10-Q

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X] No[ ]

Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the last practicable date.

On July 16, 2004 YaSheng Group, a California Corporation, acquired 54% of the total issued and outstanding common stock of Nicholas Investment Company, Inc. from its shareholders on a stock for stock basis determined by the relative net asset values of the two companies as of June30, 2004. Subsequent to the acquisition and pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission (the "Commission"), YaSheng elected to become the successor issuer to Nicholas for reporting purposes under the Securities and Exchange Act of 1934, as amended, (the "Exchange Act") and elected to report under the Exchange Act effective July 15, 2004.

The accompanying financial statements have been prepared as of June 30, 2004 and therefore only reflect the balances and activities of Nicholas Investment Company, Inc. Financial statements for YaSheng Group for as of and for the six months ended June 30, 2004 are attached as an exhibit hereto. Pro-forma consolidated financial statements of YaSheng Group as of the date of acquisition were filed as an exhibit to the Company's Form 8-K12(g) filed on July 16, 2004 and are incorporated herein by reference.

NICHOLAS INVESTMENT COMPANY
Notes to Financial Statements
(Unaudited)

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the consolidated financial position as of June 30, 2004, and the results of operations and cash flows for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2003, audited financial statements. The results of operations for the periods ended June 30, 2004 and 2003 are not necessarily indicative of the operating results for the full years.

NOTE 2 - INVESTMENTS

The Company currently has investments in four entities. The first is an investment in a wholly-owned, unconsolidated subsidiary, Javelin Holdings, Inc. The Company issued 200,000 shares of its common stock to affiliated officers for the acquisition of Javelin Holdings, Inc. (Javelin) on November 15, 2003. The shares were valued at $0.48 per share which was the closing price on the date of issue. Javelin is in the business of providing management, consulting and other services to small and micro cap companies. The second is an investment in a 95% owned unconsolidated entity, Sino UJE, Ltd. The Company issued 150,000 shares of common stock in exchange for approximately 95% of the capital of Sino UJE. The Company subsequently advanced a total of $310,461 to Sino UJE. Sino UJE is a distribution company for western-manufactured medical and industrial products into the Asian markets. The Company's remaining two investments, Exus Global, Inc. and HydroFlo, Inc., consist of convertible preferred stock in these two companies which was paid to Javelin Holdings in exchange for debt forgiveness. As a point of practice, Javelin Holdings upstreams all of its stock holdings to the Company.

As required by ASR 118, the investment committee of the company is required to assign a fair value to all investments. To comply with Section 2(a)(41) of the Investment Company Act and Rule 2a-4 under the Investment Company Act, it is incumbent upon the board of directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the board may appoint persons to assist them in the determination of such value, and to make the actual calculations pursuant to the board's direction. The board must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in the company's portfolio. The directors must recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not directors, the findings of such intervals must be carefully reviewed by the directors in order to satisfy themselves that the resulting valuations are fair.

NICHOLAS INVESTMENT COMPANY
Notes to Financial Statements
(Unaudited)

NOTE 2 - INVESTMENTS (Continued)

No single standard for determining "fair value....in good faith" can be laid down, since fair value depends upon the circumstances of each individual case. As a general principle, the current "fair value" of an issue of securities being valued by the board of directors would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accord with this principle may, for example, be based on a multiple of earnings, or a discount from market of a similar freely traded security, or yield to maturity with respect to debt issues, or a combination of these and other methods. Some of the general factors which the directors should consider in determining a valuation method for an individual issue of securities include: 1) the fundamental analytical data relating to the investment, 2) the nature and duration of restrictions on disposition of the securities, and 3) an evaluation of the forces which influence the market in which these securities are purchased and sold. Among the more specific factors which are to be considered are: type of security, financial statements, cost at date of purchase, size of holding, discount from market value of unrestricted securities of the same class at time of purchase, special reports prepared by analysis, information as to any transactions or offers with respect to the security, existence of merger proposals or tender offers affecting the securities, price and extent of public trading in similar securities of the issuer or comparable companies, and other relevant matters.

The board has arrived at the following valuation method for its investments. Where there is not a readily available source for determining the market value of any investment, either because the investment is not publicly traded, or is thinly traded, and in absence of a recent appraisal, the value of the investment shall be based on the following criteria:

1. Total amount of the Company's actual investment ("AI"). This amount shall include all loans, purchase price of securities, and fair value of securities given at the time of exchange.
2. Total revenues for the preceding twelve months ("R").
3. Earnings before interest, taxes and depreciation ("EBITD")
4. Estimate of likely sale price of investment ("ESP")
5. Net assets of investment ("NA")
6. Likelihood of investment generating positive returns (going concern).

The estimated value of each investment shall be determined as follows:

Where no or limited revenues or earnings are present, then the value shall be the greater of the investment's a) net assets, b) estimated sales price, or c) total amount of actual investment.

Where revenues and/or earnings are present, then the value shall be the greater of one time (1x) revenues or three times (3x) earnings, plus the greater of the net assets of the investment or the total amount of the actual investment.

Under both scenarios, the value of the investment shall be adjusted down if there is a reasonable expectation that the Company will not be able to recoup the investment or if there is reasonable doubt about the investments ability to continue as a going concern.

9

NICHOLAS INVESTMENT COMPANY
Notes to Financial Statements
(Unaudited)

NOTE 2 - INVESTMENTS (Continued)

Based on the previous methodology, the Company determined that it's investment in Javelin should be valued at $1,866,540 and $376,000 as of June 30, 2004 and December 31, 2003, respectively. An unrealized gain of $1,331,540 has been recorded for the six month period ended June 30, 2004.

The investment is Sino UJE (Sino) consisted of a loan of $497,602 and $93,691 at June 30, 2004 and December 31, 2003, respectively and a 95% ownership interest acquired by the issuance of the Company's common stock valued at $34,500 in January 2004.

The Company has determined that since Sino continues to meet its monthly budgets with respect to revenues, expenses and cash flows that the value of the loan is not impaired. After the acquisition in January 2004, the investment and loans to Sino are being valued using the procedures described above.

The investment in Hydroflo consists of 200,000 shares of Preferred Stock which can be converted into common stock at a 3:1 basis, for total of 600,000 shares of common stock. Inasmuch as the common stock of Hydroflo is traded on the OTCBB, a quote and valuation of the stock is readily obtainable. As of June 30, 2004, the stock dropped to $0.10 per share. The value of the Hydroflo shares should therefore be based on the most recently available stock price. Accordingly, the Hydroflo preferred stock should be valued at $80,000 (200,000 X 3 X $0.10/share).

The investment in Exus Global consists of 500,000 shares of Preferred Stock which can be converted into common stock at a 1:1 basis, for a total of 500,000 shares of common stock. Inasmuch as the common stock of Exus is traded on the OTCBB, a quote and valuation of the stock is readily obtainable. As of June 30, 2004, Exus common stock traded at $0.018 per share. Accordingly, the Exus preferred stock should be valued at $9,000 (500,000 X $0.018/share).

The Company has not retained independent appraisers to assist in the valuation of the portfolio investments because the cost was determined to be prohibitive for the current levels of investments.

NOTE 3 - EQUITY TRANSACTIONS

During the six months ended June 30, 2004, the Company issued 3,887,588 shares of its free trading common stock at an average price of $0.03 per share for cash proceeds of $122,960.

During the six months ended June 30, 2004, the Company issued 8,615,864 shares of its free trading common stock upon the conversion of convertible debentures totaling $261,000. The shares were valued at $.03 per share, which represents 50% of the fair market value of the shares as of the date of notice of conversion.

On June 11, 2004, the Company issued 6,000,000 shares of its common stock upon the conversion of 6,000,000 Series C Preferred Shares.

NICHOLAS INVESTMENT COMPANY
Notes to Financial Statements
(Unaudited)

NOTE 4 - SIGNIFICANT EVENTS

Convertible Debentures

During the six months ended June 30, 2004, the Company raised $165,000 of operating capital in the form of convertible debentures. All outstanding debentures were converted prior to June 30, 2004.

Upon issuance of the debentures, the Company recognized a debt discount related to the beneficial conversion feature of the debentures totaling $100,000. The discount on the debentures was charged to interest expense.

Subsequent Events

On July 16, 2004 YaSheng Group, a California Corporation, acquired 54% of the total issued and outstanding common stock of Nicholas Investment Company, Inc. from its shareholders on a stock for stock basis determined by the relative net asset values of the two companies as of June30, 2004. YaSheng agreed to issue one share of its common stock for every 84 shares of Nicholas common stock tendered. As of July 16, 2004 a total of 21,702,529 shares of Nicholas common stock had been tendered, resulting in the issuance of 258,363 shares of YaSheng common stock. Subsequent to the acquisition and pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission (the "Commission"), YaSheng elected to become the successor issuer to Nicholas for reporting purposes under the Securities and Exchange Act of 1934, as amended, (the "Exchange Act") and elected to report under the Exchange Act effective July 15, 2004.

The accompanying financial statements have been prepared as of June 30, 2004 and therefore only reflect the balances and activities of Nicholas Investment Company, Inc. The following select financial information represents the pro-forma consolidated financial information as of June 30, 2004:

		For the Six Months Ended June 30, 2004
Operating revenue	$	339,525,743
Gross profit		64,510,426
Net income		34,533,434
Total assets		1,453,377,319
Total current liabilities		224,020,574
Total Shareholders' equity		1,012,771,723

During July 2004, the Company issued 18,355,006 shares of its common stock at a price of $0.03 per share for cash proceeds of $550,650.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION

GENERAL

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts and may contain forward-looking statements that involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, among other factors, general business conditions, government regulations, manufacturing practices, competitive market conditions, success of the Company's business strategy, delay of orders, changes in the mix of products sold, availability of suppliers, concentration of sales in markets and to certain customers, changes in manufacturing efficiencies, development and introduction of new products, fluctuations in margins, timing of significant orders, and other risks and uncertainties currently unknown to management.

CRITICAL ACCOUNTING POLICIES

The Company's financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States of America ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in the external disclosures of the Company including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. Valuations based on estimates are reviewed by us for reasonableness and conservatism on a consistent basis throughout the Company. Primary areas where financial information of the Company is subject to the use of estimates, assumptions and the application of judgment include acquisitions, valuation of long-lived and intangible assets, and the realizability of deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

Valuation Of Long-Lived And Intangible Assets

The recoverability of long lived assets requires considerable judgment and is evaluated on an annual basis or more frequently if events or circumstances indicate that the assets may be impaired. As it relates to definite life intangible assets, we apply the impairment rules as required by SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Assets to Be Disposed Of" as amended by SFAS No. 144, which also requires significant judgment and assumptions related to the expected future cash flows attributable to the intangible asset. The impact of modifying any of these assumptions can have a significant impact on the estimate of fair value and, thus, the recoverability of the asset.

Income Taxes

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As of June 30, 2004, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets.

COMPANY STRATEGY

In December 2002, Management determined that the value of its operating businesses were substantially below book and determined to liquidate each of these holdings. In April 2003, the Company exchanged all of its ownership in each of these companies in exchange for hold harmless agreements.

On June 4, 2003, the Company issued two million (2,000,000) shares of Series B Preferred Stock to MRG California in exchange for $5,000 and a further commitment to provide working capital to the Company. These preferred Series B shares entitled the holder to 100 votes per share of preferred stock, effectively giving voting control of the Company to MRG California. On September 17, 2003, MRG sold all of the Preferred Series B stock to Shane Traveller, the Company's Chief Financial Officer, in exchange for $5,000. In addition, the Company repaid to MRG a total of $28,500 representing all monies advanced to the Company by MRG and legal expenses incurred. On November 10, 2003, the Company issued 8,450,000 shares of Series C Convertible Preferred Stock to Mr. Traveller in exchange for all of the outstanding shares of Series B Preferred Stock, which were then cancelled. The Series C Preferred Stock is non-voting stock, but can convert into common stock on a 1:1 basis.

On October 10, 2003, the Company's Board of Directors unanimously approved a resolution to effect a 1 for 200 reverse split of the Company's common stock, which was subsequently approved by a vote of the shareholders. This reverse split was done to better position the capital structure of the Company in order to raise investment money to implement the Company's business strategy.

On November 18, 2003, the Company acquired 100% of the common stock of Javelin Holdings, Inc., a California-based private company that provides management consulting, accounting, and financial services to public companies, in exchange for 200,000 shares of the Company's restricted common stock. Prior to the acquisition by the Company, Javelin Holdings was controlled by members of the Company's board of directors.

On November 20, 2003, the Company's Board of Directors elected to be regulated as a business investment company under the Investment Company Act of 1940. As a business development company ("BDC"), the Company was required to maintain at least 70% of its assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded or that has assets less than $4 million.

On January 15, 2004, the Company acquired 95% of the common stock of Sino UJE, LTD, a Hong Kong corporation located in Temecula, CA that distributes medical and industrial supplies in China, in exchange for 150,000 shares of free-trading common stock of NIVM and a working capital line of credit for $1,000,000. Sino has an extensive distribution network in China that is supplied by a group of Original Equipment Manufacturers (OEM's) in Europe and the US that are exclusively represented in China by Sino. This world-wide network provided even greater potential to increase stock liquidity and raise investment money.

On July 16, 2004 YaSheng Group, a California Corporation, acquired 54% of the total issued and outstanding common stock of Nicholas Investment Company, Inc. from its shareholders on a stock for stock basis determined by the relative net asset values of the two companies as of June30, 2004. YaSheng agreed to issue one share of its common stock for every 84 shares of Nicholas common stock tendered. As of July 16, 2004 a total of 21,702,529 shares of Nicholas common stock had been tendered, resulting in the issuance of 258,363 shares of YaSheng common stock. Subsequent to the acquisition and pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission (the "Commission"), YaSheng elected to become the successor issuer to Nicholas for reporting purposes under the Securities and Exchange Act of 1934, as amended, (the "Exchange Act") and elected to report under the Exchange Act effective July 15, 2004.

YaSheng was formed in 1988 in the Gansu province of China. A super-conglomerate, YaSheng has over 124 operating divisions that generated combined revenues of over $339 million during the six-months ended June 30, 2004 and had net assets as of that date in excess of one billion dollars (U.S.). YaSheng's operations are primarily agricultural in nature, producing a vast array of products from fruits and vegetables to wool and fine liquors. YaSheng also produces various chemicals and industrial products.

Through June 30, 2004, YaSheng has generated the bulk of its revenues inside of China with some export to parts of Asia and South America. The Company expects to use its acquisition of Nicholas Investment Company as a springboard to an expansion of its holdings and distribution into North American and western Europe. Short-term, YaSheng will be seeking a listing on a major U.S. stock exchange to be followed by a capital raising effort to fund the expansion program.

