Transforming to be an Emerging Force in China s

Transforming to be an Emerging Force in China's “Internet Economy” July 5, 2000

Mr. Zhuo Fu Min Chief Executive Officer

Transaction Summary u Partner: – Shanghai Information Investment Inc. ("SII") u Cross Investment: – SIHL will pay US$120 MM for 20% of the enlarged share capital of SII – SII’s major existing shareholder’s wholly owned subsidiary has an option to acquire 50 MM shares of SIHL at HK$15. 90 u Governance / Management: – SIHL appoints two directors to SII's Board – SII’s major shareholder appoints one director to SIHL’s Board – SII seconds a Chief Technology Officer to SIHL u Joint Initiatives: – Cooperate in the existing Shanghai Infoport projects – Jointly participate in future investments – Access to the international capital markets 2

SII Highlights u Investor and project manager of Shanghai Infoport u Owner of Shanghai’s key Internet infrastructure resources u Innovator of Internet-based business applications u Partner of international Internet and telecom players u Leading player in Shanghai and China’s Internet economy 3

The "Win - Win" Partnership u Leading player in China's Internet u International capital markets economy experience u Pilot projects with national u Overseas brand name recognition implications u Public company management u Unique core competence expertise u Strategic investors / partners u Enterprise operating capability 4

Strategic Repositioning - The Steps Formed Partnership with SII Formed S. I. Tech JV Fund with Temasek and Vertex Agreed to form Shanghai High-Tech VC Fund with SVCC Acquired Sunway Biotech Co. & Merger Ltd. Invested in Shanghai Optical Communications Development Co. 11/98 1/99 8/99 3/00 5 7/00

Participating in Shanghai and China's “Internet Economy” - The Window of Opportunities Shanghai China Local Incubation National Implications u Interactive cable services u Over 100 MM cable subs in China u Certificate authority u China's e-commerce potential u Credit infobank u China's urban consumer population Bottleneck Solutions Global Internet Connection u Internet exchange u Facilitator of China's Internet economy 6

Joining the Unmatched Partners 20% SIHL 8% SRFT 8% SOPC 5% SGEG 35% SAIL 24% SPT 7

Mr. Fan Xiping President and Director Shanghai Information Investment Inc. (SII)

SII History u Founded SII u Initiated CA u Initiated ATM project backbone project Mature Growth Early Stage Development u Signed agreement u Alliance with CMGI with SFRT to upgrade cable network u Launched SIN, SCN & SHECA u Launched a & Compaq news portal (Eastday. com) u Signed JV u Strategic Milestones Timeline u Signed LOI with alliance with Gartner Group 9/97 3/98 u Signed with TI to 6/98 10/98 u Initiated provide broadband access solutions (Digi. Vision) u Launched Credit Infobank (CIS) Microsoft to develop advanced web services contracts with AT&T and SPT u Took control over Cablenet and initiated Interactive Cable Services (ICS) Shanghai broadband fiber network u Initiated SHIX project 12/98 8/99 9 11/99 1/00 5/00 6/00

Strategic Advantages u Uniquely positioned to invest in "bottleneck" projects u Ability to create synergies among investments u World class partners (e. g. , CMGI, AT&T, IBM, Microsoft, Texas Instruments, Gartner Group & GTE) u Financing capability u Strong government / shareholder sponsorship 10

Operating Strategies u Focus on value creation u Build and operate u Seek strategic partners u Apply advanced technologies and management skill sets u Incubate in Shanghai and apply in nationwide scale 11

Business Focus Telecom / Internet Infrastructure 51% 100% 30% 100% SCN Broadband Fiber Network Infonet SHIX (1) Value-Added Services Cable network with 3 MM subs Broadband fiber network builder and operator ATM / IP backbone Internet exchange 51% ICS (2) (Interactive Cable Services) 15% AT&T JV (Telecom VAS) 10% East. Day. com Converged offerings of Internet access, Vo. IP, e-commerce and Vo. D IP-based applications for MNCs News portal In Operation E-Commerce Enabler 45% 35% SHECA CIS 12. 5% Community Network SII IPS (3) Certificate Authority for ECommerce Credit Infobank 800 community Internet access points Internet professional services In Development 50% Digi. Vision Broadband access solution provider (1)SII has 100% operating rights 12 (2) SCN owns 100% of ICS project (3) SII’s ownership in IPS varies among projects

