Major Shareholder:

• Mr. Ringo Chan - 20.28% interest
• Mr. Ng Lai Yick ¡V 13.26% interest
• ARC (Hong Kong) ¡V 17.41% interest

Company Subsidiaries:

• Wafer (Hong Kong) (100%): Provision of total network infrastructure solutions outside the PRC
• Wafer (China) (100%): Provision of total network infrastructure solutions in the PRC
• Wafer (Xian) (PRC)(100%): Research and production of proprietary software

The Group is principally engaged in the provision of network infrastructure solutions including (i) Network Infrastructure, which involves the performance by the Group of installation and optimization work on clients' networks; (ii) Professional Services, which involves the provision by the Group of management services for clients' networks; and (iii) Network Software, which involves the provision by the Group of management and optimization services for clients' networks. Since its establishment in November 1998, the Group has contracted directly with approximately 300 customers, ranging from large multinational/domestic corporations, communications service providers, government entities to educational institutes in Hong Kong and the PRC.

Headquartered in Hong Kong, the Group, as at the Latest Practicable Date, had 170 employees with four PRC regional sales and marketing presences in Beijing, Shanghai, Chengdu, and Guangzhou serving the northern, eastern, western, and southern regions of the PRC, respectively.

Over the years, the Group has established business alliances with leading global technology vendors such as Cisco, Nokia, NetScout, NAI, CheckPoint, Radvision and PictureTel. Major terms of these business alliances are set out in the sub-section headed ¡§Strategic relationship with major suppliers¡¨ in the section headed ¡§Business of the Group¡¨ of this prospectus. In 2001, the Group was certified as a Cisco Gold Partner and a Nokia Gold Reseller in the PRC and Hong Kong, respectively.

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

• it being, the Directors believe, one of the leading network infrastructure solutions and services providers in the PRC and its competence in offering recognized network infrastructure solutions on a competitive cost structure achieved from localization;

• its specialized research and development capabilities possessed by its technical team comprising experienced and skilled IT professionals;

• its ability to develop widely applicable proprietary network software, which can be customised to suit different applications and to run on various platforms developed by different technology vendors;

• its business alliances with and being a partner of several global networking and security companies including Cisco, Nokia, NetScout, NAI, Check Point, Radvision and PictureTel;

• its broad customer base of more than 300 large communication service providers, including multinational/domestic corporations, government entities and educational institutes in Hong Kong and the PRC;

• Volatility in the operations of the Group
• Working capital requirements
• Guarantees for bank loans provided by connected person
• Termination of management services agreements
• Threats from potential competitors

In order to capture such tremendous market potential and achieve its business objective, the Group intends to focus on the following areas:

• enhance the functionality and expand the range of the Group's back-end network infrastructure solutions, in particular, Network Software, Expert Services and Outsourcing Services;

• maintain the position it has achieved in the private sector in eastern China and the telecommunications industry in western China; expand its market share in other areas in the PRC and other parts of Asia through strengthening its existing sales and service network and establish additional sales and marketing presences in Singapore, Taiwan, and Changsha, Nanjing and Suzhou in the PRC;

• strengthen its own research capabilities for the development of its proprietary network software, which can also directly contribute to the Group's revenue and enrich its Network Infrastructure solutions and Professional Services provided to clients;

• establish a network monitoring centre for the provision of Outsourcing Services for the operation and/or the security of customers' networks throughout the PRC; and
• pursue strategic alliance, joint venture, and merger and acquisition opportunities which will facilitate the Group in achieving its overall business objective.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$19.0 million (based on the offer price HK$0.55 per share). The Group at present intends to apply the net proceeds as follows: