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

Mr. Zhuo Fu Min Chief Executive Officer Mr. Zhuo Fu Min Chief Executive Officer

Transaction Summary u Partner: – Shanghai Information Investment Inc. ( 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 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 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 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 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 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) 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 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 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 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 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 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 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 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 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 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 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 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 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 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 = ICS Revenue Projection R AG C 8 18 * Exchange rate: US$ 1 = RMB 8. 2 22 %

The 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 Mr. Zhuo Fu Min Chief Executive Officer

SIHL's Strategy u Committed to full-scale transformation • Cultivate new high-growth businesses through acquisitions 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 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 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 The Perfect Match Shareholders value creation 28