As filed with the Securities and Exchange Commission on February 7, 2005
Registration No. 333-_______

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

DAHUA INC.
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(Name of small business issuer in its charter)

Delaware 6500 04-3616479
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(State or jurisdiction Primarily Standard (I.R.S Employer I.D. No.)
of incorporation or Industrial Classification
organization) Code Number)

Level 19, Building C, Tianchuangshiyuan, Huizhongbeili,
Chaoyang District, Beijing, China, 100012
86-10-6480-1527
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(Address and telephone number of principal executive offices)

Level 19, Building C, Tianchuangshiyuan, Huizhongbeili,
Chaoyang District, Beijing, China, 100012
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(Address of principal place of business or intended principal
place of business)

William G. Hu, Esq.
80 Wall Street, Suite 818
New York, NY 10005
Tel: (212) 809-1200, Fax: (212) 809-1289
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(Name, address and telephone number of agent for service)

Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this registration statement.

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]

CALCULATION OF REGISTRATION FEE

Proposed Proposed
Title of Each Maximum Maximum Amount of
Class of Securities Dollar Amount to Offering Price Aggregate Registration
To be Registered be Registered Per Share Offering Price Fee
- ---------------------- ------------------- ----------------- --------------- -----------
<s> <c> <c> <c> <c>
Common Stock 7,548,000 shares $.05 $ 377,400 $ 44.42

(1) This registration statement registers the resale of up to 7,548,000
shares of common stock offered by our selling shareholders.

(2) The Proposed Maximum Offering Price Per Share and the Proposed Maximum
Aggregate Offering Price in the table above are estimated solely for the
purpose of calculating the registration fee pursuant to Rule 457
promulgated under the Securities Act of 1933. Since there is no current
trading market for the common stock, the Proposed Maximum Offering Price
is based upon the initial offering price of the shares.

We hereby amend this registration statement on such date or dates as may be
necessary to delay its effective date until we shall file a further amendment
which specifically states that this registration statement shall thereafter
become effective in accordance with Section 8(a) of the Securities Act of 1933
or until the registration statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section 8(a), may
determine.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

Subject to Completion Dated February 7, 2005

DAHUA INC.

Prospectus
7,548,000 SHARES OF COMMON STOCK

This prospectus covers the resale of up to 7,548,000 shares of our common stock
owned by our selling shareholders who will offer their shares initially at
$.05 per share and thereafter, if our common stock is quoted on the Over-the-
Counter Bulletin Board, at then prevailing market prices or privately
negotiated prices. We will not receive any of the proceeds from the sale of
the 7,548,000 shares.

There are no underwriting commissions involved in this offering. We have
agreed to pay all expenses of registering the shares for the selling
stockholders.

No public market currently exists for our common stock. There is no guarantee
that our securities will ever trade on the OTC Bulletin Board or other
exchange.

Investing in our common stock involves substantial risks. See "Risk Factors"
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starting at page 7.
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Neither the Securities and Exchange Commission nor any state securities
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commission has approved or disapproved of these securities or passed upon the
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adequacy or accuracy of the disclosures in this prospectus. Any
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representation to the contrary is a criminal offense.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

The date of this prospectus is February 7, 2005.

TABLE OF CONTENTS

Prospectus Summary.................................................. 4
Risk Factors........................................................ 6
Use of Proceeds..................................................... 13
Determination of Offering Price..................................... 13
Dilution............................................................ 13
Selling Security Holders............................................ 13
lan of Distribution................................................. 16
Legal Proceedings................................................... 17
Directors, Executive Officers, Promoters and Control Persons........ 17
Security Ownership of Certain Beneficial Owners and Management...... 19
Description of Securities........................................... 20
Interest of Named Experts and Counsel............................... 21
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities........................................ 22
Organization Within Last Five Years................................. 22
Description of Business............................................. 23
Management's Discussion and Analysis or Plan of Operation........... 29
Description of Property............................................. 34
Certain Relationships and Related Transactions...................... 35
Market for Common Equity and Related Stockholder Matters............ 35
Executive Compensation.............................................. 37
Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure........................................... 38
Additional Information.............................................. 39
Financial Statements................................................ 44

PROSPECTUS SUMMARY

This prospectus contains forward-looking statements, which involve risks and
uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors
including those set forth under "Risk Factors" and elsewhere in this
prospectus. You should read and carefully consider the entire prospectus
before making a decision to purchase our common stock.

Our Company
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Dahua Inc. ("Dahua," "we," or "our") was incorporated on March 8, 2002 in the
State of Delaware as Norton Industries Corp. ("Norton"). We changed our name
to Dahua Inc. on February 7, 2005 as result of a reverse acquisition in which
Norton acquired all capital shares of Bauer Invest Inc. ("Bauer"). The
acquisition was accounted for as a reverse merger, and the historical
operations of Bauer and its subsidiary were represented as our historical
operations.

Prior to the acquisition, Norton was a blank check company seeking to complete
a merger or business acquisition. Since inception, Norton has virtually
conducted no business until January 30, 2005 when Norton acquired Bauer. Bauer
is a holding company, which conducts its business through its 80% owned
subsidiary Beijing Dahua Real Estate Development, Ltd., an operating company
organized in the People's Republic of China ("Dahua Real Estate").

Dahua Real Estate was incorporated on September 24, 2001 to engage in the
development and sale of residential luxurious single family-houses in Beijing,
China. The operating activities of Dahua Real Estate are entirely located in
the suburban area of Beijing, China. It began to build luxurious single
family-houses in July 2003. As of December 31, 2004, the First Phase of its
development, a total of 76 residential units, has been completed. We are
currently in the sale of those houses. As of September 30, 2004, we have not
generated any revenues.

Our executive offices are located at Level 19, Building C, Tianchuangshiyuan,
Huizhongbeili, Chaoyang District, Beijing, China, 100012. Our telephone number
at that address is 86-10-6480-1527.

We have no website. Our operating subsidiary Beijing Dahua Real Estate
Development, Ltd. has a website, whose address is www.dhzhy.com.cn. Information
contained on the website is not a part of this prospectus.

Our fiscal year end is December 31.

The Offering
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Securities Offered: Up to 7,548,000 shares of common stock. The securities
being offered are those of the existing shareholders
only.

Price per share: $.05 as determined by the selling shareholders. The
price of $.05 per share is a fixed price until the
securities are listed on the OTC Bulletin Board or other
national exchange, and thereafter at prevailing market
prices or privately negotiated prices.

Securities Issued
and Outstanding: 20,000,000 shares of common stock were issued and
outstanding as of the date of this prospectus.

Use of Proceeds: We will not receive any proceeds from the sale of the
common stock by the selling shareholders.

Plan of Distribution: We are unaware of the nature and timing of any future
sales of our common stock by existing shareholders.
There is no minimum number of shares to be sold in this
offering. No underwriting arrangements for this
offering exist. There are no arrangements to place any
of the proceeds in escrow.

Registration Costs: We estimate our total offering registration costs to be
$65,545. We have agreed to pay all costs and expenses
relating to the registration of our common stock.

FINANCIAL SUMMARY INFORMATION

The following Financial Summary and Operating Data have been derived from our
audited financial statements for the periods indicated. You should read the
following financial data in conjunction with our financial statements and the
notes thereto included elsewhere in this prospectus.

Statement of Operations Data:
- ----------------------------
September 24, 2001
Nine Months Year Ended (Inception) Through
Ended September 30, 2004 December 31, 2003 December 31, 2002
------------------------ ----------------- ------------------
<s> <c> <c> <c>
Revenue $ - $ - $ -
Expenses $ 270,021 $ 167,169 $ 169,953
Net Loss $ (274,858) $ (271,442) $ (169,784)
================= ============== =============

Balance Sheet Data:
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September 30, 2004 December 31, 2003 December 31, 2002
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Total Assets $ 8,249,373 $ 5,145,607 $ 2,049,668
Total Liabilities $ 7,756,267 $ 4,377,643 $ 1,010,262
Shareholders' Equity $ 493,106 $ 767,964 $ 1,039,406
================== ============= ===============

RISK FACTORS

The shares of common stock offered by this prospectus involve a high degree of
risk. You should carefully consider the following risk factors, in addition to
the other information set forth in this prospectus, before you purchase these
shares. The risks and uncertainties described below are those that we have
identified as material. If any of the events contemplated by the following
discussion of risks should occur, our business, financial condition and results
of operations may suffer. As a result, the trading price of our common stock
could decline and you could lose part or all of your investment in our common
stock.

Risks Related to Our Business

WE LACK AN OPERATING HISTORY UPON WHICH AN EVALUATION OF OUR FUTURE SUCCESS
OR FAILURE CAN BE MADE.

We were incorporated in March 2002 as a blank check company for the purpose
of seeking to complete a merger or business acquisition. We virtually
conducted no business until January 30, 2005 when we acquired Bauer Invest Ltd.
Bauer is a holding company, which conducts its business through its 80% owned

subsidiary Beijing Dahua Real Estate Development, Ltd., a private company
operating in the People's Republic of China ("Dahua Real Estate"). Dahua Real
Estate was incorporated on September 24, 2001 to engage in the development
and sale of residential luxurious single family-houses in Beijing, China. The
acquisition of Bauer was accounted for as a reverse merger, the historical
operations of Bauer and its subsidiary were represented as our historical
operations. Our limited operating history makes it difficult for you to
evaluate our business and future prospects.

WE HAVE LOSSES IN THE PAST. IF THE LOSSES CONTINUE WE MAY HAVE TO SUSPEND OUR
OPERATIONS OR CEASE CARRYING ON BUSINESS.

We have been operating at a loss since inception. To date we have not
generated any revenues. As of September 30, 2004, we had $716,084 of
accumulated deficit. We are a development stage company, and we may incur
additional losses. There is no assurance that our operations will become
profitable. Failure to generate revenues will cause us to go out of business
and could cause you to lose all or a substantial part of your investment.

WE MAY NEED ADDITIONAL FINANCING TO CARRY OUT OUR SECOND PRASE PROJECT. IF WE
ARE UNABLE TO OBTAIN ADDITIONAL FINANCING, WE MAY HAVE TO DELAY THE
IMPLEMENTATION OF OUR SECOND PHASE PROJECT, AND OUR ABILITY TO INCREASE
REVENUES WILL BE MATERIALLY IMPAIRED.

Since inception, we have been depended on short-term loans and customer
deposits to meet our cash requirements. We have completed our First Phase of
development and construction of Dahua Garden project (a 76-unit of luxurious
single-family houses) by the end of 2004. Currently we are applying with
Beijing municipal and Changping district governmental agencies for all the
requisite licenses, permits, and approvals to start our second Phase of Dahua
Garden. As of the date of this prospectus, we have not received any licenses,
permits or approvals from governmental authorities. It is estimated that
approximately $60.5 million is needed to complete our Second Phase project.
We intend to use (i) our proceeds from sales of our First Phase housing units,
(ii) customer deposits from our pre-sale of the housing units in the Second
Phase, and (iii) short-term borrowings from our affiliates to finance our
Second Phase of Dahua Garden. At present we do not have any arrangements for
additional financing.

Obtaining additional financing will be subject to a number of factors,
including market conditions, our operating performance and investor sentiment.
These factors may make the timing, amount, terms and conditions of additional
financing unattractive to us. We cannot assure you that we will be able to
obtain any additional financing on terms accepted to us. If we are unable to
obtain additional financing, we may have to delay the implementation of our
Second Phase of Dahua Garden development, and our ability to increase revenues
will be materially impaired. Additionally, any additional capital raised
through the sale of equity or convertible debt securities may dilute your
ownership percentage in us.

OUR OPERATIONS ARE SUBJECT TO AN INTENSIVE REGULATORY APPROVAL PROCESS.

Even though the Chinese national and local governments have been supported
business entities to develop commodity housing for more than 15 years, the
real estate development in China is highly regulated. All real estate

projects are subject to regulatory approval and supervision by government
authorities in charge of urban planning, land use, zoning, construction,
fire-safety and environment protection. The administrative and regulatory
power exercised by those governmental authorities is beyond our control. Any
significant change in real estate regulations may have a materially adverse
effect on our business.

Before we can develop a property, we must obtain a variety of approvals from
local and municipal governments with respect to such matters as zoning,
density, subdivision, traffic considerations, site planning and environmental
issues. Although there are currently no unfavorable rulings that would have
a significant adverse effect on the development of our proposed Second Phase
of Dahua Garden, there is no assurance that we are able to obtain all required
licenses, permits, or approvals from governmental authorities. Our ability
to develop these properties and realize future income from our properties
could be delayed, reduced, prevented or resulted in additional costs.

WE ACT AS GENERAL CONTRACTOR ON OUR CONSTRUCTION PROJECTS, AND IF ANY OF OUR
SUBCONTRACTORS SHOULD FAIL TO COMPLETE THEIR JOBS ON TIME, OUR BUSINESS COULD
BE DISRUPTED.

We act as general contractor on our construction projects. We hire
unaffiliated subcontractors to do work for us. In the event that any of our
subcontractors should fail to complete their jobs on time, our business could
be disrupted, which will have an adverse effect on our results of operation
and our financial condition.

WE ARE VULNERABLE TO CONCENTRATION RISKS BECAUSE OUR OPERATIONS ARE CURRENTLY
PRIMARILY TO THE BEIJING, CHINA MARKET.

We operate our business in Beijing, China. All of our revenues will be
derived from the sale of our luxurious single-family houses in Beijing.
Although some of our customers are from the neighboring areas in Beijing, we
may not be able to generate adequate revenues if local business conditions
in Beijing change adversely. These changes may include business downsizing,
industry slowdowns, local oversupply or reduction in demand for real estate
properties, and changes in local governmental policies. Operating exclusively
in Beijing exposes us to greater economic risks than if we operate in several
geographic regions. Any adverse changes in business conditions in Beijing,
China, could adversely impact our financial condition, results of operations
and cash flows.

