Peak RoadKwai
                Chung, N.T. Hong Kong(Address
                of principal executive offices)(852)
                2514-4880(Registrant’s
                telephone number, including area code)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the 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 o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. (See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act):




Large
      Accelerated Filer o  Accelerated
      Filer o   Non-Accelerated
      Filer x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x




The
      number of shares of Common Stock outstanding as of May 10, 2007 was
      115,463,499.







**CHINA
      PREMIUM LIFESTYLE ENTERPRISE, INC.**


**FORM
      10-Q**




**FOR
      THE QUARTERLY PERIOD ENDED MARCH 31, 2007**




**TABLE
      OF CONTENTS**


PagePART
                    I: FINANCIAL INFORMATION
                
                
                3Item
                    1.  Condensed Consolidated Financial Statements.
                
                
                3Condensed
                    Consolidated Balance Sheets as of March 31, 2007 (unaudited)
                    and December
                    31, 2006
                
                
                4Condensed Consolidated Statements of Income (unaudited) for the
                    three
                    months ended March 31, 2007 and 2006
                
                
                5Condensed Consolidated Statements of Cash Flows (unaudited) for
                    the three
                    months ended March 31, 2007 and 2006
                
                
                6Notes to Condensed Consolidated Financial Statements
                    (unaudited)
                
                
                7Item
                    2. Management’s Discussion and Analysis of Financial Condition and Results
                    of Operations.
                
                
                13Item
                    3. Quantitative and Qualitative Disclosures about Market
                    Risk.
                
                
                18Item
                    4. Controls and Procedures.
                
                
                19PART
                    II: OTHER INFORMATION
                
                
                20Item
                    1. Legal Proceedings.
                
                
                20Item
                    1A. Risk Factors.
                
                
                20Item
                    2. Unregistered Sales of Equity Securities and Use of
                    Proceeds.
                
                
                20Item
                    3. Defaults Upon Senior Securities.
                
                
                20Item
                    4. Submission of Matters to a Vote of Security Holders.
                
                
                20Item
                    5. Other Information.
                
                
                20Item
                    6. Exhibits.
                
                
                20**SIGNATURES****EXHIBITS**




2






**PART
              I:**
            **FINANCIAL
                INFORMATION**  **Item
              1.**
            **Condensed Consolidated Financial
                Statements.**




**CHINA
      PREMIUM LIFESTYLE ENTERPRISE, INC. AND SUBSIDIARIES**




**CONDENSED
      CONSOLIDATED FINANCIAL STATEMENTS**




**AS
      OF MARCH 31, 2007 AND**




**FOR
      THE THREE MONTHS ENDED MARCH 31, 2007**




**INDEX
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**CONDENSED
                CONSOLIDATED BALANCE SHEETS (UNAUDITED)****CONDENSED
                CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)****CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                (UNAUDITED)****NOTES
                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                (UNAUDITED)**





3


**CHINA
      PREMIUM LIFESTYLE ENTERPRISE, INC. AND SUBSIDIARIES**




**CONDENSED
      CONSOLIDATED BALANCE SHEETS**




**March
                31,**
            
            **December
                31,****2007**
            
            **2006**$
            
            $**(unaudited)****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            
            2,168,690
            
            
            3,475,635Restricted
                cash
            
            
            384,025
            
            
            385,629Trade
                receivables, net of provision
            
            
            4,345,358
            
            
            11,246,621Inventory,
                net
            
            
            9,445,959
            
            
            6,815,863Prepayments
            
            
            1,482,983
            
            
            1,506,258Other
                current assets
            
            
            1,819,432
            
            
            1,503,626Amounts
                due from affiliates
            
            
            6,996,531
            
            
            4,503,367Amount
                due from an associate
            
            
            356,235
            
            
            457,267Total
                current assets
            
            
            26,999,213
            
            
            29,894,266Property
                and equipment, net
            
            
            2,234,148
            
            
            2,377,656Investment
                in an associate
            
            
            1,333,357
            
            
            1,355,530Deferred
                income taxes
            
            
            537,634
            
            
            539,880**TOTAL
                ASSETS**
            
            
            31,104,352
            
            
            34,167,332**LIABILITIES
                AND SHAREHOLDERS’ EQUITY**Current
                liabilities:Short-term
                borrowings
            
            
            6,423,734
            
            
            5,315,497Obligations
                due under finance lease - current portion
            
            
            166,411
            
            
            167,106Bills
                payable
            
            
            3,027,919
            
            
            4,412,575Trade
                payables
            
            
            300,187
            
            
            480,859Deposits
                received
            
            
            10,827,003
            
            
            8,607,049Other
                current liabilities
            
            
            2,793,809
            
            
            7,331,020Total
                current liabilities
            
            
            23,539,063
            
            
            26,314,106Long-term
                liabilities:Obligations
                due under finance lease - non-current portion
            
            
            69,338
            
            
            111,404**TOTAL
                LIABILITIES**
            
            
            23,608,401
            
            
            26,425,510Commitments
                and ContingenciesMinority
                interests
            
            
            3,335,133
            
            
            3,318,358Shareholders’
                equityPreferred
                stockAuthorized:
                100,000,000 preferred stock, par value $0.001Issued
                and outstanding: 573,973 shares as at March 31, 2007 (1,533,973 as
                at
                December 31, 2006)
            
            
            574
            
            
            1,534Common
                stockAuthorized:
                400,000,000 common stock, par value $0.001Issued
                and outstanding: 115,463,499 shares as at March 31, 2007 (26,929,180
                as at
                December 31, 2006)
            
            
            115,495
            
            
            26,961Additional
                paid-in-capital
            
            
            5,588,588
            
            
            5,676,162Accumulated
                other comprehensive income
            
            
            48,860
            
            
            51,507Accumulated
                deficits
            
            
            (1,592,699
            )
            
            (1,332,700
            )**TOTAL
                SHAREHOLDERS’ EQUITY**
            
            
            4,160,818
            
            
            4,423,464**TOTAL
                LIABILITIES AND SHAREHOLDERS’ EQUITY**
            
            
            31,104,352
            
            
            34,167,332




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


4




**CHINA
      PREMIUM LIFESTYLE ENTERPRISE, INC. AND SUBSIDIARIES**




**CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)**





**Three
                months ended****March
                31,****2007**
            
            **2006**$
            
            $Sales:New
                and used vehicles
            
            
            15,823,975
            
            
            8,265,543Parts
                and services
            
            
            1,186,668
            
            
            979,477**Net
                sales**
            
            
            17,010,643
            
            
            9,245,020Cost
                of sales:New
                and used vehicles
            
            
            (14,149,803
            )
            
            (7,424,582
            )Parts
                and services
            
            
            (342,099
            )
            
            (309,147
            )**Total
                cost of sales**
            
            
            (14,491,902
            )
            
            (7,733,729
            )Gross
                profit:New
                and used vehicles
            
            
            1,674,172
            
            
            840,961Parts
                and services
            
            
            844,569
            
            
            670,330**Total
                gross profit**
            
            
            2,518,741
            
            
            1,511,291Selling
                and marketing
            
            
            (142,048
            )
            
            (107,106
            )General
                and administrative expenses
            
            
            (2,493,061
            )
            
            (1,925,755
            )**Operating
                loss**
            
            
            (116,368
            )
            