Infonet - ATM Backbone - Carriers' Carrier u SPT / China Telecom owns the remaining 70% u The only ATM backbone in Shanghai, North District one of the largest metropolitan area ATM backbones in the world u 1, 545 fiber km length South West District Pudong District Shanghai Online ATM Platform u 8 Core Nortel Passport 15 K switches, 41 Concoder ATM switches expanding to 268 u Carriers' carrier for ISPs and national telecom carriers entering the Shanghai market China. Net South District u LQA revenue of US$ 0. 26 MM National Broadband Backbone 13

SCN - 2 -Way Broadband Alternative Cable network before upgrading One-way and analog 49 -450 MHz transmitting 36 analog TV signals Cable network after upgrading Two-way, digital and interactive Set-Top Box 5 -860 MHz transmitting 90 digital & analog TV signals PC 14 TV Tel

ICS - Next Gen. Converged Offering Bank E-Commerce Multimedia Voice over Cable Broadband Internet Access 15

AT&T JV - Next Generation Telecommunication Operator Network Profile u First pilot telecom service project in China open to foreign investors u Connected to AT&T Global Network u Facilities-based u AT&T managed AT&T Pudong JV u Services to be launched late 2000 Targeted Customers u MNCs Services / Applications u VPN u Other IP-based value-added services 16

SHECA - E-Commerce Enabler Bank ISP Internet Certificate Center (SHECA) Customer / Consumer 17

SHIX - Local and International Internet Exchange u Only Internet exchange in Internet Overseas u Connected to international Shanghai ICS Jitong CNC Router backbones u Solve traffic bottleneck and facilitate China's Internet development u Aim to become a major Unicom Router Shanghai regional and national Internet exchange center Router SHIX 18

Synergistic Investment Business Objective Shareholder Value Interactive Cable Services VAS Certificate Authority Enabler Cable Network AT&T JV Credit Infobank ATM/IP Backbone East. Day. com Community Network Internet Exchange Infrastructure Broadband Fiber Network 19 Internet Professional Services Digi. Vision

Capital Requirements (US$ MM) 2001 2002 Infonet (ATM / IP Backbone) $ 8. 7 $ 3. 1 n. a. SCN 74. 6 2000 63. 9 18. 4 Network Upgrading 66. 2 49. 6 n. a. Interactive Cable Services 8. 4 14. 3 18. 4 Broadband Fiber Network 55. 6 52. 9 n. a. Internet Exchange Center 2. 4 0. 5 n. a. 9. 0 5. 5 AT&T JV Capital Contribution Total $ 150. 3 $ 125. 5 $ 23. 3 * Exchange rate: US$ 1 = RMB 8. 2 20 4. 9

Infonet ATM Revenue Projection 0% R 8 G CA * Exchange rate: US$ 1 = RMB 8. 2 21

ICS Revenue Projection R AG C 8 18 * Exchange rate: US$ 1 = RMB 8. 2 22 %

The "Win - Win" Partnership u Leading player in China's Internet u International capital markets economy experience u Unique core competence u International brand name recognition u Pilot projects with national implications u Public company management expertise u Strategic investors / partners u Enterprise operating capability 23

Mr. Zhuo Fu Min Chief Executive Officer

SIHL's Strategy u Committed to full-scale transformation • Cultivate new high-growth businesses through acquisitions • Upgrade and transit selected traditional businesses to e-commerce based by leveraging SII’s investments and new technologies • Divest non-core and stagnant businesses u Achieve substantial repositioning through forming partnership with SII u Identify and seek synergies between SII's and SIHL's investments 25

SIHL and SII Joint Initiatives u SII seconds a Chief Technology Officer to SIHL u SIHL invests directly in existing projects u Jointly participate in future investments u Co-operate in promoting businesses in China u Seek international partners to participate in SII’s projects u Access to the international capital markets 26

E-Commerce Meets The "Old Economy" Case Study - Shanghai Bright Dairy and Food u A 200 -plus convenience store network u Scope of products available for delivery is currently over 1, 300 u Over 232, 000 subscribers and 25% of the total volume is delivered through its distribution network 27

The Perfect Match Shareholders value creation 28