SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

            ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                         COMMISSION FILE NUMBER: 0-26029


                          ASIAN STAR DEVELOPMENT, INC.
                          ----------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




       NEVADA                                           88-0866395
-----------------------                     ------------------------------------
(STATE OF ORGANIZATION)                     (I.R.S. EMPLOYER IDENTIFICATION NO.)


                          ROOM 930, BLOCK B, EAST WING
                            NEW WORLD OFFICE BUILDING
                         TSIMSHATSUI, KOWLOON, HONG KONG
                    ----------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)


                                 (852) 2721-0936
               --------------------------------------------------
               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE



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  AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X

THERE ARE xx,xxx,xxx SHARES OF COMMON STOCK OUTSTANDING AS OF _________ xx, 2001



<PAGE>




                          ASIAN STAR DEVELOPMENT, INC.




--------------------------------------------------------------------------------


              UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 2001


--------------------------------------------------------------------------------





<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                                    FORM 10-Q

                                TABLE OF CONTENTS







PART 1     FINANCIAL INFORMATION


ITEM 1     CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

           Consolidated Condensed Balance Sheets as of December 31, 2000
           and March 31, 2001                                              F - 1

           Consolidated Condensed Statements of Operations for the Three
           Months Ended March 31, 2000 and 2001                            F - 2

           Consolidated Condensed Statements of Cash Flows for the Three
           Months Ended March 31, 2000 and 2001                            F - 3

           Notes to Consolidated Condensed Financial Statements        F-4 to 10


ITEM 2     MANAGEMENT'S DISCUSSION AND ANALYSIS

Signatures



<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                            (EXPRESSED IN US DOLLARS)


                                                                            DECEMBER 31,           MARCH 31,
                                                                                    2000                2001
                                                                               (AUDITED)         (UNAUDITED)

<S>                                                                         <C>                 <C>

ASSETS                                                     NOTES

CURRENT ASSETS
        Cash and cash equivalents                                           $    114,832        $     41,004
        Prepayments                                                              273,211             279,235
        Inventories                                                               20,123              18,672
        Other assets                                          2                   45,888              47,100
                                                                            --------------------------------
            Total current assets                                                 454,054             386,011

Goodwill                                                      3                   80,459              78,285
Investment                                                    2                9,938,160           9,938,160
Less : Provision for diminution in value of investment        2               (9,938,160)         (9,938,160)
Land usage rights                                             4                        -                   -
Land improvement                                              4                1,876,701           1,876,701
Construction in-progress                                      4                  545,681             545,681
Property and equipment, net                                                    2,458,700           2,403,359
                                                                            --------------------------------
Total assets                                                                   5,415,595           5,290,037
                                                                            ================================


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Due to a shareholder                                                   1,143,059           1,211,576
        Accounts payable                                                         748,734             731,575
        Other payables                                                           398,784             378,741
        Accrued expenses                                                         261,659             210,993
                                                                            --------------------------------
            Total current liabilities                                          2,552,236           2,532,885

COMMITMENTS AND CONTINGENCIES                                 5                        -                   -

SHAREHOLDERS' EQUITY Common stock, $0.001 par value:
        25,000,000 shares authorized, 15,746,015 shares                           15,746              15,746
        issued and outstanding as of March 31, 2001 and
        December 31, 2000
Additional paid-in capital                                    6               19,499,733          19,499,733
Accumulated deficit                                                          (16,652,120)        (16,758,327)
                                                                            --------------------------------
             Total shareholders' equity                                        2,863,359           2,757,152
                                                                            --------------------------------
Total liabilities and shareholders' equity                                  $  5,415,595        $  5,290,037
                                                                            ================================


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

</TABLE>


                                      F-1


<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                            (EXPRESSED IN US DOLLARS)


                                                                                      FOR THE THREE MONTHS ENDED
                                                                                              MARCH 31,

                                                                                       2000             2001
                                                                                    -------------------------------
                                                                     NOTE           (UNAUDITED)     (UNAUDITED)
<S>                                                                                 <C>                <C>

Revenue, net                                                          7             $    370,447       $    273,457

Cost of sales                                                                           (379,134)          (229,141)
                                                                                    -------------------------------
Gross profit/(loss)                                                   7                   (8,687)            44,316

Selling, general and administrative
  expenses                                                                              (212,249)          (151,177)

