Analysis by business segment
The following is an analysis of the Group’s turnover for the year ended 31 December 2007 by business
segment:
For the year ended 31 December
2007 2006
RMB’000 % RMB’000 %
Provision of system integration services 2,150 30.9 8,670 36.9
Development of customised software products 516 7.4 3,310 14.1
Sale of software and hardware products 2,977 42.7 7,904 33.7
Provision of maintenance and other services 1,323 19.0 3,582 15.3
Total 6,966 100 23,466 100

During the year, the Group’s principal source of income was derived from the sale of software and
hardware products and the provision of system integration services, which accounted for approximately
42.7% and 30.9% respectively of the total turnover of the Group, while incomes from the development of
customised software products and the provision of maintenance and other services took up approximately
7.4% and 19.0% of the total turnover respectively.
Due to the rapid diminishing demand of RCCs market, the incomes from provision of system integration
services and provision of maintenance and other services have experienced serious decline. The income
from the provision of system integration services accounted for RMB2,150,000, representing a decrease
of 75.2% from RMB8,670,000 in 2006, while income from the provision of maintenance and other services
recorded a decrease of 63.1% to RMB1,323,000 as compared with RMB3,582,000 in 2006.
Despite the aforementioned, given that the Group has comprehensive products of RCCs information
network system in store and no significant investment for business development is required, it is believed
that the Group’s turnover and profits will improve when the RCCs market recovers in the near term by the
Group’s effort in seizing every business opportunities, meeting the demand of RCCs market and accelerating
the construction progress of information networks.
Similar to the year 2006, most of the Group’s income was derived from Shandong Province in 2007, which
accounted for over 56.1% of the Group’s total turnover (2006: 74.4%). Contribution from Hubei Province
and Guangdong Province increased to 14.6% and 15.4% respectively as compared to 12.1% and 7.1% in
the previous year. The contribution from other provinces in the total turnover increased from 6.4% in the
previous year to currently 13.9%.
As the Group will continuously expand its market share in the RCCs information network development in
the PRC, the Group anticipates that income from other provinces will continue to increase.