            (521,570
            )Other
                income (expenses)Interest
                expenses
            
            
            (177,287
            )
            
            (65,608
            )Share
                of result of an associate
            
            
            (39,892
            )
            
            (226,722
            )Other
                income
            
            
            90,343
            
            
            107,964Total
                other expenses
            
            
            (126,836
            )
            
            (184,366
            )**Loss
                before minority interests and income taxes**
            
            
            (243,204
            )
            
            (705,936
            )Provision
                for income taxes
            
            
            -
            
            
            -**Loss
                before minority interests**
            
            
            (243,204
            )
            
            (705,936
            )Minority
                interests
            
            
            (16,795
            )
            
            360,374**Net
                loss**
            
            
            (259,999
            )
            
            (345,562
            )**Loss
                per share****Basic**
            
            
            (0.0087
            )
            
            N/A**Diluted**
            
            
            (0.0087
            )
            
            N/AWeighted
                average number of common stock outstandingBasic
            
            
            29,880,324
            
            
            N/ADiluted
            
            
            29,880,324
            
            
            N/A




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


5


**CHINA
      PREMIUM LIFESTYLE ENTERPRISE, INC. AND SUBSIDIARIES**




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**




**Three
                months ended**
              **March
                31,****2007**
            
            **2006**$
            
            $**Cash
                flows from operating activities:**Net
                loss
            
            
            (259,999
            )
            
            (345,562
            )Adjustments
                to reconcile net loss to net cash provided by operating
                activitiesMinority
                interests
            
            
            16,795
            
            
            (360,374
            )Depreciation
                and amortization
            
            
            172,539
            
            
            120,896Provision
                for bad debts and bad debts written off
            
            
            53,825
            
            
            46,911Provision
                for inventory written back
            
            
            (8,975
            )
            
            -Equity
                earnings of an associate
            
            
            39,892
            
            
            226,722Other
                non-cash items
            
            
            (11,987
            )
            
            29,639Changes
                in operating assets and liabilities:Trade
                receivables
            
            
            6,847,438
            
            
            3,977,971Other
                current assets and prepayments
            
            
            (292,531
            )
            
            915,325Inventory
            
            
            (2,621,121
            )
            
            (2,842,072
            )Trade
                payables
            
            
            (180,672
            )
            
            23,489Other
                current liabilities and deposits received
            
            
            (2,317,257
            )
            
            93,098Net
                cash provided by operating activities
            
            
            1,437,947
            
            
            1,886,043**Cash
                flows from investing activities:**Purchases
                of property and equipment
            
            
            (33,580
            )
            
            (14,490
            )Net
                cash used in investing activities
            
            
            (33,580
            )
            
            (14,490
            )**Cash
                flows from financing activities:**Advances
                to affiliates
            
            
            (2,493,164
            )
            
            (2,170,832
            )Repayments
                from an associate
            
            
            101,032
            
            
            239,368Increase
                (decrease) in borrowings and bills payable
            
            
            (319,180
            )
            
            1,044,015Net
                cash used in financing activities
            
            
            (2,711,312
            )
            
            (887,449
            )Increase
                (decrease) in cash and cash equivalents
            
            
            (1,306,945
            )
            
            984,104Cash
                and cash equivalents at beginning of the period
            
            
            3,475,635
            
            
            452,754Cash
                and cash equivalents at end of the period
            
            
            2,168,690
            
            
            1,436,858**Supplemental
                disclosure of cash flow information:**Cash
                paid for:Interest
            
            
            177,287
            
            
            65,608




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


6




**CHINA
      PREMIUM** **LIFESTYLE
      ENTERPRISE, INC. AND SUBSIDIARIES**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**




**NOTE
      1. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES**




*Basis
      of presentation*




The
      condensed consolidated financial statements include the accounts of China
      Premium Lifestyle Enterprise, Inc. (the “Company”) and its subsidiaries. The
      condensed consolidated financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States. All
      significant intercompany transactions and balances have been
      eliminated.




The
      condensed consolidated financial statements are unaudited and, in our opinion,
      include all adjustments, consisting of normal recurring adjustments and accruals
      necessary for a fair representation of our condensed consolidated balance
      sheets, operating results, and cash flows for the periods presented. Operating
      results for the periods presented are not necessarily indicatives of the results
      that may be expected for 2007 due to seasonal and other factors. Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States have been condensed or omitted in accordance with the rules and
      regulations of the Securities and Exchange Commission (the “SEC”). The condensed
      consolidated financial statements should be read in conjunction with the audited
      consolidated financial statements and accompany notes included in the 2006
      annual report on Form 10-K.




*Use
      of estimates*




The
      preparation of the condensed consolidated financial statements requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and the disclosure of contingent assets and liabilities
      at the date of the condensed consolidated financial statements, and the reported
      amounts of revenue and expenses during the reporting periods. Management makes
      it best estimate of the outcome for these items based on historical trends
      and
      other information available when the condensed consolidated financial statements
      are prepared. Changes in estimates are recognized in accordance with the
      accounting principles for the estimate, which is typically in the period when
      new information becomes available to management. Management believes the most
      significant estimates affecting the condensed consolidated financial statements
      include provision for bad debts, provision for inventory write-off, and
      accounting for income taxes. Actual results could differ from those
      estimates.




*Share-based
      compensation*




The
      Company elected to adopt SFAS No. 123(R), “Share-Based Payment,” as amended and
      interpreted, which is effective as of the beginning of the annual reporting
      period that begins after June 15, 2005. The Company utilized the modified
      prospective method approach, pursuant to which the Company has recorded
      compensation for all awards granted after July 1, 2005 based on their fair
      value.




*Earnings
      per share*




Basic
      earnings per share is computed by dividing net operating results for the
      reporting period attributable to common shareholders by the weighted average
      number of common shares outstanding during the period. Diluted earnings per
      share is calculated by dividing net operating results for the reporting period
      attributable to common shareholders by the weighted average number of common
      shares outstanding and the dilutive effect of common stock equivalents. All
      per
      share and per share information are adjusted retroactively to the earliest
      periods presented to reflect the effect of the Company’s recent recapitalization
      between the Company and Technorient Limited (See the Form 10-K of the Company
      filed to the SEC on April 2, 2007 for details of the Company’s recent
      recapitalization).




*Reclassifications*




Certain
      financial statement line items have been reclassified to conform to the current
      period presentation and have no impact on the previously reported consolidated
      net sales, operating results, or net financial position.




7




**NOTE
      2. CONCENTRATION OF RISK**




*Concentration
      of supplier risk*




Our
      Company relies on supplies from numerous vendors. For the three months ended
      March 31, 2007 and 2006, the Company had two vendors that each accounted for
      more than 10% of total supply purchases. If any of the vendors terminate their
      relationships with our Company or if our Company’s supply from the vendors is
      interrupted or terminated for any reason, we may not have sufficient time to
      replace the supply of products from the remaining vendors. Any such interruption
      would negatively impact our ability to sell and distribute our products.
      However, the suppliers’ concentration of risk does not pose any effect to the
      concentration of risk with respect to trade payables as the Company made the
      purchases through facilities provided by banks and financial
      institutions.




*Concentration
      of risk due to geographic location*




Our
      Company’s business, assets and operations is currently focused on the sales of
      new and used vehicles, provision of vehicle maintenance and repair services,
      and
      sales of vehicle parts in Hong Kong and is currently expanding its operations
      to
      People Republic of China (“PRC”), and accordingly, is affected to a significant
      degree by any economic, political and legal developments in Hong Kong and
      PRC.




**NOTE
      3. RECENT ACCOUNTING PRONOUNCEMENTS**




In
      February 2006, the FASB issued SFAS 155, *Accounting
      for Certain Hybrid Financial Instruments - an amendment of FASB Statements
      133
      and 140* ,
      (“SFAS
      155”), which will be effective for the Company beginning January 1, 2007. The
      statement permits interests in hybrid financial instruments that contain an
      embedded derivative that would otherwise require bifurcation, to be accounted
      for as a single financial instrument at fair value, with changes in fair value
      recognized in earnings. This election is permitted on an
      instrument-by-instrument basis for all hybrid financial instruments held,
      obtained, or issued as of the adoption date. The Company does not expect there
      to be any significant impact of adopting this standard on its consolidated
      financial position, cash flows and results of operations.




In
      June
      2006, the FASB issued Interpretation 48, *Accounting
      for Uncertainty in Income Taxes — an Interpretation of FASB Statement
      No. 109* (“FIN
      48”), which clarifies the accounting for uncertainty in tax positions. This
      Interpretation requires that the Company recognize in its financial statements
      the impact of a tax position if that position is more likely than not of being
      sustained on audit, based on the technical merits of the position. The
      provisions of FIN 48 are effective for the Company on January 1, 2007, with
      the cumulative effect of the change in accounting principle, if any, recorded
      as
      an adjustment to opening retained earnings. The Company does not expect there
      to
      be any significant impact of adopting FIN 48 on its consolidated financial
      position, cash flows and results of operations.




In
      September 2006, the FASB issued SFAS 157, *Fair
      Value Measurements* (“SFAS
      157”), which provides guidance about how to measure assets and liabilities that
      use fair value. SFAS 157 will apply whenever another US GAAP standard requires
      (or permits) assets or liabilities to be measured at fair value but does not
      expand the use of fair value to any new circumstances. This standard also will
      require additional disclosures in both annual and quarterly reports. SFAS 157
      will be effective for financial statements issued for fiscal years beginning
      after November 15, 2007, and will be adopted by us beginning in the first
      quarter of 2008. The Company does not expect there to be any significant impact
      of adopting this standard on its consolidated financial position, cash flows
      and
      results of operations.




In
      September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* (“SAB
      108”). SAB 108 was issued to eliminate the diversity of practice in how public
      companies quantify misstatements of financial statements, including
      misstatements that were not material to prior years’ financial statements. The
      Company will apply the provisions of SAB 108 to its annual financial statements
      for the year ending December 31, 2006. The Company has evaluated the potential
      impact of SAB 108 and does not believe the impact of the application of this
      guidance will be material to its consolidated financial position, cash flows
      and
      results of operations.




In
      February 2007, the FASB issued SFAS 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      amendment of FASB Statement No. 115* (“SFAS
      159”), which will be effective for the Company beginning January 1, 2008. This
      standard permits entities to choose to measure many financial instruments and
      certain other items at fair value and consequently report unrealized gains
      and
      losses on such items in earnings. The Company does not expect there to be any
      significant impact of adopting this standard on its consolidated financial
      position, cash flows and results of operations.




8




Other
      recent accounting pronouncements issued by the FASB (including its Emerging
      Issues Task Force (“EITF”)), the American Institute of Certified Public
      Accountants (“AICPA”), and the SEC did not or are not believed by management to
      have a material impact on the Company’s present or future financial
      statements.




**NOTE
      4. LOSS PER SHARE**




The
      computation of basic and diluted loss per share is as follows for the three
      months ended March 31:




**2007**
            
            **2006**$
            
            $**Numerator:**Net
                loss available to common shareholders
            
            
            (259,999
            )
            
            (345,562
            )**Denominator:**Weighted
                average common stock outstanding
            
            
            29,880,324
            
            
            -Effect
                of dilutive preferred stock
            
            
            -
            
            
            N/AWeighted
                average common stock and dilutive potential common stock
            
            
            29,880,324
            
            
            N/ABasic
                net loss per share
            
            
            (0.0087
            )
            
            N/ADiluted
                net loss per share
            
            
            (0.0087
            )
            
            N/A




The
      weighted average common stock outstanding for the three months ended March
      31,
      2006, was adjusted to reflect the Company’s recent recapitalization between the
      Company and Technorient Limited. The computation of the net loss per share
      for
      the three months ended March 31, 2006, is computed by dividing the net loss
      attributable to the common stockholders’ by the number of shares issued in the
      reverse takeover transaction.




As
      no
      mandatory dividend is attached to the Series A convertible preferred stock
      (“Series A Preferred Stock”), no adjustment was made to the basic loss per share
      to take into consideration the Series A Preferred Stock.




The
      computation of diluted loss per share for the three months ended March 31,
      2007
      did not assume the exercise of the potential dilution of 573,973 shares of
      Series A Preferred Stock as the exercise of such preferred stock is
      antidilutive.




**NOTE
      5. INVENTORY, NET**




Inventory
      by major categories are summarized as follows:




**March
                31,**
            
            **December
                31,****2007**
            
            **2006**$
            
            $New
                vehicles
            
            
            4,276,469
            
            
            2,310,112Used
                vehicles
            
            
            3,695,156
            
            
            3,183,658Parts,
                accessories and other
            
            
            1,474,334
            
            
            1,322,0939,445,959
            
            
            6,815,863




Vehicles
      included in inventory of approximately $2,440,000 and $1,710,000 were pledged
      to
      secure the stocking loan outstanding as of March 31, 2007 and December 31,
      2006,
      respectively (See Note 8).




9




**NOTE
      6. PREPAYMENTS**




Prepayments
      at are summarized as follows:





**March
                31,**
            
            **December
                31,****2007**
            
            **2006**$
            
            $Share-based
                payment receivable - related party
            
            
            1,468,930
            
            
            1,468,930Prepaid
                expenses
            
            
            14,053
            
            
            37,3281,482,983
            
            
            1,506,258




**NOTE
      7. INVESTMENT IN AN ASSOCIATE**




In
      2004,
      a subsidiary of the Company entered into a strategic alliance with Ferrari
      S.p.A. (“Ferrari”) and Poly Technologies, Inc. (“Poly Technologies”), a
      subsidiary of Poly Group, to set up an Equity Joint Venture (“EJV”) company,
      Ferrari Maserati Cars International Trading (Shanghai) Co., Limited, in Mainland
      China. The EJV is the sole importer of “Ferrari” and “Maserati” cars in China,
      responsible for the import, marketing, dealer sales, spare parts and accessories
      supply, and after-sale technical supports for these unique global brands. The
      Company, Ferrari and Poly Technologies own 30%, 40% and 30% respectively in
      the
      EJV. The registered capital of the EJV was $3 million and was contributed by
      the
      partners to the EJV in proportion to their respective equity interest. In August
      2004, the EJV was formally set up, with the business license issued by the
      relevant PRC authority.




On
      December 30, 2005, a subsidiary of the Company and Ferrari entered into the
      Equity Interest Transfer Agreement relating to the transfer of 29% equity
      interest in the EJV (“Equity Interest Transfer”), for a consideration of
      $870,000. As of March 31, 2007, the disposal has yet to be approved by the
      relevant authorities in the PRC and the disposal has not become effective.
      Due
      to the undeterminable timeline in finalizing the Equity Interest Transfer,
      the
      investment in EJV continues to be accounted for as “Investment In An Associate”
under the equity method of accounting.




**NOTE
      8. BORROWINGS**




The
      Company’s borrowings at are summarized as follows:




**March
                31,**
            
            **December
                31,****2007**
            
            **2006**$
            
            $Bank
                borrowings
            
            
            4,498,875
            
            
            3,985,579Stocking
                loans
            
            
            1,924,859
            
            
            1,329,918Obligations
                due under finance lease
            
            
            235,749
            
            
            278,5106,659,483
            
            
            5,594,007Borrowings
                due after one year - obligations under finance lease
            
            
            69,338
            
            
            111,404Short-term
                borrowings
            
            
            6,590,145
            
            
            5,482,603




Vehicles
      included in inventory of approximately $2,440,000 and $1,710,000 were pledged
      to
      secure the stocking loan outstanding as of March 31, 2007 and December 31,
      2006,
      respectively. The current portion together with the non-current portion of
      finance lease was secured by motor vehicle included in property and equipment
      with a carrying value of approximately $310,000 (December 31, 2006:
      $330,000).




The
      bank
      borrowings, which are mainly used to finance the purchase of vehicles, are
      secured by pledge of certain affiliates’ properties and are interest-bearing
      with settlement date within twelve months from the corresponding balance sheet
      dates. The interest rates are generally based on the bank’s best lending rate
      plus a certain percentage and the credit lines are normally subject to periodic
      review. The range of effective interest rates (which are also equal to
      contracted interest rates) on the Company’s borrowings is 8.50% per annum
      (December 31, 2006: 8.50% to 9.25% per annum).




The
      Company has financed a motor vehicle in the amount of approximately $330,000
      (December 31, 2006: $330,000) under a non-cancellable finance
      lease.


10




**NOTE
      9. OTHER CURRENT LIABILITIES**




Other
      current liabilities by major categories are summarized as follows:





**March
                31,**
            
            **December
                31,****2007**
            
            **2006**$
            
            $Accruals
            
            
            524,325
            
            
            443,434Other
                payables
            
            
            2,269,484
            
            
            6,887,5862,793,809
            
            
            7,331,020




Other
      payables mainly consist of first registration tax on motor vehicles sold. First
      registration tax is applicable to new motor vehicles sold in Hong Kong and
      is
      computed on a progressive rate based on the gross selling price of the new
      motor
      vehicles.




**NOTE
      10. CAPITAL STOCK**




*General*




The
      Company’s total authorized capital at March 31, 2007, is 500,000,000 shares of
      which 400,000,000 shares are common stock, par value $0.001 and 100,000,000
      shares are preferred stock, par value $0.001. At March 31, 2007, 115,463,499
      shares of common stock and 573,973 shares of preferred stock, respectively,
      were
      issued and outstanding.




*Common
      stock*




During
      the three months ended March 31, 2007, the Company’s Series A Preferred Stock’s
      holders, Happy Emerald Limited, Mr. Herbert Adamczyk and Corich Enterprises
      Inc.
      made applications to the Company to convert 65,454 shares, 167,273 shares and
      727,273 shares of Series A Preferred Stock, respectively, into the 6,053,153
      shares, 15,423,323 shares and 67,057,843 shares, respectively, of the Company’s
      restricted common stock at a conversion ratio of 1 Series A Preferred Stock
      to
      92.2045 shares of common stock. On March 29, 2007, the 88,534,319 shares of
      restricted common stock in connection to such Series A Preferred Stock
      conversion were issued.




*Preferred
      stock*




During
      the three months ended March 31, 2007, the Company’s Series A Preferred Stock’s
      holders, Happy Emerald Limited, Mr. Herbert Adamczyk and Corich Enterprises
      Inc.
      made applications to the Company to convert 65,454 shares, 167,273 shares and
      727,273 shares of Series A Preferred Stock, respectively, into the Company’s
      restricted common stock. As a result of such Series A Preferred Stock
      conversion, the Company’s outstanding preferred stock decreased by 960,000
      shares from 1,533,973 shares at December 31, 2006 to 573,973 shares at March
      31,
      2007.




**NOTE
      11. COMMITMENTS AND CONTINGENT LIABILITIES**




*Litigation,
      Claims and Assessments*




From
      time
      to time the Company may be involved in various disputes and litigation matters
      arising in the normal course of business. It
      is the
      Company’s belief that the resolution of these matters will not have a material
      adverse effect on its financial position or results of operations, however,
      management cannot provide assurance that damages that result in a material
      adverse effect on its financial position or results of operations will not
      be
      imposed in these matters. The Company accounts for contingent liabilities when
      it is probable that future expenditures will be made and such expenditures
      can
      be reasonably estimated.




11




*Operating
      Lease Commitments*




The
      Company leases its dealership facilities, service center facilities and office
      space under non-cancellable operating leases in Hong Kong and PRC. Minimum
      future rental payments required under non-cancellable operating leases in effect
      as of March 31, 2007 are as follows:


2007
            
            $
            743,5192008
            
            
            136,041$
            879,560




Rent
      expense for the three months ended March 31, 2007 and 2006 was $286,679 and
      $269,548, respectively.




*Employment
      Agreements*




The
      Company maintains employment agreements with its executives which extend through
      2007 to 2008. The agreements provide for a base salary, annual bonus to be
      determined by the Board of Directors, termination payments, and other terms
      and
      conditions of employment. In addition, the Company maintains employment
      agreements with other key employees with similar terms and conditions. As of
      March 31, 2007, committed compensation to the executives and other key employees
      totaling approximately $573,000 remain in effect.




**NOTE
      12. RELATED PARTY TRANSACTIONS**




The
      following is a summary of significant transactions among certain related parties
      and the Company during the three months ended March 31:





Note
            
            **2007**
            
            **2006****$**
            
            **$**Sales
                to:-
                Affiliates
            
            (a)
            
            3,835
            
            161,356-
                An associate
            
            (a)
            
            -
            
            70,733Purchases
                from:-
                Affiliates
            
            (a)
            
            5,559
            
            1,355-
                An associate
            
            (a)
            
            1,428,160
            
            -Interest
                received from:-
                Affiliates
            
            (b)
            
            11,047
            
            -Management
                fee paid to:-
                Affiliates
            
            (c)
            
            -
            
            77,290Service
                fee from:-
                An associate
            
            (c)
            
            132,972
            
            121,626




Notes:


(a)
            The
                transactions were carried out at market price or, where no market
                price
                was available, at cost plus a percentage profit
                mark-up.





(b)
            The
                loan advance to an affiliate is unsecured, bears interest at 8.50%
                per
                annum and repayable on demand.





(c)
            The
                transactions were carried out at terms agreed between both
                parties.




