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 SEPTEMBER 30, 2000

                         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 15,711,015 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 2000



<PAGE>



                          ASIAN STAR DEVELOPMENT, INC.




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


              UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 2000


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





<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                                    FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


                                                                                                      PAGE NUMBER


<S>           <C>                                                                                     <C>
PART 1        FINANCIAL INFORMATION


ITEM 1        CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


              Consolidated Condensed Balance Sheets as of December 31, 1999 and September 30, 2000    F - 1

              Consolidated  Condensed Statements of Operations for the Three and
              Nine Months Ended September 30, 1999 and 2000                                           F - 2

              Consolidated  Condensed  Statements  of Cash  Flows  for the  Nine
              Months Ended September 30, 1999 and 2000                                                F - 3

              Notes to Consolidated Condensed Financial Statements                                    F - 4 to F - 10


ITEM 2        MANAGEMENT'S DISCUSSION AND ANALYSIS


</TABLE>



<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                             DECEMBER 31,            SEPTEMBER 30,
                                                                                     1999                     2000
                                                                                (AUDITED)              (UNAUDITED)
ASSETS                                                            NOTES

CURRENT ASSETS
<S>                                                                 <C>          <C>                    <C>
        Cash and cash equivalents                                                   5,628                  240,877
        Prepayments                                                               133,059                  218,702
        Inventories                                                  2              3,905                1,274,076
        Other assets                                                 4             43,690                  483,524
                                                                             -------------            -------------

            Total current assets                                                  186,282                2,217,179

Goodwill                                                             3                  -                   82,635
Investment                                                           4                  -                9,953,501
Land usage rights                                                    5            469,814                        -
Land improvement                                                     5          4,274,312                1,876,701
Construction in progress                                             5          1,656,970                  721,924
Property and equipment, net                                                     1,363,294                2,629,474
                                                                             -------------            -------------

Total assets                                                                    7,950,672               17,481,414
                                                                             =============            =============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Due to a shareholder                                                      714,204                  668,188
        Accounts payable                                                          542,821                2,089,021
        Other payables                                                            159,150                  321,331
        Accrued expenses                                                          180,890                  182,123
                                                                             -------------            -------------

            Total current liabilities                                           1,597,065                3,260,663

COMMITMENTS AND CONTINGENCIES                                        6

SHAREHOLDERS' EQUITY
Common stock, $0.001 par value:
        25,000,000 shares  authorized,  15,711,015 shares                          12,956                   15,711
        issued and outstanding as of September 30, 2000 and
        12,955,530 shares issued and outstanding as of
        December 31, 1999
Additional paid-in capital                                           7          8,510,311               18,465,718
Accumulated deficit                                                            (2,169,660)              (4,260,678)
                                                                             -------------            -------------

        Total shareholders' equity                                              6,353,607               14,220,751
                                                                             -------------            -------------

Total liabilities and shareholders' equity                                      7,950,672               17,481,414
                                                                             =============            =============

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


                                                  THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                    SEPTEMBER 30,                           SEPTEMBER 30,

                                                1999              2000                 1999               2000
                                            -------------      ------------        -------------      -------------
                                   NOTE      (UNAUDITED)       (UNAUDITED)          (UNAUDITED)        (UNAUDITED)

<S>                                   <C>     <C>              <C>                   <C>               <C>
Revenue, net                                 $    22,643       $   337,074          $    41,926        $   962,332

Cost of sales                                    (22,965)         (253,757)             (40,603)          (929,445)
                                            -------------      ------------        -------------      -------------

Gross profit / (loss)                               (322)           83,317                1,323             32,887

Selling, general and
     administrative expenses                    (102,016)         (458,155)            (361,493)          (866,071)

Other income/(loss), net              8            1,458        (1,677,196)              53,370         (1,257,834)
                                            -------------      ------------        -------------      -------------

Loss before income tax                          (100,880)       (2,052,034)            (306,800)        (2,091,018)

Income tax provision                  9                -                 -                    -                  -
                                            -------------      ------------        -------------      -------------

Net loss                                     $  (100,880)      $(2,052,034)         $  (306,800)       $(2,091,018)
                                            =============      ============        =============      =============

Net loss per common share -
     basic and diluted                            (0.008)           (0.131)              (0.024)            (0.151)
                                            -------------      ------------        -------------      -------------

Basic and diluted weighted average
     number of common shares outstanding      12,955,530        15,711,015           12,955,530         13,825,339
                                            =============      ============        =============      =============