WE DEPEND ON THE CONTINUED SERVICES OF OUR EXECUTIVE OFFICERS AND THE LOSS
OF A KEY EXECUTIVE COULD SEVERELY IMPACT OUR OPERATIONS.

Given the early stage of development of our business, our future success
depends to a large extent on the continued services of our executive officers,
particularly Mr. Yonglin Du (our CEO) and Ms. Hua Meng (our CFO). There are
no persons making significant contribution to the business other than our
executive officers. We have not entered any employment agreement with each
of Mr. Du and Ms. Meng. The loss of any of their services could have a
material adverse effect on our business, financial condition and results of
operations. We have no key-man life insurance for any of our executive
officers.

OUR OFFICERS AND DIRECTORS ARE SUBJECT TO CONFLICTS OF INTEREST, AND THERE IS
A RISK THAT THEY MAY PLACE THEIR INTERESTS AHEAD OF YOURS.

We believe that our officers and directors will be subject to conflicts of
interest. The conflicts arise from their relationships with our affiliate.
Mr. Yonglin Du, our Chief Executive Officer, Ms. Hua Meng, our Chief Financial
Officer, and Qinna Zen, our Corporate Secretary , currently also serve as
officers and directors of Dahua Project (Engineering) Management (Group) Co.
Ltd. (Dahua Group"), a Chinese central government licensed construction project
supervising business entity. These officers and directors may have conflicts
of interest in allocating time, services, and functions between us and Dahua
Group, in which any of them are or may become involved. Mr. Du anticipates
devoting minimum of twenty to thirty-two hours per week of his business hours,
and each of Ms. Meng and Zen fifteen to twenty hours of their business hours
to our business activities. If and when the business operations increase and
a more extensive time commitment is needed, they are prepared to devote more
time to our affairs, in the event that becomes necessary.

To ensure that potential conflicts of interest are avoided or declared to us
and to comply with the requirements of the Sarbanes - Oxley Act of 2002, our
Board of Directors, on January 30, 2005, adopted a Code of Business Conduct
and Ethics, among other things, to reduce potential conflicts of interest.
Conflicts of interest must, to the extent possible, be avoided, and any
material transaction or relationship involving a potential conflict of interest
must be reviewed and approved in advance by majority of the board of directors,
or, if required by law, a majority of disinterested stockholders. No personal
loans will be made to executive officers and directors.

All our transactions with affiliates have been and will be made on terms no
less favorable to us than could have been obtained from unaffiliated third
parties. Our policy is to require that a majority of board members approve all
transactions between us and our officers, directors, principal stockholders
and their affiliates.

OUR QUARTERLY OPERATING RESULTS, REVENUES AND EXPENSES MAY FLUCTUATE
SIGNIFICANTLY WHICH COULD HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF OUR
COMMON STOCK.

Our operating results, revenues and expenses may fluctuate significantly from
quarter to quarter due to a variety of factors including:

o the timing, size and execution of sales contracts and home deliveries;

o lengthy and unpredictable sales cycles,

o changes in our operating expenses,

o fluctuations in general economic conditions.

We believe that period-to-period comparisons of our results of operations are
not a good indication of future performance. It is possible that our operating
results will be below your expectations. In that event, the trading price of
our common stock may fall.

MANY OF OUR COMPETITORS ARE SIGNIFICANTLY LARGER THAN WE ARE, AND THEY HAVE
GREATER FINANCIAL RESOURCES AND HAVE MORE EXPERIENCED MANAGERS THAN WE DO.

We are a small company and have little market share in our target market.
The market of residential housing development in Beijing, China is highly
competitive. We compete with numerous entities, many of them are significantly
larger than we are, and have greater financial resources and have more
experienced managers than we do. As a result, they may be able to respond more
quickly to new or emerging house plans or construction materials and changes
in customer demands or to devote greater resources to the development,
promotion and sale of their products or services than we can. If we cannot
compete effectively, we may never become profitable. Although no one of our
competitors currently dominate or significantly influence the market, they
could adversely affect us.

THE RESIDENTIAL REAL ESTATE DEVELOPMENT INDUSTRY IS A HIGH RISK INDUSTRY. IF
THE MARKET CONDITIONS DRAMATICALLY CHANGE UNFAVORABLELY TO US, WE MAY GO OUT
OF BUSINESS.

The real estate development industry in general, and the residential luxurious
real estate development industry in particular, is a high risk industry,
subject to changes in general economic conditions, fluctuating interest rates,
and changing demand for the types of developments being considered. Volatility
in local and regional land use demands, as well as changing supply and demand
for the specific uses for which the real property is being developed, are also
factors in assessing the relative risks of the business. The demand for
residential real estate development is particularly sensitive to changing
interest rates and shifting demographics. Both of these factors affecting the
demand for residential housing are highly unpredictable over both the short-
and long-term. If the market conditions dramatically change unfavorablely to
us, we may go out of business.

Risks Related to Doing Business in China

POLITICAL AND ECONOMIC POLICIES IN CHINA COULD AFFECT OUR BUSINESS IN
UNPREDICTABLE WAYS.

Substantially all of our assets are located in China and substantially all of
our revenues are derived from our operations in China. Accordingly, our
results of operations and prospects are subject, to a significant degree, to
economic and political developments in China. The economy of China differs
from the economies of most developed countries in many respects, including:

o the extent of government involvement;

o level of development;

o allocation of resources

The economy of China has been transitioning from a planned economy to a more
market-oriented economy. Although in recent years the Chinese government has
implemented measures emphasizing the utilization of market forces and the
reduction of state ownership of productive assets, a substantial portion of

productive assets in China is still owned by the Chinese government, which
continues to play a significant role in regulating China's economic
development, setting monetary policy and providing preferential treatment to
particular industries or companies. Political and economic policies in China
could affect our business in unpredictable ways. Our operating results and
financial condition could be materially and adversely affected by changes in
governmental policies, such as government control over capital expenditures,
changes in government monetary policy, or changes in planning and zoning
policy. Accordingly, we may experience delays or other problems in the
issuance of the necessary permits or licenses to complete our projects, if any.

GOVERNMENT CONTROL OF CURRENCY CONVERSION MAY AFFECT OUR ABILITY TO PAY
DIVIDENDS DECLARED, IF ANY, IN FOREIGN CURRENCIES.

We receive substantial portion of our revenues in Renminbi ("RMB"), which
currently is not a freely convertible currency. A portion of our revenues may
have to be converted into US dollars to make payment of dividends declared,
if any, in respect of our common shares. Under China's existing foreign
exchange regulations, we will be able to pay dividends in foreign currencies
without prior approval from the State Administration of Foreign Exchange of
China by complying with certain procedural requirements. However, the Chinese
government may take measures at its discretion in the future to restrict
access to foreign currencies if foreign currencies become scarce in China. We
may not be able to pay dividends in foreign currencies to our shareholders,
if the Chinese government restricts access to foreign currencies for current
account transactions.

FLUCTUATIONS IN THE EXCHANGE RATE BETWEEN THE CHINESE CURRENCY AND THE UNITED
STATES DOLLAR MAY ADVERSELY AFFECT OUR OPERATING RESULTS.

The functional currency of our operations in China is "Renminbi." Results of
our operations are translated at average exchange rates into United States
dollars for purposes of reporting results. As a result, fluctuations in
exchange rates may adversely affect our expenses and results of operations as
well as the value of our assets and liabilities. Although the exchange rate
for RMB to US dollars has varied by only 100ths during 2004, 2003, and 2002,
exchange rate fluctuations, if any, could have a material adverse impact on
our operating results and stock price.

Risks Related to Investment in Our Securities

THERE IS NO AND THERE MAY NEVER BE A PUBLIC MARKET FOR OUR COMMON STOCK SHARES,
WHICH MAY MAKE IT DIFFICULT FOR SHAREHOLDERS TO SELL THEIR SHARES.

There is currently no market for our common stock and we can provide no
assurance that a market will develop. We currently plan to apply for listing
of our common stock on the OTC Bulletin Board upon the effectiveness of the
registration statement, of which this prospectus forms a part. However, there
is no assurance that our shares will be traded on the Bulletin Board or, if
traded, that a public market will materialize. If no market is ever developed
for our shares, it will be difficult for shareholders to sell their stock.
In such a case, shareholders may find that they are unable to achieve benefits
from their investment.

OUR COMMON STOCK MAY BE DEEMED TO BE A PENNY STOCK. AS A RESULT, TRADING OF
OUR SHARES MAY BE SUBJECT TO SPECIAL REQUIREMENTS THAT COULD IMPEDE OUR
SHAREHOLDERS' ABILITY TO RESELL THEIR SHARES.

The shares offered by this prospectus constitute penny stock under the
Securities Exchange Act of 1934 ("Exchange Act"). The shares will remain penny
stock for the foreseeable future. As defined in Rule 3a51-1 of the Exchange
Act, penny stocks generally are equity securities with a price of less than
$5.00, other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and
volume information with respect to transactions in such securities is
provided by the exchange or system.

Section 15(g) of the Exchange Act and Rule 15g-2 of the Exchange Act require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction
in a penny stock for the investor's account. Moreover, Rule 15g-9 of the
Exchange Act requires broker-dealers in penny stocks to approve the account
of any investor for transactions in such stocks before selling any penny stock
to that investor. This procedure requires the broker-dealer to:

o obtain from the investor information concerning his or her financial
situation, investment experience and investment objectives;

o reasonably determine, based on that information, that transaction in
penny stocks are suitable for the investor and that the investor has
significant knowledge and experience to be reasonably capable of evaluating
the risks of penny stock transactions;

o provide the investor with a written statement setting forth the basis
on which the broker-dealer made the determination in (ii) above; and

o receive a signed and dated copy of such statement from such investor,
confirming that it accurately reflects the investor's financial situation,
investment experience and investment objects.

Compliance with these requirements may make it more difficult for investors in
our common stock to resell the shares to third parties or to otherwise dispose
of them.

FORWARD-LOOKING STATEMENTS

This prospectus contains certain forward-looking statements that involve risks
and uncertainties. We use words such as "anticipate," "believe", "expect",
"future", "intend", "plan", and similar expressions to identify forward-looking
statements. These statements are only predictions. Although we believe that
the expectations reflected in these forward-looking statements are reasonable,
we cannot guarantee future results, levels of activity, performance or
achievements. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Our actual
results could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks faced by us and described on
the preceding pages and elsewhere in this prospectus.

USE OF PROCEEDS

The selling shareholders are selling shares of common stock covered by this
prospectus for their own accounts. We will not receive any proceeds from the
sale of the securities being registered pursuant to this prospectus.

DETERMINATION OF OFFERING PRICE

The selling shareholders will sell their shares at a price of $.05 per share
until our shares are quoted on the OTC Bulletin Board and thereafter at
prevailing market prices or privately negotiated prices. There is no
established public market for our shares. As a result, the offering price and
other terms and conditions relative to our shares have been arbitrarily
determined by us and do not bear any relationship to assets, earnings, book
value, or any other objective criteria of value. No investment banker,
appraiser, or other independent third party has been consulted concerning the
offering price for the shares or the fairness of the offering price used for
the shares.

DILUTION

The shares offered for sale by the selling shareholders are already outstanding
and, therefore, do not contribute to dilution.

SELLING SHAREHOLDERS

The following table sets forth information concerning the selling shareholders
including:

o the number of shares owned by each shareholder prior to this offering;

o the total number of shares that are to be offered for each shareholder;
and

o the total number of shares and the percentage of stock that will be
owned by each shareholder upon completion of the offering.

All costs, expenses and fees in connection with the registration of the
selling shareholders' shares will be borne by us. All brokerage
commissions, if any attributable to the sale of shares by selling shareholders
will be borne by such holders.

The offered shares of common stock may be offered from time to time by each of
the selling shareholders named below. However, the selling shareholders are
under no obligation to sell all or any portion of the shares of common stock
offered, neither are the selling shareholders obligated to sell such shares
of common stock immediately under this prospectus, and therefore, no accurate
forecast can be made as to the number of securities that will be held by the
shareholders upon completion of this offering. To the best of our knowledge,
the selling shareholders listed in the table set forth below have sole voting
and investment powers with respect to the securities indicated, and none of
the selling shareholders are broker-dealers or affiliates of broker-dealers.

None of the selling shareholders has held any position or office with us,
except as specified on the notes to the table. Other than the relationships
described below, none of the selling shareholders had or have any material
relationship with us.

