Turnover Increased by 39% in 2003 Annual Results

                                              Benefit from Increased Capital Expenditure of PRC Mobile Operators
                                      Strengthen Development in China and Extend Presence in Overseas Markets


(31 March, 2004 – Hong Kong) – Comba Telecom Systems Holdings Limited (‘Comba' or the ‘Group'; stock code: 2342), the leading integrated wireless coverage solutions provider in Asia, is pleased to announce its first annual results since listing for the year ended 31st December, 2003.

Financial Review
For the year under review, the Group's turnover reached HK$806.23 million, representing an increase of 39.4% from the corresponding period last year. The improvement was mainly attributable to an overall increase in wireless coverage capital expenditure by PRC mobile operators to improve the quality of their mobile networks amidst intense competition. In addition, the respective increases of 14% and 130% in revenue from China Mobile and China Unicom also contributed immensely to the Group's turnover growth.
Indoor coverage solutions accounted for approximately 71.7% of the Group's revenue in 2003 as compared to 65.8% last year. The share of outdoor coverage solutions decreased from 27.8% to 22.7% in 2002.
Geographically, Southern China (covering Guangdong) remained as the major contributor by accounting for 32.1% of total revenue. The Eastern branch (covering Shanghai, Jiangsu and Zhejiang) and the Northeast branch (covering Liaoning, Jilin and Heilongjiang) together accounted for 36.8% of the Group's total revenue. Thanks to the Group's ability in developing new models regularly to meet changing market needs, improving its production technology, optimizing its supply chain thereby getting better terms from suppliers, benefiting from its expanding operations scale and continuously exercising stringent cost control measures, the Group's gross margin was comparable to that of 2002.

Business Review
The encouraging 2003 annual results reflected the Group's commitment to capturing potential opportunities in both the domestic and overseas markets. Mr. Fok Tung Ling, Chairman and Managing Director of the Group, explained the reasons for its growth and said, "Keen market competition prompted many mobile operators to accelerate capital investment in wireless coverage to enhance their market competitiveness and to differentiate their mobile services. As such, Comba benefited immensely by providing low-cost, high efficiency wireless coverage solutions and new products that meet the ever-changing needs of the mobile market.
"While solidifying our presence in existing PRC cities, the Group has also diversified into inland and western provinces to tap into the underserved markets and to further expand customer base. Sales from overseas markets more than tripled despite the impact of SARS. With the global telecom recovery and high growth in emerging markets, we are confident of achieving new business heights with the sustainable growth momentum in 2004."
The Group has always committed to improving its R&D capability and expanding its product diversity. During the period under review, the Group acquired a 51.75% interest in WaveLab Holdings Limited to enhance its R&D by developing certain models of ODUs (outdoor units). Pilot production has commenced and field trials of digital microwave systems comprising ODUs and IDUs (indoor units) will soon be launched with some of the Group's customers in the PRC. This new product line is expected to generate satisfactory revenue by the second half of 2004. In addition, the Group also diversified its resource allocation for developing components and products that are related to 3G mobile standards in anticipation of the possible grant of 3G mobile licenses in the PRC in the near future.

Future Prospects
Leveraging on the recovery of the global telecom market and robust growth momentum in emerging markets, the wireless telecommunications industry in the PRC has, and will continue to, record steady growth. Statistics from International Data Corporation indicated that total wireless capital expenditure from 2002 to 2007 is expected to grow at a compound annual growth rate of 9.5%, while total wireless coverage capital expenditure will grow at an even faster pace of 20.6%. Leveraging on the industry's projected stable growth and the Group's increasing market share, Comba is confident of generating the same, if not greater, revenue growth in the future.
Throughout the past year, the Group won many tenders and qualified as one of the suppliers of wireless coverage solutions for all major PRC provinces, which set a stellar stage for continuous business progress. The increase in business opportunities will broaden the Group's geographical reach and customer base and propel its sustainable development in the long run.
Mr. Fok, commenting on the Group's future strategies, said, "Comba has strengthened its brand name in the wireless coverage market in the PRC with well established reputation as a market leader. Looking ahead, Comba will continue to pursue the strategy of organic growth by establishing offices both in the PRC and Asia. At the same time, it will also seek after any business or M&A opportunities that will bring synergy to our existing operations in areas of market expansion, supply chain integration and enhancing our R&D capabilities. While we remain focus on our core competency in radio frequency technology, we will also stay abreast of market changes and developments in relevant industries, with the view of consolidating our leading market position, maintaining a solid and healthy financial position and maximizing our shareholders' value."