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 JUNE 30, 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 15,746,015 SHARES OF COMMON STOCK OUTSTANDING AS OF June 30, 2001



<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.




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


              UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 2001


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





<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                                   FORM 10-QSB

                                TABLE OF CONTENTS







PART 1        FINANCIAL INFORMATION


ITEM 1        CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

              Consolidated  Condensed Balance Sheets as of
              December 31, 2000 and unaudited  Consolidated
              Condensed  Balance  Sheets as of June 30, 2001               F - 1

              Unaudited  Consolidated Condensed Statements
              of Operations for the Three and Six Months Ended
              June 30, 2000 and 2001                                       F - 2

              Unaudited  Consolidated Condensed Statements of
              Cash Flows for the Three and Six Months Ended
              June 30, 2000 and 2001                                       F - 3

              Notes to Consolidated Condensed Financial Statements   F - 4 to 13


ITEM 2        MANAGEMENT'S DISCUSSION AND ANALYSIS

Signautes




<PAGE>

<TABLE>
<CAPTION>

                          ASIAN STAR DEVELOPMENT, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                            (EXPRESSED IN US DOLLARS)

                                                                                DECEMBER 31,       JUNE 30,
                                                                                    2000             2001
                                                                NOTES            (AUDITED)       (UNAUDITED)
ASSETS

<S>                                                                <C>       <C>                 <C>
CURRENT ASSETS
        Cash and cash equivalents                                            $     114,832       $     4,035
        Prepayments                                                                273,211           272,681
        Inventories                                                                 20,123            18,023
        Other receivables                                          2                     -           816,750
        Other assets                                               3                45,888            40,621
                                                                          ----------------- ------------------

            Total current assets                                                   454,054         1,152,110

Goodwill                                                           4                80,459            76,109
Investment                                                         3                     -                 -
Long term receivables                                              2                     -           272,250
Land usage rights                                                  5                     -                 -
Land improvement                                                   5             1,876,701         1,876,701
Construction in-progress                                           5               545,681           545,681
Property and equipment, net                                        6             2,458,700           335,908
                                                                          ----------------- ------------------

Total assets                                                                     5,415,595         4,258,759
                                                                          ================= ==================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Amount due to a shareholder                                7             1,143,059         1,222,850
        Accounts payable                                                           748,734           145,642
        Other payables                                                             398,784           374,391
        Accrued expenses                                                           261,659           271,476
                                                                          ----------------- ------------------

            Total current liabilities                                            2,552,236         2,014,359

COMMITMENTS AND CONTINGENCIES                                      7                     -                 -

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 June 30, 2001 and
        December 31, 2000
Additional paid-in capital                                         8            19,499,733        19,499,733
Accumulated deficit                                                            (16,652,120)      (17,271,079)
                                                                          ----------------- ------------------

             Total shareholders' equity                                          2,863,359         2,244,400
                                                                          ----------------- ------------------

Total liabilities and shareholders' equity                                    $  5,415,595      $  4,258,759
                                                                          ================= ==================

<FN>
The accompanying notes are an integral part of these consolidated condensed financial statements.
</FN>
</TABLE>

                                      F-1

<PAGE>
<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                            (EXPRESSED IN US DOLLARS)


                                                 THREE MONTHS ENDED                       SIX MONTHS ENDED
                                                      JUNE 30,                                JUNE 30,

                                               2000               2001                2000               2001
                                           --------------------------------       ---------------------------------
                                NOTES        (UNAUDITED)       (UNAUDITED)          (UNAUDITED)        (UNAUDITED)

<S>                               <C>   <C>                 <C>                 <C>                <C>
Revenue, net                      9     $       254,811     $      299,990      $      625,258     $      573,447

Cost of sales                                  (296,554)          (250,539)           (675,688)          (479,680)
                                          ---------------------------------       ---------------------------------

Gross profit / (loss)             9             (41,743)            49,451             (50,430)            93,767

Selling, general and
     administrative expenses                   (195,667)          (175,688)           (407,916)          (326,865)

Other income/(loss), net          2             (43,701)          (386,515)            419,362           (385,861)
                                          ---------------------------------       ---------------------------------

