(August 10, 2001, HONG KONG) - Q9 Technology Holdings Limited ('Q9', the 'Company', together with its subsidiaries, the 'Group'; stock code: 8129) announced today its interim results for the six months ended June 30, 2001. During the period under review, turnover went up 18%, or HK$687,200 to HK$4,421,000. As a result of the adjustment in sales mix, gross profit margin increased to about 91% as compared to about 82% for the corresponding period last year.

Turnover growth was mainly attributable to increase in sales of Q9 CIS in Hong Kong and revenue derived from licensing Q9 CIS to corporations adopting Q9 CIS web version and five OEM manufacturers. Despite the rise in sales revenue, the Company recorded a net loss of HK$7,078,000 and the Directors have resolved not to declare interim dividend. The Group anticipated that a further increase in selling and distribution expenses will be incurred in the second half of 2001 as a number of marketing programs will be launched to promote Q9 CIS in Hong Kong, China and Taiwan.

The Group has taken initiatives to reach more potential customers through new market channels and programs. By September 2001, the Group expects the number of retail outlets distributing Q9 CIS will increase to over 1,500 from less than 60 outlets at present. In addition, a new version of Qcode with enhanced features will also be ready to market in September 2001.

Going forward, Q9 CIS licensing income from OEM manufacturers will further increase as more OEM manufacturers who have signed licensing agreements with the Group will commence production in the second half of 2001. Prototype products with three international mobile phone manufacturers are completed and being tested.

The Group will replicate the successful marketing strategies in Hong Kong and plan to penetrate the PRC market through direct sales and promotional activities targeted towards the OEM, corporate, government, bank and education market segments, and through distribution channels targeted at the mass consumers. The Group has negotiated with a number of companies in the PRC on distribution arrangements, as well as franchise arrangements. The Group has also signed an agreement with Sohu.com (Hong Kong) Limited in July 2001 to jointly promote a national Q9 competition in China.

Commenting on the future development of Q9, Mr. Mark Leung, Chairman of Q9 noted, 'The Greater China region is the most crucial market for the Group. Majority of the 1.3 billion population relies on Chinese as the means of communication. The region lacks one input system that can operate on various platforms and products. Q9 CIS fills this niche and is a good match with this fast growing market.

'The listing of the Group in Hong Kong GEM will certainly enhance the Group's reputation in China and strengthen its negotiation power with potential customers. The Group's licensing business will directly benefit from the strong growth in China's economy, which will support high volume sales of mobile phones, PDAs and personal computers. In view of the growth rate of 40,000,000 mobile phone users per year, there is now over 100,000,000 mobile phone users in the PRC market. In addition to the Shenzhen subsidiary incorporated on July 3, 2001, the Group also plans to set up additional offices in other PRC cities to enhance the sales and marketing penetration.'

The Group will continue to commit its efforts on research and development of new products. Q9 2001 (Hong Kong version) was completed in May 2001 and has been successfully launched. The Group plans to launch Q9 2001 (PRC version) in the PRC market in August 2001. Q9 2001 has new features including Q9 stroke input option, comprehensive Chinese and English dictionaries and an interactive game.

The Group has completed the development of Q9 English version in June 2001. The Group has also completed the Q9 versions for both Japanese and Korean, and plans to develop European and Arabic languages versions in the second half of 2002.

The Group is also working with a number of desk top phone manufacturers to incorporate Q9 CIS into their message telephones, and testing of these message telephones is expected to commence in the third quarter of 2001.

Mr Leung concluded, 'Q9 anywhere is our vision. Our ultimate objective of the Group is to make Q9 CIS the standard operating system for all small-size electronic devices, and applicable to all technological products.'

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