Shares Owned Shares Owned
Prior To the Offering After the Offering
Selling No. of Shares --------------------- ----------------------
Stockholders Offered Number Percentage Number Percentage
- -----------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
Toshiaki Mashima 952,000 952,000 4.76% 0 0.00%
Comp Hotel
International Ltd. 850,000 850,000 4.25% 0 0.00%
Li Yiyang 596,000 596,000 2.98% 0 0.00%
Duan Lei 596,000 596,000 2.98% 0 0.00%
Hiroyuki Itakura 380,000 380,000 1.90% 0 0.00%
Masako Horie 380,000 380,000 1.90% 0 0.00%
Hisahiro Kashida 286,000 286,000 1.43% 0 0.00%
Hisakuni Kashida 286,000 286,000 1.43% 0 0.00%
Li Weiwei 224,000 224,000 1.12% 0 0.00%
Dong Yuhua 224,000 224,000 1.12% 0 0.00%
Zhao Shumin 196,000 196,000 0.98% 0 0.00%
Li Yan 196,000 196,000 0.98% 0 0.00%
Naoko Takemura 190,000 190,000 0.95% 0 0.00%
Takayoshi Ishibashi 190,000 190,000 0.95% 0 0.00%
Katsuhisa Aga 190,000 190,000 0.95% 0 0.00%
Gao Jingjie 184,000 184,000 0.92% 0 0.00%
Waywood Investments Ltd. 150,000 150,000 0.75% 0 0.00%
Huang Qihan 126,000 126,000 0.63% 0 0.00%
Shi Wei 114,000 114,000 0.57% 0 0.00%
Chigusa Itakura 96,000 96,000 0.48% 0 0.00%
Mitsuhiko Tadatsu 96,000 96,000 0.48% 0 0.00%
Takako Kashida 96,000 96,000 0.48% 0 0.00%
Yutaka Kobayashi 96,000 96,000 0.48% 0 0.00%
Yan Ruiqing 58,000 58,000 0.29% 0 0.00%
Zeng Qinna(i) 58,000 58,000 0.29% 0 0.00%
Zhang Bin 58,000 58,000 0.29% 0 0.00%
Cao Jing 46,000 46,000 0.23% 0 0.00%
Cao Xuefen 46,000 46,000 0.23% 0 0.00%
Fu Weihong 46,000 46,000 0.23% 0 0.00%
Lin Minya 46,000 46,000 0.23% 0 0.00%
Liu Chunxiu 46,000 46,000 0.23% 0 0.00%
Wang Liancheng 46,000 46,000 0.23% 0 0.00%
Xue Yuwei 46,000 46,000 0.23% 0 0.00%
Qu Pingji 34,000 34,000 0.17% 0 0.00%
Chen Min 22,000 22,000 0.11% 0 0.00%
Dong Fu 22,000 22,000 0.11% 0 0.00%
Gan Xuemei 22,000 22,000 0.11% 0 0.00%
Gao Yugui 22,000 22,000 0.11% 0 0.00%
He Bing 22,000 22,000 0.11% 0 0.00%
Li Jian 22,000 22,000 0.11% 0 0.00%
Li Ying 22,000 22,000 0.11% 0 0.00%
Song Fuying 22,000 22,000 0.11% 0 0.00%
Wang Jun 22,000 22,000 0.11% 0 0.00%
Wang Yong 22,000 22,000 0.11% 0 0.00%
Wei Wei 22,000 22,000 0.11% 0 0.00%
Zhang Jie 22,000 22,000 0.11% 0 0.00%
Huang Meishu 12,000 12,000 0.06% 0 0.00%
Meng Hua (ii) 12,000 12,000 0.06% 0 0.00%
Song Liqiang 12,000 12,000 0.06% 0 0.00%
Wang Shoujian 12,000 12,000 0.06% 0 0.00%
Wen Weiping 12,000 12,000 0.06% 0 0.00%
- --------------------------------------------------------------------------------
TOTAL 7,548,000 7,548,000 37.74% 0 0.00%

(i) Zeng Qinna is our Corporate Secretary.
(ii) Meng Hua is our Chief Financial Officer.

The numbers in this table assume that none of the selling shareholders sells
shares of common stock not being offered in this prospectus or purchases
additional shares of common stock, and assumes that all shares offered are
sold. The percentages are based on 20,000,000 shares of common stock
outstanding on the date of this prospectus

We are not aware of any agreements or arrangements among the selling
shareholders listed above. To our knowledge, there are no coordinated
investment efforts among the selling shareholders, and they are not acting as
a "group" as that term is used in Instruction 7 to Item 403 of Regulation
S-B.

PLAN OF DISTRIBUTION

The shares covered by this prospectus may be offered and sold from time to
time by the selling shareholders. The selling shareholders will act
independently of us in making decisions with respect to the timing, manner and
size of each sale. The selling shareholders will sell their shares at $.05
per share until our shares are quoted on the OTC Bulletin Board, thereafter,
at then prevailing market prices or privately negotiated prices.

The selling shareholders may sell their shares directly to purchasers or to
or through broker-dealers, which may act as agents or principals. These broker
- -dealers may receive compensation in the form of discounts, concessions or
commissions from the selling shareholders. They may also receive compensation
from the purchasers of common shares for whom such broker-dealers may act as
agents or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). Each
selling shareholder and any broker-dealer that assists in the sale of the
common stock may be deemed to be an underwriter within the meaning of Section
2(a)(11) of the Securities Act of 1933, as amended. Any discounts,
commissions, or concessions received by such underwriters, broker-dealers, or
agents may be deemed to be underwriting discounts and commissions under the
Securities Act.

The selling shareholders have advised us that they have not entered into
agreements, understandings or arrangements with any underwriters or broker-
dealers regarding the sale of their shares. The selling shareholders do not
have an underwriter or coordinating broker acting in connection with the
proposed sale of the common shares.

The selling shareholders have agreed to comply with applicable securities laws.
Each of the selling shareholders and any securities broker-dealer or others
who may be deemed to be statutory underwriters will be subject to the
prospectus delivery requirements under the Securities Act. The offer and sale
by the selling shareholders may be a "distribution" under Regulation M, in
which the selling stockholder, any "affiliated purchasers", and any broker-
dealer or other person who participates in such distribution may be subject
to Rule 102 of Regulation M until their participation in that distribution
is completed. Rule 102 makes it unlawful for any person who is participating
in a distribution to bid for or purchase stock of the same class of securities
that are the subject of the distribution. A "distribution" is defined in
Rule 102 as an offering of securities "that is distinguished from ordinary
trading transactions by the magnitude of the offering and the presence of
special selling efforts and selling methods." In addition, Rule 101 under
Regulation M prohibits any "stabilizing bid" or "stabilizing purchase" by a
selling shareholder in connection with a distribution for the purpose of
pegging, fixing or stabilizing the price of the common stock in connection
with this offering.

The selling shareholders also may resell all or a portion of their shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.

We are responsible for all costs, expenses and fees incurred in registering
the shares offered hereby. The selling shareholders are responsible for
brokerage commissions, if any, attributable to the sale of such securities.
We will not receive any of the proceeds from the sale of any of the shares by
the selling shareholders.

LEGAL PROCEEDINGS

There are no legal actions pending against us nor are any legal actions
contemplated by us.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Directors and Executive Officers
- --------------------------------

Each of our directors is elected by the shareholders to a term of one (1) year
and serves until his or her successor is elected and qualified, or until he
or she resigns or is removed from office. Each of our officers is elected by
the board of directors to a term of one (1) year and serves until his or her
successor is duly elected and qualified, or until he or she resigns or is
removed from office. The board of directors has no nominating or compensation
committees. The board of directors does not have an audit committee financial
expert.

The name, address, age and position of our officers and directors are as set
forth below:

Name Age Position Held
- --------------- ----- ---------------------------------------------------
Du Yonglin 62 President, Chief Executive Officer and Director
Wang Wulong 64 Director
Meng Hua 28 Chief Financial Officer
Zeng Qinna 26 Corporate Secretary

The following is a brief description of business experience of each of our
directors and executive officers during the past five years.

Mr. Yonglin Du has been our Chairman, Chief Executive Officer and President
since January 30, 2005. From 1982 to 2003, Mr. Du held various positions in
China's petroleum and petrochemical industries, including Deputy Director of
the Research Institute of Daqing Oilfield, Head of Petroleum and Petrochemical
Division of the State Planning Commission, Deputy Director of the Energy
Institute of the State Planning Commission, President of Shanghai Petroleum
and Natural Gas Company. In 2003, he founded Dahua Project (Engineering)
Management (Group) Co. Ltd., which he has been served as its President and
Chief Executive Officer.

Mr. Wulong Wang has been our Director since January 30, 2005. A graduate of
Beijing Post and Telecommunication University, Mr. Wang is a senior engineer
and China's registered Consulting Engineer. He joined China's State Planning
Commission in 1979, and served as its Deputy Chief of Investment Bureau from
1988 to 1992, Chief of Key Construction Bureau from 1992 to 1994, Chief of
Investment Bureau from 1994 to 1995. From 1995 to 2002, Mr. Wang served as
the President of China International Engineering Consulting Company, and
from 2002 to the present as a member of the Expert Committee of China
Engineering Consulting Company, as well as a member of the Economic Commission
of Chinese National People's Political Consultative Conference.

Ms. Hua Meng has been our Chief Financial Officer since January 30, 2005. She
graduated from the Central University of Finance and Economics of China in

July 2003 with a master degree in accounting. Ms. Meng is a Certified Public
Accountant in China. From July 1999 to May 2000, she worked for Beijing
Baisheng Light Industry Development Co. Ltd. as an accountant. From July
2003 to the present, Ms. Meng has also been Chief Financial Officer of Dahua
Project (Engineering) Management (Group) Co., Ltd.

Ms. Qinna Zeng has been our Corporate Secretary since January 30, 2005. She
graduated from the Central University of Finance and Economics in China in
July 2003 with a master degree in finance. From July 1999 to August 2000,
Ms. Zeng worked for the Lichuan Branch of People's Bank of China as a
statistician. From July 2003 to the present, Ms. Zeng has also been Corporate
Secretary of Dahua Project (Engineering) Management (Group) Co. Ltd.

None of our directors and officers has ever held any position in a reporting
company.

Significant Employees
- ---------------------

There are no significant employees other than our executive officers.

Family Relationships
- --------------------

There are no family relationships among directors or officers.

Involvement in Certain Legal Proceedings
- ----------------------------------------

During the past five years, none of our officers, directors, promoters or
control persons has had any of the following events occur:

o any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

o any conviction in a criminal proceeding or being subject to a pending
criminal proceeding, excluding traffic violations and other minor offenses;

o being subject to any order, judgment or decree, not substantially
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking business; and/or

o being found by a court of competent jurisdiction, in a civil action, the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.

Code of Ethics
- --------------

On January 30, 2005, the Board of Directors established a written code of
ethics that applies to our executive officers and financial officers. A copy
of the code of ethics is filed as an Exhibit of this prospectus and or may be
obtained by any person, without charge, who sends a written request to Dahua

Inc. c/o Corporate Secretary, Level 19, Building C, Tianchuangshiyuan,
Huizhongbeili, Chaoyang District, Beijing, China, 100012. We will disclose
any waivers or amendments to our Code of Business Code and Ethics on Item 10
of a Form 8-K.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners
- -----------------------------------------------

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of February 7, 2005, each person who is known
by us to own beneficially more than five percent of our outstanding common
stock. We have only one class of securities outstanding. Except as otherwise
indicated, we believe that the beneficial owners of the common stock listed
below, based on information furnished by such owners, have sole investment
and voting power with respect to such shares, subject to community property
laws where applicable.

Name and Address Amount & Nature of Percent
Title of Class of Beneficial Owner Beneficial Owner of Class
- ---------------- -------------------- ------------------------ -----------
Common Stock Yonglin Du 1,520,000 shares 7.60%
Level 19, Building C,
Tianchuangshiyuan,
Huizhongbeili,
Beijing, China, 100012
- ----------------------------------------------------------------------------

Security Ownership of Management
- --------------------------------

The following table sets forth certain information, as of February 7, 2005, as
to each class of our equity securities beneficially owned by all of our
directors and nominees, each of the named executive officers, and our
directors and executive officers as a group.

Common Stock Qinna Zeng 58,000 shares * (ii)
Level 19, Building C,
Tianchuangshiyuan,
Huizhongbeili,
Beijing, China, 100012

Common Stock Hua Meng 12,000 shares *
Level 19, Building C,
Tianchuangshiyuan,
Huizhongbeili,
Beijing, China, 100012

Common Stock Wang Wulong Nil Nil
c/o Dahua Inc.
Level 19, Building C,
Tianchuangshiyuan,
Huizhongbeili,
Beijing, China, 100012

All officers and directors 1,590,000 shares 7.95%
as a group
- -----------------------------------------------------------------------------

Notes:

(i) The persons named above do not have any specified rights to acquire,
within 60 days of the date of this registration statement any options,
warrants or rights and no conversion privileges or other similar obligations
exist.

(ii) Less than one percent of the total number of shares outstanding

We do not have any securities that are convertible into common stock.

Changes in Control
- ------------------

There are no arrangements that management is aware of that may result in
changes in control as that term is defined by the provisions of Item 403(c)
of Regulation S-B. There are no provisions within our Articles or Bylaws
that would delay or prevent a change of control.

DESCRIPTION OF SECURITIES

We are authorized to issue up to 80,000,000 shares of our common stock, $.0001
par value, and 20,000,000 shares of preferred stock, $.0001 par value per
share. As of February 7, 2005, there were 20,000,000 shares of common stock
issued and outstanding, and no shares of preferred stock were issued and
outstanding.

Common Stock
- ------------

The holders of the common stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of shareholders. Shares of common
stock do not carry cumulative voting rights and, therefore, a majority of the
outstanding shares of common stock will be able to elect the entire Board of
Directors and, if they do so, minority shareholders would not be able to elect
any members to the Board of Directors.

Shareholders have no preemptive rights to acquire additional shares of common
stock or other securities. The common stock is not subject to redemption and
carries no subscription or conversion rights. In the event of our liquidation,
the shares of common stock are entitled to share equally in corporate assets
after satisfaction of all liabilities.

Preferred Stock
- ----------------

As of the date of this prospectus, there were no preferred shares that have
been designated or issued. The Board of Directors is authorized to provide
for the issuance of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Delaware, to establish from time
to time the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions thereof without
any further vote or action by the shareholders. Any shares of preferred
stock so issued would have priority over the common stock with respect to
dividend or liquidation rights. Any future issuance of preferred stock may
have the effect of delaying, deferring or preventing a change in control of us
without further action by the shareholders and may adversely affect the voting
and other rights of the holders of common stock. We have no current plans to
issue any preferred stock or adopt any series, preferences or other
classification of preferred stock.

Debt Securities
- ---------------

As of the date of this prospectus, we do not have any debt securities.

Other Securities To Be Registered
- ---------------------------------

There are no other securities to be registered.

INTEREST OF NAMED EXPERTS AND COUNSEL

The financial statements included in this prospectus and the registration
statement have been audited by Child, Sullivan & Company, to the extent and
for the periods set forth in their reports appearing elsewhere in this
document and in the registration statement, and are included in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.

William G. Hu, Esq., our legal counsel, has provided an opinion on the
validity of our common stock. We retained him solely for the purpose of
providing this opinion and have not received any other legal services from
him.

No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of
the securities being registered or upon other legal matters in connection
with the registration or offering of the common stock was employed on a
contingency basis, or had, or is to receive, in connection with the offering,
an interest, direct or indirect, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any
of its parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES

Our directors and officers are indemnified as provided by the Delaware General
Corporation Law and our Articles of Incorporation. We have been advised that
in the opinion of the Securities and Exchange Commission indemnification for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities is asserted
by one of our directors, officers, or controlling persons in connection with
the securities being registered, we will, unless in the opinion of our legal
counsel the matter has been settled by controlling precedent, submit the
question of whether such indemnification is against public policy to court of
appropriate jurisdiction. We will then be governed by the court's decision.

ORGANIZATION WITHIN LAST FIVE YEARS

Dahua Inc. ("Dahua," "we," or "our") was incorporated on March 8, 2002 in the
State of Delaware under the name of Norton Industries Corp. ("Norton") as a
blank check company for the purpose of either merging with or acquiring an
operating company with operating history and assets. In June 2002, we filed
a registration statement on Form 10-SB with the Securities and Exchange
Commission ("SEC") in order to become a Section 12(g) registered company under
the Securities Exchange Act of 1934, as amended. The registration statement
became effective on or about December 20, 2002.

From March 8, 2002 to January 30, 2005, Norton had conducted virtually no
business other than organizational matters and the filings of periodic reports
with the SEC pursuant to the reporting requirements of Securities Exchange Act
of 1934, as amended.

We changed our name to Dahua Inc. on February 7, 2005, following a reverse
merger, in which Norton acquired all capital shares of Bauer Invest Inc.
("Bauer") on January 30, 2005. Bauer is a holding company, which conducts
its business through its 80% owned subsidiary Beijing Dahua Real Estate
Development, Ltd., an operating company organized in the People's Republic
of China ("Dahua Real Estate"). As a result of this transaction, Bauer
becomes our wholly owned subsidiary, and the shareholders of Bauer became our
controlling shareholders. This transaction was accounted for as a reverse
acquisition.

Bauer was incorporated on December 10, 2003, under the laws of the Territory
of the British Virgin Islands. On May 25, 2004, Bauer acquired of 80% of
capital stock of Dahua Real Estate on a reverse merger transaction. Prior
to the acquisition, because Bauer has no operations, the assets and
liabilities reflected on the balance sheet of Bauer are essentially those of
Dahua Real Estate, and the statement of operations reflects the operations
of Dahua Real Estate. Whatever organizational and acquisition costs incurred
by Bauer were recorded on the books of Bauer.

Dahua Real Estate was incorporated on September 24, 2001 to engage in the
development, construction, and sale of residential housing units. Norton and
Bauer were non-operating shell companies, respectively, and incurred minimal
costs to acquire Bauer or Dahua Real Estate, and therefore there were no needs
for adjustments for any costs incurred by Norton or Bauer to be "pushed down"

in the accounts of Norton, Bauer or Dahua Real Estate. Dahua Real Estate did
not incur any other costs which were required to be "pushed down" for the
completion of the transaction.

The merger transaction between Norton and Bauer was accounted for as a reverse
acquisition, whereby, under accounting principles generally accepted in the
United States of America, after completion of the merger, we will file prior
historical financial information of Bauer and its subsidiary, on a stand-alone
basis, for the year prior to the acquisition. Our continuing operations will
reflect the consolidated operations of Bauer and its subsidiary. The
acquisition of Dahua Real Estate by Bauer was treated as a reverse merger in
accordance with purchase accounting under APB 16.

We have not been involved in any bankruptcy, receivership or similar
proceedings.

DESCRIPTION OF BUSINESS

General
- -------

We, through our 80% owned subsidiary Beijing Dahua Real Estate Development Ltd.
("Dahua Real Estate"), engage in the business of development, construction and
sale of residential single-family homes in suburban area of Beijing, China.
Dahua Real Estate has been given permission by Beijing municipal governmental
agencies to provide certain services for housing, information consulting, and
sales of building, electrical, and decorating materials. Since inception Dahua
Real Estate has not provided such services.

Development Projects
- --------------------

In July 2003, we started to develop our first real estate project. The project
is called the first phase of Dahua Garden (the "First Phase"), which consists
of 76 luxurious residential units, all of which are single houses ranging from
approximately 2,000 to 5,000 square feet, each with 3 - 4 bedrooms with built
- -in closets and adjacent bathrooms, an open eat-in kitchen, a family room, a
living room, and an attic solarium for indoor sun bathing. Those homes are
within reasonable driving distances from Beijing metropolitan areas. The
project is located at the northern skirt of Beijing, China. The property
being developed sits on a hot spring, spewing10,000 cubic meters per day
providing every house with hot spring water for baths. The water temperature
at the mouth of the hot spring is over 60 degrees centigrade. The surplus
hot spring water is discharged into the surrounding creeks and ponds, making
them unfrozen all year round.

The average sales price is around RMB1,000 (approximately $120) per square
foot. The price does not include interior finishing, light fixtures, plumbing
and appliances, which are custom tailored to suit individual tastes and
preferences of the buyer from a menu of options. The average cost for interior
finishing is approximately RMB 200 per square foot. The interior finishing
can be done by outside contractors of the buyer's choice.

The First Phase is constructed on land licensed from the Government of China
for a period of 70 years, expiring on April 27, 2073. The granting of land
use licenses is a common practice in China as all land is government-owned,

and, at present, no option to purchase land has ever been granted. Pursuant
to the laws of China, all land belongs to the government. Regardless of
whether real estate is purchased or sold for residential or business purposes,
the purchaser will receive the ownership license and a permit to only use the
land, as opposed to owning the land. Upon transfer of title of the units to
the owners, each unit will be assigned its portion of the 70-year license and
we will not have any interest in such units or licensed land.

The construction began in July 2003 and was completed in December 2004.
Through the end of 2004, we had sold 30 of the 76 units of the First Phase. As
of September 30, 2004, we had received purchaser deposits from the pre-sale of
some of the residential units totaling $3.75 million.

We are currently applying with Beijing municipal and Changping district
governmental agencies for all the requisite licenses, permits, and approvals
to start the Second Phase of our Dahua Garden. The Second Phase will include
250 homes located on a 267,000-square meter site with community clubhouse,
creeks, ponds, and professionally manicured gardens and landscape. As of the
date of this prospectus, we have not obtained such licenses, permits or
approvals. The Second Phase is not contingent upon our successful completion
of the First Phase.

Home Construction
- -----------------

We act as the general contractor for our residential home developments and
hire subcontractors for all construction activities. The use of
subcontractors enables us to reduce our investment in direct labor costs,
equipment and facilities. We generally price our housing only after we have
entered into contracts for the construction with subcontractors, an approach
which improves our ability to estimate costs accurately.

As the general contractor, we select our subcontractors for construction
through a competitive bidding process. In addition to the bid price, our
criteria include the bidders' experience, reputation, recommendations and
reference from other developers, etc. The construction prices are capped and
cover all materials and labor needed to complete the construction under the
construction contract. The bid-winning subcontractor will make advance
payments for all materials and labor. We make payments to the subcontractors
over time upon completion and acceptance of certain phases of construction
according to agreed-upon milestones specified in the construction contract.

Our competitive bidding process include the following steps: (1) Bid
invitation registration, (2) Bid invitation announcement, (3) Bid submission,
(4) Pre-screening of bidders' qualifications, (5) Purchase of bid document
package by the pre-qualified bidders, (6) Opening bids, (7) Assessment of bids,
(8) Selection and determination of the winning bidder, (9) Notice of award,
and (10) execution of the construction contract.

To assure quality, construction is monitored by Beijing Aocheng Construction
Management Ltd. and by construction quality control authorities under the
Changping District government.

As the general contractor, we are responsible for all planning, scheduling and
budgeting operations. There is an on-site superintendent who oversees the
subcontractors. We supervise the construction of our project, coordinate the
activities of subcontractors and suppliers, subject their work to quality and
cost controls and assure compliance with zoning and building codes.

Subcontractors typically are retained on a project-by-project basis to complete
construction at a fixed price. Agreements with our subcontractors are
generally entered into after competitive bidding on an individual basis. We
generally obtain information from prospective subcontractors and suppliers
with respect to their financial conditions and abilities to perform under
their agreements prior to commencement of a formal bidding process. The
services performed for us by subcontractors are generally readily available
from a number of qualified subcontractors.

We use, to the extent feasible, standardized materials in our commercial
construction and homebuilding operations in order to permit efficiencies in
construction and material purchasing that can result in higher margins. Our
subcontractors generally negotiate the purchase of major raw material
components such as concrete, lumber and structural steel. They are responsible
for what they purchase and for what they pay for. Raw materials used in our
operations are generally readily available from a number of sources but prices
of such raw materials may fluctuate due to various factors, including supply
and demand.

To date, we have not encountered any problems that would affect the delivery
date of our First Phase units, nor have we experienced a significant increase
in prices of materials.

The First Phase is subject to government inspections prior to transfer of title
to buyers. The purpose of the inspection is to ensure that real estate
developers adhere to government standards of quality and safety.

Other Government regulations that we must adhere to are:

o Any structures being constructed must be for residential and commercial
use;

o All structures must be within certain dimensions;

o Public infrastructures must be in place such as electrical and telephone
poles, underground pipe systems,

o There must be various safety access routes in case of emergencies such
as a fire or earthquake;

o Construction must not violate Environmental Laws in effect; and

o Compliance with certain infrastructure standards.

To date we have not violated any of the above noted regulations.

We typically obtain all necessary development approvals, complete a
satisfactory environmental assessment of the site, secure any necessary
financing and complete other due diligence deemed appropriate by us prior to
becoming obligated to commerce the construction.

Acquisition of Land-Use Rights
- ------------------------------

The residential home development process in China generally consists of three
phases: (1) acquisition of land-use rights; (2) land development and

construction; and (3) sale. The development cycles vary depending on the
extent of the government approvals required, the size of the development,
necessary site preparation, weather conditions and marketing results.

The whole development process for our First Phase is set forth as follows:

1. Signing of a land use rights transfer agreement with the owner of such
rights, i.e. Lutuan Village Committee of Beiqijia County, Changping District,
Beijing. Said agreement was then submitted to the Beiqijia County Government
for approval.

2. Preparation of a "Proposal of the First Phase of Dahua Low Density
Residential Development Subdivision, which, after approval by Beiqijia County
Government and Changping District Government, was submitted to the Development
and Reform Commission of Beijing Municipal Government for approval.

3. Approval of the Proposal by the Development and Reform Commission of
Beijing Municipal Government after consultation with Beijing Construction
Commission and Planning Commission.

4. Submission of the Proposal by the Land Resources Bureau of Changping
District to Beijing National Land Resources Bureau in applying for changing
the nature of the proposed construction site from a collective land to a state
land.

5. Signing of a "Land Use Rights Transfer Agreement" with Beijing National
Land Resources Bureau and Beijing Housing Administration, making payment of
land use fee, and obtaining the "National Land Use Permit".

6. Submission of a detailed development plan to Beijing Planning
Commission to obtain "Development Planning Permit" and "Development
Construction Permit".

7. Upon issuance of the four Permits as set forth above, submission of
an application to Beijing National Land Resource Bureau and Beijing Housing
Administration for the "Residential Housing Pre-sale Permit".

The above-mention Permits are needed for all real estate development projects
in Beijing. Upon issuance of the "Residential Housing Pre-sales Permit", we
may begin to sell housing units to the public. After signing a purchase
agreement with buyer, the agreement is recorded at the National Land Resource
Bureau and Housing Administration of Changping District, Beijing.

Sales and Marketing
- -------------------

Our sales and marketing activities are conducted principally through our sales
employees. They are paid by base salary, plus sales commission, which is 0.3%
of gross sales.

Our sales are made pursuant to a standard sales contract, which generally
requires a customer deposit at the time of execution. Subject to particular
contract provisions, we generally permit purchasers to cancel their contractual
obligations in the event mortgage approvals are unobtainable within a specified
period of time and under certain other circumstances, including rescission
rights which may be given under local law. We believe that our cancellation

rate is consistent with that generally experienced at other similar home
developments. Although cancellations can delay the sale of our homes, they
have not had a material impact on our sales, operations or liquidity.

Our residential homes are targeted toward buyers who desire luxurious property
with many attractive features on which to build primary and secondary homes
for use as primary residences, vacation retreats, retirement residences, or
investments. Our target buyers include upper and middle class Chinese citizens
and foreign nationals working in Beijing and the surrounding area, such as
Shanxi and Hebei provinces, ranging from 30 to 60 years of age, including
private entrepreneurs, senior executives, technology elites, college professors
and self-employed professionals. The foreign nationals are expatriates of
foreign companies based in China. Our strategy for remaining competitive in
this market involves building on our reputation of offering quality homes;
using our own sales offices and personnel; and offering properties with many
appealing features, such as trails, water access, creeks, and attractive views.

We sell our homes through our sales representatives who typically work from
sales offices located in the model homes at the development site. Sales
representatives assist potential buyers by providing them with basic floor
plans, price information, development and construction timetables, preview of
model homes and the selection of options. Our sales representatives are
trained by us and generally have had prior experience selling new homes in
the local market. We also market our homes for sale through direct mailing to
identified population of prospective buyers and, to a lesser extent, through
other media, including newspapers, television and radio advertising, airplane
advertising, product tie-ins, billboards and other signage. From January 1,
2003 to September 30, 2004, our advertising expenses were approximately
$92,660.

