Chun Can Capital Group (CNCN)

[Growth And Value]

CinTel Corp. Enters Game Contents Service Business
Thursday February 16, 9:30 am ET


LOUISVILLE, Ky.--(BUSINESS WIRE)--Feb. 16, 2006--CinTel Corp. (OTCBB: CNCN - News), a leader in Internet traffic management, announced today it has signed a non-binding memorandum of understanding (MOU) for the acquisition and operation of all assets related to the online game company called, "Let's Game" (URL: www.letsgame.com) currently owned and operated by Dataway Eng Inc. The significance of CinTel's anticipated acquisition and operation of the "Let's Game" portal as an independent subsidiary is that CinTel will use this acquisition as a foundation to become a leading online game company, to expand into the new business of digital contents provider and to further diversify and improve its revenue stream. Rather than relying merely on its current revenue cycle of solution development and sale, CinTel will be able to earn recurring revenues from its growing user-base in the rapidly growing digital content market with high margins when this acquisition is successful.
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"Let's Game" is a well-known, multi-functional game portal launched in January 2003 by Korea's second largest network provider Dacom Inc.'s subsidiary, Dacom MediaInternet Inc. (URL: www.dacommi.co.kr), after millions of dollars in research and years of development. It has a variety of games and a well-balanced user-base who have proven loyal to the dedicated game portal site "Let's Game." The users of "Let's Game" regard it as one of the more innovative and user-friendly game portal sites with a variety of innovative functions such as a web-game community, questweb, and MyGame.

"Let's Game" is preparing the world-wide launch of the portal and is in discussion with some of the world's leading game publishers regarding joint ventures and strategic alliances. It has been an exhibitor at a variety of industry exhibitions and conferences starting with the E3 Show in 2003 through G Star Show in 2005. Its prospective partners include leading game companies in America, Europe, China, Japan, South East Asia, and Brazil. In 2006, it plans to establish a beach-head subsidiary in England to direct its world-wide launch; thereafter, the portal will be launched in U.S., China and Japan. Although Korea is quite unique in the world as the undisputed leader in online gaming due to the high penetration of super-high broadband, it is rare for a game portal such as "Let's Game" to have internalized and institutionalized the proprietary stable, recurring revenue generation that can be ported to other countries.

One of the game titles held by "Let's Game," which is akin to an arcade bomb game fashioned after "Crazy Arcade," has a potential to develop a cult-following among users, and its own original Casual-MMORPG game title "Afiliad" will be launched amidst high anticipation in the second half of this year.

Since CinTel received several million dollar investment in the fourth quarter of 2005, it has been seeking ways to significantly diversify and improve its revenues and has concluded that focusing on online gaming would be promising due to its high growth prospects and the potential to leverage CinTel's core strengths in game server technology. As can be seen from the repeated results of Korean online game leaders, NC Soft and Nexon, online games are a high-margin, high EBITDA business. CinTel will continue its internet traffic management (ITM), cache-server, and network system integration business with its world-renowned partners such as KT (Korea Telecom) and Hyundai HDS in various projects such as the Korean National Museum Project, and overseas projects with the likes of Hyundai Heavy Industries. The development and executive team of "Let's Game" is reputed to have world-class technology and the addition of CinTel's unique expertise in the field of massive traffic management will enable the "Let's Game" portal to leverage CinTel game servers to be vastly more productive and efficient.

Sang-Don Kim, the CEO of CinTel, stated, "The combination of CinTel's network and server technology and the industry leading game development technology of "Let's Game" is expected to up-grade the online game development ability. We anticipate that CinTel will be able to leverage this technological competitive advantage into a licensing business of our core technology." Mr. Kim added, "The high growth of the subsidiary to be formed with "Let's Game" will act as a second reliable profit center for CinTel and will diversify CinTel's reliance away from the internet traffic management and network integration business. CinTel will be able to fund any further acquisition of vital gaming solutions that it expects will create additional shareholder value. CinTel may also be able to leverage its ITM and network integration business with the assistance of the overseas contacts that "Let's Game" already has. Subject to CinTel's satisfaction after a thirty (30) day due diligence period, it is expected that CinTel and Dataway Eng Corp. would execute a legally binding agreement whereby CinTel would invest approximately $150,000 at the time of signing the binding agreement and a mandatory additional investment of approximately $500,000 within an year to acquire more than 50% of the newly formed spin-off which is expected to contribute approximately $2,000,000 of additional revenues and $700,000 in EBITDA."

About "Let's Game":

Originally launched by Dacom Inc. in November 2002, "Let's Game" was acquired and re-launched by Dataway in December 2004. It currently operates as a game and community portal, and has twenty five games, flash games, mini-homepages, and online cafes.

http://biz.yahoo.com/bw/060216/20060216005477.html?.v=1