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LENOVO AND ASIAINFO IN STRATEGIC ALLIANCE

   

(Hong Kong, July 28, 2004) - Lenovo Group Limited ("Lenovo") (SEHK: 992) announced today that it will form a strategic alliance with AsiaInfo Holdings, Inc ("AsiaInfo") (NASDAQ: ASIA) to capture the growing IT service market in China. According to the agreement, Lenovo will transfer its non-telecom related IT services business to AsiaInfo in a stock transaction valued at RMB 300 million (US$36.3 million). Upon completion, Lenovo will become one of the largest shareholders of AsiaInfo.

Lenovo's non-telecom related IT services business and AsiaInfo's existing enterprise information solutions (EIS) business unit together will become a new division of AsiaInfo, to be named Lenovo-AsiaInfo. Leveraging both companies' core competencies in the IT industry, Lenovo-AsiaInfo is expected to be a leading IT services provider in China, offering Chinese enterprises solutions including security products and services, management consultancy, e-HRM and business intelligence, e-government and financial solutions.

Bing Yu, Senior Vice President and current head of Lenovo's IT services unit, will lead Lenovo-AsiaInfo. He will join AsiaInfo's senior management team and become an executive director of the Board.

The IT industry is currently shifting its development focus from provision of products to services. The forging of the strategic alliance between Lenovo and AsiaInfo will allow the two companies to capture the rapidly growing China IT service market. As government IT infrastructure, business enterprises and society become increasingly sophisticated, the market is poised for sizeable IT service providers who are highly professional and institutionalised. Both Lenovo and AsiaInfo have accumulated extensive experience in IT service sector, share the same positive outlook towards China's IT service industry and have the same aspiration of strengthening China's IT services brands. Lenovo-AsiaInfo will move towards scaled business development and this alliance is expected to play an instrumental role in shaping the future of China's IT services market.

Commenting on this strategic move, Yang Yuanqing, President and CEO of Lenovo, said, "IT services is a strategic business of Lenovo, and we have been adopting innovative approaches to develop the business. Lenovo partnered with AsiaInfo primarily because of its aspirations to build a strong and solid IT service brand in China, its abundant capital resources, as well as its outstanding technologies and talented personnel. In addition, AsiaInfo possesses the management platform needed for the rendering of IT services. The cooperation with AsiaInfo is in line with Lenovo's long term plan to invest in IT services. We believe this new approach will promote IT service business development."

James Ding, Chairman of the Board of AsiaInfo, said, "It is a golden opportunity for the development of software service enterprises in China. AsiaInfo teamed up with Lenovo because of its remarkable brand name, its vast experience, extensive customer base that spans the finance, government, manufacturing and other sectors, and its top class IT team. The strategic integration of IT service resources will greatly strengthen both companies' influence in the application software and IT service industry. With huge market resources and a rich pool of software talent, China is set to see the emergence of a world-class software and services enterprise."

As the largest IT enterprise in China, Lenovo continues to focus on its core businesses and committed to providing customers with state-of-the-art IT products. At the same time, Lenovo also holds the vision of evolving into a "service-oriented Lenovo". Within three years from the start of its IT service business in 2001, Lenovo has successfully built an IT service operation that serves diverse fields from finance, telecommunications, government, manufacturing and information security, providing different Chinese enterprises and organisations with all services located on the value chain from IT consultancy to service outsourcing. In 2003, Lenovo was named "The Most Influential Chinese IT Service Brand".

Prompted by the further development of the Chinese IT services market, the strategic alliance of Lenovo and AsiaInfo mirrors the inevitable trend of collaboration between major industry players. With two giant enterprises working together, the IT industry will certainly see profound and long term changes as it enters a new era.

Lenovo Group Limited (HKSE stock code: 992; ADR stock code: LNVLY) is the largest IT enterprise in China. The Group is mainly engaged in the manufacture and sales of desktop computers, notebook computers, mobile handsets, servers and peripherals in China. Lenovo's own brand PCs have been the best seller in China since 1997, commanding a market share of about 27% in 2003. Lenovo PCs also top the best seller list in the Asia Pacific region (excluding Japan) with a market share of 12.6%. The Group has been actively involved in supporting sports activities and has joined the sixth generation of the International Olympic Committee's global sponsorship programme, The Olympic Partner (TOP) Programme, in March this year. Lenovo was listed on the Hong Kong Stock Exchange in 1994, and is a constituent stock of the Hang Seng Index. Its American Depositary Receipts are currently being traded in the United States. For more information, please visit www.lenovo.com

AsiaInfo Holdings, Inc. (Nasdaq: ASIA) is a leading provider of high-quality software and solutions in China. The company provides total customer solutions to some of China's largest companies, and helps its customers to increase their business value in fast-growing and evolving markets. AsiaInfo's products and services cover telecom network infrastructure and application services, encompassing messaging, broadband and wireless; customer relationship management (CRM) and billing solutions; decision support systems; business intelligence (BI); and human resource management (HRM).

Organised as a Delaware corporation, AsiaInfo began in 1995 as the constructor of national backbones and provincial access networks for all of China's major national telecom carriers, including China Telecom, China Mobile, China Unicom and China Netcom. After its acquisition of OSS vendor Bonson in 2002, and the HRM and BI business from Pacific Software in 2003, the company has successfully leveraged its strengths as a IT systems integrator and telecom software solution provider, to offer a full suite of IT services to a broad range of customers.

For more information about AsiaInfo, please visit http://www.asiainfo.com