China Electronics Holdings, Inc. through its subsidiary, Lu’an Guoying Electronic Sales Co., Ltd., (Guoying) is engaged in the wholesale and retail sale of consumer electronics and appliances in the People’s Republic of China, such as solar heaters, refrigerators, air conditioners, televisions, and similar items. The Company distributes merchandise through Company-owned stores and to exclusive franchise stores and non-exclusive franchise stores. The merchandise the Company provides includes Guoying branded products, as well as products from manufacturers, such as Sony, Samsung and LG. The Company targets customers in counties, townships and villages in Anhui Province, China. As of December 31, 2012, the Company had 306 exclusive franchise stores and 176 non-exclusive stores. As of December 31, 2012, the Company owned and operated two stores under the Guoying brand name at which, it sells only merchandise that the Company provides.