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


                                                                                    NINE MONTHS ENDED
                                                                                      SEPTEMBER 30,

                                                                               1999                   2000
                                                                          ----------------       ---------------
<S>                                                                 <C>         <C>                  <C>

                                                                  NOTE      (UNAUDITED)            (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                                     $(306,800)           $(2,091,018)
Adjustments to reconcile net loss to
        net cash provided by/(used in) operating activities
      Depreciation and amortisation                                                50,419                128,043
      Recognition of deferred expense                                             112,500                      -
      Loss/(Gain) on disposal of subsidiaries                       8             (53,370)             1,257,834
      Changes in operating assets and liabilities:
      Prepayments                                                                 111,296                (85,643)
      Inventories                                                                  21,459             (1,270,171)
      Other assets                                                                (44,992)              (439,834)
      Accounts payable                                                            (36,477)             1,546,200
      Other payables                                                              149,562                162,181
      Accrued expenses                                                            (86,514)                 1,233
                                                                          ----------------       ---------------

NET CASH USED IN OPERATING ACTIVITIES                                             (82,917)              (791,175)

CASH FLOWS FROM INVESTING ACTIVITIES
  Payments for investment                                                               -               (665,501)
  Payments for capitalized overhead costs in connection with
    construction                                                                 (188,907)                (9,379)
  Purchases of construction materials and fixed assets                           (155,388)              (959,266)
  Proceeds from disposal of subsidiaries                                           26,162              2,481,586
                                                                          ----------------       ---------------

NET CASH USED IN INVESTING ACTIVITIES                                            (318,133)               847,440

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock subscription                                            91,980                225,000
Advance from/(repayment to) a shareholder                                         241,981                (46,016)
                                                                          ----------------       ---------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                         333,961                178,984
                                                                          ----------------       ---------------

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                              (67,089)               235,249

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                   71,690                  5,628
                                                                          ----------------       ---------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $   4,601            $   240,877
                                                                          ================       ===============

SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON CASH INVESTING AND
  FINANCING ACTIVITIES
     Issuance of 2,313,625 common stock for acquiring equity
     interest in an investment (Note 4)                                         $       -            $ 9,288,000
                                                                          ================       ===============


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, 1999 and
September  30, 2000 and for the three and nine months ended  September  30, 1999
and 2000, 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 in consolidation.  The
balance  sheet as of  December  31,  1999 was  derived  from  audited  financial
statements  included in the Company's  Form 10-K for the year ended December 31,
1999 (the "Form 10-K").  The financial  statements at September 30, 2000 and for
the  three  and nine  months  ended  September  30,  1999 and 2000 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  interim  financial
statements  and  footnotes  are adequate to make the  information  presented not
misleading.  These interim  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 September  30,  2000,  results of
operations and cash flows for the three and nine months ended September 30, 1999
and 2000, 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 accompanying notes are an integral part of these consolidated condensed
financial statements.


                                      F-4


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 2      -     INVENTORIES
-----------------------------

Inventories  comprise  primarily  of  souvenir  held for sales and are stated at
lower of cost or market value. Market value will be determined using replacement
cost in  accordance  with the  relevant  industry  standard.  In June 2000,  the
Company's  newly  established  subsidiary,  Asian  Star  Technology  Development
Limited  ("ASTD"),  was  appointed as an agent for the Chinese  Academy of Space
Technology for all international commercial activities.  ASTD launched marketing
programs for sales of highly coveted China Space Souvenir Products.


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 during the period                                   (4,348)
                                                                    ----------

                                                                    $  82,635
                                                                    ==========

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


NOTE 4      -     INVESTMENT IN HARMONIC HALL INVESTMENT
--------------------------------------------------------

On March 28,  2000,  the Company  entered into  agreements  with  Harmonic  Hall
Investment Holdings Ltd, ("HHI"), whereby the 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  $665,501.  The
consummation date of the transaction was in April 2000.

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


                                      F-5


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


As of June 30,  2000,  the Company  paid cash of $665,501  and issued  2,313,625
shares of the  Company's  Common Stock at a fair value of  $9,288,000.  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,  the  Company  had  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.

Following the purchase,  management of the Company has not been able to exercise
significant  influence over the operation of HHI or obtain financial  statements
of HHI as of June 30, 2000. In August 2000, the Company 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, the Company 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
the  Company  in  the  transaction,  together  with  damages.  Accordingly,  the
financial statements of HHI have not been included in the consolidated financial
statements.  No  provision  has  been  made for any  diminution  in value of the
investment.


