1. 1 Beijing Beida Jade Bird Universal Sci-Tech Company Limited Strategic Development May 2002

2. 2 Content Part (I) About the Company Part (II) Strategic Investment in SMIC Part (III) Prospects & Outlook of Semiconductor Industry Industry Part (IV) Proposed Placing of New H Shares

3. 3 Part (I) About the Company

4. 4 Company Background 29 Mar 2000 27 Jul 2000 The first H Shares Listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong Stock Code : 8095 Capital raised : Approx. HK$300 million Incorporated as a joint stock limited company Registered capital : RMB 96,400,000 18 Dec 2000 Company subdivided each of the Promoters’ shares and H shares into ten shares`

5. 5 Shareholder’s Structure The Company Employees of Jade Bird Group & the Company 93.37%6.63% 22.82%27.39%32.16% Peking University 17.63% Strategic Investors from Hong Kong Public (H Shares) Dynamic Win Strategic Investors from HK& Singapore Jade Bird Group

6. 6 Company Structure (1) 100% 5.29% 75%51% Hebei Beida Jade Bird Universal Fire Alarm Device Co Ltd Beijing Jade Bird Hao Di Electric System Co Ltd Beida Jade Bird Universal Sci-Tech (Cayman) Development Co Ltd Beida Jade Bird Universal Sci-Tech (Cayman) Investment Co Ltd SMIC The Company

7. 7 Company Structure (2) JBU (Cayman) Development : engaged in the sales of computer products JBU (Cayman) Investment : holding the investment in SMIC SMIC : an IC foundry factory located in Shanghai Pudong Hebei JBU Fire Alarm Device : engaged in the manufacture and sales of fire alarm devices Jade Bird Hao Di : engaged in the manufacture and sales of electric meter remote reading system

8. 8 Principal Activities One of the leading software developers and integrated circuit designers in the PRC Engaged in the design, manufacture, marketing, distribution and sale of proprietary embedded products including: Application Specific Integrated Circuit (“ASIC”) Network Security Products GPS Application System Smart Card Application System Wireless Fire Alarm System (“WFAS”)

9. 9 Awards & Qualifications (1) People’s Bank of ChinaOne of the short-listed authorized products Passed the JB151A-97 anti- electromagnetic release national standard examination China State Cryptography Control Authorities Office (CSCCAO) Certificate of Technological Examination People’s Liberation Army Information Security Testing Evaluation and Certification Center (PLAISTEC) Certificate of Military Information Security Product China National Information Security Testing Evaluation and Certification Center(CNISTEC) Certificate of Information Security Product Ministry of Public SecuritySales CertificateJade Bird Firewall JB- FW1 AUTHORITY OF CERTIFICATEQUALIFICATIONPRODUCT

10. 10 Awards & Qualifications (2) China Certificate Committee for Fire Alarm Products Quality ISO9002 Certificates for the Fire Products Safety Certification Four Fire Alarm Devices from Hebei Jade Bird Universal Fire Alarm Device Company Limited CSCCAOPassed system security review SJY-A Data Encryption Card CSCCAOPassed system security review SZD02 Bank Terminal Certificate Card PLAISTECCertificate of Military Information Security Product JB-SG2 Security Gateway AUTHORITY OF CERTIFICATEQUALIFICATIONPRODUCT

11. 11 Awards & Qualifications (3) Shenzhen Radio Management OfficeCertificates for Sale, Manufacture and Network Forming of Radio Communication Equipments Shenzhen Branch of the Company Ministry of Information Technology Certificate for Wireless Radio Transmitter JB-DT1 Data Transmitter Public Security Department of Guangdong Province The Security Technology Safeguard Management office of Shenzhen Public Security Bureau Security Technology Safeguard Product Manufacture Certificate Security Technology Safeguard Certificate JB-DT1 GPS Vehicle Box Ministry of Public Security & National Radio Monitor and Examination Center Acceptance quality certificate GPS 230M Vehicle Box AUTHORITY OF CERTIFICATEQUALITYPRODUCT

12. 12 Major Products (1) ASIC Develop embedded microprocessor and specific integrated circuits Provide ASIC technologies and customized engineering design, strives to improve the system with optimal performance, smaller size and lower cost Design and develop ASIC synthesized with cryptographic logic (“Security ICs”) for commercial information security systems

13. 13 Major Products (2) Network Security Products Security gateway, firewall and network monitor systems are applied in government branches, financial institutions, large enterprises and the army Begin mass production of SJY01- A, SZD02 and SJY04 encryption cards Emphasize security services such as risk evaluation, system optimization, security alarm and consulting Strengthen cooperation with SYMANTEC and other famous information security providers

14. 14 Major Products (3) GPS Application System Box unit installed in moving or static target sending longitude and latitude information via wireless communication network, thus allowing remote monitoring facility and control center to keep track of target Apply JB-230M GPS system in fleet management monitoring, dispatch and theft alarm of all kinds of vehicles Strengthen R&D on emerging applications such as logistics distribution and navigation Strengthen ties with regional governments, and strive to establish markets in Beijing, Guangdong, Sichuan and South- eastern part of the PRC

