iSteelAsia.com Limited (HKSE: 8080) today announces the Group's first-quarter results for fiscal 2000/2001. The Group registered an 86% increase in turnover to HK$56,098,000 for the period, and a gross profit of HK$2,535,000. A net loss attributable to shareholders of HK$33,350,000 was recorded due to the Group's start-up investments during the period in brand building, major enhancements to the Website, platform development and online operations, which totaled HK$36,191,000. In the quarter ended June 30, 2000, total online transactions have grown to US$49 million, generating commission income of HK$1,469,000. US$82 million of steel products were transacted through iSteelAsia.com in the first half year of 2000, and the aggregate transaction volume now exceeds US$100 million.

The Group's investments were expended to the technological enhancement of the vertical portal (vortal), to broaden its customer base and expand difference marketplaces, all geared to consolidating the Group's competitive position and long-term profitability. Of the total investments, HK$22.4 million were used to improve the functionalities of the platform technology, brand building, Website launching and strategic alliance strategies.

Mr Andrew Yao Cho-fai, Chairman of iSteelAsia.com said, "The Company has a clear vision of path to profitability. Our investment will level off while commission income increases, and to further broaden our income base, we are exploring to add fee-based revenue pipelines to our online business model in the near future, to be derived from the provision of more value-added services."

Membership has grown 47% in the first quarter to over 2,000 while transaction postings have surged 125%. To consolidate iSteelAsia.com's position as a dominant steel vortal, the Group has continued to bring online services along the steel supply chain, including customs clearance, regulatory compliance, surveying, financial, freight, logistics and insurance, through strategic alliances with major services partners.

Turnover from traditional steel trading also grew by 81% to HK$54,629,000, fueled mainly by the increasing demand for computers, household appliances and electrical appliances in China. The Group believes the traditional operation will continue to provide a steady income base for iSteelAsia.com as it provides an alternative solution to customers who are not yet prepared for the migration to online trading.

The Group's global presence covers over 10 locations including Hong Kong, Beijing, Shanghai, Guangzhou, South Koera, India, Singapore, Philippines, Europe, Dubai, the US and Japan.

Going forward, the Group will extend its traditional commission-based revenue model to new fee-based income derived from value-added services. Mr Yao concluded, "We are fully aware that the Internet industry is undergoing consolidation and the Group is very conscious about profitability and stringent cost control. We are confident of our business model, which was dubbed as having ‘the most potential of Asian B2B plays that have come to market so far' by an influential writer in the industry*."

About iSteelAsia.com Limited
Launched in December 1999, iSteelAsia.com (iSteelAsia) was Asia's first online exchange for trading in steel and steel products. It is the first of its kind to be listed on the Hong Kong Stock Exchange's GEM board in April 2000. Focused on the Asian steel community, iSteelAsia aims to offer an open and neutral marketplace for steel trading. Trading competitiveness and efficiency are optimised on iSteelAsia as players can access a full spectrum of buyers and sellers and timely market knowledge. iSteelAsia serves as a single point of contact offering financing, insurance, surveying, shipping and logistics services, providing members with a one-stop end-to-end steel trading.

To date, iSteelAsia has over 2,600 registered members who regularly use its online trading services and access into its online Reuters and Asia Information Resources News.

Financial Highlights

* James Brandman of Global Finance wrote in the June 2000 issue: "B2B portal iSteelAsia.com probably has the most potential of the Asian B2B plays that have come to market so far. After just a few months of up and running, it already has a head start on its competition in setting up operations and signing up steel producers."