Hong Kong, May 16, 2001 - Shenzhen High-Tech Holdings Limited ("Shenzhen High-Tech") (SEHK: 106) announces a new business development plan of its recently acquired (acquisition to be completed shortly) wholly-owned subsidiary company, Dawning Information Industry Company Limited ("Dawning? at the annual general meeting of the Company held today. To capitalize on the success of Dawning's recent collaboration deal with VDSL Systems Oy ("Systems Oy"), a telecommunication technological products manufacturer in Finland, Dawning will be marketing and distributing Systems Oy's VDSL (Very High-speed Digital Subscriber Line) products and technology-related support services through Dawning's own customer and sales network. Apart from being the only currently appointed agent for the Systems Oy's VDSL solutions in the PRC, Dawning has also had an agreement with System Oy that Dawning will remain its sole agent for its VDSL solutions if it is able to secure 5,000 VDSL subscribers within the mainland.

As the use of the Internet service becoming more commonplace together with the rapid development of interactive information technology, there has been a tremendous surge of demand for broadband high speed access network from business as well as residential customers. Using ordinary modem, the data transmission speed under the current existing twisted pair access copper telephone lines network for voice communication is limited to 56Kb/s, which is totally inadequate for high volume data transmission. Even using the ADSL technology, the maximum transmission speed can only be increased up 6Mb/s. To surmount this problem by providing optical network access directly to all users?home and offices not only involve very high cost but also extremely time consuming engineering work. But with VDSL technology, telecom operators only need to extend the optical fibre to the buildings (In many situations, this infrastructure is already available.) and then install a VDSL transceiver at the subscriber's premises to transform the existing telephone twisted pair access network into an information superhighway with speeds increased multi-folded up to 56Mbit/s, hence fully utilize the bandwidth of the copper telephone lines. Using VDSL solution, telecom operators will be able to offer existing and emerging services at unequaled speeds over the existing twisted pairs, supporting both symmetrical and asymmetrical services, including fast broadband Internet accesses, VOD (video on demand), HDTV (high definition television) broadcasting and high quality real time videoconferencing. With the VDSL technology, subscribers can now use their telephone lines for voice communications while enjoying other broadband services at the same time.

As the only company in the PRC that has the capabilities to produce and system assemble an extensive range of different grades of computer servers with a price range from RMB20,000 to tens of millions of RMB and being the only systems integrator in the PRC owning its brand of high performance computers and servers, Dawning takes prides in its well established and extensive customer base and sales distribution network which will be utilized to complement its products and technology to provide Systems Oy's VDSL broadband solutions to telecom operators, cable television network providers, internet service providers and other corporate customers within the PRC. In this respect, Dawning's business operations in the area of providing internet services will be greatly enhanced.

"Optical network in the PRC has been mostly developed for the backbone infrastructure and is not widely available for individual households, thereby creating a bottle neck situation wherein the VDSL technology serves to provide a solution. VDSL is the fastest and most advanced technology in digital subscriber line. It has already been tried and tested and since its first launch in Finland in April this year, it has been broadly adopted in Europe and overseas. Committed to its mission and company goal in serving the Internet, Dawning pursues to deploy this technology and work together with the mainland's network operators to transform the copper telephone lines into information superhighway and provide real time, stable and reliable broadband services for our mainland customers." Said Mr Gong Hanbing, Director of Dawning and Executive Director and President of Shenzhen High-Tech.

Shenzhen High-Tech Holdings Limited ("Shenzhen High-Tech") (SEHK: 106) has its business focus on developing business operations in advanced technology and information industry in Greater China. With the new management gradually assuming duties since March last year, the Group has been devoting keen efforts in reorganizing its business operations and has basically accomplished its debt restructuring and business repositioning exercise. In August last year, Shenzhen High-Tech has successfully raised new funds by placing new shares. To date, the Group has no borrowings and a net cash balance on hand of over HK$100 million. The acquisition of Dawning Information Industry Company Limited ("Dawning"), the only UNIX/RISC server producer in the PRC, in March this year, further substantiates and enhances the Group's operation in advanced technology and information industry.

Issued by :
Shenzhen High-Tech Holdings Limited

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