11:03 K. WAH INT'L<00173>K. WAH CONS<00027>-Joint Ann & Resumed-10 Galaxy's Strategy Galaxy's goal is to provide high quality gaming and non-gaming leisure entertainment facilities to tourists in Macau. In order to achieve this goal, Galaxy adopts, among others, the following strategies: Establish Galaxy as a leading operator of integrated leisure entertainment facilities in Macau. Galaxy intends to integrate gaming facilities and non-gaming amenities and services such as fine dining, quality leisure and entertainment, and high-end shopping outlets into its luxury hotel and resort properties, thereby making these properties attractive destinations for VIP players, mass-market players and non-gaming tourists to Macau. This strategy will be implemented in relation to Galaxy StarWorld and Galaxy Cotai Mega Resort. Consolidate and expand Galaxy's presence in Macau's VIP player market. Galaxy StarWorld will have approximately 60 tables dedicated to VIP players. Galaxy Casino at Waldo Hotel currently operates 43 tables dedicated to VIP gaming players. The second and third city club casinos will also offer VIP play. Establish a competitive position in Macau's mass gaming market. The KWCM Board shares Galaxy's belief that higher margin, mass-market table and slot machine play will account for a larger share of Macau's gaming market as the overall market expands and more facilities are built to complement and satisfy growth in demand. Galaxy Casino at Waldo Hotel is currently operating 20 tables for the mass-market players. Under its `one-stop-at-Galaxy' theme, Galaxy StarWorld and Galaxy Cotai Mega Resort will have gaming facilities designed to appeal to mass-market players. Establish the ``Galaxy'' brand. Galaxy aims to develop properties and amenities that have a unique character and appeal to players and tourists from Mainland China and other countries from nearby regions. The ``Galaxy'' brand will differentiate the Galaxy properties from other Macau gaming resorts and facilities. Galaxy believes that, through Galaxy Casino at Waldo Hotel, it has already created a strong platform for growth and expansion by establishing a premium brand, creating a track record of reliable operations, and acquiring a significant presence in Macau's VIP gaming market. Expand marketing activities. The Galaxy management and the KWCM Board believe that there is significant potential for growth in the tourism, leisure and entertainment business in Macau. Galaxy plans to stimulate demand in order to maximise the potential from tourists to Macau with promotions, regional liaison offices, market research, customer database mining, advertising, loyalty programmes, and other marketing initiatives. Attract and retain high-quality employees. Galaxy has already assembled a core team of qualified and well-trained staff, including high-quality professionals from abroad. Galaxy provides extensive training and seeks to keep its expanding pool of casino staff up-to-date with the latest industry information and technology. Galaxy's Business Galaxy has commenced the development of its StarWorld project at Lote 3(A2/I) of NAPE, Avenida da Amizade, Macau and its Cotai Mega Resort project at a plot in the ``Cotai'' area which is identified but not yet named. These projects form the core of Galaxy's investment obligations under the Concession. The Galaxy StarWorld and the Galaxy Cotai Mega Resort properties are high quality leisure entertainment and hotel/resort facilities, which Galaxy intends to build, own, and operate under its own brand. Both projects seek to offer comprehensive gaming as well as non-gaming amenities for gaming and non-gaming tourists to Macau. Alongside these integrated leisure and entertainment projects is Galaxy's city club casinos chain, which offers sophisticated gaming facilities with emphasis on VIP gaming. Galaxy has already commenced business at its first city club casino, the Galaxy Casino at Waldo Hotel at Zona de Atterros do Porto Exterra (``ZAPE''), Lot 6J, Av. Da Amizade, Macau. Galaxy intends to open two more city club casinos, namely, the Galaxy Casino at Cotai City Club at the Cotai reclamation and Galaxy Casino at Rio Hotel at Quarteira 9 Lots C & D at Zona de Aterros do Porto Exterior, Macau, and is constantly evaluating other gaming sites and opportunities on a project merits basis.