NOTE 5 - DISPOSAL OF LAND USAGE RIGHTS/LAND IMPROVEMENT/CONSTRUCTION IN PROGRESS
--------------------------------------------------------------------------------

The  Company  disposed of its 100%  equity  interest  in the  Shilong  Town Hall
project to  Dongguan  Shilong  Properties  Limited in July 2000.  Details of the
disposal are as follows:


Consideration received                                    $  1,453,066
Less: Book value of net assets disposed                     (3,180,639)
                                                       ---------------
Loss on disposal                                          $  1,727,573
                                                       ===============


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


                                      F-6


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements



NOTE 6      -     COMMITMENTS AND CONTINGENCIES
-----------------------------------------------

Based on the joint venture  contract and agreement,  the Company  entered into a
project in China as of September 30, 2000.  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
--------------------------------------------------------------------------------
                                      (unaudited)

Maple City           38,000,000         2,517,461       No time limit
                     ==========         =========

Details of other projects are summarized in Note 10.


FINANCING RESOURCE DEPENDENCY

The operating activities of the above project 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 project on a timely basis will
depend significantly on additional funding available to the Company through debt
and/or equity financing in the near future. There will be no assurance that such
financing will be available,  or if so, at terms beneficial for the Company.  No
development of the project was made during the last quarter.


NOTE 7      -     COMMON STOCK, ADDITIONAL PAID-IN CAPITAL
----------------------------------------------------------

There  was no share of  Common  Stock  issued  during  the  three  months  ended
September 30, 2000.  Details of shares of Common Stock  movements for the period
December 31, 1999 to September 30, 2000 are as follows:


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


                                      F-7


<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


                                                                                                  Additional
                                                          Common Stock                               Paid in
                                                         No. of shares           Amount              Capital
<S>                                                         <C>                 <C>                <C>

As of December 31, 1999                                     12,955,530          $12,956          $ 8,510,311
Common Stock issued for option exercised                        50,000               50               62,450
Purchase of a cafeteria                                        261,860              262              444,900
                                                     ------------------ ----------------  -------------------

As of March 31, 2000                                        13,267,390           13,268            9,017,661
Common Stock issued for option exercised                       130,000              130              162,370
Acquisition of HHI *                                         2,313,625            2,313            9,285,687
                                                     ------------------ ----------------  -------------------

As of September 30, 2000                                    15,711,015          $15,711          $18,465,718
                                                     ================== ================  ===================

* 2,313,625 shares of Restricted  Common Stock were issued to acquire the equity interest of HHI as detailed
in Note 4.


</TABLE>


NOTE 8      -    OTHER LOSS
---------------------------

Other loss comprises mainly of the loss on disposal of the Company's 100% equity
interest in the Shilong Town Project as detailed in Note 5.


NOTE 9     -    INCOME TAXES
----------------------------

The Company has no taxable profits for the period ended September 30, 2000.

The Company accounts for income taxes using the liability method, which requires
an entity to recognise  deferred tax  liabilities  and assets.  A full valuation
allowance  will be provided due to the  uncertainty  that  deferred tax benefits
will be realised.


NOTE 10     -     OTHER PROJECTS
--------------------------------


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


                                      F-8


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


A)    SUPERPORT PROJECT

On January  25,  2000,  the  Company  entered  into an  agreement  to acquire an
existing to 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 is
estimated to be $2.3  billion.  The  agreement is currently  under review by the
Foreign  Investment  Consulate  of  Malaysian  Government  and  is  seeking  its
approval.  The  Company  has  no  firm  capital  commitment  for  this  project.
Management considers that upon obtaining the approval,  other financiers to fund
the project costs in various phases will be sought.

B)    "6-12" CONVENIENCE STORE CHAIN

According  to a letter of intent  entered into in  September  1998,  the Company
planned  to  acquire  100% of total  issued  and  outstanding  shares of two PRC
corporations through a 75% owned  newly-established  Hong Kong subsidiary.  This
plan has been subsequently changed as only one PRC corporation will be acquired.
The  Company  has no firm  commitment  for  this  project.  Before  China's  WTO
accession,  there are still  restrictions  for the Company to  directly  operate
chain  stores.  No cost has been  incurred on this project as of  September  30,
2000.

C)    JIANGMEN GOLD CROWN HARDWARE AND LOCK MANUFACTORY CO LIMITED

In  September  2000,  one of the  Company's  subsidiary,  Honking  International
Limited,  signed a  contract  with the  Employee  Union of  Jiangmen  Gold Crown
Hardware  And Lock  Manufactory  Co.  Limited  ("JGC")  whereby the Company will
acquire 30% of the equity  interest in JGC in exchange for 279,400 shares of the
Company's  Restricted  Common  Stock at a value of US$4 per share.  The contract
also  grants the Company an option to acquire an  additional  50% of JGC shares.
The contract has yet been approved by Jiangmen city government.


NOTE 11 - 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


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


                                      F-9

<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


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.  We do 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.

In December 1999, the  Securities and Exchange  Commission  ("SEC") issued Staff
Accounting  Bulletin  No.  101, or SAB 101,  Revenue  Recognition  in  Financial
Statements.  SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting  principles to revenue recognition in financial  statements.
In June 2000, the SEC issued SAB 101B which defers the implementation of SAB 101
to no later than the fourth quarter of fiscal years beginning after December 15,
1999. We do not expect the adoption of SAB 101 to have a material  effect on our
financial position or results of operations.

In March 2000, the Financial  Accounting  Standards Board, or FASB,  issued FASB
Interpretation No. 44, or FIN 44, Accounting for Certain Transactions  Involving
Stock  Compensation and  Interpretation  of APB Opinion No. 25. FIN 44 clarifies
the application of Opinion 25 for (a) the definition of employee for purposes of
applying  Opinion 25, (b) the criteria for determining  whether a plan qualifies
as  a  non-compensatory   plan,  (c)  the  accounting   consequence  of  various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for an  exchange  of stock  compensation  awards in a  business
combination.  FIN 44 is effective  July 1, 2000, but certain  conclusions  cover
specific  events that occur after either December 15, 1998, or January 12, 2000.
Management believes that the impact of FIN 44 will not have a material effect on
the financial position or results of operations of the Company.


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


                                      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 $4,260,678 as of September 30, 2000.  The Company's cash
and cash  equivalents  increased from $5,628 at December 31, 1999 to $240,877 at
September 30, 2000.



RECENT DEVELOPMENTS

A) LAWSUIT

On March 28,  2000,  the Company  entered into  agreements  with  Harmonic  Hall
Investment Holdings Ltd, ("HHI"), whereby the 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  $665,501.  The
consummation date of the transaction was in April 2000.

As of June 30,  2000,  the Company  paid cash of $665,501  and issued  2,313,625
shares of the Company'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,  the  Company  had  advanced a sum of  approximately
US$323,000 to 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
significant  influence over the operation of HHI or obtain financial  statements
of HHI as of June 30, 2000. In August 2000, the Company 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, the Company filed as 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
the  Company  in  the  transaction,  together  with  damages.  Accordingly,  the
financial statements of HHI have not been


<PAGE>


included in the consolidated financial statements.  Management considers that it
is uncertain  to determine  the outcome of the lawsuit and is unable to estimate
the loss, if any. No provision has been made for any  diminution in value of the
investment.

B) DISPOSAL OF INVESTMENTS

The  Company  disposed of its 100%  equity  interest  in the  Shilong  Town Hall
project  to  Dongguan  Shilong  Properties  Limited  in  July  2000 at a loss of
$1,727,573.

C) VARIOUS PROJECTS

i)  In September 2000, one of the Company's subsidiary, Honking International
    Limited, signed a contract with the Employee Union of Jiangmen Gold Crown
    Hardware And Lock Manufactory Co. Limited ("JGC") whereby the Company will
    acquire 30% of the equity interest in JGC in exchange for 279,400 shares of
    the Company's Restricted Common Stock at a value of $4 per share. The
    contract also grants the Company an option to acquire an additional 50% of
    JGC shares. The contract has not yet been approved by Jiangmen city
    government.

ii) The Company has participated in various activities for promoting the return
    of China's first space shuttle. A variety of souvenir products in relation
    to this event has been held for sales.

THREE MONTHS ENDED  SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 1999

Revenue and operating expenses

Revenue from the operation of Ocean Wealth  Restaurant,  Shilong Water World and
Asian Star Technology  Development  Limited increased from $22,643 for the three
months ended September 30, 1999 to $337,074 for the three months ended September
30, 2000.  The increase was mainly due to revenue  generated  from the cafeteria
business and the management fee received from contracting Shilong Water World to
a third party.