Homes are sometimes sold prior to or during construction using sales contracts
which are accompanied by cash deposits. After receiving the Residential
Housing Pre-sale Permit issued by the government, we, the developer, are
permitted to sell the residential units to be built to the public, which is
common practice in China. Upon execution of a binding purchase contract
between the developer and the buyer, a deposit is required to be made to the
developer, which we use to construct our residential units. As of September 30,
2004, we received $3.75 million of buyer deposits.

To assist in the marketing of our homes and to limit our liability for certain
construction defects, we sell our homes subject to a limited warranty that is
provided by our subcontractors. We don't provide any kind of warranty to
homebuyers. Our subcontractors are responsible for the cost to repair major
structural defects, roofing, internal walls, heating, tiling problems, if any,
for certain period of time, from one to five years. The foregoing repair
costs are limited by our subcontractors' policy to the repair, replacement or
payment of the reasonable cost of repair or replacement of such warranted items
not to exceed an aggregate amount equal to the final sales price of the home
covered by the warranty.

We do not provide financing to prospective homebuyers, but work closely with
mortgage brokers or lenders who assist our homebuyers in obtaining financing.
We have no single customer that accounts for any substantial portion of our
revenues.

Regulation
- -----------

Real estate development is a government regulated industry, and we are subject
to extensive local, district, municipal and national rules and regulations
regarding permitting, zoning, subdivision, utilities and water quality.
Regulation is carried on by municipal, district, and national authorities, of
which the municipal and district governments have the greatest regulatory
impact. The City of Beijing, in which we operate, has been adopting
increasingly restrictive regulations associated with development activities,
including the adoption of more restrictive ordinances, greater emphasis on
land use planning, pressure to increase the number of low density residential
developments, and heightened public concern aimed at limiting development as
a means to control growth. Such regulation may delay development of our
properties and result in higher developmental and administrative costs.

To engage in the business of real estate development and sale of residential
units in Beijing, China, certain government approval is required. We have
obtained all necessary licenses and permits, which include (i) State-Owned
Land Using License issued by Beijing Land Resources and Residential Housing
anagement Bureau; (ii) Constructive Lands Planning License issued by Beijing
Planning Committee; (iii) Constructive Project Construction License issued
by Beijing Construction Committee; (iv) Constructive Project Planning License
issued by Beijing Planning Committee; and (v) Commercial Residential House
Pre-Sales License issued by Beijing Land Resources Bureau and Building
Management Bureau.

To date, we are in material compliance with these laws and regulations.

Environmental Matters
- ---------------------

We are subject to China's national and local environmental protection laws.
These laws could hold us liable for the costs of removal and remedy of certain
hazardous substances or wastes released on our property regardless of whether
we were responsible for the presence of hazardous substances. The presence
of hazardous substances, or the failure to properly remedy them, may have a
material adverse effect on our results of operations and financial condition.
As of the date of this prospectus, we are not aware of any material
noncompliance, liability or claim relating to hazardous or toxic substances
in connection with our property and operations. As to date, we did not incur
any costs in complying with environmental laws and regulations. We believe
that we are in material compliance with these laws and regulations.

Patents and Trademarks
- ----------------------

We do not own any patents or trademarks.

Product Research and Development
- --------------------------------

To date we have not conducted any product research and development. We do not
plan to conduct any product research and development activities in the next
twelve months.

Employees
- ---------

We currently have 22 full-time employees. We expect that there will be no
significant changes in the number of employees in the coming twelve months.
None of our employees is represented by trade unions. We consider our employee
relation to be satisfactory.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

You should read the following discussion and analysis in conjunction with our
financial statements, including the notes thereto contained elsewhere in this
prospectus. This discussion contains forward-looking statements that involve
risks, uncertainties and assumptions. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of a
variety of certain factors, including those set forth under "Risk Factors"
and elsewhere in this prospectus.

Overview
- ---------

We are engaged in the business of development, construction and sale of
residential luxurious single-family homes in Beijing, China. We have been
given permission by Beijing municipal governmental agencies to provide certain
services for housing, information consulting, and sales of building,
electrical, and decorating materials. Since inception we have not provided
such services.

We conduct our business through our operating subsidiary Beijing Dahua Real
Estate Development Ltd. In July 2003, we started to develop our first real
estate project. The project is called the first phase of Dahua Garden (the
"First Phase"), which consists of 76 residential luxurious units, all of which
are single houses ranging from approximately 2,000 to 5,000 square feet, each
with 3 - 4 bedrooms. The construction site is located at the northern skirt
of Beijing, China. The construction began in July 2003 and was completed in
December 2004. By the end of 2004, we had sold 30 of the 76 units of the First
Phase.

We are currently applying with Beijing municipal and Changping district
governmental agencies for all the requisite licenses, permits, and approvals
to start the Second Phase of Dahua Garden, which will include 250 homes
located on a 267,000 square meter site with community clubhouse, creeks, ponds,
and professionally manicured gardens and landscape. As of the date of this
prospectus, we have not obtained such licenses, permits or approvals.

Results of Operations
- ---------------------

For the Nine-Month Period Ended September 30, 2004

Revenue. We had no revenue for the nine months ended September 30, 2004.
We started our first construction project on development of residential
luxurious single-family homes in July 2003. The project was not completed
until December 20, 2004. No revenue was been recognized for the nine months
ended September 30, 2004.

Operating Expenses. Operating expenses, consisting of selling, general and
administrative expenses, was $270,021 for the nine-month period ended September
30, 2004. Of which, $87,121, or 32.3%, were payroll expenses, and $63,992, or
23.7%, was advertising expenses.

Interest Income and Expenses. For the nine months ended September 30, 2004,
we had no interest expenses, and we had interest income of $2,624.

Net Loss

As a result of the factors discussed above, for the nine-month period ended
September 30, 2004, our net loss was $274,858.

For the Year Ended December 31, 2003

Revenue. For the year ended December 31, 2003, we did not generate any
revenue. We started our first construction project on development of real
estate residential single-family homes in July 2003. The project was not
completed until December 20, 2004. Accordingly, there was no revenue that had
been recognized for this period.

Operating Expenses. For the year ended December 31, 2003, our operating
expenses were $167,169. Of which, $58,193, or 34.8%, was payroll expense, and
$28,665, or 17.2%, was advertising expenses.

Interest Income and Expenses. For the year ended December 31, 2003, we spent
$98,161 in interest expenses, and we had interest income of $664.

Net Loss

As a result of the factors discussed above, we had net loss of $271,442 for
the year ended December 31, 2003.

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

To date, our operating funds have been provided primarily by $1,209,190 of
equity capital, $3,845,326 of unsecured short-term loans from Dahua Group,
our affiliate, and $3,749,038 of purchaser deposits that we received from
our pre-sale of housing units.

After receiving the Residential Housing Pre-sale Permit issued by the
government, we, the developer, are permitted to sell the residential units to
be built to the public, which is common practice in China. Upon execution of
a binding purchase contract between the developer and the buyer, a deposit
is required to be made to the developer, which we use to construct our
residential units. As of September 30, 2004, we received $3.75 million of
buyer deposits on the First Phase of Dahua Garden.

We started our First Phase of Dahua Garden in July 2003. For the year ended
December 31, 2003, Dahau Group provided us $3.96 million of unsecured short-
term loans, and we received purchaser deposits of $65,296. For the nine months
ended September 30, 2004, we received purchaser deposits of $3.68 million and
made payments of $116,773 to Dahua Group for return a portion of short-term

loans. The unsecured short-term loans (a line of credit) provided by Dahua
Group bear annual interest rate of 6%, for a period of three years.

For the nine months ended September 30, 2004, our operating activities
provided us $562,343 of cash, largely as a result of purchaser deposits
($3,683,742), offset by increase in inventory of $2,665,057. For the year
ended December 31, 2003, our operating activities used cash of $3,341,971,
primarily as a result of net loss and increase in inventory ($2,985,427).

Our investing activities used cash $2,185 and $45,883 for the nine-month
period ended September 30, 2004 and for the year ended December 31, 2003,
respectively, which were used for purchase of property and equipment.

For the nine months ended September 30, 2004, our financing activities used
cash of $93,925, of which we paid $116,773 of short-term loans, offset by net
repayments received from short-term loans receivable. For the year ended
December 31, 2003, our financing activities provided us $3,472,069 of cash,
primarily from short-term loans ($3,610,073) provided by Dahua Group, our
affiliate. We have no bank credit facility.

As of December 31, 2004, the First Phase of Dahua Garden has been completed.
We are currently applying with Beijing municipal and Changping district
governmental agencies for all the requisite licenses, permits, and approvals
to start our Second Phase of Dahua Garden, which will include 250 luxurious
single-family houses located on a 267,000 square meter site with community
clubhouse, creeks, ponds, and professionally manicured gardens and landscape.
As of the date of this prospectus, we have not received any licenses, permits
or approvals. It is estimated that approximately $60.5 million is needed to
complete the Second Phase. In addition to purchaser deposits, short-term
loans (line of credit) from Dahua Group, the proceeds generated from sale of
the First Phase will also be used to finance the Second Phase development.
We have made no material commitments for capital expenditures.

While there can be no assurance that we will have sufficient funds over the
next twelve months, we believe that funds generated from the sale of our First
Phase of Dahua Garden housing units, purchaser deposits from pre-sale
contracts, and the line of credit provided by our affiliate, Dahua Group, will
be adequate to meet our anticipated operating expenses, capital expenditure
and debt obligations for at least the next twelve months. Nevertheless, our
continuing operating and investing activities may require us to obtain
additional sources of financing. In that case, we may seek financing from
institutional investors or banks to identify additional sources of financing.
There can be no assurance that any necessary additional financing will be
available to us on commercially reasonable terms, if at all.

Off-balance sheet arrangements
- ------------------------------

We have entered into an agreement with a bank that extended mortgage loans to
buyers of our residential units, whereby we agree to provide certain limited
guarantee, which cover the risk before the conveyance of title upon closing.
We are required to deposit certain amount of funds into a special account
with the bank.

Critical Accounting Polices and Estimates

Our financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenue and expenses, and related
disclosure of contingent assets and liabilities. On an on-going basis, we
evaluate our estimates, which are based on our historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. We believe that revenue recognition
affects our more significant judgments and estimates used in the preparation
of our financial statements.

Revenue Recognition

We follow the provisions of the SEC Staff Accounting Bulletin 104, "Revenue
Recognition" for revenue recognition. Under Staff Accounting Bulletin 104,
four conditions must be met before revenue can be recognized: (i) there is
persuasive evidence that an arrangement exists, (ii) delivery has occurred or
service has been rendered, (iii) the seller's price to the buyer is fixed or
determinable, and (iv) collectibility is reasonably assured.

We recognize revenue from sale of our residential homes when persuasive
evidence of an arrangement exists, the homes are delivered to the buyers under
the terms of the arrangement and title passes, the revenue is fixed or
determinable, and the payment received.

Recent Accounting Pronouncements
- --------------------------------

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"), which requires that, for
guarantees within the scope of FIN 45 issued or amended after December 31,
2002, a liability for the fair value of the obligation undertaken in issuing
the guarantee be recognized. FIN 45 does not apply to certain guarantee
contracts, such as for a lessee's residual value guarantee embedded in a
capital lease. FIN 45 also requires additional disclosures in financial
statements for periods ending after December 15, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure", which (i) amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for an entity that voluntarily changes to the fair value based
method of accounting for stock-based compensation; (ii) amends the disclosure
provisions of SFAS No. 123 to require prominent disclosure about the effects
on reported net income of an entity's accounting policy decisions with respect
to stock-based employee compensation; and (iii) amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. Items (ii) and (iii) of the new requirements in
SFAS No. 148 are effective for financial statements for fiscal years ending
after December 15, 2002.

In January 2003, the Financial Accounting Standards Board ("FASB") issued
nterpretation No. 46, "Consolidation of Variable Interest Entities", an

interpretation of accounting Research Bulletin ("ARB") No. 51 "Consolidated
Financial Statement". In December 2003, the FASB issued a revised version of
FIN 46 (FIN 46R) that replaced the original FIN 46. Interpretation No. 46R
addresses consolidation by business enterprises of variable interest
entities, which have one or both of the following characteristics: (i) the
equity investment at risk is not sufficient to permit the entity to finance
its activities without additional subordinated support from other parties,
which is provided through other interest that will absorb some or all of the
expected losses of the entity; (ii) the equity investors lack one or more
of the following essential characteristics of a controlling financial
interest: the direct or indirect ability to make decisions about the
entities activities through voting rights or similar rights; or the
obligation to absorb the expected losses of the entity if they occur, which
makes it possible for the entity to finance its activities; the right to
receive the expected residual returns of the entity if they occur, which is
the compensation for the risk of absorbing the expected loss.

Interpretation No. 46R, also requires expanded disclosures by the primary
beneficiary of a variable interest entity and by an enterprise that holds a
significant variable interest in a variable interest entity but is not the
primary beneficiary. Interpretation No. 46 as revised, applies to small
business issues no later than the end of the first reporting period that ends
after December 15, 2004.

This effective date includes those entities to which Interpretation No. 46R
had previously been applied. However, prior to the required application of
Interpretation No. 46R, a public entity that is a small business issuer shall
apply Interpretation No. 46R or this Interpretation to those entities that
are considered to be special-purpose entities no later than as of the end of
the first reporting period that ends after December 15, 2003.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting reporting for derivative instruments, including
certain derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The changes
in SFAS No. 149 improve financial reporting by requiring that contracts with
comparable characteristics be accounted for similarly. This statement is
effective for contracts entered into or modified after June 30, 2003 and all
of its provisions should be applied prospectively.

In May 2003, SFAS 150 "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity", was issued. This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity.
It requires that an issuer classify a financial instrument that is within its
scope as a liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. Generally, a financial
instrument, whether in the form of shares or otherwise, that is mandatorily
redeemable, i.e. that embodies an unconditional obligation requiring the
issuer to redeem it by transferring its shares or assets at a specified or
determinable date (or dates) or upon an event that is certain to occur, must
be classified as a liability (or asset in some circumstances). In some cases,
a financial instrument that is conditionally redeemable may also be subject
to the same treatment. This Statement does not apply to features that are
embedded in a financial instrument that is not a derivative (as defined) in
its entirety. For public entities, SFAS 150 is effective for financial
instruments entered into or modified after May 31, 2003.

We do not believe that the adoption of the above recent pronouncements will
have a material effect on our financial position or results of operations.

DESCRIPTION OF PROPERTY

We do not own any real estate properties other than the residential units we
develop for sale. Our executive offices are located in an office complex of
approximately 2,000 square feet at Level 19, Building C, Tianchuangshiyuan,
Huizhongbeili, Chaoyang District, Beijing, China, 100012. This office spaces
are provided by Dahua Project (Engineering) Management (Group) Co. Ltd.
("Dahua Group"), our affiliate, at no charge. There is no leasing agreement
regarding our office spaces. We believe that these facilities are adequate
for our current and anticipated needs. Dahua Group may repossess the office
facility at any time by giving us six-month notice. As of the date hereof,
we have not received such notice to repossess from Dahua Group.

Investment Policies
- --------------------

As to date, we have no established policy with respect to investments on real
estate or interests in real estate. However, we intend that substantially all
of our investments will be residential luxurious single-family houses. The
purpose of such investments will primarily be generating sales revenues. There
are no limitations on the percentage of assets which may be invested in any
one investment or type of investments. Our Board of Directors may set such
policy without a vote of our shareholders. We will not invest in real estate
mortgages, and we will not invest securities of or interests in real estate
investment trusts, partnership interests, or other persons primarily engaged
in real estate activities.

We do not plan to limit the geographical area in which we may invest, but we
expect that all of our investments will be made in metropolitan Beijing, China.
We have no current plans to form a joint venture or other arrangements with
third parties to engage in real estate development.

We may finance our investments through both public and private secured and
unsecured debt offerings, as well as public and private placements of our
equity securities. The equity securities may include both common and
preferred equity issues. There are currently no restrictions on the amount
of debt that we may incur. Since inception, our operating activities have
been mainly financed by equity capital, unsecured short-term loans (line of
credit) provided by Dahua Group, our affiliate, and purchaser deposits
received from our pre-sale of the First Phase units of Dahua Garden.

Description of Real Estate and Operating Data
- ---------------------------------------------

Our only real estate project currently being developed is the First Phase of
Dahua Garden, which is located in the northern suburban areas of Beijing,
China, approximately 20 kilometers from the downtown of Beijing. It consists
of 76 luxurious residential units, each ranging from 2,000 to 5,000 square
feet in size with 3 to 4 bedrooms. The residential units are constructed on
a piece of land of approximately 30 acres. The construction of all the units
have been completed and being sold to the public. As the developer, we do not
have title to the land, the use of which is licensed from the Chinese
government for a period of 70 years expiring on April 27, 2073, but we own all
the residential units constructed thereon. There are no material mortgages,

liens or other encumbrances against the land or residential units. Upon
conveyance of title to the residential units to the buyer, the land use rights
will be passed to the buyer.

The second phase of Dahua Garden development includes 250 homes located on a
267,000 square meter site with community clubhouse, creeks, ponds, and
professionally manicured gardens and landscape. We are currently applying with
the Beijing municipal and local governmental authorities for all the requisite
licenses, permits, and approvals. As of the date of this prospectus, no such
licenses, permits or approvals have been obtained.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Officers and Directors
- ----------------------------------------

As a shareholder of Bauer Invest Inc., Mr. Yonhlin Du, our President and Chief
Executive Officer received 1,520,000 shares of our common stock as result of
our reverse acquisition of Bauer on January 30, 2005. The number of shares
Mr. Du received was on pro rata basis, i.e., the number of shares he received
is proportionate to the number of shares he owns in Bauer.

Transactions with Promoters
- ---------------------------

Waywood Investments Ltd. and Comp Hotel International Ltd. received 150,000 and
850,000 shares, respectively, of our common stock as a result of the reverse
merger between Bauer Invest Inc. and Norton Industries Corp. on January 30,
2005. The numbers of shares they received were proportionate to their
respective numbers of shares they originally owned in Norton Industries Corp.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information
- ------------------

There is no public trading market for our common stock.

Holders
- -------

As of February 7, 2005, there were 110 holders of record for our common shares.
We have only one class of stock outstanding.

Stock Options, Warrants and Convertible Securities
- --------------------------------------------------

We have not granted any stock options or warrants to purchase shares of our
common stock, and we have not issued and do not have any securities
outstanding that may be converted into our common shares or have any rights
convertible or exchangeable into shares of our common stock.

Dividends
- ---------

We have not paid any dividends since our incorporation and do not anticipate
as of February 7, 2005 the payment of dividends in the foreseeable future. We
intend to retain future earnings, if any, to fund the expansion and growth of

our business. Payments of any future cash dividends on our common stock will
be at the discretion of our Board of Directors after taking into account
various factors, including our financial condition, operating results, current
and anticipated cash needs, plans for expansion and other factors that our
board of directors deem relevant.

There are no restrictions in our Articles of Incorporation or Bylaws that
prevent us from declaring dividends. The Delaware Revised Statutes, however,
do prohibit us from declaring dividends, after giving effect to the
distribution of the dividend: (i) we would not be able to pay our debts as
they become due in the usual course of business; or (ii) our total assets
would be less than the sum of our total liabilities plus the amount that
would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.

Securities Authorized for Issuance under Equity Compensation Plans
- ------------------------------------------------------------------

We do not have any compensation plan under which equity securities are
authorized for issuance.

Future Sales by Existing Shareholders
- -------------------------------------

As of the date of this prospectus, there are 20,000,000 shares of common stock
issued and outstanding, all of which are "restricted securities", as that
term is defined in Rule 144 of the Rules and Regulations of the SEC promulgated
under the Securities Act. Under Rule 144, such shares can be publicly sold,
subject to volume restrictions and certain restrictions on the manner of sale,
commencing one (1) year after their acquisition.

A total of 19,000,000 shares were issued, on January 30, 2005, to 108
shareholders of Bauer Invest Inc. on pro rata basis, the number of shares
received by each person is proportionate to the number of shares he/she
originally owns in Bauer. The above-mentioned shares were issued pursuant to
Regulation S of the Securities Act of 1933, as amended. These shares can be
sold under Rule 144 resale restrictions.

150,000 and 850,000 shares were issued to Waywood Investment Ltd. and Comp
Hotel International Ltd., respectively, as a result of the reverse merger
transaction on January 30, 2005. Those shares were issued pursuant to
Regulation S of the Securities Act of 1933, as amended. These shares can
also be sold under Rule 144 resale restrictions.

In general, under Rule 144 as currently in effect, any of our affiliates and
any person or persons whose sales are aggregated who has beneficially owned
his or her restricted shares for at least one year, may be entitled to sell
in the open market within any three-month period a number of shares of common
stock that does not exceed the greater of (i) 1% of the then outstanding
shares of our common stock, or (ii) the average weekly trading volume in the
common stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also affected by limitations on manner of sale, notice
requirements, and availability of current public information about us. Non-
affiliates who have held their restricted shares for one year may be entitled
to sell their shares under Rule 144 without regard to any of the above
limitations, provided they have not been affiliates for the three months
preceding such sale.

Shares purchased in this offering, which will be immediately resalable, and
sales of all of our other shares after applicable restrictions expire, could
have a depressive effect on the market price, if any, of our common stock and
the shares we are offering.

We do not have any securities that are convertible into common stock. We have
not registered any shares for sale by selling shareholders under the Securities
Act other than as disclosed in this prospectus.

EXECUTIVE COMPENSATION

Since inception, none of the named executive officers has received any salary
or other kind of compensation from us. Their services have been compensated
solely by Dahua Project (Engineering) Management (Group) Co. Ltd. ("Dahua
Group"), our affiliate. From 2002 to 2004, the annual salaries paid by Dahua
Group to Mr. Yonglin Du, our President and CEO, were RMB 200,000, or
approximately $24,145, and Ms. Hua Meng, our CFO, RMB 60,000, or approximately
$7,250, respectively.

Summary Compensation Table
- --------------------------

SUMMARY COMPENSATION TABLE

- -----------------------------------------------------------------------------------------------------
Long Term Compensation
- -----------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
- ------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Securities
Name & Other Annual Restricted Underlying
Principal Salary Bonus Compensation Stock Options/ LTIP All Other
Position Year ($) ($) ($) Awards SARs Payouts Compensation
- ------------------------------------------------------------------------------------------------------
Yonglin Du, 2004 0 0 0 0 0 0 0
CEO & President 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0

Hua Meng 2004 0 0 0 0 0 0 0
CFO 2003 0 0 0 0 0 0 0
2002 0 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------

Option/SAR Grants
- -----------------

We do not currently have a stock option plan. No stock options have been
granted or exercised by any of the officers or directors since we were founded.

Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values
- ---------------------------------------------------------------------

No individual grants of stock options, whether or not in tandem with stock
appreciation rights known as SARs or freestanding SARs have been made to any
executive officer or any director since our inception; accordingly, no stock
options have been granted or exercised by any of the officers or directors
since we were founded.

Long-Tem Incentive Plans and Awards
- -----------------------------------

We do not have any long-term incentive plans that provide compensation
intended to serve as incentive for performance. No individual grants or
agreements regarding future payouts under non-stock price-based plans have
been made to any executive officer or any director or any employee or
consultant since our inception; accordingly, no future payouts under non-stock
price-based plans or agreements have been granted or entered into or exercised
by any of the officers or directors or employees or consultants since we were
founded.

Compensation of Directors
- -------------------------

The members of the Board of Directors are not compensated by us for their
service as members of the Board of Directors, but may be reimbursed for
reasonable expenses incurred in connection with attendance of meetings of the
board of directors. There are no arrangements pursuant to which directors are
or will be compensated in the future for any services provided as a director.

Employment Contracts, Termination of Employment, Change-in-Control
- ------------------------------------------------------------------
Arrangements
- ------------

We have not entered employment agreements with our executive officers. There
are no compensatory plans or arrangements, including payments to be received
from us, with respect to a named executive officers, if such plan or
arrangement would result from the resignation, retirement or any other
termination of such executive officer's employment with us or form a change-
in-control of us or a change in the named executive officer's responsibilities
following a change-in-control.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

As a result of our acquisition of Bauer Invest Inc., we dismissed Stan J. H.
Lee, CPA, a member firm of DMHD Hamilton Clark & Co., as our independent
public accountant, and engaged Child, Sullivan & Company, the auditors of
Bauer, as our certifying accountants. Since September 2004, Bauer has engaged
Child, Sullivan & Company as its independent public accountants. The
decision to dismiss Stan J.H. Lee, CPA and appoint Child, Sullivan & Company
was approved by our whole Board of Directors.

Stan J.H. Lee, CPA served as our independent public accountants for the period
from March 8, 2002 (inception) to October 2003, when Stan J. H. Lee, CPA
became unqualified because he did not register with the Public Accounting
Oversight Board ("PAOB") as required by the Sarbares - Oxley Act of 2002
(the "Act"). Pursuant to the Act, accounting firms that are not registered
with PAOB are prohibited from preparing or issuing audit reports on U.S.

public companies and from participating in such audits. During the period as
our independent public accountant, Stan H. Lee, CPA, issued a report for the
period from March 8, 2002 (date of inception) to December 31, 2002.

During the period from March 8, 2002, to October 2003, there were no
disagreements between us and Stan J.H. Lee, CPA on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement(s), if not resolved to the satisfaction of Stan
J.H. Lee, CPA would have caused Stan J.H. Lee, CPA to make reference to the
matter of the disagreement(s) in connection with its reports. In addition,
during the period from March 8, 2002 to October 2003, there were no reportable
events as that term is described in Item 304(a)(1)(iv) of Regulation S-B.

In fiscal 2003 and until January 30, 2005, we were inactive. Pursuant to
Section 3-11 of Regulation S-X, our financial statements required for purposes
of reports pursuant to the Securities Act of 1934 were unaudited.

At no time prior to January 30, 2005, did we (or anyone on behalf of us)
consult with Child, Sullivan & Company on matters regarding (i) the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on its financial
statements, or (ii) any matter that was the subject of a disagreement with
Stan J.H. Lee, CPA or a reportable event, as defined in Item 304(a)(2) of
Regulation S-B.

ADDITIONAL INFORMATION

We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. In accordance with those regulations, we file
periodic reports, and other information with the Securities and Exchange
Commission. Our reports and other information can be inspected and copied at
the public reference facilities maintained by the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain
information on the operations of the Public Reference Room by calling the SEC
at (800) SEC-0330. Information also is available electronically on the
Internet at http://www.sec.gov.

We will provide without charge to each person to whom a copy of this prospectus
is delivered, upon oral or written request of such person, a copy of any or
all documents which are incorporated by reference in this prospectus, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Written requests for such
documents should be directed to Dahua Inc., c/o 80 Wall Street, Suite 818, New
York, NY 10005. Telephone requests may be directed to us at (212) 809-1200.

We intend to furnish our shareholders with annual reports containing audited
financial statements and quarterly reports containing unaudited financial
information for the first three quarters of each year.

Bauer Invest Inc.