12




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




In
      addition to historical information, the matters discussed in this Form 10-Q
      contain forward-looking statements that involve risks or uncertainties.
      Generally, the words “believes,” “anticipates,” “may,” “will,” “should,”
“expect,” “intend,” “estimate,” “continue,” and similar expressions or the
      negative thereof or comparable terminology are intended to identify
      forward-looking statements. Such statements are subject to certain risks and
      uncertainties, including the matters set forth in this report or other reports
      or documents we file with the Securities and Exchange Commission from time
      to
      time, which could cause actual results or outcomes to differ materially from
      those projected. Undue reliance should not be placed on these forward-looking
      statements, which speak only as of the date hereof. We undertake no obligation
      to update these forward-looking statements. Readers should carefully review
      the
      risks described in other documents we file from time to time with the Securities
      and Exchange Commission, including the Annual Report on Form 10-K for the fiscal
      year ended December 31, 2006, the Quarterly Reports on Form 10-Q or 10-QSB
      filed
      by the Company and Current Reports on Form 8-K (including any amendments to
      such
      reports). References in this filing to the “Company”, “Group”, “we”, “us”, and
“our” refer to China Premium Lifestyle Enterprise, Inc. and its
      subsidiaries.




**COMPANY
      OVERVIEW AND HISTORY**




China
      Premium Lifestyle Enterprise, Inc. is in the business of distributing and
      selling premium brand luxury products in the Hong Kong Special Administrative
      Region (“Hong Kong”), the Macau Special Administrative Region (“Macau”) and in
      the People’s Republic of China (for the purpose of this report excludes Hong
      Kong and Macau and hereinafter “China”). Currently, the Company’s main business
      is its ownership interest in Technorient Group Limited, a Hong Kong corporation
      whose business consists mainly of import, distribution, and after-sale service
      of Italian “Ferrari” and “Maserati” branded cars and spare parts in Hong Kong,
      Macau and China. The Company is also planning to import, distribute and sell
      premium brand apparel and other luxury brand products in Hong Kong, Macau,
      China
      and Taiwan.




The
      Company was originally formed in the State of Nevada on April 19, 2004 under
      its
      predecessor name, Xact Aid, Inc. On April 30, 2004, the Company issued 1,000
      shares of our common stock (representing all of its issued and outstanding
      shares) to Addison-Davis Diagnostics, Inc. (F/K/A QT5, Inc.), a Delaware
      corporation (“Addison-Davis”), in consideration of Addison-Davis advancing
      start-up and operating capital. On November 15, 2004, the Company acquired
      the
      Xact Aid line of first aid products for minor injuries from Addison-Davis in
      accordance with an Agreement of Sale and Transfer of Assets entered into between
      the Company and Addison-Davis.




From
      the
      Company’s inception to May 9, 2005, Addison-Davis was the Company’s sole
      stockholder and as such the Company was a wholly-owned subsidiary of
      Addison-Davis and it was included in the consolidated financial statements
      filed
      by Addison-Davis with the Securities and Exchange Commission. (the
“SEC”).




On
      December 22, 2005, the Company acquired one hundred percent (100%) of the issued
      and outstanding shares of Brooke Carlyle Life Sciences, Inc., a Nevada
      corporation (“Brooke Carlyle”), a development stage company with a business plan
      to develop an online Internet portal containing information on sexually
      transmitted diseases, generating revenue from advertising from pharmaceutical
      companies.




13




The
      Company’s management team then realized that it was no longer in the best
      interests of the Company and its shareholders to continue pursuing sales and
      marketing efforts for the wound-specific first aid kit line of products. In
      an
      effort to bring revenues and profitable operations to the Company, management
      sought to effect a transaction that would attract a viable business operation
      and liquidate its liabilities. As a result of such decisions, on March 3, 2006,
      the Company entered into a non-binding letter of intent (“LOI”) with
      Technorient, Limited, a Hong Kong corporation (“Technorient”) for a proposed
      acquisition of an interest in Technorient via a share exchange by and among
      the
      Company and Technorient and Technorient’s shareholders. On May 4, 2006, in order
      to satisfy certain provisions in the Share Exchange Agreement described below
      with Technorient, the Company entered into a Stock Purchase Agreement (the
      “Agreement”) with Nexgen Biogroup, Inc. (“Nexgen”), for the sale of the
      1,000,000 shares (the “Shares”) of the common stock of Brooke Carlyle held by
      the Company, which at that time represented all or substantially all of the
      assets of the Company, for $1,000 cash, representing a consideration of $.001
      per share of Brooke Carlyle, Brooke Carlyle’s par value per Share (the “Sale”).
      In accordance with the terms of the Agreement, the Company agreed to: (i) sell,
      assign and transfer to Nexgen any and all of its rights, title and interests
      in
      Brooke Carlyle; and (ii) transfer to Nexgen 1,000,000 shares of Brooke Carlyle
      common stock. Further, on April 7, 2006, in order to satisfy certain provisions
      of the Share Exchange Agreement described below, the Company amended its
      Articles of Incorporation to provide for the authorization of 100,000,000 shares
      of preferred stock.




On
      June
      9, 2006, the Company entered into a share exchange agreement (the “Exchange
      Agreement”) with Technorient, Fred De Luca, a director of the Company (“De
      Luca”), Corich Enterprises Inc., a British Virgin Islands corporation
      (“Corich”), and Herbert Adamczyk (“Adamczyk”) (collectively the “parties”).
      Subsequently, on July 15, 2006, the parties entered into an amended share
      exchange agreement (the “Amended Exchange Agreement”), which agreement replaced
      in its entirety and superseded the Exchange Agreement. Pursuant to the terms
      of
      the Amended Exchange Agreement, the Company agreed to acquire from Corich and
      Adamczyk (the “Sellers”) 49% of the outstanding capital stock of Technorient in
      exchange for the Company issuing to the Sellers and Orient Financial Services
      Ltd. (“OFS”) 972,728 shares of Series A Convertible Preferred Stock (the “Series
      A Preferred Shares”) (this share exchange transaction is hereinafter referred to
      as the “Exchange”). The 972,728 Series A Preferred Shares are convertible into
      approximately 89,689,881 shares, which on an as-converted basis represented
      53.5% of the outstanding Common Stock of the Company on a fully diluted basis,
      taking into account the Exchange.




On
      September 5, 2006, pursuant to the Amended Exchange Agreement and after all
      of
      the conditions precedent to closing were satisfied, Corich and Adamczyk, as
      shareholders of Technorient, transferred 49% of the outstanding capital stock
      of
      Technorient on a fully diluted basis to the Company in exchange for 972,728
      shares of the Company’s Series A Preferred Shares. Pursuant to the terms of the
      Amended Exchange Agreement, there were approximately 167,644,553 shares of
      common stock issued and outstanding after giving effect to (a) the Exchange,
      (b)
      the share cancellations, debt conversions and the issuance of the consulting
      shares pursuant to the Amended Exchange Agreement, and (c) assuming the full
      conversion of the Series A Preferred Shares. As a result of this Exchange,
      the
      Company became a 49% shareholder of Technorient. Additionally, as a condition
      to
      the Exchange, the Company completed the sale of all the capital stock of Brooke
      Carlyle, which prior to the Exchange constituted all of the Company’s assets for
      $1,000 cash, to Nexgen.