Other income, net                                                                        463,063                654
                                                                                    -------------------------------
Profit/(Loss) before income tax                                                          242,127           (106,207)

Income tax                                                            8                        -                  -
                                                                                    -------------------------------
Net Profit/(Loss)                                                                   $    242,127       $   (106,207)
                                                                                    ===============================

Net loss per common share - basic and
     diluted                                                                        $      (0.02)      $     (0.007)
                                                                                    -------------------------------

Basic and diluted weighted average number of
  common shares outstanding                                                           13,267,390         15,746,015
                                                                                    ===============================


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

</TABLE>


                                      F-2


<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (EXPRESSED IN US DOLLARS)


                                                                                 FOR THE THREE MONTHS ENDED
                                                                                         MARCH 31,

                                                                                 2000                   2001
                                                                              ---------------------------------
                                                                              (UNAUDITED)            (UNAUDITED)
<S>                                                                           <C>                     <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                                   $   242,127             $(106,207)
Adjustments to reconcile net loss to
   net cash provided by/(used in) operating activities
      Depreciation and amortisation                                               104,095                57,606
      Gain on disposal of subsidiaries                                            461,687                     -
      Changes in operating assets and liabilities:
      Prepayments                                                                (193,186)               (6,024)
      Inventories                                                                  (5,125)                1,451
      Other assets                                                             (1,029,720)               (1,212)
      Accounts payable                                                            138,407               (17,159)
      Other payables                                                              251,127               (20,043)
      Accrued expenses                                                             16,277               (50,666)
                                                                              ---------------------------------

NET CASH USED IN OPERATING ACTIVITIES                                             (14,311)             (142,254)

CASH FLOWS FROM INVESTING ACTIVITIES
  Payments for  capitalized  overhead costs in connection  with                   (23,133)                    -
   construction
  Purchases of construction materials and fixed assets                           (249,618)                  (91)
                                                                              ---------------------------------

NET CASH USED IN INVESTING ACTIVITIES                                            (272,751)                  (91)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock subscription                                            62,500                     -
Advances from a shareholder                                                       331,722                68,517
                                                                              ---------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                         394,222                68,517

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                              107,160               (73,828)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    5,628               114,832
                                                                              ---------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                    $   112,788             $  41,004
                                                                              =================================


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

</TABLE>


                                      F-3


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 1      -     BASIS OF PRESENTATION
_______________________________________

The accompanying consolidated financial statements as of December 31, 2000 and
March 31, 2001 and for the three months ended March 31, 2000 and 2001, of Asian
Star Development, Inc and its subsidiaries (the "Company") have been prepared in
accordance with accounting principles generally accepted in the United States
and with instructions to Form 10-Q and Regulation S-X. All significant
inter-company balances have been eliminated on consolidation. The balance sheet
as of December 31, 2000 was derived from audited financial statements included
in the Company's Form 10-K for the year ended December 31, 2000 (the "Form
10-K"). The financial statements at March 31, 2001 and for the three months
ended March 31, 2000 and 2001 have not been audited by independent accountants.
Certain information and footnote disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to requirements of the Securities and
Exchange Commission. However, the Company believes that the disclosures included
in the accompanying quarterly financial statements and footnotes are adequate to
make the information presented not misleading. These quarterly financial
statements should be read in conjunction with the financial statements and the
notes thereto included in the Company's Form 10-K.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
reported amounts of assets, liabilities, revenues and expenses and the
disclosure of contingent assets and liabilities. Actual results could differ
from these estimates.

The consolidated financial statements are reported in US Dollars ("$").

In the opinion of management, all normally recurring adjustments necessary to
present fairly the financial position as of March 31, 2001, results of
operations and cash flows for the three months ended March 31, 2000 and 2001,
have been made. However, these results are not necessarily indicative of the
operating results for any other interim period or for the full year.

The Company and its subsidiaries suffered losses of $106,207 for the first
quarter ended March 31, 2001 and had negative working capital as of March 31,
2001. Historically, one of the Company's directors and major shareholders
provided the Company with substantial sources of finance for the operations of
the Company.

The directors and major shareholders have confirmed their intention to provide
continuing financial support so as to enable the Company to meet its liabilities
as and when they fall due and carry on its business without a significant
curtailment of operations for the foreseeable future. The directors believe that
the Company will continue as a going concern and consequently have prepared the
financial statements on a going concern basis.


