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Legend Group Limited 2003/04 Q1 Results Announcement Results Overview Mr. Liu Chuanzhi Chairman August 6, 2003.

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Presentation on theme: "Legend Group Limited 2003/04 Q1 Results Announcement Results Overview Mr. Liu Chuanzhi Chairman August 6, 2003."— Presentation transcript:

1 Legend Group Limited 2003/04 Q1 Results Announcement Results Overview Mr. Liu Chuanzhi Chairman August 6, 2003

2 2 Overview  Turnover for FY2003/04 Q1 reached HK$5.34 billion, an increase of 11.4% year on year  EBITDA amounted to HK$307 million, grew 2.3% year on year from HK$300 million  Profit attributable to shareholders increased by 3.9% year on year to HK$278 million  The Group’s gross margin improved from 15.49% to 15.63%  Net profit margin was 5.21%, compared to 5.59% of the same period of last year  Return on equity (ROE) was 6.5%, compared to 7.0% of the same period of last year

3 Legend Group Limited 2003/04 Q1 Results Announcement Financial Review Ms. Mary Ma Senior Vice-President & Chief Financial Officer August 6, 2003

4 4 2003/04 Q1 Consolidated Profit & Loss Account

5 5 2003/04 Q1 Turnover Breakdown Corporate IT 48.3% (52.0%) Consumer IT 38.3% (38.2%) Handheld Device 7.5% (5.4%) Contract Manufacturing 3.9% (3.6%) IT Service 2.0% (0.8%) Note 1: FY2002/03 Q1 figures are in brackets.

6 6 Changes in Turnover Breakdown

7 7 Changes in Profit Contribution Breakdown Note 2: Profit contribution for FY2002/03 and FY2003/04 before amortization of goodwill and gains on disposal of investment securities.

8 8 Gross Margin Analysis Note 3: Before elimination of inter-company transaction, the gross margin of contract manufacturing business is 8.0% (2002/03 Q1: 9.4%). Corporate ITConsumer ITHandheld Device GroupContract Manufacturing (Note 3) IT Service

9 9 Consolidated Balance Sheet

10 10 Key Financial Figures

11 11 Key Financial Figures

12 Legend Group Limited 2003/04 Q1 Results Announcement Market and Business Review Mr. Yang Yuanqing President & Chief Executive Officer August 6, 2003

13 13 Market Overview  China IT market in FY2003/04 Q1 was impacted by SARS outbreak –Corporate IT market was affected heavily Business trips and promotion activities were restricted Government focused on fighting SARS School classes were suspended in some regions –Retail market (PC, handset and digital products stores) in epidemic regions was seriously impacted during April and May  China IT market continues to demonstrate great potential, PC unit shipment in April to June quarter is estimated to grow 10% YoY –SARS outbreak promoted IT applications, hence stimulated the sales of consumer PC, especially PC for schooling –4 to 6 tier market maintains fast growth, yet lowered configurations and average selling price  Intensified competition in handset market continued, product upgrading time shortened –B/W screen handset inventory reduction caused more price pressure and lowered average profit level

14 14 Business Review  Performed well during SARS period, achieved growth both in turnover and net profit –Corporate IT was seriously impacted by SARS, especially for education and government sectors, yet still recorded 3.3% and 8.5% growth in turnover and profit respectively –Consumer IT performed remarkably by leveraging competitive strengths and quick responses to the market, achieving 11.6% and 35.1% growth in turnover and net profit respectively Advantages stood out in branding, 1+1 home specialty shop, call center and after sale services –Handset business grew 53.4% in turnover with the launch of new models and channel expansion Gross margin lowered by both SARS and inventory reduction from competitors –IT service business showed positive results from business integration, the acquired businesses performed well and began to contribute profit Possible lagging effect from SARS outbreak

15 15 3-Tier Business Strategies on Track  Core business strongly outperformed the overall market –PC unit shipment grew 21.6% YoY, far better than market growth –PC market share increased QoQ and YoY  Majority of growth businesses and seed businesses performed in line with expectations –Notebook unit shipment grew 52.4% –IT service revenue grew 195.7% –Handheld device revenue grew 53.4% –Printer units grew 65.5% Commercial DT 15.7% Notebook 52.4% Consumer DT 24.5% Server 2.0%

16 16 Technology Innovation & Product Portfolio Optimization  Executed market segmentation strategy, rolled out customer-oriented/time-to-market products FengxingJiayue High-end users in large cities Enhanced share of replacement market Low income families / Students General users /Quality buyers Hot model; 30,000 units booked on its debut Principal product Launched in June Tianjiao Launched in May

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18 18 Promote Applications for Data and Communication Convergence  Leverage on data processing advantage, strengthen self- developed capabilities –Released six new models with proprietary technologies, G818 is the first MMS handset among domestic vendors –Debuted high end PC-phone ET180 –Penetrate notebook market by rolling out new products with fashionable features such as wireless, wide screen, etc. G818 ET180 Tianyi Strengthens high end market position Improves gross marginDevelops new market

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