RESULTS OF OPERATIONS

Quarter ended June 30, 2004 compared to quarter ended June 30, 2003

During the quarter ended June 30, 2004, the Company incurred a net profit of $259,337 compared to a loss of $23,249 for the same quarter of 2003. The profit generated in the 2nd quarter of 2004 resulted from an unrealized gain on the Company's investment in Javelin Holdings of $440,540 plus revenue from investments of approximately $175,085. The loss in 2003 related to operations which were discontinued in fiscal 2002. As of December 31, 2002, the Company's Board of Directors determined to abandon its current operational strategy and elected to spin-off all of its operating assets. Accordingly, all operations associated with such operations were classified as "discontinued operations" in the fiscal year 2003 financial statements.

Operating expenses were $171,126 and $23,124 for the quarters ended June 30, 2004 and 2003, respectively. The increase is attributed to the commencement of operations associated with operating as a business development company in late 2003, whereas the Company was not operational during the first two quarters of 2003. Operating expenses in the quarter ended June 30, 2004 included $132,085 in "Professional Fees" which included accounting, legal and consulting fees.

Interest expense for the quarter ended June 30, 2004 was $86,213, compared to $0 for the quarter ended June 30, 2003. The increase is attributed to the addition of convertible debentures during late 2003 and early 2004.

Liquidity and Capital Resources

The accompanying financial statements have been prepared in conformity with principles of accounting applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

On July 16, 2004 YaSheng Group, a California Corporation, acquired 54% of the total issued and outstanding common stock of Nicholas Investment Company, Inc from its shareholders on a stock for stock basis determined by the relative net asset values of the two companies as of June 30, 2004. As of that date YaSheng's net asset value was $977,282,289. or $6.32 per share, and Nicholas' net asset value was $3,025,726 or $.075 per share. Accordingly, YaSheng agreed to issue one share of its common stock for every 84 shares of Nicholas common stock tendered. As of July 16,2004 a total of 21,702,529 shares of Nicholas common stock had been tendered, resulting in the issuance of 258,363 shares of YaSheng common stock. The total issued and outstanding common stock of YaSheng after defecting the agreement is 154,909,371. It is anticipated that additional shares of Nicholas common stock will be tendered, which could result in the issuance of 220,446 additional shares of YaSheng common stock if 100% of the common stock of Nicholas is eventually tendered.

YaSheng Group was originally incorporated in the Gansu province of China in November 1988 under the name Gansu YaSheng Salt Industrial Company, Ltd. In January 2004 YaSheng reincorporated in California under the name YaSheng Group. With its largest operations and holdings in China, YaSheng is one of the three largest conglomerates in Gansu province with 126 operating divisions. In addition to its large diverse agricultural holdings YaSheng is diversified in other industries such as the livestock and poultry, Chemical production, textiles, and construction materials.

The acquisition of Nicholas Investment Company, Inc. will be added to its other US holding of 80 acres in Victorville, CA that is being developed into a modern warehousing and distribution facility. Subsequent to the acquisition and pursuant to Rule 12g-3(a) of the General Rules & Regulations of the Securties and Exchange Commission, YaSheng elected to become the successor issuer to Nicholas for reporting purposes under the Securities and Exchange Act of 1934 as amended, and elected to report under the exchange Act effective July 16, 2004.

For the six months ended June 30, 2004, YaSheng Group generated net income of approximately $33 million, or $0.21 per share, on operating revenues of $339 million. The Company was profitable in both the years ended December 31, 2003 and 2002, generating net income of approximately $60 million and $58 million, respectively.

As of June 30, 2004, YaSheng had total cash and current assets of $226 million and current liabilities of $224 million. The Company's total assets exceeded total liabilities by $1.01 billion U.S. The Company generated cash for operations from profits from operations.

YaSheng plans on pursuing a listing of its securities on a major U.S. exchange at its earliest opportunity. Management is presently reviewing its various options in this regard. YaSheng also intends to raise capital in the coming months to finance, in part, the expansion of its distribution network into North America and western Europe, where it can better take advantage of its lower production costs over products produced locally. YaSheng anticipates that the higher prices to be paid by western markets will increase the Company's profit margins. The Company offers no assurance that it will be successful in obtaining a listing on a U.S. market or that there will be an active market for its securities. Further, there is no assurance that the Company will be successful in raising capital in the U.S. If YaSheng is unable to raise additional capital, it may impact the Company's ability to implement its distribution expansion plans.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk for changes in interest rates is limited as the company does not generate significant interest income. We are subject to interest rate risk on our cash equivalents which at June 30, 2004 had an average interest rate of approximately 1.0%. Under our current policies, we do not use interest rate derivative instruments to manage exposure to interest rate changes. We ensure the safety and preservation of our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by investing in investment grade securities. A hypothetical 100 basis point adverse move in interest rates along the entire interest rate yield curve would not materially affect the fair value of our interest sensitive financial instruments. Declines in interest rates over time will, however, reduce the interest income.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The term "disclosure controls and procedures" refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under Rule 13a - 14 of the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within required time periods. As of the end of the period covered by this Quarterly Report on Form 10-Q (the "Evaluation Date"), we carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, such controls and procedures were effective in ensuring that required information will be disclosed on a timely basis in our periodic reports filed with the SEC under the Exchange Act.

