(15 September 2005 – Hong Kong) – Comba Telecom Systems Holdings Limited (‘Comba’ or the ‘Group’; stock code: 2342), China’s No.1 integrated wireless solutions and sub-system provider, announced today its interim results for the six months ended 30 June 2005.

For the period under review, the Group’s turnover was HK$413,013,000, representing a year-on-year decrease of 7.5%. Gross profit for the six months under review dropped 21.2% to HK$161,219,000 as compared with HK$204,471,000 for the corresponding period the previous year. Profit attributable to equity holders was HK$35,941,000, representing a decrease of 67.2% from the corresponding period the previous year. Basic earnings per share was HK4.32 cents.

For the six months ended 30 June 2005, developments in the PRC, a key market for the Group, had negative impacts on the financial performance of the Group. The PRC market experienced a slowdown in capital expenditure on wireless enhancement and coverage solutions of the CDMA network. This was caused by uncertainty of industry restructuring. The downward trends in selling prices for the mature 2G mobile telecommunications market in the PRC also had adverse impacts to the Group.

The Board of Directors did not recommend the payment of an interim dividend for the six months ended 30 June 2005 (For the first half of 2004: HK 4 cents).

Commenting on the Group’s performance, Mr. Fok Tung Ling, Chairman and Managing Director of the Group, said, “Amidst stagnant business conditions, the Group recorded decreases in turnover and profit attributable to equity holders during the first half of 2005. Although the Group faced continued pressure on the average selling price of its products, the Group strove to maintain a healthy gross margin with better pricing in material costs and the implementation of effective cost control measures. In addition, we continued to strengthen our research and development capabilities during the period, so as to capture the immense potential brought forth by the granting of 3G licences in the near future, which is expected to become a strong profit driver of the Group.”

During the period under review, the Group expanded its business in the international market. The Group participated in various international conferences such as 3GSM World Congress 2005 and CommunicAsia 2005 during the period under review and has set up sales offices in Hong Kong, Singapore, Sweden, Thailand and India respectively to explore the business opportunities in the international market. In view of the promising international market, it is expected that international sales will pick up in the second half of 2005 and generate revenue to the Group.

While enhancing its product portfolio and penetrating new markets to ensure long term growth, the Group reviewed various possible measures to further improve the efficiency in the utilization of its resources and to reduce operating costs given the current difficult market conditions.

To cater to the Group’s future development in the coming years, the Group commenced the construction of its new regional headquarters in the PRC. The Group expects to relocate the sales, marketing, administration and the R&D departments to the new headquarters in the first half of 2006. Subsequently, the Group’s production facilities will be expanded to occupy the vacated floor space.

Looking ahead, the Group remains highly optimistic about the opportunities that the future development of the 3G telecommunications market in the PRC will bring. With the efforts in the R&D of 3G technologies over the years, the Group’s 3G products are ready to launch. As and when the 3G licenses are granted to telecommunications operators in the PRC, the Group expects significant business opportunities from both existing and new customers.

The PRC market is also expected to be a powerful contributor to the OEM vendor market over the next 3 years driven by the 3G license issuance and the subsequent network upgrades and installations. Leveraging its established R&D and manufacturing capabilities, the Group will capture the business opportunities and gain share in the OEM vendor market.

With the establishment of a dedicated marketing organisation with employees in Hong Kong, China, Asia Pacific region and EMEA coupled with a Global Service & Support Team (“GSST”) in Singapore, the Group is now in a position to address different market requirements as well as to offer a complete solution from consultation to post-sales support and maintenance. The Group is committed to the international expansion and believes that it will provide substantial growth for the Group in 2005 and beyond.

Mr. Fok further commented, “We are confident of the business opportunity and growth potential for Comba by the granting of 3G licenses in the PRC. Being the market leader in the PRC in terms of market share, R&D and production capabilities, the Group is well positioned to provide quality products and services in the international and OEM Vendor markets. By leveraging our leading position, quality product and prominent production capabilities, we are well-poised to capture the immense potential in 3G, international and OEM Vendor markets ahead. We are committed to maintaining a solid and healthy financial position, consolidating our leading market position and pursuing a prudent growth strategy, bringing profitable returns to shareholders.”