                                      F-4



<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 2 - OTHER ASSETS AND INVESTMENT
____________________________________

On March 28, 2000, the Company and a subsidiary company, Asian Star (Hong Kong)
Limited entered into various agreements with Harmonic Hall Investment Holdings
Ltd, ("HHI"), whereby the Company and the subsidiary company acquired
approximately 52% of the outstanding common stock of HHI for 2,313,625 shares of
the Company's Restricted Common Stock at par value $.001 and cash of $650,160.
The consummation date of the transaction was on April 15, 2000.

As of June 30, 2000, the subsidiary company paid cash of $650,160 and the
Company issued 2,313,625 shares of the Company's Restricted Common Stock at a
fair value of $9,288,000. The fair value of the Restricted Common Stock at
approximately $4 per share was determined based on the 7 days weighted average
trading share prices quoted on the stock exchange prior to the consummation date
of the transaction.


                                                     2000            2001

Investment, at cost                             9,288,000       9,288,000
Advances to HHI                                   650,160         650,160
                                               --------------------------
Total investment                                9,938,160       9,938,160
Less: Provision for diminution in value of     (9,938,160)     (9,938,160)
     investment                                --------------------------
                                                        -              -
                                               ==========================

In addition to the above, the Company advanced a sum of approximately $323,000
to HHI for its working capital. The advance has no specific terms of repayment
and is recorded as other assets. As detailed in the following paragraphs, a full
provision of $323,000 has been made in the financial statements for the
advances.
                                                     2000                2001

Other assets                                      368,888               370,100
Less: Provision for diminution in value          (323,000)             (323,000)
                                                 ------------------------------
Other assets, net                                  45,888                47,100
                                                 ==============================

Following the purchase,  management of the Company has not been able to exercise
control over the  operation of HHI or obtain  financial  statements of HHI as of
June  30,  2000.  Accordingly,  the  financial  statements  of HHI have not been
included in the consolidated financial statements.

In August 2000, the Company retained legal counsel in Hong Kong to prepare and
file a writ with the Court against HHI and a director of HHI for breach of the
agreements.

On September 26, 2000, the Company filed an action in the High Court of the Hong
Kong Special Administrative Region seeking return of all monies paid and all
shares issued by the Company in the transaction, together with damages as
follows:


                                      F-5


<PAGE>



                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


(a)  rescission of a Subscription Agreement entered into on March 28, 2000 and
     return $650,160;

(b)  rescission of an Agreement in relation to Sales and Purchase of Shares in
     HHI signed on March 28, 2000 and return of the 2,313,625 issued shares or a
     sum of $9,288,000; and

(c)  rescission of an Investment Agreement signed on March 28, 2000 providing
     for injection of funds into HHI by the subsidiary company.

HHI and the director of HHI have made counter claims against the Company and its
subsidiary company for breach of the various agreements. Based on the
information pleaded in the pleadings filed and served and the instructions
obtained by legal Counsel, Counsel is of the view that, whilst it appears HHI
and the director of HHI managed to disclose a PRIMA FACIE defence, the claims
against them have good prospects.

Management considers that the Company and its subsidiary company have a strong
case against HHI and the director of HHI. One of the subsidiary company of HHI
was under a winding up order in April 2001. Although management is not sure
whether HHI and the director of HHI have the financial ability to return
the cost of investment and advances under the various agreements, management
considers that the chances of an unfavourable outcome to the litigation,
significant contingent liabilities and losses as a result of the litigation are
remote. However, full provisions for diminution in value of investment of
$9,938,160, and the advances of $323,000, in all totaling $10,261,160, have been
made.

NOTE 3      -     GOODWILL
__________________________

In January 2000, the Company acquired 100% of the equity interest of two Hong
Kong companies owned by an officer of the Company. Goodwill represents the
excess of consideration given over the fair value of the net assets of the
acquired companies at the date of acquisition. The carrying amount of goodwill
is amortised over a period of 10 years on a straight-line basis. Details of the
acquisition are as follows:

Consideration   *                                               $ 445,162
Less: Fair value of net assets acquired                          (358,179)
                                                                ---------

Goodwill                                                           86,983
Less: amortisation                                                 (8,698)
                                                                ---------

                                                                 $ 78,285
                                                                =========

*  The Company issued 261,860 of the Company's Restricted Common Stock valued at
   $1.7 per share as consideration


                                      F-6


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 4     -     LAND USAGE RIGHT, LAND IMPROVEMENT AND CONSTRUCTION IN PROGRESS
________________________________________________________________________________

MAPLE CITY (LAND OCCUPANCY TERM: 70 YEARS)

The Maple City project, which is developed by the Company, comprises three
parcels of land which are close to each other. The land usage rights
certificates of the Maple City project stipulate a lease term of 70 years
commencing from 1993 and the total area is approximately 74,000 square meters.
The land was contributed by a local Chinese partner to the Company at no
consideration. It was the original intention of the Company to build a hotel,
commercial and entertainment complex on these parcels of land. The concrete
structural work of the project was completed by a PRC registered and
wholly-owned subsidiary, Honstar Entertainment Centre Ltd. During the period, no
construction costs were incurred for this project as management prefers to hold
the project development until a recovery of the property market in China.
Management considers that there is no impairment in the carrying value of the
project.

Land usage rights, land improvement and construction in progress comprise the
following:

                                                 2000                 2001
   Land usage rights                                -                    -
   Land improvement                         1,876,701            1,876,701
   Construction in progress                   139,920              139,920
   Overhead costs  *                          405,761              405,761
                                           -------------------------------

                                           $2,422,382           $2,422,382
                                           ===============================


*  Overhead costs represent all accumulated indirect costs such as project
   supervisors' salaries, certain travel and administrative expenses, and legal
   fees related to the projects. The accumulated overhead costs are allocated to
   the respective projects based on the actual time spent on each project.


NOTE 5      -     COMMITMENTS AND CONTINGENCIES
_______________________________________________

Based on the joint venture contract and agreement, the Company entered into a
project in China as of March 31, 2001. Details of the current status of the
project are as follows:


               Total Investment
                    Per Project        Costs         Years Remaining to
                  Per Agreement      Incurred        Complete the Project Per
Project             or Contract       to Date        Agreement or Contract
--------------------------------------------------------------------------------
                                    (audited)

Maple City           38,000,000     2,422,382        No fixed period
                     ==========     =========


                                      F-7


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


FINANCING RESOURCE DEPENDENCY

The operating activities of the Company was substantially financed by one of the
Company's directors through either capital infusion or loans, and funds raised.

Management believes that the completion of the Company's projects on a timely
basis will depend significantly on additional funding available to the Company
through debt and/or equity financing in the near future and a recovery of the
property market in China. There will be no assurance that such financing will be
available, or if so, at terms beneficial to the Company.


NOTE 6      -     COMMON STOCK, ADDITIONAL PAID-IN CAPITAL
__________________________________________________________

There was no share of Common Stock issued during the three months ended March
31, 2001. All share options granted to employees and consultants were expired as
of March 31, 2001.

NOTE 7      -     SEGMENTAL ANALYSIS
____________________________________

                                             3 months ended     3 months ended
REVENUE                                      March 31, 2000     March 31, 2001
Operating income from Cafeteria business        370,447            235,002
Contracting income from Water World                   -             24,200
Commission income from sales of souvenir              -             14,255
--------------------------------------------------------------------------------
                                                370,447            273,457

GROSS (LOSS)/PROFIT CONTRIBUTION
Cafeteria business                              ( 8,687)             9,037
Water World                                           -             24,200
Sales of souvenir                                     -             11,079
--------------------------------------------------------------------------------
                                                ( 8,687)            44,316
================================================================================

NOTE 8      -     INCOME TAXES
______________________________

No corporate income tax has been provided for the year ended December 31, 2000
and 3 months ended March 31, 2001 as the Company suffered tax losses for the
year/period and has no taxable profits.

The Company and its subsidiaries account for income taxes using the asset and
liability method, which require an entity to recognise deferred tax liabilities
and assets. A full valuation allowance was provided due to the uncertainty that
deferred tax benefits will be realized in future years.


