Returns to Style using Style Research’s Markets Analyzer

1. Returns to Styleusing Style Research’s Markets Analyzer Taiwan End April 2011

2. International Experience • Style Investing works • Value and Small Cap works long term • Best Value Markets • China, Japan and Korea • Most markets have small cap premium • High beta stocks do not generally perform well

3. Taiwan • Quality and Value works consistently and in long term • Quality more important unlike in other markets • Quality factors 5/10, Value 3/10 in last 5 years • Quality factors 4/10, Value 3/10 in last 10 years • Market cap does not work well – no small cap premium • unlike other markets • High Beta does not work • like other markets • Returns can be better than sector bets • Nothing works consistently • Top 10 inconsistent over different time periods

4. Approach • Use Style Research’s Market Analyzer • Benchmark = market • All stocks with market cap of USD 100 million • Analysis after sector adjustment • Factor screen within sectors • Eliminates sector bias • Rebalanced every 6 months • Repriced every month • Includes dividends

5. Sector Returns - Positive

6. Sector Returns - negative

7. Value – last 5 years

8. Book to Price

9. Book to Price Last 10 Years - SA Last 5 Years - SA

10. Dividend Yield

11. Dividend Yield Last 10 Years - SA Last 5 Years - SA

12. Earnings Yield

13. Earnings Yield Last 10 Years - SA Last 5 Years - SA

14. Cashflow Yield

15. Cashflow Yield Last 10 Years - SA Last 5 Years - SA

16. Sales to Price

17. Sales to Price Last 10 Years - SA Last 5 Years - SA

18. EBITDA to Price

19. EBITDA to Price Last 10 Years - SA Last 5 Years - SA

20. Growth

21. Return on Equity Last 10 Years - SA Last 5 Years - SA

22. Growth in Earnings per Share Last 10 Years - SA Last 5 Years - SA

23. Income to Sales Last 10 Years - SA Last 5 Years - SA

24. Sales Growth Last 10 Years - SA Last 5 Years - SA

25. Forecast Earnings Last 10 Years - SA Last 5 Years - SA

26. Forecast Earnings Revisions Last 10 Years - SA Last 5 Years - SA

27. Other

28. Market Cap Last 10 Years Last 5 Years - SA

29. Beta Last 10 Years - SA Last 5 Years - SA

30. Price Momentum – 6 months Last 10 Years - SA Last 5 Years - SA

31. Price Momentum – 12 months Last 10 Years - SA Last 5 Years - SA

32. Quality

33. Low Accrual Last 10 Years - SA Last 5 Years - SA

34. Debt to Equity Last 10 Years - SA Last 5 Years - SA

35. Stability of Earnings Growth Last 10 Years - SA Last 5 Years - SA

36. Sustainable Growth Rate Last 10 Years SA Last 5 Years - SA

37. Stability of Sales Growth Last 10 Years - SA Last 5 Years - SA

38. Stability of Forecast Earnings Last 10 Years - SA Last 5 Years - SA

39. Returns to Style – last 5 yearsValue and Quality works! SA, annualised

40. Returns to Style – last 10 yearsQuality and Value works! 10 Years SA 5 Years - SA SA, annualised

41. Returns to StyleQuality & Value works in long term 10 Years SA 5 Years - SA Common factors in 5 and 10 years are: 1. Quality - Stable IBES Earnings Growth top qtr 2. Value – Earnings Yield 3rd qtr 3. Quality - Sustainable Growth bottom qtr 4. Value - Dividend Yield 3rd qtr 5. Growth - IBES Growth Revisions top qtr SA, annualised

42. 5 year XS returns

43. 10 year XS returns

44. Value 10 Year - SA 5 Year - SA

45. Growth 10 Year - SA 5 Year - SA

46. Other 10 Year - SA 5 Year - SA

47. Quality 10 Year - SA 5 Year - SA

48. Market Cap Weight, 6 mthRebal XS Return 4.3 % pa T/over 41 % pa

49. Market Cap Weight, 3 mthRebal XS Return 3.3 % pa T/over 57 % pa

50. Total Earnings Weight, 6 mthRebal XS Return 5.6 % pa T/over 71 % pa