General Announcement Reference No O&-050614-61144

Submitting Merchant Bank	:	K & N KENANGA BHD
Company Name	:	ASIAEP BHD (MESDAQ Market)
Stock Name	:	ASIAEP
Date Announced	:	15/06/2005

Type	:	Announcement
Subject	:	asiaEP Berhad ("asiaEP" or "the Company") Research Report 28 February 2005

Contents :

Financial Highlights

Turnover and PAT

For the 12-month period ended 28 February 2005, the Company achieved a turnover and PAT of approximately RM10.304 million and RM2.466 million respectively. Revenue for financial year ended 28 February 2005 is approximately 22.2% higher than the revenue recorded for the previous financial year of RM8.431 million. However, despite the increase in revenue, PAT decreased as the Company decided to be more stringent in the treatment of its development expenditure incurred for the entire financial year ended 28 February 2005. Due to the Company's more conservative approach to charge out some of its development expenditure, adjustments for the entire financial year was made in the current fourth quarter resulting in a net loss of approximately RM812,000 for the quarter ended 28 February 2005 and a cumulative net profit of approximately RM2.5 million for the financial year.


Utilization of Proceeds

As at 28 February 2005, the Company had utilized approximately 57.2% of the proceeds raised from its Initial Public Offering ("IPO") in January 2004.

The actual total listing expenses was at approximately RM1.72 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 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.

According to the Eighth Malaysia Plan 2001 – 2005, Malaysia is well placed to benefit from the new wave of growth under the ICT revolution. The relatively developed infrastructure and the conducive environment put in place during the period under the Seventh Malaysia Plan for the development of ICT industry, particularly within the Multimedia Super Corridor, have formed the foundation for Malaysia to leverage on the growth opportunities provided by ICT. Under the Eighth Malaysia Plan, focus will be towards further strengthening the human resource capabilities, hard and soft infrastructure as well as the building of a critical mass of small-medium enterprises and Internet users to enable Malaysia to mover rapidly towards achieving a developed nation status with a knowledge-based society.

On 24 March 2005, the Company entered into a conditional sale of shares agreement for the acquisition of approximately 76.77% of Cimtek Pte Ltd ("Cimtek"), a company incorporated in Singapore (the "Acquisition Agreement"), and a conditional subscription agreement for the subscription of 24,426 new ordinary shares of SGD1.00 each in Cimtek (the "Subscription Agreement"). Upon completion of the Acquisition Agreement and the Subscription Agreement, the Company shall own approximately 80.02% of the enlarged issued and paid-up share capital of Cimtek. As part of the Acquisition Agreement, the Company was also granted a conditional call option to acquire the remaining 19.98% shares in Cimtek which are not already owned by asiaEP (upon completion of the Acquisition Agreement and the Subscription Agreement) (the "Call Option"). The Acquisition Agreement and the Subscription Agreement is currently pending completion.

Cimtek and its subsidiary companies are primarily involved in product development, consultancy and product distribution in computer-integrated solutions, specifically in relation to supply chain management solutions and materials forecasting simulation solutions. The Board of Directors of asiaEP are of the view that Cimtek will provide a unique opportunity for asiaEP to tap into its existing clientele base and to provide value added services. In addition, it will serve as an enhancement to the current core businesses of asiaEP by providing strategic benefits in the form of cross-selling of Cimtek's suites of software to asiaEP's existing customers in the manufacturing sector through the Company's e-marketplace portals, and vice versa.

The Company also proposes to increase the authorised share capital of the Company from the existing RM25,000,000 comprising 250,000,000 ordinary shares of RM0.10 each in asiaEP ("asiaEP Shares") to RM50,000,000 comprising 500,000,000 asiaEP Shares by the creation of an additional 250,000,000 new asiaEP Shares primarily to accommodate the issue of the new asiaEP Shares pursuant to the Acquisition Agreement and the Call Option and any other new issuance of asiaEP Shares as well as the exercise of options in relation to the Company's existing employees' share option scheme.