Mr Ron Chan, Chairman of TVH remarked in the Group's interim report: "We have prudently implemented our redefined corporate strategies to achieve a new positioning to spearhead the future development of our operations. Our core market, China is changing at a rapid speed, with industry boundaries blurring and customers getting increasingly sophisticated. We have started to rethink our fundamental offerings ahead of this change, and our new marketing thinking has led TVH to further assimilate its offerings into the everyday life of people in the Mainland. In addition to directly selling its IT expertise and resources to enhance IT functions of clients, we are now leveraging our core strengths to create and market demand-led services."

The business renewal and refocus process has consolidated into further collaboration among TVH's core businesses of IT solutions and systems integration, and software development, and its strategic investment in online education services.

The Group's IT solutions and systems integration business was driven by the combined teams of TopAsia and Sequent China. In the first half, TopAsia's self-service banking products and services, including automated teller machines, contributed immensely to the satisfactory performance of this division. Maintenance services line was somewhat restrained by the SARS outbreak in a number of cities in China, but still managed to deliver targeted results.

The new TopAsia team has been successful in securing contracts from Sequent's customers for maintenance services. Such contracts aggregated to more than RMB5 million in the first six months of 2003. It also clinched an RMB1.5-million contract from Teacher.com.cn, China's official continuous education portal for primary and secondary school teachers. This initial contract represented a key step forward in the unit's advance into China's online education market.

On the banking SI front, TopAsia won an RMB8-million contract from Hangzhou Commercial Bank. Other projects included a customs control monitoring system of the Public Security Department at the capital airport with initial works worth over US$1 million. The division's overall order books continued to show sustainable growth year-on-year.

The Group's software vehicle, 55%-owned Advanced Digital Technology (ADT), was named one of China's top 100 software companies for 2003, giving a further boost to its brand recognition in the country. This was coupled by the award of silver partnership by CISCO, and sole distributorships by Netscreen and Netscout, which helped further its lead in storage solutions.

In addition to being ranked favorably in the preferred suppliers' shortlists of Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB), ADT also promoted its IT offerings aggressively to the country's five medium-sized commercial banks. During the period, ADT recorded RMB22 million in revenues and held costs flat.

TVH's ventures into online education in China continued to be spearheaded by its investment in ChinaCast, with the support of collaborative efforts with other TVH units. In the first half, the SARS epidemic presented an unexpected and catastrophic threat to most sectors of China. Being the nation's only distance learning services provider with a nationwide satellite delivery network and the operator of the official teachers' portal Teacher.com.cn, ChinaCast responded quickly to the country's urgent call for online tuition services during the period of SARS quarantine. It launched on April 30, 2003 the K-12 Video Classroom, a free Internet distance learning service for primary and high school students.

Solid results were also achieved in extending collaboration efforts to enrich its distance learning content. New projects included a joint program with the prestigious Jiangsu Qidong Secondary School, a new English program with Dell English International and an interactive recruitment platform jointly with Beijing Municipal Education Committee and more than 300 high schools across the country. Similar discussions are also underway with the Press Office of the State Council, All-China Women's Association, Shanghai Accountancy Institute and Dell English International.

"We remain confident in the overall online education market in China and will continue to explore possible ventures or collaboration with ChinaCast in this area. In addition, through its investment in ChinaCast, TVH will continue to examine closely the education market in China to assess whether this expanding market warrants the Group to cater more management and capital resources to it or, in one day, set up a separate business unit to cater for the development in this area," said Mr Chan.

As an overview of the future, Mr. Chan commented, "Management believes that TVH is well placed to create new values and solutions to meet the evolving needs of the homes, businesses and society at large. Although faced with a continued difficult environment, compounded by economic and political uncertainties, TVH has the strengths and resources to generate reasonable return from its operating units. Now that a lot of effort has been made in developing new growth areas and solid foundation has been laid, management is confident that TVH will again be ahead of its competitors when the next wave arrives."

About TVH
Technology Venture Holdings Limited (TVH, SEHK: 61) is an information technology enabler focusing its systems-integration and software competencies on the banking, finance and newly emerged education and training sectors. It aspires to be a catalyst to facilitate the development of digital Asia by serving as a value-added bridge of advanced technology from developed economies and e-solutions demands in Asia.

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