In
      connection with the Exchange, the Company issued (i) to Corich and Adamczyk
      an
      aggregate of 972,728 shares of the Series A Preferred Shares in exchange for
      49%
      of the issued and outstanding shares of Technorient, (ii) 561,245 shares of
      Series A Preferred Shares to Happy Emerald Limited, a British Virgin Islands
      company (“Happy Emerald”), for consulting services to be provided to Technorient
      after the Exchange, and (iii) an aggregate of 21,629,337 shares of Common Stock
      in connection with the certain conversions of outstanding debt. As a result,
      after giving effect to the Exchange, the debt conversions, the issuance of
      shares to Happy Emerald, the issued and outstanding shares of the Company’s
      common stock on a fully diluted, as converted basis was 167,644,553
      shares.




After
      the
      closing of the Exchange, the Company’s main business is its 49% ownership
      interest in Technorient.




**TECHNORIENT
      OVERVIEW**




Technorient
      is a private limited liability company incorporated in Hong Kong on March 8,
      1983. Technorient is the parent company of Auto Italia Limited (“Auto Italia”),
      German Motors Limited (“German Motors”), Italian Motors (Sales & Service)
      (“Italian Motors”), and Italian Motors (Sales & Service) Limited (“IML”).
      Collectively, Auto Italia, Italian Motors, IML and German Motors are hereafter
      referred to as the “Technorient Group”. Originally founded in 1974 by Adamczyk
      as German Motors, Technorient was formed as the holding company for Auto Italia,
      IML and German Motors in 1985. IML was appointed sole Ferrari importer and
      distributor for Hong Kong and Macau in 1992 (and exclusive importer for China
      between 1994 and 2004), and Auto Italia was appointed importer and distributor
      for Maserati in 1996, having been a dealer for the brand since 1994. In 2003,
      IML transferred its entire car trading business to Auto Italia, which in turn
      set up a new subdivision, Italian Motors, to continue the business.




IML
      is a
      30% equity holder in Ferrari Maserati Cars International Trading (Shanghai)
      Co.
      Ltd., (the “Shanghai JV”) an equity joint venture company created with Ferrari
      S.p.A. and the Beijing-based Poly Investment Group in 2004 to handle sales,
      marketing and distribution of Maserati and Ferrari in China. As the structure
      of
      Shanghai JV precludes direct ownership by the shareholders of a licensed dealer
      in China and in view of Technorient’s strategy to develop a luxury brand
      platform amongst its high net worth clients, Technorient’s management
      subsequently approached Ferrari S.p.A. to dispose of Shanghai JV’s interest so
      that it could acquire an independent dealer network and, inter alia, maintain
      its direct customer relationships. As part of this arrangement, Technorient
      would apply for and receive a number of dealer licenses in key markets in China
      such as Dalian (already awarded) and would, in conjunction with Ferrari and
      Maserati, continue to build its dealer network to capitalize on its client
      base
      in China and pursue its luxury brand platform.




Pursuant
      to the above, IML entered into an agreement with the Shanghai JV parties to
      dispose of 29% equity interest in Shanghai JV in July 2006. As of the date
      hereof, the disposal has been approved by the relevant authorities and is
      waiting for the completion of local formalities. Upon completion of the
      disposal, however, IML will continue to hold a 1% equity interest in Shanghai
      JV. Beginning in 2006, the Technorient Group was able to act as an authorized
      dealer of Ferrari and Maserati cars in certain cities in China that were
      allocated in accordance with the Shanghai JV. In January 2006, IML formed Dalian
      Auto Italia in China to engage in the distribution of Ferrari and Maserati
      cars
      in Dalian, China. IML owns a 95% equity interest in Dalian Auto
      Italia.




14




Auto
      Italia and Italian Motors operate from six locations in Hong Kong and China,
      incorporating sales, spare parts, service and body and paint shop facilities
      for
      Ferrari and Maserati.




**EMPLOYEES**




As
      of
      March 31, 2007, we employed approximately 148 persons on a full-time basis
      in
      Hong Kong and China. We believe we have good relationships with our employees
      and no major disputes or work stoppages have occurred since our
      inception.




**CURRENCY
      CONVERSION AND EXCHANGE**




The
      value
      of Renminbi (“RMB”), Hong Kong Dollar and the Macau Pataca against the U.S.
      dollar and other currencies may fluctuate and is affected by, among other
      things, changes in political and economic conditions. Since 1994, the conversion
      of RMB into foreign currencies, including Hong Kong and U.S. dollars, has been
      based on rates set by the People’s Bank of China, or PBOC, which are set daily
      based on the previous day’s PRC interbank foreign exchange market rate and
      current exchange rates on the world financial markets. Since 1994, the official
      exchange rate for the conversion of RMB to U.S. dollars has generally been
      stable.




On
      July 21, 2005, however, PBOC announced a reform of its exchange rate
      system. Under the reform, RMB is no longer effectively linked to US dollars
      but
      instead is allowed to trade in a tight 0.3% band against a basket of foreign
      currencies. If the RMB were to increase in value against the U.S. dollar, for
      example, mainland Chinese consumers would experience a reduction in the relative
      prices of goods and services, which may translate into a positive increase
      in
      sales. On the other hand, a decrease in the value of the RMB against the dollar
      would have the opposite effect and may adversely affect our results of
      operations. Any significant revaluation of RMB may materially and adversely
      affect our cash flows, revenues, earnings and financial position, and the value
      of, and any dividends payments. For example, an appreciation of RMB against
      the
      U.S. dollar or Hong Kong dollars would make any new RMB denominated investments
      or expenditures more costly to us, to the extent that we need to convert U.S.
      dollars or Hong Kong dollars into RMB for such purposes. In addition, a
      strengthening of the U.S. dollar against the Hong Kong Dollar or the Macau
      Pataca, if it occurred, would adversely affect the value of your
      investment.




**CRITICAL
      ACCOUNTING POLICIES**




See
      Note
      1 of the Notes to Condensed Consolidated Financial Statements
      (unaudited).




**RECENT
      ACCOUNTING PRONOUNCEMENTS**




In
      February 2006, the FASB issued SFAS 155, *Accounting
      for Certain Hybrid Financial Instruments - an amendment of FASB Statements
      133
      and 140* ,
      (“SFAS
      155”), which will be effective for the Company beginning January 1, 2007. The
      statement permits interests in hybrid financial instruments that contain an
      embedded derivative that would otherwise require bifurcation, to be accounted
      for as a single financial instrument at fair value, with changes in fair value
      recognized in earnings. This election is permitted on an
      instrument-by-instrument basis for all hybrid financial instruments held,
      obtained, or issued as of the adoption date. The Company does not expect there
      will be any significant impact of adopting this standard on its consolidated
      financial position, cash flows and results of operations.




In
      June
      2006, the FASB issued Interpretation 48, *Accounting
      for Uncertainty in Income Taxes — an Interpretation of FASB Statement
      No. 109* (“FIN
      48”), which clarifies the accounting for uncertainty in tax positions. This
      Interpretation requires that the Company recognize in its financial statements
      the impact of a tax position if that position is more likely than not of being
      sustained on audit, based on the technical merits of the position. The
      provisions of FIN 48 are effective for the Company on January 1, 2007, with
      the cumulative effect of the change in accounting principle, if any, recorded
      as
      an adjustment to opening retained earnings. The Company does not expect there
      will be any significant impact of adopting FIN 48 on its consolidated financial
      position, cash flows and results of operations.




In
      September 2006, the FASB issued SFAS 157, *Fair
      Value Measurements* (“SFAS
      157”), which provides guidance about how to measure assets and liabilities that
      use fair value. SFAS 157 will apply whenever another US GAAP standard requires
      (or permits) assets or liabilities to be measured at fair value but does not
      expand the use of fair value to any new circumstances. This standard also will
      require additional disclosures in both annual and quarterly reports. SFAS 157
      will be effective for financial statements issued for fiscal years beginning
      after November 15, 2007, and will be adopted by us beginning in the first
      quarter of 2008. The Company does not expect there will be any significant
      impact of adopting this standard on its consolidated financial position, cash
      flows and results of operations.




15




In
      September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* (“SAB
      108”). SAB 108 was issued to eliminate the diversity of practice in how public
      companies quantify misstatements of financial statements, including
      misstatements that were not material to prior years’ financial statements. The
      Company will apply the provisions of SAB 108 to its annual financial statements
      for the year ending December 31, 2006. The Company has evaluated the potential
      impact of SAB 108 and does not believe the impact of the application of this
      guidance will be material to its consolidated financial position, cash flows
      and
      results of operations.




In
      February 2007, the FASB issued SFAS 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      amendment of FASB Statement No. 115* (“SFAS
      159”), which will be effective for the Company beginning January 1, 2008. This
      standard permits entities to choose to measure many financial instruments and
      certain other items at fair value and consequently report unrealized gains
      and
      losses on such items in earnings. The Company does not expect there will be
      any
      significant impact of adopting this standard on its consolidated financial
      position, cash flows and results of operations.




Other
      recent accounting pronouncements issued by the FASB (including its Emerging
      Issues Task Force (“EITF”)), the American Institute of Certified Public
      Accountants (“AICPA”), and the SEC did not or are not believed by management to
      have a material impact on the Company’s present or future financial
      statements.




**RESULTS
      OF OPERATIONS**




**Results
      of Operations comparison of three months ended March 31, 2007 to three months
      ended March 31, 2006**




**SALES**




**Three
                Months ended**
            
            **Three
                Months ended****March
                31, 2007**
            
            **March
                31, 2006****Total**
              **Sales**
            
            **%
                of Total Sales**
            
            **Total**
              **Sales**
            
            **%
                of Total Sales**New
                and Used Vehicles
            
            $
            15,824,000
            
            
            93
            %
            $
            8,266,000
            
            
            89.4
            %Parts
                and Services
            
            $
            1,187,000
            
            
            7
            %
            $
            979,000
            
            
            10.6
            %Total
            
            $
            17,011,000
            
            
            100
            %
            $
            9,245,000
            
            
            100
            %




Sales
      consist of sales of new and used vehicles, sale of parts, and services rendered
      for vehicle maintenance and repair.




Net
      sales
      for three months ended March 31, 2007 increased by approximately $7,766,000
      or
      84% to approximately $17,011,000, compared with the same period of 2006. The
      increase was attributable to the new and used vehicles trading segment. The
      increase was due to an increase of deliveries of the “Ferrari” 8-cylinder sports
      car, F430 and Spider and the launch of the new “Ferrari” 12-cylinder 2-seater
      sports car, F599 GTB Fiorano in the last quarter of 2006. The increase in parts
      and service sales was mainly attributed to the increase of deliveries of Ferrari
      and Maserati cars to customers during the last few years, for which our parts
      and services were used to maintain.




**COST
      OF SALES**




Cost
      of
      sales for three months ended March 31, 2007 increased to $14,492,000 from
      $7,734,000 for the three months ended March 31, 2006, a $6,758,000 or 87%
      increase was consistent with the increase in Company’s revenues during this
      period.




**GROSS
      PROFIT**




Gross
      profit margin for three months ended March 31, 2007 fell by 1.5% to 14.8% from
      16.3% for the same period of 2006 while the gross profit increased by
      approximately $1,008,000 to approximately $2,519,000 for the three months ended
      March 31, 2007. This increase is mainly attributed to the new and used vehicles
      trading segment.


16




**SELLING
      AND MARKETING EXPENSES**




Selling
      and marketing expenses for the three months ended March 31, 2007 was
      approximately $142,000, compared to approximately $107,000 for the same period
      of 2006. The increase in selling and marketing expenses was primarily due to
      the
      increased exhibition expenses incurred during this period, which increased
      from
      approximately $21,000 in first quarter of 2006 to approximately $106,000 in
      first quarter of 2007. This was mainly due to an event held in Hong Kong in
      February 2007 for the celebrations of Ferrari’s 60 th anniversary.




**GENERAL
      AND ADMINISTRATIVE EXPENSES**




General
      and administrative (“G&A”) expenses include salaries and related staffing
      expenses, facilities rent, rate and building management fees, legal,
      professional services and general corporate expenses.




G&A
      expenses for the three months ended March 31, 2007 was approximately $2,493,000
      or 14.7% of net sales compared to approximately $1,926,000 or 21% of net sales
      for the same period of 2006. The approximately $567,000 increase in G&A
      expenses was primarily due to the growth of our revenues and business expansion
      which required an increase in staffing and legal and professional
      services.




**OTHER
      EXPENSES**




Other
      expenses decreased to approximately $127,000 compared with approximately
      $184,000 in first quarter of 2006, a decrease of $57,000. The decrease was
      mainly a result of the decreased share of loss of an associate from
      approximately $227,000 in first quarter of 2006 to approximately $40,000 for
      the
      same period of 2007. Interest expenses increased from approximately $66,000
      in
      first quarter of 2006 to approximately $177,000 for the same period of 2007.
      The
      funds from which our increased interest expenses were incurred were used for
      working capital purposes.




**MINORITY
      INTERESTS**




Minority
      interests for the periods presented represent outside ownership interests in
      subsidiaries that are consolidated with the parent for financial reporting
      purposes.




**LIQUIDITY
      AND CAPITAL RESOURCES**




CASH
      FLOWS FROM CONTINUING OPERATING ACTIVITIES




Our
      operations generated cash resources of approximately $1,438,000 for the three
      months ended March 31, 2007, compared to generating cash resources of
      approximately $1,886,000 for the three months ended March 31, 2006, primarily
      as
      a net result of the following:




·
            For
                thethree
                months ended March 31, 2007,
                cash flow provided by sales net of operating expenses increased by
                approximately $284,000 to $2,000. The increase was primarily as a
                result
                of the increase in our sales.




·
            For
                thethree
                months ended March 31, 2007,
                account receivables decreased by approximately $6,847,000, primarily
                due
                to the collection of account receivable in regarding to the sales
                recognized in the fourth quarter of
                2006.




·
            For
                thethree
                months ended March 31, 2007,
                our inventory increased by approximately $2,621,000. The increase
                was
                consistent with our business growth especially in the car trading
                segment.




·
            For
                thethree
                months ended March 31, 2007,
                the increase or decrease of various current operating assets and
                liabilities, included in the aforementioned items, resulted in an
                aggregate increase of cash inflow from operations of approximately
                $1,436,000.


17


CASH
      FLOWS FROM CONTINUING INVESTING ACTIVITIES




For
      the
      three months ended March 31, 2007 we expended net cash of approximately $34,000
      in investing activities, mainly for acquisition of property, plant and equipment
      to support the growth of our business. For the three months ended March 31,
      2006, we utilized approximately $14,000 in investing activities, mainly for
      acquisition of property, plant and equipment.




CASH
      FLOWS FROM CONTINUING FINANCING ACTIVITIES




During
      the three months ended March 31, 2007, we repaid approximately $319,000 of
      our
      obligations owed on outstanding debt and provided approximately $2,493,000
      advances to affiliates. For the three months ended March 31, 2006, we made
      new
      net drawdown amounting to approximately $1,044,000 from banks and provided
      approximately $2,171,000 advances to affiliates. The advances to affiliates
      were
      made to entities that are under common control, where Mr. Richard Man Fai Lee,
      the Company’s Chief Executive Officer, is the common director of the Company and
      the affiliates. These advances included interest bearing and non interest
      bearing portion depending on the nature of the advances.




WORKING
      CAPITAL REQUIREMENTS




Current
      assets exceeded current liabilities at March 31, 2007 by approximately
      $3,460,000 a decrease of $120,000 from December 31, 2006. The ratio of our
      current assets to our current liabilities was 1.15 to 1 at March 31, 2007 and
      it
      was 1.14 to 1 at December 31, 2006. At March 31, 2007, our current assets
      of approximately $26,999,000 included approximately $9,446,000 in inventory
      that was funded by the operating cash flow and trade finance facilities. Our
      current liabilities of approximately $23,539,000 included customer
      deposits.  Given the exclusive nature and extremely limited production of
      Ferrari cars, our customers are willing to place material deposits in advance
      to
      the Company in order to secure their new car orders. This resulted in
      customer deposits of approximately $10,827,000.




**SEASONALITY**




Our
      business is modestly seasonal overall. Our operations generally experience
      higher volumes of vehicle sales in the fourth quarter of each year due in part
      to manufacturers’ production and delivery patterns.




**EFFECT
      OF FLUCTUATION IN FOREIGN EXCHANGE RATES**




Information
      regarding the effects of the fluctuation in foreign exchange rates on our
      Company is included in Item 3 below.




**OFF-BALANCE
      SHEET ARRANGEMENTS**




We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a material current or future effect on our financial condition, changes
      in
      financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures or capital resources.




**Item
              3.**
            **Quantitative
                and Qualitative Disclosures about Market
                Risk.**




We
      currently do not hold or use any derivative or other financial instruments
      that
      expose us to substantial market risk and we have no foreign exchange contracts.
      Our financial instruments consist of cash and cash equivalents, trade
      receivables **** and
      payables, bills payable, other current assets, other current liabilities, and
      bank borrowings. We consider investments in highly liquid instruments purchased
      with a remaining maturity of 90 days or less at the date of purchase to be
      cash
      equivalents. However, in order to manage the foreign exchange risks, we may
      engage in hedging activities to manage our financial exposure related to
      currency exchange fluctuation. In these hedging activities, we might use
      fixed-price, forward and option contracts when feasible.




*Interest
      Rates* .
      Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term obligations; thus, fluctuations in interest rates would not have
      a
      material impact on the fair value of the Company’s securities. At March 31,
      2007, we had approximately $2,169,000 in cash and cash equivalents. A
      hypothetical 10% increase or decrease in interest rates would not have a
      material impact on our earnings or loss, or the fair market value or cash flows
      of these instruments.




*Foreign
      Exchange Rates* .
      While
      our reporting currency is the U.S. dollar, to date virtually all of our revenues
      and costs are denominated in Hong Kong Dollars and a significant portion of
      our
      assets and liabilities is denominated in Hong Kong Dollars. As a result, we
      are
      exposed to foreign exchange risk as our revenues and results of operations
      may
      be impacted by fluctuations in the exchange rate between U.S. Dollars and Hong
      Kong Dollars. If the Hong Kong Dollar depreciates against the U.S. Dollar,
      the
      value of our Hong Kong Dollar revenues and assets as expressed in our U.S.
      Dollar financial statements will decline. Thus, our revenues and operating
      results may be impacted by exchange rate fluctuations of the Hong Kong Dollar.
      While we may choose to do so in the future, the availability and effectiveness
      of any hedging transactions may be limited and we may not be able to
      successfully hedge our exchange rate risks. Accordingly, we may experience
      economic losses and negative impacts on earnings and equity as a result of
      foreign exchange rate fluctuations. The effect of foreign exchange rate
      fluctuation for the three
      months ended March 31, 2007 was
      not
      material to us.




18




**Item
              4.**
            **Controls
                and Procedures.**




***Disclosure
      Controls and Procedures***




Under
      the
      supervision and with the participation of our management, including our chief
      executive officer and the chief financial officer, we conducted an evaluation
      of
      the effectiveness of the design and operation of our disclosure controls and
      procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Exchange Act of 1934, as of March 31, 2007, the end of the period covered by
      this report (the “Evaluation Date”). Based on this evaluation, our chief
      executive officer and chief financial officer concluded as of the Evaluation
      Date that our disclosure controls and procedures were effective such that the
      material information required to be included in our Securities and Exchange
      Commission (“SEC”) reports is recorded, processed, summarized and reported
      within the time periods specified in SEC rules and forms relating to us and
      our
      consolidated subsidiaries, and was made known to others within those entities,
      particularly during the period when this report was being prepared.




***Changes
      in internal controls over financial reporting***




There
      were no significant changes in our internal controls over financial reporting
      (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange
      Act
      of 1934) during the three months ended March 31, 2007 that have materially
      affected, or are reasonably likely to materially affect, the Company’s internal
      control over financial reporting.




19




**PART
      II:** **OTHER
      INFORMATION**




**Item
              1.**
            **Legal
                Proceedings.**




None.




**Item
      1A. Risk Factors.**




There
      have been no material changes in our business, operations or prospects that
      would require a change to the Risk Factor disclosure included in our most recent
      Annual Report on Form 10-K that have not already been disclosed.




**Item
              2.**
            **Unregistered
                Sales of Equity Securities and Use of
                Proceeds.**




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
      April
      19, 2007, Mr. Sammy Chi Chung Suen resigned as Director of Technorient because
      he reached retirement age.




There
      have been no material changes to the procedures by which security holders may
      recommend nominees to the Company’s board of directors.




**Item
              6.**
            **Exhibits.**






ExhibitNumber
            
            Description31.1
            
            Certification
                of Chief Executive Officer pursuant to Rules 13A-14(A)/15D-15(E)
                of the
                Securities Exchange Act of 1934, as adopted pursuant to Section 302
                of the
                Sarbanes-Oxley Act of 2002, filed herewith.31.2
            
            Certification
                of the Chief Financial Officer pursuant to Rules 13A-14(A)/15D-15(E)
                of
                the Securities Exchange Act of 1934, as adopted pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002, filed herewith.32.1
            
            Certification
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                18
                U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002), filed
                herewith.






20




**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
                PREMIUM LIFESTYLE ENTERPRISE, INC.**(Registrant)Date:
                May 14, 2007
            By:
            /s/
                Richard Man Fai LeeRichard
                Man Fai LeeChief
                Executive OfficerDate:
                May 14, 2007
            By:
            /s/
                Joseph Tik Tung WongJoseph
                Tik Tung WongChief
                Financial Officer


21