General Announcement
Reference No O&-041007-62313

Submitting Merchant Bank	:	K & N KENANGA BHD
Company Name	:	ASIAEP BHD (MESDAQ Market)
Stock Name	:	ASIAEP
Date Announced	:	07/10/2004


Type	:	Announcement
Subject	:	AsiaEP Berhad ("AsiaEP" or "the Company") Research Report 31 August 2004

Contents :

Financial Highlights

Turnover and PAT

For the 6-month period ended 31 August 2004, the Company achieved a turnover and PAT of approximately RM5.271 million and RM2.142 million respectively. As AsiaEP is in its first year of listing on the MESDAQ Market of Bursa Malaysia Securities Berhad, no corresponding turnover and PAT for the 6 months period ended 31 August 2003 are available for comparison.

Utilization of Proceeds

As at 31 August 2004, the Company had utilized approximately 43.1% of the proceeds raised from its Initial Public Offering ("IPO") in January 2004.

The actual total listing expenses was at approximately RM1.720 million where the Company utilized only approximately RM1.399 million out of the listing proceeds to pay for the listing expenses. The balance of the listing expenses were settled through the use of internally generated funds.

The IPO proceeds were received by the Company in late January 2004 and the Company expects to fully utilize the said proceeds by early of 2006.

Future Prospects

There is no change in the principal activity of the Company since the date of the last research report, being the provision of a comprehensive range of Internet and advertising related services. The prospect of the Company is dependent on the growth of the Information and Communication Technology ("ICT") industry, which sees a strong expansion due mainly to an increase in cellular phone and Internet users. Of significance to AsiaEP's operations is the number of Internet subscribers, which increased by 14.2% to 3.12 million subscribers from January to June 2004 (January-June 2003: 18.9%, 2.73 million), resulting in a 12.2% penetration rate in the period from January to June 2004 (January-June 2003: 10.9%). (Source: Economic Report 2004/2005). Consequently, the Directors are of the opinion that the outlook of the ICT industry is expected to be favourable and encouraging for the Company's business.

In addition, the Company had also entered into a number of Memorandum of Understandings ("MOU") with various companies based in the People's Republic of China ("PRC"). Such collaboration with the PRC partners would provide an opportunity for the Company to enhance and expand its products base via the promotion and access to PRC. The MOUs are subject to the execution of formal agreements. The salient terms of these MOUs were announced in the Company's announcements dated 6 August 2004 and 17 August 2004.