Selling,   general  and   administrative   expenses   comprised  mainly  salary,
depreciation  expenses,  commission  and  promotional  expenses  increased  from
$102,016  for the three months  ended  September  30, 1999 to $458,155 for the 3
months  ended  September  30,  2000 as a  result  of the  running  costs  of the
cafeteria.


<PAGE>


OTHER LOSS

During the  quarter  ended  September  30,  2000,  the  Company  disposed of its
investment in Shilong Town Hall project resulting from a loss of $1,727,573.

NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999

REVENUE AND OPERATING EXPENSES

Revenue from the operation of the Ocean Wealth  Restaurant,  Shilong Water World
and  Asian  Star  Technology  Development  Limited  for the  nine  months  ended
September 30, 2000 and 1999 amounted to $962,332 and $41,926  respectively.  The
increase was mainly due to revenue generated from the cafeteria business and the
management fee received from contracting Shilong Water World to a third party.

Included in the selling,  general and administrative expenses are mainly salary,
commission,  depreciation and promotional expenses.  The increase was mainly due
to running costs of the cafeteria.

Payments  for  overheads,  representing  accumulated  indirect  costs  which are
related to projects, decreased from $188,907 for the nine months ended September
30, 1999 to $9,379 for the nine months ended  September  30, 2000.  Payments for
construction materials and fixed assets in relation to Water Park increased from
$155,388 for the nine months ended  September  30, 1999 to $959,266 for the nine
months ended September 30, 2000.

OTHER LOSS

Other loss comprised mainly:

1.   a gain on disposal of 80% equity  interest  in  Dongguan  Dragon  Villa and
     Dongguan Dragon Entertainment Center Limited of $417,138 in March 2000.

2.  a loss of disposal of 100% equity interest in Shilong Town Hall project of
    $1,727,573.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Company had generated positive cash flows of  $235,249  for the nine  months
ended September 30, 2000


<PAGE>


mainly due to issuance of its equity  securities in conjunction with the options
exercised,  disposal of subsidiaries and advances from a shareholder. Due to the
infant stage of its operations, substantial ongoing investment in properties and
development  efforts,  and  expenditures   incurred  to  build  the  appropriate
infrastructure to support expected future growth, together with the operation of
a cafeteria  and  further  investment,  the  Company  has been  substantially
dependent on shareholder loan financing.

As of September 30, 2000,  the Company's total assets and total liabilities were
$17,481,414 and $3,260,663 respectively.

The Company's  investment  portfolio comprised the following as of September 30,
2000:

<TABLE>
<CAPTION>


Project / Subsidiary                                 Business Nature
-------------------------------------                ---------------------------------------------

<S>                                                  <C>
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

</TABLE>

FINANCIAL POSITIONS AS OF SEPTEMBER 30, 2000 AS COMPARED TO DECEMBER 31, 1999

INVENTORY

Inventory as of December 31, 1999 and September 30, 2000  increased  from $3,905
to $1,274,076.  The increase was mainly the result of highly coveted China Space
souvenir products held for sales by one of the company's subsidiary,  Asian Star
Technology  Development Limited, which was appointed as an agent for the Chinese
Academy of Space Technology for all international commercial activities.

LAND USAGE RIGHTS, LAND IMPROVEMENT AND CONSTRUCTION IN PROGRESS

Total costs incurred for land usage rights, land improvement and construction in
progress  as of  December  31,  1999  and  September  30,  2000  decreased  from
$6,401,096  to  $2,598,625  was mainly due to disposals  of the Dongguan  Dragon
Villa, Dongguan Dragon Entertainment Centre and Shilong City Hall project during
the period.


<PAGE>


INVESTMENT

Investment  as of September  30, 2000 consists of an investment in Harmonic Hall
Investment Holdings Ltd. ("HHI"), whereby the Company acquired approximately 52%
of the  outstanding  common stock of HHI for  2,313,625  shares of the Company's
Restricted Common Stock at fair value of $9,288,000 and cash of $665,501.

ACCOUNTS PAYABLE

Accounts  payable as of December 31, 1999 and September 30, 2000  increased from
$542,821 to $2,089,021 was mainly due to significant  increase in inventory from
suppliers.

COMMON STOCK AND PAID IN CAPITAL

During the period,  the Company issued 130,000  additional  shares of Restricted
Common Stock to  non-employees  at a share price of $1.25 per share  pursuant to
the share option exercised.  In addition,  2,313,625 shares of Restricted Common
Stock were issued to acquire the equity interest of HHI.