Financial Statements

For the Nine Months Ended September 30, 2004,

Report of Independent Registered Public Accounting Firm

To The Stockholders
Bauer Invest Inc.

We have audited the accompanying balance sheet of Bauer Invest Inc. as of
September 30, 2004, and the related statements of operations, changes in
equity, and cash flows for the nine months then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with generally accepted auditing
standards as established by the AICPA's Auditing Standards Board and in
accordance with the Standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bauer Invest Inc. as of
September 30, 2004, and the results of its operations and its cash flows for
the nine months then ended, in conformity with accounting principles generally
accepted in the United States of America.

/s/ Child, Sullivan & Company
- -----------------------------
Child, Sullivan & Company
Salt Lake City, Utah
December 5, 2004

BAUER INVEST INC.

BALANCE SHEET

September 30,
2004
-------------------

ASSETS

Current Assets:
Cash and cash equivalents....................... $ 570,932
Inventory....................................... 7,579,601
Loans receivable (note 4)....................... 56,943
--------------
Total Current Assets....................... 8,207,476

Property, Plant, & Equipment:
Computer equipment.............................. 3,450
Office equipment................................ 43,464
Telephones...................................... 1,026
Vehicles........................................ 11,498
--------------
Total Property, Plant, & Equipment......... 59,438
Less: Accumulated depreciation.......... (17,541)
--------------
Net Fixed Assets........................... 41,897

Total Assets.................................... $ 8,249,373
==============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Accounts payable................................ $ 25,393
Customer deposits............................... 3,749,038
Short-term loans (note 5)....................... 34,134
Short-term loans - related parties (note 6)..... 3,845,326
Accrued interest - short-term loans,
related parties (note 6)...................... 98,161
Other accruals.................................. 4,215
-------------
Total Current Liabilities.................. 7,756,267

Minority interest............................... 98,621

Equity:
Common stock; $1.00 par; 50,000 shares authorized;
1 share issued and outstanding................ 1
Additional paid-in capital...................... 492,211
Accumulated deficit............................. (97,727)
-------------
Total Equity............................... 394,485

Total Liabilities and Equity.................... $ 8,249,373
=============

See accompanying notes to financial statements

BAUER INVEST INC.

STATEMENT OF OPERATIONS

Nine Months
Ended
September 30,
2004
--------------

Revenue
Sales........................................ $ -
Cost of goods sold........................... -
--------------
Gross profit (loss) -

Expenses:
Advertising..................................... 28,442
Depreciation.................................... 3,049
Office supplies................................. 4,356
Payroll expense................................. 38,720
Legal fees...................................... 8,061
Utilities....................................... 10,296
Meals, travel, & entertainment.................. 5,066
Telephone....................................... 2,541
Automobile...................................... 4,971
Taxes........................................... 7,809
Other general and administrative................ 6,698
--------------
Total Expenses.................................. 120,009

Net Loss From Operations........................ (120,009)

Other Income (Expense)
Other expenses.................................. (3,477)
Interest expense................................ -
Interest income................................. 1,166
Other income.................................... 161
-------------
Total Other Income (Expense).................... (2,150)

Net Loss Before Income Taxes.................... (122,159)

Provision for income taxes.................... -

Minority interest in loss of subsidiary......... (24,432)

Net Loss........................................ $ (97,727)
==============

See accompanying notes to financial statements

BAUER INVEST INC.

STATEMENTS OF CASH FLOWS

Nine Months
Ended
September 30,
2004
-----------------

Cash Flows from Operating Activities
Net loss.................................... $ (97,727)
Adjustments to reconcile net loss to
net cash provided by (used in) operations:
Depreciation............................. 3,049

Changes in operating assets and liabilities:
Inventory................................ (1,184,470)
Accounts payable......................... (81,472)
Customer deposits........................ 1,637,219
Accrued interest......................... -
Other accruals........................... (2,236)
---------------
Cash Provided by (Used in) Operating Activities 274,363

Cash Flows from Investing Activities
Purchase of property, plant, & equipment..... (971)
---------------
Cash Used in Investing Activities............ (971)

Cash Flows from Financing Activities
Repayments received from short-term loans receivable 22,848
Payments on short-term loans payable - related parties (116,773)
Contributed capital for subsidiary acquisition 391,465
---------------
Cash Provided by (Used in) Financing Activities 297,540

Net Increase in Cash and Cash Equivalents..... 570,932

Cash and Cash Equivalents at the Beginning of the Period -

Cash and Cash Equivalents at the End of the Period $ 570,932
==============

Supplemental Disclosures:
Interest paid in cash....................... $ -
==============
Supplemental Disclosures of Noncash Investing
and Financing Activities:

Acquisition of subsidiary with equity......... $ 100,747
==============

See accompanying notes to financial statements

BAUER INVEST INC.

STATEMENT OF CHANGES IN EQUITY

Additional
Common Paid-in Accumulated
Stock Capital Deficit Total
------------- ----------------- ------------- ------------
<s> <c> <c> <c> <c>
Balance, January 1, 2004 $ - $ - $ - $ -

Acquisition of subsidiary 1 492,211 - 492,212

Net loss - - (97,727) (97,727)
----------- ------------- ------------ -------------
Balance, September 30, 2004 $ 1 $ 492,211 $(97,727) $ 394,485
=========== ============= ============ =============

See accompanying notes to financial statements

BAUER INVEST INC.

NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004

1. Nature of operations

Bauer Invest Inc. (the Parent) was incorporated on December 10, 2003, under the
laws of the Territory of the British Virgin Islands (BVI).

The Parent has had no operations other than the acquisition of 80% of Beijing
Dahua Real Estate Development, Ltd. (the Subsidiary), a corporation with
operations in the People's Republic of China (PRC), on May 25, 2004. Because
the Parent has no operations, the assets and liabilities reflected on the
balance sheet are essentially those of the Subsidiary, and the statement of
operations reflects the operations of the Subsidiary from the date of
acquisition to September 30, 2004. These financial statements should be read
in conjunction with the full set of financial statements of the Subsidiary as
of and for the periods ended September 30, 2004, and December 31, 2003 and
2002. The consolidated entity is referred to as the Company.

The Company engages in the development of real estate and the sale of commodity
housing. The Company also provides management for its housing, information
consulting, and sales of building, electrical, and decorating materials. The
Company has been in the process of acquiring and developing land and housing
for sale, and is now prepared for sales of those items to begin.

2. Basis of Presentation

The accompanying financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America
(US GAAP). This basis differs from that used in the statutory accounts of the
Subsidiary, which were prepared in accordance with the accounting principles
and relevant financial regulations applicable to enterprises in the PRC.
All necessary adjustments have been made to present the financial statements
in accordance with US GAAP.

3. Summary of Significant Accounting Policies

Economic and Political Risks

The Company faces a number of risks and challenges as a result of having
primary operations and markets in the PRC. Changing political climates in the
PRC could have a significant effect on the Company's business.

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents
includes cash on hand and demand deposits held by banks.

Trade Accounts Receivable

Trade accounts receivable are recognized and carried at original invoice
amount less an allowance for any uncollectible amounts. An estimate for
doubtful accounts is made when collection of the full amount becomes
questionable. The Company had no trade accounts receivable during the audit
periods presented.

Inventories

Inventories consist primarily of land acquisition and development costs, and
engineering, infrastructure, and construction work-in-progress costs. The
inventories are valued at cost based on the level of completion. No provision
for potential obsolete inventory has been made.

Property, Plant, and Equipment

Property, plant, and equipment are carried at cost less accumulated
depreciation, which is computed using the straight-line method over the useful
lives of the assets. Upon disposal of assets, the cost and related accumulated
depreciation are removed from the accounts and any gain or loss is included
in income. Property and equipment are depreciated over their estimated useful
lives as follows:

Computer equipment 3 years
Office equipment 7 years
Vehicles 7 years

Long-term assets of the Company are reviewed annually to assess whether the
carrying value has become impaired, according to the guidelines established in
Statement of Accounting Standards (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." The Company also evaluates the
periods of amortization to determine whether subsequent events and
circumstances warrant revised estimates of useful lives. No impairment of
assets was recorded in the periods reported.

Revenue Recognition

The Company recognizes revenue when the earnings process is complete. Such
completion is identified when a home is sold and payment received, or when
services are provided.

Advertising Expenses

Advertising costs are expensed as incurred. Advertising expense amounted to
$28,442 for the nine months ended September 30, 2004.

Foreign Currency and Comprehensive Income

The accompanying financial statements are presented in United States (US)
dollars. The functional currency is the Renminbi (RMB). The financial
statements are translated into US dollars from RMB at year-end exchange rates
for assets and liabilities, and weighted average exchange rates for revenues
and expenses. Capital accounts are translated at their historical exchange
rates when the capital transactions occurred.

The exchange rate for RMB to US dollars has varied by only 100ths during 2004,
2003, and 2002. Thus, the consistent exchange rate used has been 8.27 RMB per
each US dollar. Since there have been no greater fluctuations in the exchange
rate, there is no gain or loss from foreign currency translation and no
resulting other comprehensive income or loss.

RMB is not freely convertible into the currency of other nations. All such
exchange transactions must take place through authorized institutions. There
is no guarantee the RMB amounts could have been, or could be, converted into
US dollars at rates used in translation.

Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date. A valuation
allowance is provided for deferred tax assets if it is more likely than not
these items will either expire before the Company is able to realize their
benefits, or that future deductibility is uncertain. Nearly all differences
in tax bases and financial statement carrying values are permanent
differences. Therefore, the Company has recorded no deferred tax assets or
liabilities.

Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.

4. Loans Receivable

The Company is owed $56,943 at September 30, 2004. The advances are non-
interest bearing and due on demand. Interest has not been imputed due to
its minimal amount.

5. Short-term Loans

Notes payable had a balance of $34,134 at September 30, 2004. The notes are
non-interest bearing and due on demand. Interest has not been imputed due to
its minimal amount.

6. Related Party Transactions

Notes payable to related parties had a balance of $3,943,487 at September 30,
2004. The notes carry an annual interest rate of 6 percent and are due on
demand. Interest expense was $98,161 for the year ended December 31, 2003,
which remained accrued at September 30, 2004. The note was negotiated to carry
no interest during 2004.

7. Income Taxes

The Company is currently not subject to income taxes according to applicable
tax laws in the PRC.

8. Contingencies

The Company has not, historically, carried any property or casualty insurance.
No amounts have been accrued for any liability that could arise from the lack
of insurance. Management feels the chances of such an obligation arising are
remote.

Beijing Dahua Real Estate Development, Ltd.

Financial Statements and Schedule

For the Nine Months Ended September 30, 2004,
the Year Ended December 31, 2003, and for
the Period from September 24, 2001 (inception) to December 31, 2002

INDEPENDENT AUDITORS' REPORT

To The Stockholders
Beijing Dahua Real Estate Development, Ltd.

We have audited the accompanying balance sheets of Beijing Dahua Real Estate
Development, Ltd. as of September 30, 2004, and as of December 31, 2003 and
2002, and the related statements of operations, changes in equity, and cash
flows for the nine months ended September 30, 2004 the year ended December 31,
2003, and the period from September 24, 2001 (inception) to December 31, 2002.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America and in accordance with the standards
of the Public Company Accounting Oversight Board (United States of America).
Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Beijing Dahua Real
Estate Development, Ltd. as of September 30, 2004, and as of December 31,
2003 and 2002, and the results of its operations and its cash flows for the
periods then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Child, Sullivan & Company
- ------------------------------
Child, Sullivan & Company
Salt Lake City, Utah
October 29, 2004

BEIJING DAHUA REAL ESTATE DEVELOPMENT, LTD.

BALANCE SHEETS

September 30, December 31,
2004 2003 2002
-------------- -------------- ------------

ASSETS
<s> <c> <c> <c>
Current Assets:
Cash and cash equivalents................ $ 570,932 $ 104,699 $ 20,484
Inventory................................ 7,579,601 4,914,544 1,929,117
Loans receivable (note 4)................ 56,943 79,791 90,662
-------------- ------------ -----------
Total Current Assets.................. 8,207,476 5,099,034 2,040,263

Property, Plant, & Equipment:
Computer equipment....................... 3,450 2,813 1,790
Office equipment......................... 43,464 41,916 8,554
Telephones............................... 1,026 1,026 1,026
Vehicles................................. 11,498 11,498 -
-------------- ------------- -------------
Total Property, Plant, & Equipment..... 59,438 57,253 11,370
Less: Accumulated depreciation....... (17,541) (10,680) (1,965)
-------------- ------------- -------------
Net Fixed Assets....................... 41,897 46,573 9,405
-------------- ------------- -------------
Total Assets.............................. $ 8,249,373 $ 5,145,607 $ 2,049,668
============== ============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Accounts payable......................... $ 25,393 $ 208,706 $ 471,584
Customer deposits........................ 3,749,038 65,296 -
Short-term loans (note 5)................ 34,134 34,134 183,009
Short-term loans - related parties (note 6) 3,845,326 3,962,099 352,026
Accrued interest - short-term loans,
related parties (note 6)............... 98,161 98,161 -
Other accruals........................... 4,215 9,247 3,643
------------- ------------- -----------
Total Current Liabilities.............. 7,756,267 4,377,643 1,010,262

Equity:
Registered capital........................ 1,209,190 1,209,190 1,209,190
Accumulated deficit....................... (716,084) (441,226) (169,784)
------------- ------------- ------------
Total Equity............................ 493,106 767,964 1,039,406
------------- ------------- ------------
Total Liabilities and Equity.............. $ 8,249,373 $ 5,145,607 $ 2,049,668
============= ============= ============

See accompanying notes to financial statements

BEIJING DAHUA REAL ESTATE DEVELOPMENT, LTD.

