Transcript 20141216155512_59

Transforming to be an
Emerging Force in China's
“Internet Economy”
July 5, 2000
Mr. Zhuo Fu Min
Chief Executive Officer
Transaction Summary
 Partner:
– Shanghai Information Investment Inc. ("SII")
 Cross Investment:
– SIHL will pay US$120 MM for 20% of the enlarged share capital of SII
– SII’s major existing shareholder’s wholly owned subsidiary has an
acquire 50 MM shares of SIHL at HK$15.90
 Governance / Management:
– SIHL appoints two directors to SII's Board
– SII’s major shareholder appoints one director to SIHL’s Board
– SII seconds a Chief Technology Officer to SIHL
 Joint Initiatives:
– Cooperate in the existing Shanghai Infoport projects
– Jointly participate in future investments
– Access to the international capital markets
2
SII Highlights
 Investor and project manager of Shanghai Infoport
 Owner of Shanghai’s key Internet infrastructure resources
 Innovator of Internet-based business applications
 Partner of international Internet and telecom players
 Leading player in Shanghai and China’s Internet economy
3
The "Win - Win" Partnership
 Leading player in China's
 International capital markets
Internet economy
experience
 Pilot projects with national
 Overseas brand name
implications
recognition
 Unique core competence
 Public company management
expertise
 Strategic investors / partners
 Enterprise operating capability
4
Strategic Repositioning - The Steps
Formed Partnership with
SII
Formed S.I. Tech
JV Fund with Temasek
and Vertex
Agreed to form Shanghai
High-Tech VC Fund with
SVCC
Acquired Sunway
Biotech Co.
& Merger Ltd.
Invested in Shanghai
Optical Communications
Development Co.
11/98
1/99
8/99
3/00
5
7/00
Participating in Shanghai and China's “Internet
Economy” - The Window of Opportunities
Shanghai
China
Local Incubation
National Implications
 Interactive cable services
 Over 100 MM cable subs in China
 Certificate authority
 China's e-commerce potential
 Credit infobank
 China's urban consumer population
Bottleneck Solutions
Global Internet Connection
 Internet exchange
 Facilitator of China's Internet economy
6
Joining the Unmatched Partners
20% SIHL
8%
SRFT
8%
SOPC
5% SGEG
35% SAIL
24% SPT
7
Mr. Fan Xiping
President and Director
Shanghai Information Investment Inc. (SII)
SII History
 Founded SII
 Initiated CA
 Initiated ATM
project
backbone project
Mature
Growth
Early Stage
Development
 Signed agreement
 Alliance with CMGI
with SFRT to upgrade
cable network
 Launched SIN, SCN
& SHECA
 Launched a
& Compaq
news portal
(Eastday.com)
 Signed JV
 Strategic
Milestones
Timeline
 Signed LOI with
alliance with
Gartner
Group
9/97
3/98
Microsoft to
develop advanced
web services
6/98
10/98
 Signed with TI to
 Initiated
provide broadband
access solutions
(DigiVision)
 Launched Credit
Infobank (CIS)
Shanghai
broadband fiber
network
 Initiated SHIX
project
12/98
8/99
9
11/99
1/00
contracts with
AT&T and
SPT
 Took control
over Cablenet
and initiated
Interactive
Cable Services
(ICS)
5/00
6/00
Strategic Advantages
 Uniquely positioned to invest in "bottleneck" projects
 Ability to create synergies among investments
 World class partners (e.g., CMGI, AT&T, IBM, Microsoft, Texas
Instruments, Gartner Group & GTE)
 Financing capability
 Strong government / shareholder sponsorship
10
Operating Strategies
 Focus on value creation
 Build and operate
 Seek strategic partners
 Apply advanced technologies and management skill sets
 Incubate in Shanghai and apply in nationwide scale
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Business Focus
Telecom / Internet
Infrastructure
51%
100%
30%
100%
SCN
Broadband
Fiber
Network
Infonet
SHIX (1)
Value-Added Services
Cable
network with
3 MM subs
Broadband
fiber network
builder and
operator
ATM / IP
backbone
Internet
exchange
51%
ICS (2)
(Interactive
Cable
Services)
15%
AT&T JV
(Telecom
VAS)
10%
EastDay
.com
Converged
offerings of
Internet access,
VoIP, e-commerce
and VoD
IP-based
applications
for MNCs
News portal
In Operation
E-Commerce Enabler
45%
35%
SHECA
CIS
12.5% Community
Network
SII IPS (3)
Certificate
Authority
for ECommerce
Credit
Infobank
800
community
Internet
access points
Internet
professional
services
In Development
50%
DigiVision
Broadband
access
solution
provider
(1)SII has 100% operating rights
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(2) SCN owns 100% of ICS project
(3) SII’s ownership in IPS varies among projects
Infonet - ATM Backbone - Carriers' Carrier
 SPT / China Telecom owns the
remaining 70%
 The only ATM backbone in
North District
Shanghai, one of the largest
metropolitan area ATM backbones
in the world
 1,545 fiber km length
South West
District
Pudong District
switches, 41 Concoder ATM
switches expanding to 268
Shanghai
Online
 Carriers' carrier for ISPs and
ChinaNet
ATM
Platform
 8 Core Nortel Passport 15K
national telecom carriers entering
the Shanghai market
South District
National
Broadband
Backbone
 LQA revenue of US$ 0.26 MM
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SCN - 2-Way Broadband Alternative
Cable network before upgrading
One-way and analog
49-450 MHz transmitting 36 analog TV signals
Cable network after upgrading
Two-way, digital and interactive
Set-Top Box
5-860 MHz transmitting 90 digital & analog TV signals
PC
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TV
Tel
ICS - Next Gen. Converged Offering
Bank
E-Commerce
Multimedia
Voice over Cable
Broadband Internet Access
15
AT&T JV - Next Generation
Telecommunication Operator
Network Profile
 First pilot telecom service project in
China open to foreign investors
 Connected to AT&T Global Network
 Facilities-based
 AT&T managed
AT&T
Pudong JV
 Services to be launched late 2000
Targeted Customers
 MNCs
Services / Applications
 VPN
 Other IP-based value-added services
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SHECA - E-Commerce Enabler
Bank
ISP
Internet
Certificate Center
(SHECA)
Customer / Consumer
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SHIX - Local and International Internet Exchange
 Only Internet exchange in
Internet
Overseas
Shanghai
 Connected to
international backbones
Shanghai
ICS
Jitong
 Solve traffic bottleneck
and facilitate China's
Internet development
 Aim to become a major
CNC
Router
Router
Unicom
Router
regional and national
Internet exchange center
Router
SHIX
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Synergistic Investment
Business
Objective
Shareholder
Value
Interactive
Cable Services
VAS
Certificate
Authority
Enabler
Cable
Network
AT&T JV
Credit
Infobank
ATM/IP
Backbone
EastDay.com
Community
Network
Internet
Exchange
Infrastructure
Broadband Fiber Network
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Internet
Professional
Services
DigiVision
Capital Requirements
(US$ MM)
2000
2001
2002
Infonet (ATM / IP Backbone)
$ 8.7
$ 3.1
n.a.
SCN
74.6
63.9
18.4
66.2
49.6
n.a.
8.4
14.3
18.4
Broadband Fiber Network
55.6
52.9
n.a.
Internet Exchange Center
2.4
0.5
n.a.
AT&T JV Capital Contribution
9.0
5.5
4.9
$ 150.3
$ 125.5
$ 23.3
Network Upgrading
Interactive Cable Services
Total
* Exchange rate: US$ 1 = RMB 8.2
20
Infonet ATM Revenue Projection
(US$ MM)
12.8
14
12
Revenue
10
7.1
8
6
4.0
4
2
2.2
1.2
0
2000E
2001E
2002E
* Exchange rate: US$ 1 = RMB 8.2
21
2003E
2004E
ICS Revenue Projection
(US$ MM)
47.3
50
45
40
32.7
Revenue
35
30
25
19.3
20
15
7.8
10
5
0.7
0
2000E
2001E
2002E
* Exchange rate: US$ 1 = RMB 8.2
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2003E
2004E
The "Win - Win" Partnership
 Leading player in China's
 International capital markets
Internet economy
experience
 Unique core competence
 International brand name
recognition
 Pilot projects with national
 Public company management
implications
expertise
 Strategic investors / partners
 Enterprise operating capability
23
Mr. Zhuo Fu Min
Chief Executive Officer
SIHL's Strategy
 Committed to full-scale transformation
• Cultivate new high-growth businesses through acquisitions
• Upgrade and transit selected traditional businesses to e-commerce based
by leveraging SII’s investments and new technologies
• Divest non-core and stagnant businesses
 Achieve substantial repositioning through forming partnership
with SII
 Identify and seek synergies between SII's and SIHL's
investments
25
SIHL and SII Joint Initiatives
 SII seconds a Chief Technology Officer to SIHL
 SIHL invests directly in existing projects
 Jointly participate in future investments
 Co-operate in promoting businesses in China
 Seek international partners to participate in SII’s projects
 Access to the international capital markets
26
E-Commerce Meets The "Old Economy"
Case Study - Shanghai Bright Dairy and Food
 A 200-plus convenience store network
 Scope of products available for delivery is currently over 1,300
 Over 232,000 subscribers and 25% of the total volume is delivered through its
distribution network
27
The Perfect Match
Shareholders
value creation
28