Management Online Q&A with Investors (25th February 2005)

Dear Investors,
Thank you very much for the questions and the opportunity for us to respond. We hope you have a better understanding of our business through this online exchange.

Your questions will be reposted in Blue followed by our replies in Black.

Regards,
The Management Team
Advanced Holdings Limited

Dear Yvonne Poh, you wrote: First, your results was very encouraging for investors. Have a few questions. (1) From your results presentation slides, it was stated that Advanced had won some major contracts since sep, which industry and country did these contracts clinch? The new contracts are mainly from Chemical and Petrochemical and Oil and Gas industries awarded by customers from PRC. (2) How does Advanced distinguish itself from competitors? Advanced is a company high in cash reserve and light in assets and capital equipments. We are a technology-based company as evidenced in our focus on technical engineering design capabilities and process know-how. We have been successful in growing the company organically to deliver consistent profitability and healthy profit margins. We are also exploring acquisitions, investments, strategic alliances and/or joint ventures to expand our core business and customer network, reduce operational risks and widen our range of offerings. [Please also refer to our “Key Competitive Strengths” in our response to query from Mr Khoo.] (3) It seems that PRC is the major country that contributed to Advanced's massive growth. What are the measures that you will take to ensure that contributions from other countries do not fall too much behind? it is quite risky to put all eggs in one basket. PRC, which constitutes the main proportion of our Group revenue, will continue to be a lucrative growth market given the growth potential of the industries which our Process Equipment is used in. However, we are continuously developing other markets as well. A clear case in point is the set up of our Seoul office in August 2004 to tap into the South Korean, the Middle East and the South American markets, particularly in the Oil and Gas industry.

Dear Mr Khoo, you wrote: (1) In your opinion, why is there a significant increase from the petrochemical and chemical industry? This is due directly to increased consumption by consumers as indicative of economic growth. For example, petrochemical and chemical products form the basic raw materials used in great quantity for a wide range of end-products like plastics, automobiles, white consumer goods (TV, refrigerators, air-conditioners etc), textiles, just to name a few. The increase in consumer demand fuels infrastructure development activities in the Chemical and Petrochemical industry which is good for our business. Our Process Equipment are essential for the proper, safe and efficient operation of process plants. (2) What are the strengths of your company that investors should know? Technical Engineering Design Capabilities One of our key competitive edge lies in the many years of technical and industrial expertise which we leverage in the design of the equipment we provide. We have the expertise to modify and adapt our principals' equipment and integrate them into a package that is most compatible with the needs of our different customers in different industries. Given that process equipment are essential to the proper, safe and efficient operation of plants and facilities, this makes the value-add service we provide very important to our customers Experienced Management Team and Engineers Our Executive Directors and Executive Officers, who have been instrumental in spearheading the growth of our Group over the past few years, are very experienced and most have at least 10 years of relevant industry experience. We also have a pool of qualified engineers who have extensive knowledge and experience in the field. Strong Exposure and Branding in Growth Markets We believe we have a strong foothold in the PRC having been in the market since 1994. Over the years, we have developed long term relationships with premium customers in the market. We have very strong branding (recognition by customers), and the majority of our contracts are from existing customers. Exclusive agreements with reputable principals Our principals, many with whom we have exclusive agreements, are major equipment manufacturers and process licensors on the approved vendor list of our customers. Right Industries, Right Markets Our company is in the right industries and the right markets. The oil/gas, chemical and petrochemicals industries, particularly in the PRC and South Korea, are experiencing phenomenal growth now, which translates into tremendous upside for our business. Strong Financials We have shown consistent profitability and growth over the years. We have very prudent financial controls and cash management. We are integrating vertically to expand our business and increase our revenue and profit margins and we have been successful in this approach as reflected in our 2004 results and our current order book. (3) What other countries are you venturing into besides south korea? What is the potential growth from these places? We have different groups of employees covering different areas. Our employees from our Seoul office cover the South Korean market. Due to the vicinity to the Korean international turnkey contractors (who are very strong in Middle East and South American), our Korean employees are therefore also covering and developing businesses in that geographical area. We are continuously developing business in new growth area, but not at the expense of diluting our existing manpower strength in seizing the opportunities in the PRC or South Korea. (4) Are your clients repeat customers? Are these businesses on project based? Our contracts may appear to be project-based, but having said that, it is significant to note that our customers are predominantly repeat customers. These repeat businesses speak strongly of our customers' acceptance and reliance on and the design engineering expertise we offer and the quality of our products. (5) your current order book for 05 is a strong figure, are these contracts huge in revenue or is it due to a larger number of contracts clinched (but smaller in revenue)? The contracts range in size from several hundred thousand dollars to several million dollars. This demonstrates a very stable base for revenue projection due to a large number of average value jobs, and some large value projects. We believe this combination is very healthy for our company.

Dear Mr Say Tee Wah, you wrote: Good Day! i would like to find out more about your company results. (1) Why are the company's revenue from Singapore and others so much weaker than the PRC? Any plans or intention to spice up the growth from these countries? PRC will continue to be a main growth driver for our Group as it is a lucrative growth market given its potential to develop into huge end-market bases for the main industries we serve. For our key industrial base segment, the market in Singapore is relatively limited and competitive, resulting in reduced margins. Our focus is still on lucrative growth market which can offer us better margins to maximise returns to our shareholders. (2) Is your company gradually shifting it's focus away from singapore and place more emphasis on other countries since the growth here is quite limited? Yes. (3) With the strong economic growth in the prc, competition is intensifying. how will your company differentiate itself from it's competitors? We believe we have a foothold in the PRC having been in the market since 1994. Over the years, we have developed long term relationships with premium customers in the market. We have very strong branding and recognition in the industry. We will continue to leverage on our technical engineering design expertise and focus on niche business applications. By doing so, we create high barriers of entry and make it difficult for our competitors to meet our standards. With lesser competition, we are able to maximise margins and returns to shareholders. We are doing this much better than our competitors

Dear Mdm Tan, you wrote: Hi! Your company has been on the quiet side since launching of IPO but the latest results are impressive. I have some questions on your company's future plans. (1) Since your company is focusing more on Oil & Gas industry, what kind of growth can we expect (approximately) and will the expectation of oil price increase affect the industry? We expect the growth rate to be in line with the market. The increase in oil and gas price and demand will have a positive impact on us. (2) How comfortable is the company's cashflow? What are the plans for these cash in hand? Presently, we have S$9.2 million of cash including the proceeds from IPO. We intend to fund possible strategic investments, join-ventures, acquisitions and/or strategic alliances when the opportunities arise.

Dear Steven Tan, you wrote: (1) Hi, What are the key strengths of Advanced as compared to competitors? Please refer to our responses to questions on key strengths from Ms Yvonne Poh and Mr Khoo. (2) What are the factors behind the strong demand of Advanced in petrochemical and chemical industry? Please refer to our responses to question on strong demand in the petrochemical and chemical industry from Mr Khoo

Dear Investors,

Thank you for all your questions and interest in Advanced Holdings Limited. We have come to the end of this Q&A session and hope that you have a better insight of our company and our operations.

Regards,
The Management Team
Advanced Holdings Limited