STATEMENTS OF OPERATIONS

September 24
Nine Months 2001 (inception)
Ended Year Ended Through
September 30 December 31 December 31
2004 2003 2002
-------------- -------------- ---------------
<s> <c> <c> <c>
Revenue
Sales................................. $ - $ - $ -
Cost of goods sold.................... - - -
-------------- -------------- --------------
Gross profit (loss)................... - - -

Expenses:
Advertising........................... 63,992 28,665 266
Depreciation.......................... 6,861 8,715 1,965
Office supplies....................... 9,801 10,481 15,695
Payroll expense....................... 87,121 58,193 17,934
Legal fees............................ 18,138 - -
Utilities............................. 23,167 9,629 2,552
Meals, travel, & entertainment........ 11,398 17,313 49,768
Telephone............................. 5,718 7,399 4,565
Automobile............................ 11,185 8,590 4,646
Taxes................................. 17,570 1,507 -
Other general and administrative...... 15,070 16,677 72,562
-------------- ----------- ------------
Total Expenses......................... 270,021 167,169 169,953
-------------- ----------- ------------

Net Loss From Operations............... (270,021) (167,169) (169,953)

Other Income (Expense)
Other expenses........................ (7,823) (6,776) (58)
Interest expense...................... - (98,161) -
Interest income....................... 2,624 664 227
Other income.......................... 362 - -
-------------- ------------ ------------
Total Other Income (Expense)........... (4,837) (104,273) 169

Net Loss Before Income Taxes........... (274,858) (271,442) (169,784)
Provision for income taxes............ - - -
--------------- ------------ ------------

Net Loss............................... $ (274,858) $ (271,442) $ (169,784)
================ ============ ============

See accompanying notes to financial statements

BEIJING DAHUA REAL ESTATE DEVELOPMENT, LTD.

STATEMENTS OF CASH FLOWS

September 24
Nine Months 2001 (inception)
Ended Year Ended Through
September 30 December 31 December 31
2004 2003 2002
-------------- -------------- ---------------
<s> <c> <c> <c>

Cash Flows from Operating Activities
Net loss............................. $ (274,858) $ (271,442) $ (169,784)
Adjustments to reconcile net loss
to net cash provided by (used in) operations:
Depreciation..................... 6,861 8,715 1,965

Changes in operating assets and liabilities:
Inventory........................ (2,665,057) (2,985,427) (1,929,117)
Accounts payable................. (183,313) (262,878) 471,584
Customer deposits................ 3,683,742 65,296 -
Accrued interest................. - 98,161 -
Other accruals................... (5,032) 5,604 3,643
-------------- ------------- ------------
Cash Provided by (Used in)
Operating Activities.............. 562,343 (3,341,971) (1,621,709)

Cash Flows from Investing Activities
Purchase of property, plant, & equipment (2,185) (45,883) (11,370)
-------------- -------------- ------------
Cash Used in Investing Activities..... (2,185) (45,883) (11,370)

Cash Flows from Financing Activities
Net repayments received from
(advances made on) short-term
loans receivable................ 22,848 10,871 (90,662)
Net proceeds from (payments on)
short-term loans payable............ - (148,875) 183,009
Net proceeds from (payments on)
short-term loans payable - related parties (116,773) 3,610,073 352,026
Contributed capital................... - - 1,209,190
-------------- ------------- -----------
Cash Provided by (Used in)
Financing Activities............. (93,925) 3,472,069 1,653,563

Net Increase in Cash and Cash Equivalents 466,233 84,215 20,484

Cash and Cash Equivalents at
the Beginning of the Period......... 104,699 20,484 -
-------------- -------------- -------------
Cash and Cash Equivalents at
the End of the Period............... $ 570,932 $ 104,699 $ 20,484
============= ============= ============

Supplemental Disclosures:

Interest paid in cash................. $ - $ - $ -
============= ============= ============

See accompanying notes to financial statements

BEIJING DAHUA REAL ESTATE DEVELOPMENT, LTD.

STATEMENT OF CHANGES IN EQUITY
FROM SEPTEMBER 24, 2001 (INCEPTION) TO SEPTEMBER 30, 2004

Registered Accumulated
Capital Deficit Total
-------------- -------------- ------------
<s> <c> <c> <c>
Balance, February 24, 2001 (inception)....... $ - $ - $ -

Capital contributions........................ 1,209,190 - 1,209,190

Net loss..................................... - (169,784) (169,784)
------------- ------------ ------------
Balance, December 31, 2002................... 1,209,190 (169,784) 1,039,406

Net loss..................................... - (271,442) (271,442)
------------- ------------ ------------
Balance, December 31, 2003................... 1,209,190 (441,226) 767,964

Net loss..................................... - (274,858) (274,858)
------------- ------------ ------------
Balance, September 30, 2004.................. $ 1,209,190 $ (716,084) $ 493,106
============= ============ =============

See accompanying notes to financial statements

BEIJING DAHUA REAL ESTATE DEVELOPMENT, LTD.

NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003 AND 2002

1. Nature of operations

Beijing Dahua Real Estate Development, Ltd. (the Company) was incorporated on
September 24, 2001, under the laws of the People's Republic of China (the PRC).
In the PRC, Ltd, or Limited, is equivalent to Inc, or Incorporated, in the
United States (US).

The Company engages in the development of real estate and the sale of
commodity housing. The Company also provides management for its housing,
information consulting, and sales of building, electrical, and decorating
materials. The Company has been in the process of acquiring and developing
land and housing for sale, and is now prepared for sales of those items to
begin.

2. Basis of Presentation

The accompanying financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America (US
GAAP). This basis differs from that used in the statutory accounts of the
Company, which were prepared in accordance with the accounting principles
and relevant financial regulations applicable to enterprises in the PRC. All
necessary adjustments have been made to present the financial statements in
accordance with US GAAP.

3. Summary of Significant Accounting Policies

Economic and Political Risks

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash and cash equivalents
includes cash on hand and demand deposits held by banks.

Trade Accounts Receivable

Inventories

Property, Plant, and Equipment

Property, plant, and equipment are carried at cost less accumulated
depreciation, which is computed using the straight-line method over the
useful lives of the assets. Upon disposal of assets, the cost and related
accumulated depreciation are removed from the accounts and any gain or loss
is included in income. Property and equipment are depreciated over their
estimated useful lives as follows:

Computer equipment 3 years
Office equipment 7 years
Vehicles 7 years

Long-term assets of the Company are reviewed annually to assess whether the
carrying value has become impaired, according to the guidelines established
in Statement of Accounting Standards (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." The Company also evaluates the
periods of amortization to determine whether subsequent events and
circumstances warrant revised estimates of useful lives. No impairment of
assets was recorded in the periods reported.

Registered Capital

Companies in the PRC are not held by stock ownership as is the case in the US.
Those creating a company register and pay in a given amount of required
registered capital at formation of the company, as required by laws in the PRC
governing business entity formation.

Revenue Recognition

The Company recognizes revenue when the earnings process is complete. Such
completion is identified when a home is sold and payment received, or when
services are provided.

Advertising Expenses

Advertising costs are expensed as incurred. Advertising expense amounted to
$63,992, $28,665 and $266 for the nine months ended September 30, 2004, the
year ended December 31, 2003 and the period from September 24, 2001
(inception) to December 31, 2002, respectively.

Foreign Currency and Comprehensive Income

The exchange rate for RMB to US dollars has varied by only 100ths during 2004,
2003, and 2002. Thus, the consistent exchange rate used has been 8.27 RMB
per each US dollar. Since there have been no greater fluctuations in the
exchange rate, there is no gain or loss from foreign currency translation
and no resulting other comprehensive income or loss.

Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to reverse. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date. A
valuation allowance is provided for deferred tax assets if it is more likely
than not these items will either expire before the Company is able to
realize their benefits, or that future deductibility is uncertain. Nearly
all differences in tax bases and financial statement carrying values are
permanent differences. Therefore, the Company has recorded no deferred tax
assets or liabilities.

Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.

4. Loans Receivable

The Company is owed $56,943, $79,791, and $90,662 at September 30, 2004 and
December 31, 2003 and 2002, respectively. The advances are non-interest
bearing and due on demand. Interest has not been imputed due to its minimal
amount.

5. Short-term Loans

Notes payable had balances of $34,134 at September 30, 2004 and December 31,
2003, and $183,009 at December 31, 2002. The notes are non-interest bearing
and due on demand. Interest has not been imputed due to its minimal amount.

6. Related Party Transactions

Notes payable to related parties had balances of $3,943,487, $4,060,260, and
$352,026 (including accrued interest) at September 30, 2004 and December 31,
2003 and 2002, respectively. The notes carry an annual interest rate of 6
percent and are due on demand. Interest expense was $98,161 for the year ended
December 31, 2003, which remained accrued at September 30, 2004. Interest for
the period of September 24, 2001 (inception) through December 31, 2002 was
minimal and, therefore, not expensed.

7. Income Taxes

The Company is currently not subject to income taxes according to applicable
tax laws in the PRC.

8. Contingencies

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our Certificate of Incorporation permits us to indemnify each person who is
or was our director or officer to the fullest extent permitted by Delaware
General Corporation Law and any current or future legislation or judicial or
administrative decision, against all fines, liabilities, costs and expenses,
including attorney's fees, arising from claims against such persons in
connection with their acting as our director or officer. We may maintain
director and officer liability insurance, at our expense, to mitigate such
exposure.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth expenses, incurred or expected to be incurred
by us in connection with the issuance and distribution of the securities being
registered by this prospectus. We have agreed to pay all the costs and
expenses of this offering. Selling shareholders will not pay any part of
these expenses.

SEC registration fee $ 45
Accounting fees and expenses 38,000
Legal fees and expenses 20,000
Transfer agent fees 1,500
Federal tax -
State tax and fees -
Blue Sky expense 1,500
Printing and engraving 2,000
Miscellaneous expenses 2,500
------------
Total $ 65,545

All expenses are estimated except the SEC filing fee.

RECENT SALES OF UNREGISTERED SECURITIES

On March 8, 2002, we issued 5,000,000 shares of our common stock to Waywood
Investment Ltd. ("Waywood") in connection with the organization of Norton
Industries Corp. The shares were issued under the exemption from registration
provided by Section 4(2) of the Securities Act, as amended. We believed this
exemption is available because the issuance was a transaction not involving
public offering. The beneficial owner was a sophisticated investor, and was
our then sole officer and director, and was in possession of all material
information relating to us. Further, no commissions were paid to anyone in

connection with the sale of the shares and no general solicitation was made
to anyone.

On February 26, 2003, Waywood entered into a stock purchase agreement with
Comp Hotel International Limited, a British Virgin Islands corporation ("Comp
Hotel"), pursuant to which Comp Hotel International acquired 4,250,000 shares
of our common stock from Waywood.

On January 30, 2005, Waywood and Comp Hotel entered into a share exchange
agreement with Bauer Invest Inc. for a reverse acquisition. Pursuant to the
agreement, Waywood and Comp Hotel sold all of our capital stock, or 5,000,000
shares of common stock, to Bauer for retirement in exchange for $100,000 in
cash and 1,000,000 shares of our post-merger common stock. As a result of
this reverse acquisition, we issued 19,000,000 shares of our common shares
to 108 shareholders of Bauer on pro rata basis, i.e., the number of shares
received by each person is proportionate to the number of shares he/she
originally owned in Bauer. All shares were issued under the exemption from
registration provided by Regulation S of the Securities Act of 1933, as
amended. All share recipients are residents outside of the United States;
the transaction took place outside the United States; and no directed selling
efforts were made in the United States.

We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.

EXHIBITS

(a) Exhibits

Exhibit No. Description
- ----------- ---------------------------------------------------------------
2.1 Share Exchange Agreement (Incorporated by reference to Current
Report on Form 8-K filed on February 1, 2005, Commission File
No. 0-49852).

3.1 Articles of Incorporation (Incorporated by reference to
Registration Statement on Form 10-SB filed on June 10, 2002
Commission File No. 0-49852).

3.2 Certificate of Amendment of Certificate of Incorporation.

3.3 Bylaws (Incorporated by reference to Registration Statement on
Form 10-SB filed on June 10, 2002 Commission File No. 0-49852).

4.1 Specimen Stock Certificate (Incorporated by reference to
Registration Statement on Form 10-SB/A filed on July 29, 2002
Commission File No. 0-49852).

5.1 Opinion of William G. Hu, Esq. regarding the legality of the
securities being registered.

14.1 Code of Business Conduct and Ethics.

21 Subsidiaries of the Registrant.

23.1. Consent of Child, Sullivan & Company, Independent Registered
Certified Public Accountants.

23.2 Consent of Wiliiam G. Hu, Esq. including in Exhibit 5.1

UNDERTAKINGS

The registrant hereby undertakes:

(1) To file, during any period in which offers or sells securities, a post-
effective amendment to this registration statement to:

(i) Include any prospectus required by section 10(a)(3) of the Securities
Act;

(ii) Reflect in the prospectus any facts or events which, individually or
in the aggregate, represent a fundamental change in the information
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent more than
a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; and

(iii) Include any additional or changed material information on the plan
of distribution;

(2) For determining liability under the Securities Act, treat each such post-
effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at end of the offering.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of
Beijing, the People's Republic of China, on February 7, 2005.

Dahua Inc.

By : /s/ Yonglin Du
- ----------------------------
Yonglin Du, President & CEO
(principal executive officer)

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates stated:

By : /s/ Yonglin Du February 7, 2005
- ------------------------- --------------------
Yonglin Du, President, CEO, and Director Date
(principal executive officer)

By : /s/ Hua Meng February 7, 2005
- ------------------------- --------------------
Hua Meng, Chief Financial Officer Date
(principal financial officer and
principal accounting officer)

By: /s/ Wulong Wang February 7, 2005
- ----------------------- --------------------
Wulong Wang, Director Date