Attracting Foreign Investors IR Magazine Asia Summit 2003

1. Attracting Foreign Investors IR Magazine Asia Summit 2003 Investor & Corporate Communications

2. Attracting Foreign Investors: Today’s Comments • The US Marketplace for Greater China equities • The strategic elements of investor relations established prior to program implementation • Elements of a successful international IR program.

3. US Investment in Foreign Equities Totals US$1.3 Trillion or 11% of Total US Investments ADR and Local Shares Source: Federal Reserve

4. Greater China: 48 percent of MSCI Source: MSCI EMF Index

5. Top US Investors in Greater China 401 US institutions invested US$18.1 billion in the 170 constituents of the MSCI China, HK, TW Indexes Total Equity # of % of Total Assets Institutions Investment (US$ trillion) Size of the Institutions (Equity Assets) 27 45.7% 3.6 Group A: Between 50 billion and 500 billion 79 39.6% 1.8 Group B: Between 10 billion and 49.9 billion 97 8.8% 0.5 Group C: Between 2 billion and 9.9 billion 38 1.3% .06 Group D: Between 1 billion and 1.99 billion 6.1 160 1.6% .05 Group E: Below 1 billion 401 100% Total Source: MSCI, 13 F Filings and Breakstone&Ruth

6. The US Decision Makers: International Securities Sell-Side Investors – Buy Side Influencers C O M P A N Y M E D I A Industry Analysts Institutional Portfolio Managers Salesmen Traders Analysts Portfolio Managers US, Europe Asia US , Europe Asia Asia US, Asia, Europe 1000-1200 600 - 700 1-150 Individuals Salesmen US US

7. What It Takes • Measurable objectives consistent with corporate strategies • A clear set of operating principles • Good disclosure practices • A well defined, consistent information and marketing program • Measurement and constant refinement Create A Strategic IR Program

8. Build Objectives to Support the Corporate Strategy…. For example, A corporate strategy might include: • Extensive money raising activities for product development or growth • An active acquisition strategy that requires a strong share price • The need to establish a global positioning to balance cash flows • A diversified shareholder base to avoid concentration and possible takeover

9. Which Translate Into Measurable IR Objectives . • Increase institutional ownership • Broaden sell side coverage • Improve liquidity and trading volume • Improve market perceptions • Modify the retail/institutional ownership balance • Create awareness and visibility in a new market Bottom line the goal is to increase demand to support the share price

10. Adhere to a Core Set of Operating, Financial, Communication Practices….. • Timely, credible forecasts consistently met • Visible financial controls • Performance predictability • Strive for transparency • Identify earnings drivers and articulate milestones • Information consistent and management available • Long term strategic focus • No surprises • Effective management of expectations • Recognize the value of brand equity

11. Address Cultural Differences…….. • Return investor calls in timely manner • Address time zone issues • Utilize U.S. IR firm • Have someone on call during U.S. market hours • Ensure primary shareholder contact is fluent in English • Educate investor base on cultural differences • Communicate about economic and political issues in China • Explain Chinese companies’ management structure and the role of the CEO • Prepare management for direct US style questions

12. And Focus on What Investors Want • Compelling, demonstrable stories that promise future results • From companies they trust to deliver • Clear value relative to the market, competitors • A well defined peer group • Visible unique characteristics that differentiate • Credible and accessible management • Communications that speak to their financial interests • On their expectations • Companies with dominant positions in their markets or strong niche players

13. Maintain Disclosure: Broadly Disseminate News… • Press Release Dissemination • Use financial wires to distribute press releases • Issue releases to U.S. investor circuit • Translate into English • Meet disclosure requirements • Automatically post press releases on Bloomberg and major financial portal sites (i.e. Yahoo, MSN) • Monitored by news media – generate coverage • Distribute releases via e-mail/ fax to investor lists • Current Shareholders • Target List • Understand and get advice on new SEC, SOX disclosure requirements

14. Maintain an informative Website…. Web Site • Communicate with investors 24/7 across all time zones • Keep website current • Disseminate Vital Information • Press Releases • SEC filings • Historical financials • Management and Board of Director bios • Presentations and conference calls • Investor Contact • Address corporate governance • Guidelines • Code of ethics • Insider transactions

15. And Support Disclosure through Direct Contact Quarterly Conference Calls • Opportunity to discuss highlights of quarterly earnings • Address company and industry trends/ concerns • Can give Revenue and/or EPS guidance • Address negatives and resolutions if they are important • Answer all investor questions One-on-one Meetings • Allow investors to meet management • Develop relationships • Build shareholder confidence • Information discussed must already be public

16. Strategic Preparation Before Communicating • Understand the US market before communicating • Interview analysts and portfolio managers • Analyze what US media says about China • The objective is to understand how international investors view • your company, how they interpret your information • And how it differs from what you know • Assess your peer group • Identify equity competitors or companies with similar • investing characteristics who are competing for • US investment dollars • Understand their investment message • Look for advantages

17. Deliver a Memorable Message…… • Prepare a strong message that communicates • your investment appeal • Simple and easy to remember • Reflects your relative strengths and earnings drivers • Differentiates the company from competitors • Takes existing perceptions into consideration • Answers the question, Why buy this stock?

18. And Understand Current & Prospective Investors • Identify your current shareholders • Understand them as you might key customers • Know investment criteria, trading patterns, valuation methods • Develop a data base for information distribution and to • track investor contacts • Use information supplied by the ADR banks, purchase data bases • or rely on consultants

19. The Buy-side……. How They Are Similar • Demand management’s time • Seek increasing shareholder value • Always fall back on the numbers How They Are Different • Investment style and type • Number of issues in portfolio • Asset allocation • Sector allocation • Rate of return • Time horizon

20. And their Various Investment Styles…. • Growth – Concentrates on companies with earnings growth well above S&P. • Value – Seeks stocks undervalued by market relative to asset value, growth rates, etc. • GARP – Growth at a reasonable multiple • Momentum – focuses on groups of stocks that are moving – short-term • Technical – Follow charts and other technical analysis of market • Index – Attempts to mirror the performance of an index • Income – Seek dividend income better than quality bond yields –

21. … Facilitate Institutional Targeting to Create, Meet and Sell Your Target Universe • Research your company • Identify a peer group of investment comparables • Analyze the peers for prospective investors • Target other prospective investors • Screen prospective investors • Prepare a qualified list • Arrange meetings • Non-deal road shows • Three to four times a year • Follow-up

22. Support Contact Through Written Material & Media • Strong investor presentation • Fact sheet geared to the interest of the financial community • Annual and interim reports • White papers enhance understanding of a product or situation • Meetings with key international reporters • Articles in the international business or financial press

23. Summary • Be prepared before you communicate • Create the right context for telling your story • Knowing your audience makes you an active participant in one-on-one roadshows • Adhere to a strong, memorable message • Follow up after the meeting is the key to success • Continue to add new targets expand your horizons • Make investor relations important in your company • Get Board backing for a solid program and keep them updated • Position yourself as the one who understands the international markets and can provide feedback