Company Overview

Our Business

Ninetowns (NASDAQ: NINE) is a leading service provider that enables enterprises to streamline the import/export process in China. Since our inception in 1995, we have focused on providing enterprise solutions for the completion over the Internet of the processing of import/export declaration, by leveraging our international trade expertise and our insights into the needs and procedures of certain trade-related PRC government agencies, such as the State Administration for Quality Supervision and Inspection and Quarantine of China, or the CIQ.

Our Market Opportunities

According to Global Insight, China's exports amounted to US$594 billion in 2004, making it the world's fourth largest exporter, and its total value of import/export transactions reached US$1,155 billion in 2004, up from US$620.9 billion in 2002 and US$851.6 billion in 2003. The value of import/export transactions in China is expected to reach approximately US$2.5 trillion by 2008, representing a compound annual growth rate of approximately 25% from 2001 to 2008, according to Global Insight. As China's import/export market expands, we expect there will be increasing demand from the enterprises for more cost-efficient and time-saving electronic processing methods, rather than the traditional paper-based filing.

Our Solutions

Our enterprise solutions are standardized, easy-to-install applications that mainly enable, among other things:

(1) electronic application to the CIQ for an Origin Certificate;

(2) electronic application to the CIQ for goods inspection;

(3) electronic transfer of various import/export documents between the local inspection agency branch office where an international trade enterprise is located and the branch office at the discharging port or station through which the relevant goods are being imported into or exported from the PRC; and

(4) electronic transfer of documents from the CIQ to PRC Customs.

Our Competitive Advantages

(1) First to market, setting the industry standard by being the first enterprise solutions officially certified by the CIQ for use in the declaration process.

(2) Proven ability to establish and maintain collaborative relationships with the CIQ since 1995, which has ensured our enterprise solutions to constantly reflect changes in the CIQ's information systems, procedures, rules and regulations.

(3) Scalable, modular and non-piratable software having easy-to-intall modules and mandatory account registration before granting access to interface with the CIQ.

(4) Strong market reputation, well-known brand name among import/export enterprises, and large captive client base.

(5) Extensive distribution and support network consisting of 22 branches covering most of the major import/export cities in China.

(6) Experienced management team with strong product development capabilities and domain knowledge of China's import/export industry.

Our Company Name

Our name, Ninetowns, was initially created by our founders for several reasons:

(1) The inner city of old Beijing was reconstructed during the early period of the Ming Dynasty, during which nine city gates were built, namely the Qianmen Gate, Xuanwumen Gate, Fuchengmen Gate, Xizhimen Gate, Deshengmen Gate, Andingmen Gate, Dongzhimen Gate, Chaoyangmen Gate and Chongwenmen Gate. The area inside these nine city gates became known as the "Inner Nine Towns" of Beijing. Therefore, our name "Ninetowns" indicates that the founding of the company occured in the heartland of Beijing.

(2) The word "Nine" in Chinese has two meanings: a) "Nine" in Chinese symbolizes fortune and auspiciousness because the number nine is the highest single digit number. In ancient China, "Nine" could be found in many structures, such as the famous "Nine-Dragon Screen" in "Beihai Park" of Beijing; and b) In Chinese, "Nine" is homonymous to the Chinese word "Long", implicating long lasting prosperity. Therefore, it is our wish that our continued efforts will assure long lasting fortune and prosperity to our company.

(3) The word "Ten" in Chinese means perfection, thus the word "Nine" represents almost perfection. Our founders want us to always remember that we must strive for perfection, but as we are all only human and not infallible, we must all be realistic and continuously assess and improve ourselves.