IIN International Limited
(Stock Code: 8128)

Major Shareholder:

• Mr. Wu Shu Min - 14.39% interest
• Multico Holdings Limited - 26.83% interest

Company Subsidiaries:

• Hunan IN International (PRC) (97.0%): Other network solutions related business
• Beijing IN (PRC)(60.0%): Data communications and network infrastructures related business
• Hunan Technologies (PRC)(100%): Sales and distribution of telecommunications equipment
• Hunan Galaxy (PRC)(97.0%): Network management solutions related business
• Hubei Galaxy (PRC)(80.0%): Other network solutions related Hubei province
• Hunan Education Information (PRC) (67.9%): Other network solutions related business in Hunan province.

The Group is a network solution provider in the PRC, engaging principally in providing network solutions to the PRC telecommunications service providers (primarily fixed line, mobile and data communications operators). The Group's sales to the PRC telecommunications service providers accounted for approximately 79.0 per cent, 81.0 per cent, and 87.0 per cent, respectively, of the Group's total turnover in the period from 17th December, 1998 to 30th September, 1999, the year ended 30th September, 2000 and the seven months ended 30th April, 2001.

The PTBs, of China Telecom are the largest customers of the Group for these periods. The Group also provides network solutions to customers in other market sectors in the PRC, including education institutions, medical institutions, state-owned enterprises and government agencies in the PRC.

The services provided by the Group to the PRC telecommunications service providers are network infrastructure solutions and network management solutions. Network infrastructure solution is a total solution for setting up telecommunications network infrastructures, including the design and implementation of network access and backbone infrastructures. The network infrastructure solutions offered by the Group comprise both the Broadband Data Network Information Platform developed by the Group as well as the integration of third-party software and hardware.

With China's entry into the World Trade Organization, the telecommunications market will be opened up to foreign competitors in stages. Foreign companies will be allowed to invest in the PRC's telecommunications services. Competition in the PRC telecommunications sector therefore will be intensified and lead to price reductions and stimulate consumer demand for better service. The Group needs to manage network more efficiently and effectively will force telecommunications service providers to adopt new software applications and management systems.

Over the next few years, the Directors believe that network management solutions will grow significantly for the following reasons:

• As the telecommunications market opens up, there will be more and more new ISPs, ICPs, telecommunications and data communications service providers as such, there will be a need for new systems as well as expansion and upgrading of existing systems;
• Research and developments will yield new technologies, which will in turn generate demand for technologies upgrade; and
• Consolidation in the telecommunications industry will require combination of networks and new network design to accommodate the changing marketplace.

The Directors believe that the Group has the following competitive advantages:

• It is well positioned to deliver a portfolio of proprietary network management software applicable to telephone, data and mobile network systems, therefore placing the Group in a competitively advantageous position in relation to its competitors in the fast growing telecommunications industry in the PRC.
• It has strong capability in research and product development for network infrastructure and network management solutions which has allowed the Group to rapidly respond to changing market demand and has formed a strong foundation for allowing the Group to provide network solutions in the PRC.
• The Group was joined the strategic alliances with well-established institutions and companies, which will strengthen the Group's market position in the PRC telecommunications sector.
• It has a team of highly trained technical staff who has over nine years of experience in the PRC telecommunications sector. An experienced team of executive Directors leads the Group also.

• Over dependence on the telecommunications sector in the PRC;
• The Group really requires a significant working capital requirement;
• Dependence on other strategic alliances and on major suppliers;
• Change in policy regarding the PRC telecommunications industry;
• Changes in the favorable taxation treatment afforded to the Company subsidiaries may adversely affect the profitability of the Group;

The Group plan to enhance the Group's sales network and market coverage. The Group will enhance its sales network and market coverage through increasing the number of branch offices and representative offices in major PRC provinces and cities. The Directors plan to upgrade four of its representative offices (which can only perform liaison function) into branch offices (which can be used to conduct business) and establish up to three new representative offices in the next two financial years.

The Group plan to expand the Group's clientele. While maintaining its existing relationship with the PTAs and the PTBs of China Telecom, the Group will also develop new business opportunities with other PRC telecommunications service providers to broaden its customer base.

The Group plan to enhance the functionality of the Group's existing network solutions and expand the range of the Group's new network solutions. To satisfy the changing network requirements of its customers, the Group will continue to enhance the functionality of its existing network solutions by releasing new versions periodically.

The Group plan to 4.build new strategic alliances, partnerships and acquisitions. The Group will strengthen its relationships with existing strategic allies to pursue larger scale projects at state and provincial levels and will identify new strategic allies or partners for product development and market expansion. In addition, the Group also plans to explore opportunities for strategic acquisitions of, or investments in, businesses that can provide synergies to its business.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$109 million (based on the offer price HK$0.30 per share). The Group at present intends to apply the net proceeds as follows: