Major Shareholder:

• Sinotrans Group Company ¡V 61.5% interest

Company Subsidiaries:

• Sinotrans Air Transportation (100%): Express services and air freight forwarding
• Sinotrans Int'l Multimodal (100%): Multimodal transportation services and trade fair cargo transportation
• China Marine Shipping Agency (100%): Shipping agency services
• Sinotrans Network Technology Co (10%): Information technology services

The Group is a leading provider of logistics services in China with access to a nationwide service network and an overseas agency network. With sea, air, rail and road freight forwarding, express services and shipping agency services being the core services, and storage and terminal services, trucking and marine transportation services being the support services, The Group is capable of providing the customers integrated logistics services.

The Group was incorporated on 20 November 2002 as a wholly owned subsidiary of Sinotrans Group Company. Pursuant to the Reorganization and in preparation for the proposed listing on the Stock Exchange, Sinotrans Group Company transferred to a substantial portion of its businesses located in the fast-growing coastal regions of China and in certain other strategic regions throughout China. As an indication of Sinotrans

According to the China International Freight Forwarding Association, Sinotrans Group Company was the largest international freight forwarder in China in 2001, with 270 subsidiaries licensed to provide freight forwarding services, representing 9% of the aggregate number of such licensed enterprises in China.Sinotrans Group Company was the largest international express services provider in China in terms of the number of parcels handled, according to statistics provided by the PRC General Administration of Customs, with a market share of 40% in 2001.According to the China Association of Shipping Agency in 2001, Sinotrans Group Company was one of the two largest providers of shipping agency services nationwide in China.

The Group benefits from strong geographical representation throughout the key coastal and other strategic regions of China. Leveraging off the substantial geographical platform, The Group have an extensive and well-established service network with strong brand recognition and a large and diversified customer base which the Group believe enable us to achieve economies of scale as well as to exploit potential cross-selling opportunities. The Group operates throughout the fast-growing coastal regions in China, namely Guangdong, Fujian, Shanghai, Zhejiang, Jiangsu, Hubei, Lianyungang, Shandong, Tianjin and Liaoning. These regions are among China's fastest developing and most economically active provinces with significant growth in GDP and foreign trade activity.

In addition, the Group benefit from multiple international service networks through the joint ventures, alliances and partnership arrangements with various international companies such as DHL, UPS and Exel. The Group believes that our extensive access to such international service networks is a significant factor in differentiating ourselves from many they more locally or regionally based transportation and logistics services providers.

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

• An extensive service network in all of the major economic centres of China.
• Full service capabilities.
• Good reputation and strong brand recognition.
• Large customer base.
• Valuable strategic relationships with international transportation and logistics companies.
• Excellent working relationships with the PRC Government and local authorities.
• Experienced management team and highly qualified staff members.
• A corporate culture that is comparable to that of our international peers.

• The Group had limited operating history as a separate entity makes it difficult for you to evaluate our business and prospects.
• The Group lack timely access to accurate combined IAS financial data on our recent results of operations and current financial condition and, therefore, our ability to identify and respond, in a timely manner, to problems that might exist is limited.
• The Group will continue to be controlled by Sinotrans Group Company whose interests may differ from those of our other shareholders.
• Sinotrans Group Company may not have adequate financial resources to fulfil its obligations to us pursuant to the Reorganisation Agreement.
• The Group cannot assure you that our business integration plans will be implemented according to our plans.
• The operating results may be adversely affected by the departure of our senior management and experienced employees.

The Group intends to expand the network coverage in China through acquisitions of businesses that complement the service network and enhance shareholder value. Such expansion plan may include purchase of regional distribution centers situated in strategic locations in the Yangtze River Area and Pearl River Delta and acquisition of domestic and overseas freight forwarding and logistics service providers. At the same time, The Group will continue to explore opportunities to expand the overseas service network through alliances and other arrangements with overseas strategic partners, thereby gaining access to their networks.

The Group aim to increase the market share and profitability by increasing the participation in a greater portion of the large enterprise customers' supply chain management. To this end, in addition to improving the marketing and sales efforts, The Group will continue to improve ongoing communications with the customers with a view to better understanding their particular logistics requirements. The Group aim is to be able to provide the large enterprise customers with one-stop service.

The Group believes standardisation of the operations will enable us to improve the quality, in particular, the consistency and efficiency of the services, as well as control the operational costs more effectively. To this end, The Group will continue to work on standardising the operational procedures for the core businesses across the various geographical regions it operate.

In addition to the various advanced IT systems The Group have acquired or are in the process of implementing, such as the MK Logistics System, the Global Positioning System, the EDI Network, the Oracle ERP network financial system and the CTS Sea Transportation Management System, The Group will continue to invest in IT systems to keep up with the expanding IT requirements of the customers and improve the accounting and financial management systems.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$2,598 million (based on the middle price HK$1.98 per share). The Group at present intends to apply the net proceeds as follows: