The Marketing Analysis of Vtion Technology Company in China

The Vtion Group is one of the leading providers of wireless data card solutions for mobile computer and internet use via wireless networks in the People's Republic of China. Vtion Wireless Technology AG, the holding company of the Vtion Group, headquartered in Frankfurt am Main, is planning an Initial Public Offering on the Prime Standard of the Frankfurt Stock Exchange. Subject to a positive market environment, the IPO is planned by the end of the year 2007. From this transaction the company anticipates proceeds of between approximately EUR 90 million and EUR 100 million and intends to use the net proceeds to expand its leading position in the Chinese market, with a particular focus on the strong intensification of its marketing and sales, as well as research and development activities.

The Vtion Group with its operating subsidiaries Vtion Information Technology (Fujian) Co. Ltd. and Vtion Software (Fujian) Co. Ltd., both located in Fuzhou, China, has developed a strong relationship with China Unicom, one of the leading Chinese mobile telecommunications network operators and the leading provider of internet access via the mobile network in China. According to company estimates, the Vtion Group's market share on the Chinese market for wireless data cards with the CDMA 1x standard was roughly 22% in 2006 and approximately 25% in the first half-year of 2007. As the only supplier of wireless data cards, Vtion was included in the World Brand Lab List 2007 as one of the 500 best-known Chinese brands. Furthermore, in August 2007, the Vtion Group was also recognized by Red Herring, a specialist magazine for the technology industry, as one of the 200 companies in the selection list for the 100 best start-ups in Asia.

Over the last three years, the Vtion Group achieved annual revenues growth of 104%, from approximately EUR 2.4 million in the 2004 financial year to roughly EUR 10 million in the 2006 financial year. In terms of net income it posted an annual growth rate of 162% from EUR 300,000 in 2004 to approximately EUR 2.1 million in the 2006 financial year. The net profit margin amounted to approximately 21% in 2006. In the first nine months of 2007, the Vtion Group generated revenues of EUR 19.3 million - up 151% year-on-year and already almost twice the level of 2006. Net profit in the first nine months of 2007 totaled EUR 6.2 million, more than quadruple compared to the equivalent period of the previous year.

In its business operations, the Vtion Group is benefiting from the generally positive development of the Chinese economy. The attractive business model is based on technologies which are particularly adapted to the requirements of the Chinese market of today and tomorrow. With its broadly-based product portfolio, the Vtion Group is well positioned to benefit from the upward trend on the Chinese mobile telecommunications market and increased mobile internet use. Even though China is already the country with the