Loss before income tax                         (281,111)          (512,752)            (38,984)          (618,959)

Income tax                        10                  -                  -                   -                  -
                                          ---------------------------------       ---------------------------------

Net loss                                $      (281,111)    $     (512,752)     $      (38,984)    $     (618,959)
                                          =================================       =================================

Loss per share  -- basic and
     diluted                            $        (0.018)    $       (0.033)      $      (0.003)    $       (0.039)
                                          ---------------------------------       ---------------------------------

Weighted average number of
     shares outstanding                      15,308,769         15,746,015          14,267,453         15,746,015
                                          ---------------------------------       ---------------------------------

<FN>
The accompanying notes are an integral part of these consolidated condensed financial statements.
</FN>
</TABLE>

                                      F-2


<PAGE>
<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (EXPRESSED IN US DOLLARS)
                                                                              FOR THE SIX MONTHS ENDED
                                                                                       JUNE 30,
                                                                             2000                  2001
                                                                       ----------------------------------------

                                                                          (UNAUDITED)           (UNAUDITED)
<S>                                                                     <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                             $       (38,984)        $    (618,959)
Adjustments to reconcile net loss to
   net cash (used in)/provided by operating activities
      Depreciation and amortisation                                             116,069               102,679
          (Gain)/loss on disposal of subsidiaries                              (417,138)              404,890
      Changes in operating assets and liabilities:
         Prepayments                                                           (151,359)               (6,973)
         Inventories                                                             (2,744)                2,100
         Other assets                                                          (694,106)                5,267
         Accounts payable                                                       818,019               (64,654)
         Other payables                                                         252,447               (24,393)
         Accrued expenses                                                         5,760                 9,817
                                                                       ----------------------------------------

NET CASH USED IN OPERATING ACTIVITIES                                          (112,036)             (190,226)

CASH FLOWS FROM INVESTING ACTIVITIES
  Payments for investment                                                      (665,501)                    -
  Payments  for  capitalized  overhead  costs in  connection  with              (20,208)                    -
   construction
  Purchases of construction materials and fixed assets                       (1,332,141)                 (362)
  Proceeds from disposal of subsidiaries                                      1,028,520                     -
                                                                       ----------------------------------------

NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES                            (989,330)                 (362)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock subscription                                         225,000                     -
Advances from a shareholder                                                     897,246                79,791
                                                                       ----------------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                     1,122,246                79,791

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                             20,880              (110,797)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                  5,628               114,832
                                                                       ----------------------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $       26,508       $         4,035
                                                                       ========================================

     SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON CASH TRANSACTION
     Issuance of 2,313,625 common stocks for acquiring equity
     interest in an investment (Note 3)                                       9,288,000                     -
                                                                       ========================================

MAJOR NON-CASH TRANSACTIONS
During the period ended June 30, 2001, the Company disposed of its investment in
Shilong Water World Project as detailed in Note 2.

<FN>
The accompanying notes are an integral part of these consolidated condensed financial statements.
</FN>
</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
June 30, 2001 and for the three and six months ended June 30, 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.  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 June 30,
2001 and for the three and six months ended June 30, 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 rules and regulation of the U.S. 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  adjustments  necessary to present fairly the
financial position as of June 30, 2001, results of operations and cash flows for
the three and six months ended June 30, 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 $618,959 for the six months
ended  June 30,  2001 and had  negative  working  capital  as of June 30,  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.

One of the directors and also a major shareholder  intends 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 RECEIVABLES, LONG TERM RECEIVABLES AND OTHER INCOME/(LOSS)

The  Company  disposed  of its  investment  in Shilong  Water  World  Project to
Dongguan Shilong  Properties Limited on June 15, 2001 at a cash consideration of
$1,089,000  and  debts   assignment  to  the  purchaser  of  $538,438   totaling
$1,627,438.   Dongguan   Shilong   Properties   Limited   will  pay  an  upfront
consideration  of  $544,500  and  the  balance  will  be  repaid  by  six  equal
installments  from July 1, 2001 to June 30, 2003.  The Company  recognized a net
loss on disposal of this investment of $404,890.  Details of the disposal are as
follows:

   Consideration
   Receivables           - current portion                      816,750
                         - long term portion                    272,250
   Debts assumed by purchaser                                   538,438
                                                 -----------------------
   Total consideration                                        1,627,438
   Less: Book value of net assets disposed                   (2,032,328)
                                                 -----------------------
   Loss on disposal                                            (404,890)
                                                 =======================


NOTE 3   -     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 with par value $.001 and cash of $650,160.
The consummation date of the transaction was April 15, 2000.

As of June 30,  2000,  the  subsidiary  company paid cash of $650,160 and 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.

                                                     As of               As of
                                              December 31,            June 30,
                                                      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 investment                 (9,938,160)         (9,938,160)
                                         ------------------- ------------------
                                                         -                   -
                                         =================== ==================


                                      F-5
<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 3   -     OTHER ASSETS AND INVESTMENT (CONTINUED)

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.

                                                   As of               As of
                                            December 31,            June 30,
                                                    2000                2001

  Other assets                                   368,888             363,621
  Less: Provision for diminution
        in value                                (323,000)           (323,000)
                                       ------------------- ------------------
  Other assets, net                               45,888              40,621
                                       =================== ==================

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:

(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 the Company's legal counsel, the 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.





                                      F-6

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 3   -     OTHER ASSETS AND INVESTMENT (CONTINUED)

Management  considers that the Company and its subsidiary  company have a strong
case against HHI and the director of HHI. One of the subsidiary companies 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.

The suit is currently still in progress and no judgement has been issued.


NOTE 4   -     GOODWILL

In January 2000,  the Company  acquired 100% of the equity  interest of two Hong
Kong companies owned by an officer of the Company.  The principal  activities of
these companies are the operation of a cafeteria  business.  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.

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

Goodwill                                                            86,983
Less: Amortisation                                                 (10,874)
                                                        ---------------------

                                                         $          76,109
                                                        =====================

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





                                      F-7
<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 5   -     LAND USAGE RIGHT, LAND IMPROVEMENT AND CONSTRUCTION IN PROGRESS

MAPLE CITY (LAND OCCUPANCY TERM: 70 YEARS)

The Maple City project, which is being 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. Certain concrete
structural work of the project was completed in 1999.

During the six months ended June 30, 2001, 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:

                                               As of                   As of
                                   December 31, 2000           June 30, 2001
                                --------------------- -----------------------

   Land usage rights                               -                       -
   Land improvement                        1,876,701               1,876,701
   Construction in progress                  545,681                 545,681
                                --------------------- -----------------------

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




                                      F-8

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 6   -     PROPERTY AND EQUIPMENT, NET

<TABLE>
<CAPTION>

                                                         Cost              Accumulated                Net book
                                                                          depreciation                   value
                                                            $                        $                       $

<S>                                                <C>                        <C>                   <C>
As of December 31, 2000                             2,782,076                  323,376               2,458,700
Add: Additions                                            362                        -                     362
                                             ------------------       -----------------       -----------------

                                                    2,782,438                  323,376               2,459,062

Less: Disposal of Water World
           (note 2)                                (2,295,147)                (270,322)             (2,024,825)
Add: Depreciation for the period                            -                   98,329                 (98,329)
                                             ------------------       -----------------       -----------------

As of June 30, 2001                                   487,291                  151,383                 335,908
                                             ==================       =================       =================

</TABLE>


NOTE 7   -     COMMITMENTS AND CONTINGENCIES

Based on the joint venture  contract and agreement with a local Chinese partner,
the Company  entered into the Maple City Project in China in year 1997.  Details
of the current status of the project are as follows:

                 Total Investment
                      Per Project             Costs     Years Remaining to
                    Per Agreement       Incurred to     Complete the Project Per
Project               or Contract     June 30, 2001     Agreement or Contract
--------------------------------------------------------------------------------
                                        (unaudited)

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

FINANCING RESOURCE DEPENDENCY

The operating  activities of the Company were  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.




                                      F-9

<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 8   -     COMMON STOCK, ADDITIONAL PAID-IN CAPITAL

The  Company  did not issue any Common  Stock or  options  during the six months
ended June 30, 2001.  All share  options  granted to employees  and  consultants
previously have expired as of June 30, 2001.


NOTE 9   -     SEGMENTAL INFORMATION


<TABLE>
<CAPTION>

                                                Six months ended          Six months ended
                                                   June 30, 2000             June 30, 2001

REVENUE
<S>                                                    <C>                       <C>
Operating income from Cafeteria business                 613,158                   505,929
Contracting income from Water World                       12,100                    48,400
Others                                                         -                    19,118
                                                -----------------        ------------------
                                                         625,258                   573,447
                                                -----------------        ------------------

GROSS (LOSS) / PROFIT CONTRIBUTION
Cafeteria business                                       (62,530)                   29,599
Water World                                               12,100                    48,400
Others                                                         -                    15,768
                                                -----------------        ------------------
                                                         (50,430)                   93,767
                                                -----------------        ------------------


                                                  As of December            As of June 30,
                                                        30, 2000                      2001
TOTAL ASSETS
Cafeteria business                                       564,297                   488,447
Water World                                            2,192,807                         -
Maple City                                             2,443,822                 2,443,822
Holding company                                            5,929                 1,136,507
Others                                                   208,740                   189,983
                                                -----------------        ------------------
                                                       5,415,595                 4,258,759
                                                -----------------        ------------------

TOTAL LIABILITIES
Cafeteria business                                       185,205                   171,515
Water World                                            1,014,968                         -
Holding company                                        1,222,603                 1,652,271
Others                                                   129,460                   190,573
                                                -----------------        ------------------
                                                       2,552,236                 2,014,359
                                                -----------------        ------------------
</TABLE>

                                      F-10
<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 10  -     INCOME TAXES

No corporate  income tax has been provided for the year ended  December 31, 2000
and six months  ended June 30, 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 recognize 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.


NOTE 11  -     OTHER PROJECTS

A)      SUPERPORT PROJECT

        On January 25, 2000, the Company 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  projected to be  approximately
        $2.3  billion.  As the  required  approval  from the Foreign  Investment
        Consulate of the  Malaysian  Government  to develop this project has not
        yet been obtained,  management  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, the Company 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.

        No cost has been  incurred on this project as at June 30,  2001.  As the
        Company has no firm  commitment  for this project,  management no longer
        considers to proceed with this project.

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.

        As no formal  agreement was entered by both parties before the specified
        time period, management will not proceed any further with this project.


                                      F-11
<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


NOTE 12  -     RECENT ACCOUNTING PRONOUNCEMENTS

In July  2001,  the  Financial  Accounting  Standards  Board  (FASB)  issued the
Statement  of  Financial  Accounting  Standard  No.  141  (SFAS  141),  BUSINESS
COMBINATION,  Statement  of  Financial  Accounting  Standard No. 142 (SFAS 142),
GOODWILL AND OTHER  INTANGIBLE  ASSETS,  and  Statement of Financial  Accounting
Standard No. 143 (SFAS 143), ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS.

SFAS 141  requires  all  business  combinations  to be  accounted  for using the
purchase method of accounting and prohibits the use of the  pooling-of-interests
(pooling)  method.  Under SFAS 141, negative goodwill is allocated as a pro rata
reduction of the amounts that  otherwise  would have been assigned to all of the
acquired assets,  other than certain assets. Any excess remaining after reducing
those  assets  to zero is  recognized  as an  extraordinary  gain.  SFAS  141 is
effective  for all  business  combinations  initiated  after  June 30,  2001 and
applies to all business  combinations  accounted for by the purchase method that
are completed  after June 30, 2001 (that is, the date of  acquisition is July 1,
2001, or later). The company is still evaluating the impact of this new standard
on its historical financial statements.

SFAS 142 supersedes APB Opinion No. 17 (APB 17),  INTANGIBLE ASSETS, and carries
forward the  provisions  in APB 17 related to  internally  developed  intangible
assets.  Under SFAS 142,  goodwill is not amortized but is tested for impairment
at least annually at the reporting unit level. Impairment loss equivalent to the
excess of carrying  amount of goodwill over its implied fair value is recognized
only if the fair value of the reporting  unit is less than its carrying  amount.
SFAS 142 also requires a recognized  intangible  asset to be amortized  over its
useful  life and  reviewed  for  impairment  in  accordance  with  Statement  of
Financial Accounting Standard No. 121 (SFAS 121),  ACCOUNTING FOR THE IMPAIRMENT
OF  LONG-LIVED  ASSETS AND FOR  LONG-LIVED  ASSETS TO BE DISPOSED OF. Under SFAS
142,  a  recognized  intangible  asset  with an  indefinite  useful  life is not
amortized  until  its life is  determined  to be no longer  indefinite  and this
intangible asset is tested for impairment annually and on an interim basis if an
event or  circumstance  occurs  between annual tests  indicating  that the asset
might be impaired.  SFAS 142 should be applied in fiscal years  beginning  after
December 15, 2001 to all goodwill and other intangible  assets  recognized in an
entity's statement of financial position at that date,  regardless of when those
assets were initially  recognized.  The  provisions of this Statement  initially
should be applied at the beginning of a fiscal year and retroactive  application
is not  permitted.  The  company  is still  evaluating  the  impact  of this new
standard on its historical financial statements.


                                      F-12
<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

              Notes to Consolidated Condensed Financial Statements


SFAS 143 requires  entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred.  When the liability
is initially recorded,  the entity capitalizes a cost by increasing the carrying
amount of the related  long-lived asset. Over time, the liability is accreted to
its present value each period,  and the capitalized cost is depreciated over the
useful life of the related asset.  Upon  settlement of the liability,  an entity
either settles the  obligation for its recorded  amount or incurs a gain or loss
upon settlement. SFAS 143 is effective for fiscal years beginning after June 15,
2002, with earlier application  encouraged.  The company is still evaluating the
impact of this new standard on its historical financial statements.


NOTE 13  -     SUBSEQUENT EVENTS

On July 6, 2001, a wholly owned subsidiary of the Company,  Honpar International
Holdings Limited, entered into an agreement with 3GEN Systems of Toronto, Canada
to acquire 25% of the total  issued  shares of 3GEN  System.  3 GEN systems is a
software  technology  company  which  develops  and  deploys   technology-driven
solutions  for small and  medium  sized  business.  Conway  Chow,  the  managing
director and sole owner of 3 GEN systems, is the son of Stephen Chow, a director
of the Company.

As consideration,  the Company will issue 1,500,000 of the Company's  Restricted
Common Stock value at $0.10 per share.  The fair value of the Restricted  Common
Stock was determined on the weighted  average trading share prices quoted on the
stock exchange.







                                      F-13

<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  $17,271,079 as of June 30, 2001. The Company's cash and
cash equivalents  decreased from $114,832 at December 31, 2000 to $4,035 at June
30, 2001


RECENT DEVELOPMENTS

A)    LAWSUIT

Harmonic Hall Investment Holdings Ltd.("HHI")

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  $650,160.   The
consummation date of the transaction was on April 15, 2000.

As of June 30,  2000,  the Company  paid cash of $650,160  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
$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, the Company retained a legal counsel in Hong Kong
to prepare and file a writ


<PAGE>


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.

Management  considers  that it is unable 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 six months ended June 30, 2001.


B)    VARIOUS PROJECTS

(i)   Superport Project

      On January 25, 2000, the Company 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 projected to be approximately $2.3 billion.  As the
      required approval from the Foreign  investment  consulate of the Malaysian
      Government to develop this project has not yet been  obtained,  management
      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.

(ii)  6-12 Convenience Store Chain, PRC

      In September,  1998, the Company  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.

      No cost was incurred on this  project as at June 30, 2001.  As the Company
      has no firm commitment for this project, management no longer considers to
      proceed with this project.

<PAGE>


(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.

      As no formal  agreement was entered by both companies before the specified
      time period, management will not proceed any further with this project.

C)    SUBSEQUENT EVENTS

      On  July 6,  2001,  a  wholly  owned  subsidiary  of the  Company,  Honpar
      International  Holdings  Limited,  entered  into an  agreement  with  3GEN
      Systems of Toronto,  Canada to acquire 25% of the total  issued  shares of
      3GEN System. 3 GEN systems is a software technology company which develops
      and  deploys  technology-driven  solutions  for  small  and  medium  sized
      business.  Conway  Chow,  the  managing  director  and sole owner of 3 GEN
      systems, is the son of Stephen Chow, a director of the Company.

      As  consideration,  the  Company  will issue  1,500,000  of the  Company's
      Restricted  Common  Stock value at $0.10 per share.  The fair value of the
      Restricted  Common Stock was  determined on the weighted  average  trading
      share prices quoted on the stock exchange.


<PAGE>


THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

REVENUE AND OPERATING EXPENSES

Revenue from the operations of Ocean Wealth  Restaurant,  Asian Star  Technology
Development  Limited  and  Shilong  Water World  increased  by $45,179,  a 17.7%
increase  from $254,811 for the three months ended June 30, 2000 to $299,990 for
the three months  ended June 30, 2001.  The increase was mainly due to increases
in  cafeteria  revenue by  $28,216 or 11.6%,  Water  World  contracting  service
revenue by $12,100,  or 100% and  souvenir  merchandising  business by $4,863 or
100%.

Selling,  general and administrative  expenses  comprised mainly salary,  rental
expenses,  depreciation  expenses,  commission  and  promotional  expenses.  The
decrease in these  operating  expenses  from $195,667 for the three months ended
June 30, 2000 to $175,688  for the three  months  ended June 30, 2001 was mainly
due to cost reductions and productivity improvements.

The  Company  disposed  of its  investment  in Shilong  Water  World  Project to
Dongguan Shilong Properties Limited on June 15, 2001 at a total consideration of
$1,627,438.  A net loss on disposal of $404,890 was  recognized.  Details of the
disposal are as follows:

Sales consideration                                    $        1,627,438
Less : Book value of net assets disposed                       (2,032,328)
                                                     ---------------------
Loss on disposal                                                 (404,890)
                                                     =====================

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

REVENUE AND OPERATING EXPENSES

Revenue from the operations of Ocean Wealth  Restaurant,  Asian Star  Technology
Development  Limited  and  Shilong  Water World  decreased  by  $51,811,  a 8.2%
decrease  from  $625,258  for the six months ended June 30, 2000 to $573,447 for
the six months  ended June 30,  2001.  The  decrease was mainly due to a drop in
cafeteria  business  income by  $107,229  which was set off by increase in Water
World contracting service revenue of $36,300.

Selling,  general and administrative  expenses  comprised mainly salary,  rental
expenses,  depreciation  expenses,  commission  and  promotional  expenses.  The
decrease in operating


<PAGE>

expenses  from  $407,916  for the six months ended June 30, 2000 to $326,865 for
the six months ended June 30, 2001 was mainly due to reduced promotional efforts
for the  souvenir  merchandising  business,  cost  reductions  and  productivity
improvements.

Other  income/loss  primarily  resulted from a loss on disposal of investment in
Shilong Water World Project to Dongguan Shilong  Properties  Limited of $404,890
for the six months  ended June 30,  2001.  During the six months  ended June 30,
2000, there was a gain on disposal of the 80% equity interest in Dongguan Dragon
Villa Limited and Dongguan Dragon Entertainment Centre Limited of $417,138.




<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

The  Company  generated  cash flows of $4,035 for the six months  ended June 30,
2001. The Company's  major sources of revenue were generated from the operations
of the cafeteria business of $505,929 and contracting income from the Water Park
of  $48,400  for the six months  ended  June 30,  2001.  The  Company's  ongoing
operations have been substantially dependent on financing from a shareholder.

As of June 30,  2001,  the  Company's  total assets and total  liabilities  were
$4,258,759 and $2,014,359 respectively.

The Company's investment portfolio comprised the following as of June 30, 2001:

PROJECT / SUBSIDIARY                        BUSINESS NATURE

Maple City                                  Property Development
Ocean Wealth Restaurant                     Cafeteria Business
Asian Star Technology Development Ltd       Souvenir Merchandising and
                                            International agent for the
                                            Chinese Academy of Space Technology





<PAGE>


FINANCIAL POSITION AS OF JUNE 30, 2001 AS COMPARED TO JUNE 30, 2000

<TABLE>
<CAPTION>


                                                                                    JUNE 30,          JUNE 30,
                                                                                        2000              2001
                                                                                 (UNAUDITED)       (UNAUDITED)

ASSETS                                                            NOTES

<S>                                                                  <C>         <C>           <C>
CURRENT ASSETS
        Cash and cash equivalents                                                $    26,508   $         4,035
        Prepayments                                                                  284,418           272,681
        Inventories                                                  1                 6,649            18,023
        Other assets                                                                       -            40,621
        Other receivables                                            2               737,796           816,750
                                                                            ----------------- -----------------

            Total current assets                                                   1,055,371         1,152,110

Goodwill                                                                              84,809            76,109
Investment                                                           3             9,953,501         9,938,160
Less : Provision for diminution in value of investment                                     -        (9,938,160)
Long term receivables                                                2                     -           272,250
Land usage rights, land improvement and construction in-progress     4             6,125,404         2,422,382
Property and equipment, net                                          5             2,624,237           335,908
                                                                            ----------------- -----------------

Total assets                                                                      19,843,322         4,258,759
                                                                            ================= =================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Amount due to a shareholder                                                1,611,450         1,222,850
        Accounts payable                                                           1,360,840           145,642
        Other payables and accrued expenses                                          598,247           645,867
                                                                            ----------------- -----------------

            Total current liabilities                                              3,570,537         2,014,359

SHAREHOLDERS' EQUITY
Paid-in capital                                                      6            18,481,429        19,515,479
Accumulated deficit                                                               (2,208,644)      (17,271,079)
                                                                            ----------------- -----------------

             Total shareholders' equity                                           16,272,785         2,244,400
                                                                            ----------------- -----------------


Total liabilities and shareholders' equity                                     $  19,843,322      $  4,258,759
                                                                            ================= =================

</TABLE>


<PAGE>


NOTE 1         INVENTORIES

Inventories  as of June 30,  2000 and June 30,  2001  increased  from  $6,649 to
$18,023.  The  increase was mainly due to an increase in  inventories  for China
Space souvenir products carried by one of the company's subsidiaries, Asian Star
Technology Development Limited.

NOTE 2         OTHER RECEIVABLES AND LONG TERM RECEIVABLES

Other  receivables  and  long  term  receivables  as of June 30,  2001  comprise
receivables for sales of Shilong Water World Project of $1,089,000.

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 six months ended June 30, 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 $6,125,404 as of June 30, 2000 to $2,422,382 as of June 30, 2001.
The costs carried forward were related to the  development  costs for Maple City
Project.

NOTE 5         PROPERTY AND EQUIPMENT

The decrease in property and equipment was mainly due to the disposal of Shilong
Water World Project of $2,024,825.

NOTE 6         PAID IN CAPITAL

As of June 30, 2000,  there were  15,711,015  shares  issued for a total paid in
capital of $18,481,429.  The increase in paid in capital to 15,746,015 shares of
$19,515,479 as of June 30, 2001 comprised the following:

- Stock issued for consultancy services                             $ 127,050
- Notional compensation for stock options                           $ 787,000
- CEO notional compensation                                         $ 120,000

                                                            ------------------
                                                                 $  1,034,050
                                                            ------------------



<PAGE>


FINANCIAL POSITION AS OF JUNE 30, 2001 AS COMPARED TO DECEMBER 31, 2000

The Company  recorded a loss of $618,959 during the six months period ended June
30, 2001.

TOTAL ASSETS

The  decrease  in total  assets was mainly due to  disposal of assets of Shilong
Water World Project.

TOTAL LIABILITIES

The decrease in total liabilities was mainly due to debts assignment of $538,438
to the  purchaser  which was part of the  consideration  for disposal of Shilong
Water World Project.


<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:  August 13, 2001                  By: /s/STEPHEN CHOW
                                        --------------------------------
                                        Name:    Stephen Chow
                                        Title:   President