(b) Changes in Internal Controls

There were no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the Evaluation Date.

PART II.

Other Information

Item 1.	Legal Proceedings
	The Company is not presently a party to any legal actions.

Item 2.	Changes in Securities
	YaSheng Group did not issue any securities during the quarter ended June 30, 2004. Nicholas Investment Company, prior to the acquisition by YaSheng, had the following changes in securities: 3,887,558 shares of common stock sold for cash of $122,960 under a regulation E exemption. 7,590,862 shares of common stock issued on the conversion of $227,725.86 in debentures under a regulation E exemption. 6,000,000 shares of preferred stock was converted to 6,000,000 shares of common stock.

Item 3.	Defaults Upon Senior Securities
	None


Item 4.	Submission of Matters to Vote of Security Holders
	None

Item 5.	Other Information
	None

Item 6.	Exhibits and Reports on Form 8-K
	10.1 Financial Statements of YaSheng Group as of June 30, 2004. 99.1 Chief Executive Officer Certification as Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002. 99.2 Chief Financial Officer Certification as Adopted Pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002.

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NICHOLAS INVESTMENT COMPANY, INC.
a Nevada corporation
CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Date: August 12, 2004

/s/ Steven R. Peacock
STEVEN R. PEACOCK
Chief Executive Officer
Nicholas Investment Company, Inc.

NICHOLAS INVESTMENT COMPANY, INC.
a Nevada corporation
CERTIFICATION OF CHIEF FINANCIAL OFFICER

Date: August 12, 2004

/s/ Shane H. Traveller
SHANE H. TRAVELLER
Chief Financial Officer
Nicholas Investment Company, Inc.

Pursuant to Sections 302 and 906 of the Corporate Fraud Accountability Act of 2002 (18 U.S.C. Section 1350, as adopted), Steven R. Peacock, Chief Executive Officer of Nicholas Investment Company, Inc. (the "Company"), hereby certifies that, to the best of his knowledge:

Pursuant to Sections 302 and 906 of the Corporate Fraud Accountability Act of 2002 (18 U.S.C. Section 1350, as adopted), Shane H. Traveller, Chief Financial Officer of Nicholas Investment Company, Inc. (the "Company"), hereby certifies that, to the best of his knowledge:



California		33-0788293
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1472 Oddstad Dr., Redwood City, CA 94063
(Address of principal executive offices) Zip Code

Registrant's telephone number, including area code: (909) 587-9100


Nicholas Investment Company, Inc. 43180 Business Park Dr., Suite 202 Temecula, CA 92590
(Registrant's Former Name and Address)


Class		Outstanding at August 1, 2004
Common Stock, $0.001 par value		154,651,008 shares


			June 30, 2004 (Unaudited)		December 31, 2003

CURRENT ASSETS
	Cash	$	4,310	$	18,193
	Accounts receivable		9,714		-

Total Current Assets			14,024		18,193

FIXED ASSETS, NET			14,400		7,862

OTHER ASSETS
	Investment in marketable securities		69,000		-
	Investment in affiliated companies (Note 2)		2,398,642		469,691
	Deposit		3,271		6,544

	Total Other Assets		2,470,913		476,235

	TOTAL ASSETS	$	2,499,337	$	502,290


LIABILITIES AND STOCKHOLDERS' EQUITY
			June 30, 2004 (Unaudited)		December 31, 2003
CURRENT LIABILITIES

	Accounts payable	$	25,911	$	28,135
	Accrued expenses		-		3,661
	Convertible debentures, net		-		102,296

	Total Current Liabilities		25,911		134,092

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

	Preferred stock Series B; $0.001 par value; no shares authorized; issued or outstanding		-		-
	Preferred stock Series C; $0.001 par value; 12,000,000 shares authorized; 6,000,000 and 12,000,000 shares issued and outstanding, respectively		6,000		12,000
	Common stock; $0.001 par value; 500,000,000 shares authorized; 21,866,686 and 2,346,596 shares issued and outstanding, respectively		21,867		2,346
	Additional paid-in capital		2,941,826		2,395,411
	Deferred consulting expense		(2,944)		(19,002)
	Accumulated deficit		(493,323)		(2,022,557)

	Total Stockholders' Equity		2,473,426		368,198

	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,499,337	$	502,290

Company	Description of Business	Percent Ownership		Cost		Fair Value		Affiliation

Javelin Holdings	Management Consulting	100%	$	84,000	$	1,866,540	(1)	Yes
Sino UJE	Distribution	95%		-		532,102		No
Exus Global, Inc.	Business development Company	1%		30,000		9,000		No
Hydroflo, Inc.	Business development Company	4%		198,000		60,000		No

			$	656,961	$	2,467,642

Company	Description of Business	Percent Ownership		Cost		Fair Value		Affiliation

Javelin Holdings	Management Consulting	100%	$	84,000	$	376,000	(2)	Yes

Sino UJE	Distribution	-0-	$	93,691	$	93,691		No

			$	177,691	$	469,691


[ X ]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

PART I - FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Balance Sheet	3

	Schedule of Investments	4

	Statements of Operations	5

	Statements of Cash Flows	6

	Notes to Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4.	Controls and Procedures	16

PART II - OTHER INFORMATION		17

SIGNATURE PAGE		18

SARBANNES-OXLEY CERTIFICATIONS

		For the Three Months Ended June 30,				For the Six Months Ended June 30,
		2004			2003	2004			2003


INVESTMENT REVENUE		$	175,085	$	-	$	585,458	$	-

EXPENSES
	Professional fees		132,085		-		226,549		-
	General and administrative		38,272		23,124		64,181		41,820
	Depreciation		769		-		1,332		-

	Total Expenses		171,126		23,124		292,062		41,820

NET INVESTMENT INCOME (LOSS)			3,959		(23,124)		293,396		(41,820)

OTHER INCOME (EXPENSE)
	Gain on debt forgiveness		60,051		-		60,051		-
	Interest Expense		(86,213)		-		(155,753)		-
	Unrealized gain on investment		281,540		-		1,331,540		-

	Total Other Income (Expense)		255,378		-		1,235,838		-

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS			259,337		(23,124)		1,529,234		(41,820)

Income taxes			-		-		-		-

INCOME FROM CONTINUING OPERATIONS			259,337		(23,124)		1,529,234		(41,820)

LOSS FROM DISCONTINUED OPERATIONS NET OF ZERO TAX EFFECT			-		(125)		-		(528)

NET INCOME (LOSS)		$	259,337	$	(23,249)	$	1,529,234	$	(42,348)

	For the Six Months Ended June 30,
	2004		2003

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,529,234	$	(42,348)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization		1,332		-
Marketable securities paid in kind		(228,000)		-
Amortization of debt discount		151,704		-
Unrealized gain on investments		(1,331,540)		-
Gain on debt forgiveness		(60,052)		-
Amortization of deferred consulting expense		16,058		-
Changes in asset and liability accounts:
(Increase) in accounts receivable		(9,714)		-
Decrease in deposits		3,273		-
Increase (decrease) in accounts payable		(7,224)		7,840
Increase in accrued expenses		3,867		527

Net Cash Provided (Used) by Operating Activities		68,938		(33,981)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(7,870)		-
Investment in Sino UJE		(403,911)		-

Net Cash Used by Investing Activities		(411,781)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft		-		(1,396)
Proceeds from related party debt		-		15,260
Payments on related party debts		-		(6,931)
Proceeds from notes payable		165,000		25,500
Issuance of common stock for cash		163,960		-
Issuance of preferred stock for cash		-		5,000

Net Cash Provided by Financing Activities		328,960		37,433

NET INCREASE (DECREASE) IN CASH		(13,883)		3,452
CASH AT BEGINNING OF PERIOD		18,193		20

CASH AT END OF PERIOD	$	4,310	$	3,472

CASH PAID FOR:
Interest	$	-	$	-
Income Tax	$	-	$	-
SCHEDULE OF NON CASH FINANCING ACTIVITIES
Stock issued for accrued expenses	$	476	$	-
Stock issued for convertible debentures	$	261,000	$	243,870

Date: August 12, 2004		/s/ Shane H. Traveller
		SHANE H. TRAVELLER
		Vice President of Finance, YaSheng Group

		/s/ Steven R. Peacock
		STEVEN R. PEACOCK
		Chief Executive Officer
		Nicholas Investment Company, Inc.

		/s/ Shane H. Traveller
		SHANE H. TRAVELLER
		Chief Financial Officer
		Nicholas Investment Company, Inc.

	As of June 30,

		2004		2003
Current assets:
Cash and cash equivalents	$	49,500,783	$	45,681,890
Accounts receivable, net (Note 4)		107,957,326		79,032,369
Inventories, net (Note 5)		61,192,616		55,325,772
Other current assets		7,221,095		1,122,607

Total current assets		225,871,820		181,162,638

Property, plant and equipment, net (Net 6)		1,156,028,951		1,088,002,037

Intangible assets, net (Note 7)		10,018,082		10,467,817
Other assets		58,959,129		47,526,778

Total assets	$	1,450,877,982	$	1,327,159,270

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	108,723,320	$	51,858,793
Accrued employee compensation and benefits (Note 8)		10,098,623		9,199,478
Short-term loans (Note 9)		94,050,246		74,797,102
Taxes payable		11,122,474		11,504,544

Total current liabilities		223,994,663		147,359,917

Long-term liabilities:
Long-term loans (Note 9)		92,859,002		81,093,901
Other long-term liabilities		6,822,844		8,203,979

Total long-term liabilities		99,681,846		89,297,880

Minority interest		116,903,176		113,219,184

Shareholders' equity:
Paid-in capital (Note 10)
Common stock, $1.00 par value; 154,651,008 shares issued and outstanding		154,651,008		154,651,008
Retained earnings (Note 11)		855,647,289		822,631,281

Total Shareholders' equity		1,010,298,297		977,282,289
Total Liabilities & Shareholders' equity	$	1,450,877,982	$	1,327,159,270

		For the Six Months Ended		For the Year Ended		For the Year Ended
		June 30, 2004		December 31, 2003		December 31, 2002

Operating revenue	$	338,940,285	$	605,246,913	$	555,479,607
Operating expense		275,015,317		487,918,542		436,338,301

Gross profit		63,924,968		117,328,371		119,141,306

Selling expenses		7,271,840		14,406,297		22,031,426
General and administrative expenses		11,846,483		21,526,469		26,934,296
Other operating expenses		6,607,297		26,797,165		25,641,261

Operating profit		38,199,348		54,598,440		44,534,323

Investment income		238,014		621,008		7,419,103
Other income		2,603,518		19,751,566		18,910,939

Income before taxes		41,040,880		74,971,014		70,864,364
Income taxes (Note 12)		3,638,980		7,536,444		6,705,875
Minority shareholder earnings		4,397,700		7,437,628		6,006,288

Net income	$	33,004,200	$	59,996,942	$	58,152,201

Earnings per common share (Note 10)
Basic	$	0.2134	$	0.3879	$	0.3760
Diluted	$	0.2134	$	0.3879	$	0.3760


		PAGE NUMBER

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2004			2003	2004			2003

BASIC INCOME (LOSS) PER SHARE


Continuing operations	$	0.03	$	(0.04)	$	0.16	$	(0.08)
Discontinued operations	$	-	$	(0.00)	$	-	$	(0.00)

Net Income (Loss)	$	0.03	$	(0.04)	$	0.16	$	(0.08)

WEIGHTED AVERAGE NUMBER OF SHARES		9,966,895		576,869		9,568,509		514,084

DILUTED INCOME PER SHARE

Continuing operations	$	0.01	$	(0.04)	$	0.07	$	(0.08)
Discontinued operations	$	-	$	-	$	-	$	-

Net Income	$	0.01	$	(0.04)	$	0.07	$	(0.08)

WEIGHTED AVERAGE NUMBER OF SHARES		20,714,147		576,869		21,041,037		514,084

	Buildings & improvements	20 - 40 years
	Farming facilities	15 years
	Machinery & equipment	12 years
	Transportation & other facilities	8 - 10 years

			June 30, 2004		December 31, 2003		December 31, 2002
(In US Dollar)
Cash and cash equivalents:
Cash		$	49,500,783	$	45,681,890	$	43,431,770

Cash Equivalents Total		$	49,500,783	$	45,681,890	$	43,431,770

Accounts receivable, net:
Accounts receivable		$	107,957,326	$	79,032,369	$	298,498,764

Accounts Receivable Total		$	107,957,326	$	79,032,369	$	298,498,764

Property, plant and equipment, net:
Land		$	272,428,449	$	286,822,160	$	176,384,058
Buildings & improvements			165,296,928		126,926,938		78,109,462
Machinery & equipment			534,037,441		453,074,108		370,639,788
Farming facilities			354,037,441		309,352,525		303,383,706
Transportation facilities			13,115,886		11,337,907		9,837,224
Construction-in-process			60,657,752		128,712,754		132,640,617
Other fixed assets			35,961,849		24,198,532		37,066,087

Accumulated depreciation			(280,000,095)		(252,422,887)		(215,883,493)

	Property, Plant and Equipment Total	$	1,156,028,951	$	1,088,002,037	$	892,177,499

		For the Six Months Ended June 30, 2004		For the Year Ended December 31, 2003		For the Year December 31, 2002

Cash flows from operating activities:
Net (loss) income	$	33,004,200	$	59,996,942	$	58,152,201
Adjustments to reconcile net (loss) income to net cash Provided by operating activities:
Depreciation and amortization		27,577,208		53,186,941		49,422,496
Non-cash compensation		13,964,553		26,042,182		33,888,410
Tax benefits from investments		( 238,015)		( 621,009)		(7,419,104 )
Loss (gain) on disposal of assets		-		145,885		-
Change in asset and liabilities:
Accounts receivable, net		(28,924,957)		141,978,079		14,343,157
Inventories, net		5,866,844		95,685,009		(16,110,943)
Account payable		56,864,527		(101,538,295)		(54,922,414)
Accrued employee compensation and benefits		899,145		(1,510,200)		(5,509,178)
Income tax payable		(2,068,319)		(1,830,569)		(2,641,539)
Other liabilities		(3,946,271)		5,662,907		(9,780,307)

Net Cash Provided by Operating Activities		102,998,915		277,197,881		59,422,779

Cash flow from investing activities:
Capital expenditures		4,762,385		51,470,822		37,321,105
Investments		264,198		621,008		2,896,301
Proceeds from sale of assets		--		19,510,351		450,878
Purchase of fixed asset		(131,803,039)		(260,568,278)		(78,415,982)

Net Cash Used by Investing Activities		(126,776,456)		(188,966,097)		(37,747,698)

Cash flows from financing activities:
Net proceeds from borrowings		76,748,826		45,992,353		26,768,415
Proceeds from accepting investments		--		20,160,275		2,604,141
Other financing activities		384,410		2,411,955		846,514
Dividends paid, net		--		(17,786,583)		(20,383,288)
Debt retirement		(49,536,802)		(136,759,664)		(26,352,764)

Net cash used in financing activities		27,596,434		(85,981,660)		(16,516,982)

Net increase (decrease) in cash		3,818,893		2,250,120		5,158,099
Cash at beginning of period		45,681,890		43,431,770		38,273,671

Cash at end of period	$	49,500,783	$	45,681,890	$	43,431,770

Supplemental disclosure:
Cash paid for interest	$	13,237,256	$	22,758,307	$	25,560,647
Cash paid for income taxes	$	1,570,662	$	6,705,875	$	9,347,413

		Common Stock Amounts	Retained Earnings	Total

Balance December 31, 2001	$	155,907,429	713,932,593	869,840,022

Cash dividends		--	(3,806,609)	(3,806,609)
Net income			58,152,201	58,152,201

Balance, December 31, 2002	$	155,907,429	768,278,185	924,185,614

Equity adjustment from foreign currency exchange translation		(1,256,421)	(5,643,846)	(6,900,267)
Net income			59,996,942	59,996,942

Balance December 31, 2003	$	154,651,008	822,631,281	977,282,289

Equity adjustment from foreign currency exchange translation			11,808	11,808
Net income			33,004,200	33,004,200

Balance June 30, 2004	$	154,651,008	855,647,289	1,010,298,297

Accounts payable and accrued expenses:
Accounts payable	$	99,952,727	$	46,283,592	$	166,944,628
Accrued expenses		8,770,591		5,575,201		4,060,864
Total	$	108,723,318	$	51,858,793	$	171,005,492

Accrued employee compensation and benefits:
Accrued payroll	$	7,683,784	$	6,991,321	$	7,672,340
Accrued vacation & sick pay		2,414,839		2,208,157		3,037,337

Total	$	10,098,623	$	9,199,478	$	10,709,677

		End June 30, 04		End 31, December 03		End 31, December 02
Item
Raw materials	$	33,251,023	$	25,102,338	$	78,510,843
Containers		1,835,246		1,352,468		4,954,089
Work-in-progress		2,911,279		2,798,337		5,643,896
Finished products		8,897,731		8,273,125		10,254,635
Goods in trade		10,306,072		13,060,648		45,140,167
Low-cost & short-lived articles		725,008		679,983		879,241
Materials-in-transit		950,110		897,516		697,512
Others		2,316,147		3,161,323		4,930,366

Total	$	61,192,616	$	55,325,772	$	151,010,782

Item		On 31/12/2003	Increased	Decreased	On 30/6/2004	Interest rate

Short-term Loan	In RMB	619,048,349	1,038,633,119	879,265,205	778,416,263	5.31%
Short-term Loan	In US $	74,794,102	125,490,312	106,234,168	94,050,246	5.31%
Long-term Loan	In RMB	671,189,890	197,368,772	100,001,843	768,556,819	6.04%
Long-term Loan	In US $	81,093,901	23,846,600	12,081,499	92,859,002	6.04%
Total	In RMB	1,290,238,239	1,236,001,891	979,267,048	1,546,973,082	-
Total	In US $	155,888,003	149,336,912	118,315,667	186,909,248	-

Item	31/12/2003 USD	30/6/2004 USD

Paid-in capital	154,651,008	154,651,008
Par value	1.00	1.00
Earnings/share	0.38795	0.21341

(In US Dollar)		2004-6-30				2003-12-31

		Income		Cost		Income		Cost

Beverage	$	13,054,318	$	12,495,983	$	23,778,357	$	22,761,354
Dye		55,473,628		49,050,028		102,581,762		87,623,871
Farming		132,884,413		88,342,713		237,293,595		157,754,844
Trade		65,208,586		61,279,559		115,413,426		108,459,397
Chemicals		88,236,386		74,296,840		154,800,678		130,345,334
Others		325,935		311,847		566,844		311,847

Sub-Total		355,183,267		285,776,971		634,434,662		507,256,647
Offsetting		16,242,982		10,761,655		29,187,749		19,338,105

Total	$	338,940,285	$	275,015,316	$	605,246,914	$	487,918,542

Related Party	Transaction Balance	Transaction Amount

Gansu Yasheng Industrial (Group) Co., Ltd.	3,557,377	1,447,400
Total	3,557,377	1,447,400