15. 15 Major Products (4) Smart Card Application System Provide contact and contactless smart cards Products cover intelligence household management system, logistics management system, POS and access control system Major customers include universities, hotels, financial institutions and large enterprises

16. 16 Major Products (5) WFAS Accurate fire detecting and fire alarm functions More reliable, economic and versatile Apply in Haikou Fire Alarm Control Center, Zhongnanhai, Yuquan Mountain, the Summer Palace and other projects Manufacture fire alarm sensors and controllers through subsidiary Hebei Beida Jade Bird Universal Fire Alarm Devices Limited Strengthen support for upstream R&D and flexible applications of wire and wireless fire alarm solutions

17. 17 Major Clients Financial Institutions Business Enterprises Universities Army & Police Force Government Authorities

18. 18 Financial Highlights (1) 11,379371,307403,997N/AShareholders’ equity 26,299386,800831,372N/ATotal assets N/A0.5 N/ADividend per share - (RMB cents) (0.64)3.83.90.46Earnings (Loss) per share - basic (RMB cents) (3,237)27,30140,64111,678Earnings (Loss) before interest, tax, depreciation, amortization and minority interest (4,486)31,06737,5104,469Profit (Loss) attributable to shareholders 10,41960,843124,61727,733Turnover 199920002001 2002 Q1 (unaudited) RMB’000

19. 19 Financial Highlights (2) RMB’000 TurnoverProfit

20. 20 Part (II) Strategic Investment in SMIC

21. 21 Reasons for & Benefits of Investing in SMIC Strengthen and enhance the Company’s technology in the design and development of ICs Enable the Company to obtain more market intelligence about ICs manufacturing technology, which in turn benefit our design of ICs which are key components of the Company’s products Ensure stable supply of ICs at competitive price by subcontracting ICs manufacture to SMIC Enable the Company to receive other support from SMIC in technologies and techniques enhancement

22. 22 JBU’s Involvement in the Management of SMIC The Company has an active role in setting up and running of SMIC As one of the promoters of SMIC, the Company has participated in SMIC’s feasibility study and taken up an important role in its liaison with PRC government authorities Two of the Company’s directors have been actively participating in the management and operation of SMIC

23. 23 JBU’s Investment Highlights Investment vehicle : Beida Jade Bird Universal (Cayman) Investment Company Limited, wholly owned subsidiary Subscribe for 54,000,540 SMIC Preference Shares at US$1.1111 per share Subscribe for 54,000,540 SMIC Series A-1 Preference Shares at US$0.00001 per share Total investment amounting to US$60 million Hold approximately 5.29% of the total issued voting share capital of SMIC

24. 24 Pro Forma Financials after the Investment * Assumed the preference shares dividend rate at 8% ** Based on issuing the additional 192,800,000 H shares and the current market price of HK$1.5 per share (total placing proceeds amounting to HK$289 million or US$37 million) (Based on the actual financials of year 2001) 787,764403,997Shareholders’ equity -390,000Bank loans 787,764831,372Total assets 6.73.9Profit per share - (RMB cents) 77,35037,510Profit attributable to shareholders 39,840-Income Dividend* 124,617 Turnover Upon Completion of Investment and Share Placing ** CurrentRMB’000

25. 25 SMIC’s Competitive Advantages (1) Strong base of strategic partners and investors Enormous market potentials Lower costs : -Building/facilities -Workforce/operations -Supplies/material Strong government support Experienced management

26. 26 SMIC’s Competitive Advantages (2) Import tax (tariff) exemptions  Equipment  Raw Material Value added tax (VAT) rebates  17% Vs <5% Corporate tax discounts  First profitable year = “5 exempt-5 halves” Accelerated depreciation (tax purposes) Preferential treatment for Fabless design houses  Same treatment as software industry (3% VAT)

27. 27 SMIC’s Initial Financing Registered Capital : US$1 billion First phase investment amount : US$ 1.4 billion Major investors include Strategic Partners Jade Bird Universal Shanghai Industrial Holdings Institutional Investors Goldman Sachs H&Q Asia Pacific Walden International Vertex Management

28. 28 SMIC’s Capability Low power static random access memory (SRAM) technology transfer from Toshiba 0.18-micron baseline logic process technology transfer and patent license rights from Chartered, one of the world's top three silicon foundries Manufacture 0.22um and 0.18um FCRAMTM (Fast Cycle RAM) Products for Fujitsu Limited Conclude a non-exclusive alliance with ChipPAC, Inc. (Nasdaq: CHPC) for end-to-end solutions from wafer probe to packaging and test and final distribution in China and global market Establish partnership in the area of advanced semiconductor process technology with Europe's leading independent R&D centre for microelectronics, IMEC

29. 29 SMIC’s Development Plan Initial products/ processes qualified Volume production commence Possible 2nd phrase financing (2H 2003) Possible 2nd phrase financing (2H 2003) Jan 2004 Aug 2000 June 2003 Jun Jan 2002 Dec Jun 2001 AugSepDec Equipment installation begin Pilot production begin Half capacity reaches 25,000 wafers/month Combined production to 85,000+ wafers/month Combined production to 85,000+ wafers/month Construction ground breaking Construction ground breaking Photo mask shop cleanroom completed Photo mask shop cleanroom completed 1H SMIC has 1-2 year leads over its competitors in terms of entering into the China market

30. 30 SMIC’s Employees Total: 1032 employees as at August 27, 2001 By Experience By Region By Education

31. 31 Part (III) Prospects & Outlook of Semiconductor Industry

32. 32 Supply & Demand of ICs in China Source:CCID

33. 33 Semiconductor Market : Worldwide and China Source:Dataquest

34. 34 Existing Suppliers in China Grace, Belling, Hua Xia and others are either under the construction or at the planning stage 24,000 wafers/month8“ wafer0.25 micronTianjinMotorola N/A5- 6“ wafer0.6/ 1.5 micronShanghaiASMC 20,000+ wafers/month by end of 2001 8“ wafer0.25 micronShanghaiNEC HuaHong N/A5- 6“ wafer0.5/ 0.6 micronWuxiCSMC-HJ N/A4- 5” wafer1- 5 micronWuxiHuajing N/A6” wafer0.35 micronBeijingNEC Shougang 85,000+ wafers/month by 2004 8” wafer0.18/ 0.25 micronShanghaiSMIC CapacityTechnologyLocationCompany

35. 35 Existing Fab Technology in China Source: Computer World ， CLSA Emerging Markets Unit: Inch Year 2000 Unit: Micron

36. 36 Market Outlook (1) US$Billion Source: Gartner Dataquest Rapid expansion of domestic market Current market = US$15 Billion (8% global market) 30.8% Growth p.a. 1998-2000 Expected Growth

37. 37 Market Outlook (2) 34.3%174Server Appliance 4.6%237Hard Disk Drive 33.7%273Handheld PC 18.4%839Optical Disk Drive 12.7%4,945Motherboard / PC CAGR (2000- 2005) Revenue in 2000 (Unit :US$ million) Product Growth drivers : Internet continues to drive growth Increase investment from Taiwanese motherboard/ notebook/ PC manufacturers Global OEMs are establishing production in China Local consumer electronics producers are venturing this sector Source: Gartner Dataquest Data Processing Semiconductor

38. 38 Market Outlook (3) 20.7%241Cordless Phone 8.2%593Legacy Phone 11.9%689Network Line Card 33.3%401LAN Switch 35.3%509Mobile infra. 29.8%7,608Cellular Phone CAGR (2000-2005) Revenue in 2000 (Unit: US$ million) Product Growth drivers : Government’s effort to enhance the information and networking system Strong foreign direct investment inflow in electronics and communications equipment sector Increase percentage of low to mid end communications production Source: Gartner Dataquest Communications Semiconductor

39. 39 Market Outlook (4) 95.6%134Digital Camcorder 44.4%263Net Audio Player 95.4%489Digital Camera 5.2%545Appliance 13.1%806Color TV 17.4%819DVD CAGR (2000-2005) Revenue in 2000 (Unit :US$ million) Product Source: Gartner Dataquest Consumer Semiconductor Growth drivers : Robust GDP growth Critical mass of middle class consumers

40. 40 Market Outlook (5) Only 1.9% PC penetration in 2000 48% growth Y/Y in Q1 2001 Projected 26% CAGR 2001-2003 Data processing electronics = 43% p.a. growth 1997-2000Data processing electronics = 43% p.a. growth 1997-2000 Source: IDC, JP Morgan estimates PC Shipment (units in million) PC Market

41. 41 Market Outlook (6) Source: IDC, JP Morgan estimates No. of subscribers (in million) (Accumulative) Mobile Phone Subscribers

42. 42 Part (IV) Proposed Placing of New H Shares

43. 43 Proposed Transaction Issuer Shares Offer Size of Offer Use of Proceeds Closing Date : Beijing Beida Jade Bird Universal Sci-Tech Co Ltd (Stock code : 8095.hk) : 192,800,000 ordinary shares (H Shares) : US$ 37 million (estimated) : Repayment of bank loan used for investment in SMIC : June 2002

44. 44 Special Capital & Price Record High: HK$2.925 per H share 31 May 2001 Record Low: HK$1.1 per H share (Placing Price) 27 July 2000 (IPO) RMB 96,400,000Total Issued Share Capital 964,000,000Total Number of Issued Shares 264,000,000Number of H Shares 700,000,000Number of Promoters’ Shares RMB 0.1 Nominal Value Current Market CapitalizationHK$1,426,720,000

45. 45 Stock Performance Stock Price and Volume Performance (IPO Date to Present) 1.50 Jul-00 Aug-00 Sep-00Nov-00Dec-00 Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01Dec-01 Jan-02 Mar-02 Apr-02 0.50 1.00 2.00 2.50 3.00 Price (HK$) 20 40 60 80 100 - 120 - 140 Volume (in million) Volume Price

46. 46 Thank you!! www.china-jbu.com Beijing Beida Jade Bird Universal Sci-Tech Company Limited