                                      F-8


<PAGE>


NOTE 9      -     OTHER PROJECTS
________________________________

a)    SUPERPORT PROJECT

On January 25, 2000, Registrant entered into a joint venture agreement to
acquire an existing LPG cylinder manufacturing plant and an associated LPG
bottling plant in the State of Kelantan, Malaysia. The Project also includes an
exclusive right to install a deep-water port for tankers. The total project cost
was approximately $2.3 billion. However, the required approval from the Foreign
investment consulate of the Malaysian Government to develop this project has not
yet been obtained. Registrant considers that this project is unable to proceed
any further and is in process of preparing documentation to cancel the
agreement. All costs related to this project were written off.

b)    "6-12" CONVENIENCE STORE CHAIN

In September, 1998, Registrant entered into a letter of intent with Lin Tao Ge,
an unrelated third party, to form a new Hong Kong corporation to acquire 100% of
the total issued and outstanding shares of two China corporations, Super
Shopping Channels Ltd. and Beijing Kinetic Sales Network Limited. Registrant
will own 75% of the newly-formed corporation and Mr. Ge will own 25%.

The Company has no firm commitment for this project. Before China's WTO
accession, there are still restrictions to the Company to directly operate chain
stores in China. No cost was incurred on this project as at March 31, 2001.

c)    SHANGHAI BAOLONG PHARMACEUTICAL CO LTD

In March 2001, the Company signed a letter of intent to merge with Shanghai
Baolong Pharmaceutical Co Ltd ("Baolong"), a pharmaceutical company located in
Technological Development Zone in Shanghai, China. Pursuant to the letter of
intent, all assets and liabilities of the Company will be transferred to a
director of the Company who has guaranteed execution of the rights and
obligations of the assets and liabilities.

As consideration, Baolong will pay a total sum of $600,000 to the Company by
instalments. In addition, Baolong will inject all the assets of Baolong into the
Company. Following the merger, Baolong and the current shareholders of the
Company will hold equity interests of 80% and 20% of the enlarged capital in the
Company respectively.

Formal agreement of the above arrangement is subject to approvals by the Board
of Directors of the Company and the Chinese government on or before 20 March
2001. As of March 31, 2001, the Company has not received any instalment payments
and the time period has expired. Management is still negotiating with Baolong
and the outcome of which is uncertain.


                                      F-9


<PAGE>


NOTE 10     -     RECENT ACCOUNTING PRONOUNCEMENTS
__________________________________________________

In June 1998, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards No. 133, or SFAS 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS 133 establishes new
standards of accounting and reporting for derivative instruments and hedging
activities. SFAS 133 requires that all derivatives be recognized at fair value
in the statement of financial position, and that the corresponding gains or
losses be reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that exists.
Management does not currently hold derivative instruments or engage in hedging
activities.

In July 1999, the FASB issued Statement of Financial Accounting Standards No.
137, or SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB No. 133. SFAS 137 deferred
the effective date of SFAS 133 until the first fiscal quarter beginning after
June 15, 2000.


                                      F-10


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                      Management's Discussion and Analysis


LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT; NEED FOR ADDITIONAL CAPITAL

There is limited historical financial information about the Company upon which
to base an evaluation of the Company's performance or to make a decision
regarding an investment in shares of Company's Common Stock. The Company has an
accumulated deficit of $16,758,327 as of March 31, 2001. The Company's cash and
cash equivalents decreased from $114,832 at December 31, 2000 to $41,004 at
March 31, 2001


RECENT DEVELOPMENTS

a)    LAWSUIT

Harmonic Hall Investment Holdings Ltd.("HHI")

On March 28, 2000, Registrant entered into agreements with Harmonic Hall
Investment Holdings Ltd, ("HHI"), whereby Registrant acquired approximately 52%
of the outstanding common stock of HHI for 2,313,625 shares of Registrant's
Restricted Common Stock at par value $.001 and cash of $650,160. The
consummation date of the transaction was on April 15, 2000.

As of June 30, 2000, Registrant paid cash of $650,160 and issued 2,313,625
shares of Registrant's Common Stock at a fair value of $9,288,000 which have
been accounted for as an investment in the accounts at cost. The fair value of
Restricted Common Stock was determined based on the average trading share prices
quoted on the stock exchange.

In addition to the above, Registrant had advanced a sum of approximately
$323,000 to a subsidiary of HHI for its working capital. The advance has no
specific terms of repayment and is recorded as other assets.

Following the purchase, management of the Company has not been able to exercise
control over the operation of HHI or obtain financial statements of HHI as of
June 30, 2000. In August 2000, Registrant retained a legal counsel in Hong Kong
to prepare and file a writ in Court against HHI for breach of the agreements. On
September 26, 2000, Registrant filed an action in the High Court of the Hong
Kong Special Administrative Region seeking rescission of the agreements. The
action seeks return of all monies paid, and all shares issued by Registrant in
the transaction, together with damages.

Management considers that it is uncertain to determine the outcome of the
lawsuit and is unable to estimate the loss, if any. However, a full provision
totaling $10,261,160 has been made for any diminution in value of the investment
and advances to HHI. There were no changes in the assessment of outcome of the
litigation by management during the three months ended March 31, 2001.


<PAGE>


b)    VARIOUS PROJECTS

(i)  "6-12"  Convenience Store Chain, PRC

In September, 1998, Registrant entered into a letter of intent with Lin Tao Ge,
an unrelated third party, to form a new Hong Kong corporation to acquire 100% of
the total issued and outstanding shares of two China corporations, Super
Shopping Channels Ltd. and Beijing Kinetic Sales Network Limited. Registrant
will own 75% of the newly-formed corporation and Mr. Ge will own 25%.

The Company has no firm commitment for this project. Before China's WTO
accession, there are still restrictions to the Company to directly operate chain
stores in China. No cost was incurred on this project as at March 31, 2001.

(ii)   Superport Project

On January 25, 2000, Registrant entered into a joint venture agreement to
acquire an existing LPG cylinder manufacturing plant and an associated LPG
bottling plant in the State of Kelantan, Malaysia. The Project also includes an
exclusive right to install a deep-water port for tankers. The total project cost
was approximately $2.3 billion. However, the required approval from the Foreign
investment consulate of the Malaysian Government to develop this project has not
yet been obtained. Registrant considers that this project is unable to proceed
any further and is in process of preparing documentation to cancel the
agreement. All costs related to this project were written off.

(iii) Shanghai Baolong Pharmaceutical Co Ltd

In March 2001, the Company signed a letter of intent to merge with Shanghai
Baolong Pharmaceutical Co Ltd ("Baolong"), a pharmaceutical company located in
Technological Development Zone in Shanghai, China. Pursuant to the letter of
intent, all assets and liabilities of the Company will be transferred to a
director of the Company who has guaranteed execution of the rights and
obligations of the assets and liabilities.

      As consideration, Baolong will pay a total sum of $600,000 to the Company
by instalments. In addition, Baolong will inject all the assets of Baolong into
the Company. Following the merger, Baolong and the current shareholders of the
Company will hold equity interests of 80% and 20% of the enlarged capital in the
Company respectively.

      Formal agreement of the above arrangement is subject to approvals by the
Board of Directors of the Company and the Chinese government on or before 20
March 2001. However, as of March 31, 2001, the Company has not received any
instalment payments and the time period has expired. Management is still
negotiating with Baolong and the outcome of which is uncertain.


<PAGE>


THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

REVENUE AND OPERATING EXPENSES

Revenue from the operations of Ocean Wealth Restaurant, Asian Star Technology
Development Limited and Shilong Water World decreased from $370,447 for the
three months ended March 31, 2000 to $273,457 for the three months ended March
31, 2001. The decrease was mainly due to a drop in revenue generated from the
cafeteria business.

Selling, general and administrative expenses comprised mainly salary, rental
expenses, depreciation expenses, commission and promotional expenses. The
decrease in these operating expenses from $212,249 for the three months ended
March 31, 2000 to $151,177 for the three months ended March 31, 2001 was mainly
due to less promotional effort for the merchandising business.

The Company disposed of its investment in Shilong Town Project and recognised a
net gain on disposal in the first quarter 2000. The Company has no such gain on
disposal for the three months ended March 31, 2001.




<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

The Company generated positive cash flows of $41,004 for the three months ended
March 31, 2001. The Company's major sources of revenue were generated from the
operations of the cafeteria business of $235,002 and contracting income from the
Water Park of $24,200 for the three months ended March 31, 2001. The Company's
ongoing operations have been substantially dependent on financing from a
shareholder.

As of March 31, 2001, the Company's total assets and total liabilities were
$5,290,037 and $2,532,885 respectively.

The Company's investment portfolio comprised the following as of March 31, 2001:

PROJECT / SUBSIDIARY                      BUSINESS NATURE
--------------------                      ---------------

Maple City                                Property Development
Ocean Wealth Restaurant                   Cafeteria Business
Dongguan Shilong Water World              Water Park
Asian Star Technology Development Ltd     Merchandising and International agent
                                          for  the Chinese Academy of Space
                                          Technology


<PAGE>


<TABLE>
<CAPTION>


FINANCIAL POSITIONS AS OF MARCH 31, 2001 AS COMPARED TO MARCH 31, 2000


                                                                                   MARCH 31, 2000     MARCH 31, 2001
                                                                                      (UNAUDITED)        (UNAUDITED)
<S>                                                                                     <C>            <C>

ASSETS                                                                NOTES

CURRENT ASSETS
        Cash and cash equivalents                                                       $ 112,788      $      41,004
        Prepayments                                                                       326,245            279,235
        Inventories                                                      1                  9,030             18,672
        Other assets                                                     2              1,073,410             47,100
                                                                                ------------------------------------
            Total current assets                                                        1,521,473            386,011

Goodwill                                                                                   86,983             78,285
Investment                                                               3                      -          9,938,160
Less : Provision for diminution in value of investment                                          -         (9,938,160)
Land usage rights, land improvement and construction in-progress         4              6,130,628          2,422,382
Property and equipment, net                                              5              1,698,910          2,403,359
                                                                                ------------------------------------
Total assets                                                                            9,437,994          5,290,037
                                                                                ====================================


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Due to a shareholder                                                            1,045,926          1,211,576
        Accounts payable                                                                  681,228            731,575
        Other payables and accrued expenses                                               607,444            589,734
                                                                                ------------------------------------

            Total current liabilities                                                   2,334,598          2,532,885

SHAREHOLDERS' EQUITY
Paid-in capital                                                          6              9,030,929         19,515,479
Accumulated deficit                                                                    (1,927,533)       (16,758,327)
                                                                                ------------------------------------

             Total shareholders' equity                                                 7,103,396          2,757,152
                                                                                ------------------------------------


Total liabilities and shareholders' equity                                             $9,437,994         $5,290,037
                                                                                ====================================

</TABLE>


<PAGE>


NOTE 1      INVENTORIES

Inventories as of March 31, 2000 and March 31, 2001 increased from $9,030 to
$18,672. The increase was mainly due to increase in inventories for highly
coveted China Space souvenir products for one of the company's subsidiary, Asian
Star Technology Development Limited.

NOTE 2      OTHER ASSETS

For the three months ended March 31, 2000, other assets comprised mainly
receivables for sales of Shilong Town Project of $1,028,520. No such receivables
as of March 31, 2001.

NOTE 3      INVESTMENT

As detailed in the MD&A recent developments (a) (i), a full provision of
$9,938,160 has been made for the Company's investment in HHI. No such provision
was made during the three months ended March 31, 2000.

NOTE 4      LAND USAGE RIGHTS, LAND IMPROVEMENT AND CONSTRUCTION IN PROGRESS

Following the disposal of Shilong Town Projects and Shilong Town Hall, the total
costs for land usage rights, land improvement and construction in progress
decreased from $6,130,628 as of March 31, 2000 to $2,422,382 as of March 31,
2001. The costs carried forward were related to the development costs for Maple
City Project.

NOTE 5      PROPERTY AND EQUIPMENT

The increase in property and equipment was mainly due to additions to building
premises and facilities for the Water Park during the twelve months period ended
March 31, 2001.

NOTE 6      PAID IN CAPITAL

As of March 31, 2000, there were 13,267,390 shares issued for a total paid in
capital of $9,030,929. The increase in paid in capital to 15,746,015 shares of
$19,515,479 as of March 31, 2001 comprised the following:

- Common stock issued for options exercised          $   162,500
- Stock issued for acquisition of HHI                $ 9,288,000
- Stock issued for consultancy services              $   127,050
- Notional compensation for stock options            $   787,000
- CEO notional compensation                          $   120,000
                                                     -----------
                                                     $10,484,550
                                                     ===========

FINANCIAL POSITIONS AS OF MARCH 31, 2001 AND DECEMBER 31, 2000

The Company recorded a loss of $106,207 during the three months period ended
March 31, 2001. There has been no significant change in the Company's financial
position since December 31, 2000.


<PAGE>


                                   SIGNATURES


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



                               ASIAN STAR DEVELOPMENT INC.



Date:  May 15, 2001                  By: /s/Stephen Chow
                                        --------------------------------
                                        Name:    Stephen Chow
                                        Title:   President