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In our opinion, New Tel has the potential to become the America Online of Asia ... an achievement in market share that has heretofore eluded AOL itself.

PR NEWSWIRE - November 24, 1999 11:42
NEW YORK, Nov 24, 1999 /PRNewswire via COMTEX/ -- The following is being issued by Security Capital Trading, Inc., a member of the National Association of Securities Dealers, CRD Number 35909:

New Tel Ltd (NASDAQ Symbol for ADR's: NWLL)

Australian Stock Exchange NASDAQ ADR's
in Austr. $in US$ in US$

Recent Price A$1.56 US$1.01 $9.625
52 Week High 1.65 1.05 10.00 (11/18/99)
52 Week Low 0.40 0.30 3.00 (9/1/99)
Shares Outstg (millions) 90 90 (see note)
Market Cap (millions) $140 $90

Note: New Tel is listed on the Australian Stock Exchange under the
symbol NWL. The Company's ADR's are listed on NASDAQ under the symbol
NWLL. There are 10 shares of New Tel common stock underlying each NASDAQ

Mkt Cap to Earnings Book Value FY Ends Revenues Revenues Per Share P/E Per Share June (MM)
2000 (e) A$ 20 mm 4 times A$ 0.02 70 x A$ 0.20
2001 (e) 50 mm 2 times 0.10 14 x 0.30

2002 (e) 100 mm 1 times 0.20 7 x 0.55
Summary & Investment Conclusion New Tel is one of several telecommunications companies to emerge in the aftermath of that industry's worldwide deregulation. The company is a technology spin-off from a non-telecommunications company (Transcon, symbol: TRIXY) to enable a clearer, unfettered commercial focus upon telecommunications and Internet applications of its proprietary technology.

In strategic alliance with China's Xinhua News Agency, New Tel has two primary business segments: (a) providing telecommunications services and equipment to Chinese-speaking people in Australia; and (b) by the end of fiscal 2000 (ending June), ISP/Internet Portal services in China. Xinhua recently announced that New Tel was acquiring 18 websites from the Chinese Government which collectively has 7 million daily users ... including China's Ministry of Foreign Trade website. Usage is projected to increase to 33 million users by 2003. Upon consummation of this transaction, Xinhua will hold a 49% equity interest in New Tel.

New Tel has established a recognizable corporate presence in Asian telephony in a relatively brief period of time. Though currently only in two markets, Australia and China, these are two of the fastest growing ... and we expect the Company to become a material factor in both markets within the next 12 months. While we project near breakeven operating results for FY2000, we forecast $0.10 in EPS in FY2001, then doubling again in 2002 to $0.20. With 400 million shares outstanding by the middle of next year, this translates in Net Income of A$40 million (Australian Dollars) in 2001, and A$ 80 million the year after.

Our near term target price (6-12 months) of A$2.50 is based on the valuation of comparable companies that have attracted industry attention. Indeed, the recently announced issuance of 200 million shares to acquire 18 Chinese Government-owned websites assigns a valuation to New Tel stock at A$2.00 per share. Longer term (12 months +), we believe New Tel has the potential to exceed A$5.00 per share in valuation reflecting its lock-up arrangements to provide ISP services to China, continuing penetration of the Australian telecommunications carrier market, and the likelihood of garnering of significant market share at an early stage.

In our opinion, New Tel has the potential to become the America Online of Asia ... an achievement in market share that has heretofore eluded AOL itself.

History, Nature of Business & Outlook New Tel Ltd is one of six telco's currently providing telecommunications services and equipment in Australia. New Tel is one of the new second tier telecommunications companies to emerge amidst the worldwide deregulation of telecommunications. The Company actually dates back to 1988 when it was a business unit of Transcon ... also a public company traded on the Australia Stock Exchange and NASDAQ in the USA (NASDAQ symbol was TRIXY). Transcon's R&D business included applications of imbedded software technology in mobile equipment, and in July 1998, these commercial applications were bundled together under one corporate entity: New Tel.

Last year, New Tel formed a strategic alliance with Xinhua News Telecommunications (Australia: XNTL), initially owning a 25% equity interest. XNTL, in turn, is a wholly-owned subsidiary of Xinhua Holdings of Hong Kong, the commercial arm of Xinhua News Agency in China and the fourth largest news agency in the world. XNTL's business focus is to provide telecommunications services to Chinese speaking people throughout Asia using its Australian telecommunications license as the operating base. New Tel currently owns a 75% equity interest in XNTL, providing telecommunications services, digital data communications and cellular systems in Australia.

More recently, Xinhua News Agency announced that it was selling 18 websites owned by the Chinese Government to New Tel for $400 million (Australian Dollars), via the issuance of 200 million New Tel shares valued at $2.00 per share. Following this investment, New Tel would become the leading Internet Service Provider and Internet Portal in China with 7 million daily users. Industry observers expect usage to ramp up five times within three years to 33 million users ... one of the faster worldwide growth rates amongst an already blistering pace of growth. Upon consummation of this investment, Xinhua Holdings will own a 49% interest in New Tel.

Australian alliances with non-Australian companies is not new. Nippon Telephone & Telegraph recently acquired a 49% interest in Australian-based Davnet (PWT) for A$118 million. This imputes a total valuation on Davnet (with annual revenues of A$3 million) of about A$240 million. A comparable market valuation for New Tel translates into a current share price of A$2.50 per share ($240 million / 90 million shares), prior to factoring in the added value from New Tel's China Internet Division, expected to contribute to EPS as early as March 2000 (4th quarter of fiscal 2000).

Following this A$400 million investment by Xinhua, New Tel will also raise an additional A$200 million in capital via the issuance of 100 million shares at A$2.00 per share. The balance sheet following illustrates the results of these investments: Balance Sheet Highlights (in millions of Australian Dollars)

June 1998 June 1999 Pro Forma

Cash $0.2 $7.6 $607.6
Accounts Receivable 0.4 0.4
Inventory/Deposits 1.8 1.6
OCA 2.0 1.1
Total Current Assets 4.4 10.7 $610.6
Total Current Liab's 3.9 4.1
Net Working Capital 0.5 6.6 $606.6

Fixed Assets 1.5 1.1
Goodwill 1.7 10.4
Other Assets 0.8 0.1
Total Net Assets 4.5 18.2 $618.2

Represented By:
Long Term Debt 1.6 1.1 1.1
Shareholders' Equity 2.9 17.1 617.1
Total Capitalization 4.5 18.2 $618.2

Book Value Per Share $0.20 $1.59

(Share Outstanding ... in millions) 90 390
SOURCE Security Capital Trading, Inc. (C) 1999 PR Newswire. All rights reserved. -0- CONTACT: Raymond L. Dirks, or Contributing Analysts, Leo Murphy or Tom

Heysek for Security Capital Trading, Inc., 212-339-2000 or 888-305-0050, or fax, 212-339-2015 (NWLL)




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ReplyMessage PreviewFromRecsPosted
265<B>New Tel's best asset: a case against directors By Colin Kruger SeStockDung-10/23/2003
264Sooner or later they come around to my way of thinking; New Tel (NWLL) MessaStockDung-11/25/2000
263 Whats nwll Coach? Now you know allot about me but soon I will know allot about StockDung-4/12/2000
262 The whole NWLL story from NEW TEL LTD SPONS ADR: (NWVoyK-3/8/2000
261 Trading Halt Document date: Tue 07 Mar 2000 Released time: Tue 07 Mar 2000 10:AL R-3/7/2000
260 Broker Analysis update on NewTel, March 3: DIRKS & CO UPDATES RESEARCH REPOAnchan-3/3/2000
259 Strange... in Australia, NWL (=NWLL) is up 10% today plus 10% yesterday -- but Anchan-2/18/2000
258 In the last hour of today's trading on the Australian Stock Exchange, NewTeAnchan-2/10/2000
257 VoyK, could you post this interview here? Somehow I can't access your linkAnchan-2/4/2000
256 an interview with the CEO, Peter Malone
255 <b>MOST COMPREHENSIVE DUE DILIGENCE ON NWLL...</b> ragingbull.comFrancois Goelo-1/25/2000
254 NWLL on the MOVE UP AGAIN... New Tel Clarifies Relationship with Xinhua; ProvidFrancois Goelo-1/18/2000
253 It does worry me a bit: NewTel's statement affirms that there is indeed a sAnchan-1/18/2000
252 New Tel <NWL.AX> says China deal has govt partner SYDNEY, Jan 18 (ReutVoyK-1/18/2000
249 NWLL-- Ah... Thanks for the great info! L.Lucky888-1/11/2000
248 Thanks. Forgot to move my JWEB SS from 49 down to ~45. Who is buying JWEB todallen menglin chen-1/11/2000
247 NWLL -- Actually JWEB is interesting today, sold some naked calls and already Lucky888-1/11/2000
246 20% in 2 hrs -- great return. No scam is flying today, what a boring day! At allen menglin chen-1/11/2000
245 NWLL-- I can't resist the 20% in a day. Shorted @16 1/2 today and covered Lucky888-1/11/2000
244 Frenchy Hump Hump, That was pretty funny. I'll give you a little creditPluvia-1/11/2000
243 XING -- Allen, I was kidding and I am not rich at all. XING, I will unbox befLucky888-1/11/2000
242 I believe you! No wonder you are so rich -- which XXX holdings are you gettingallen menglin chen-1/11/2000
241 NWLL -- <i>The Holding are managed by the people who have very close relLucky888-1/11/2000
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