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HANSUNG ELCOMTEC CO., LTD.

Toward to a world-class IT firm. HANSUNG ELCOMTEC CO., LTD. Investment Guide Book. 2003 February. CONTENTS. Company Profile Sales Plan and Business Performance Business Turnaround

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HANSUNG ELCOMTEC CO., LTD.

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  1. Toward to a world-class IT firm HANSUNG ELCOMTEC CO., LTD. Investment Guide Book 2003 February

  2. CONTENTS Company Profile Sales Plan and Business Performance Business Turnaround EL Business CCM Business BLU Business Appendix 1

  3. Company Profile 1. Introduction Company name Established Founder Capital stock Total assets Turnover Company website Hansung Elcomtec Co., Ltd. (Registered on KOSDAQ) June, 1983 HAN, Wan Soo (CEO) 4.6 Billion Korean Won (KRW) 67.5 Billion KRW 59.4 Billion KRW www.hselcomtec.com 2. Shareholders Name No. of shares Percentage( % ) Remarks HAN, Wan Soo 3,451,359 37.35 CEO HAN, Sam Soo 534,112 5.78 Co-founder, President Public 5,254,529 56.87 of Chinese subsidiaries Total 9,240,000 100.00 2

  4. Company Profile 3. Organization 3

  5. Sales Plan and Business Performance 1. 2003 Sales plan (Unit: Million KRW) DEPT I T E M 1Q 2Q 3Q 4Q T O T A L D I S P L A Y D E L 7,951 6,783 5,406 3,860 24,000 19% K E L 266 3,618 7,201 10,415 21,500 17% B L U 2,240 6,923 14,938 17,599 41,700 33% MODULE 1,428 1,382 1,344 1,036 5,190 4% OTHERS TOTAL 11,885 18,706 28,889 32,910 92,390 73% SEMI- CONDUC -TOR CCM 749 6,459 10,282 16,410 33,900 27% TOTAL 749 6,459 10,282 16,410 33,900 27% T O T A L 12,634 25,165 39,171 49,320 126,290 100% GROTH RATE 2002 12,663 14,931 14,739 17,161 59,494 GROTH - 0.2% 68.54% 165.76% 187.40% 112.27% <Note > DEL : Display EL KEL : Keypad EL BLU : LED Back Light CCM : Compact Camera Module 4

  6. Sales Plan and Business Performance 2. 2002 Business performance (Unit : Million KRW) I T E M 1Q 2Q 3Q 4Q T O T A L E L 6,827 7,939 9,174 10,118 34,058 57.2% B L U 0 0 0 96 96 0. 2% C C M 0 0 0 55 55 0. 1% MODULE 0 43 161 805 1,009 1 .7% H V C 3,645 4,026 2,974 2,835 13,480 22.7% OTHERS 2,191 2,923 2,430 3,252 10,796 18. 1% TOTAL 12,663 14,931 14,739 17,161 59,494 100.0% GROTH RATE VS 2001 7,334 8,901 10,093 11,680 38,008 72.7% 67.7% 46.0% 46.9%56.5% 5

  7. Sales Plan and Business Performance 3. 2001 Business performance (Unit: Million KRW) I T E M 1Q 2Q 3Q 4Q T O T A L E L 1,335 2,465 4,413 6,266 14,479 38.1% B L U 0 0 0 0 0 0% C C M 0 0 0 0 0 0% MODULE 99 0 127 0 226 0.6% H V C 4,347 4,447 3,847 3,055 15,696 41.3% OTHERS ,553 1,989 1,706 2,359 7,607 20.0% TOTAL 7,334 8,901 10,093 11,680 38,008 100.0% GROTH RATE VS 2000 23,553 61.4% 6

  8. Business Turnaround World class IT firm - Manufacturing specialized IT parts - High value added products (Profitability) - Healthy financial status World class IT firm (’05 ~ ) BLU, CCM, KEL - Good demands for color and camera phones lead good demands for BLU and CCM - KEL is a preferred thanks to its superiority 2nd growth (’03 ~ ’04) EL - Good market share in domestic market ( 60%) - Market demands increased due to wider applications - 1st growth stage 1st growth (’01 ~ ’02) HVC - Excellent market share in the world (43%) - Established a factory in China for strategic competitiveness Foundation (’83 ~ ’00) 7

  9. EL Business 1.Business performance (Unit : Million KRW) Items Remarks 2000 2001 2002 2003 2004 2005 DEL 1,516 14,479 34,080 24,000 14,000 5,000 Turnout KEL 0 0 0 20,000 40,000 80,000 Other 0 0 0 1,500 6,000 15,000 Total 1,516 14,479 34,080 45,500 60,000 100,000 Performance Plan <Current status> Samsung Electronics Sharp - Sample tests completed with positive results - Sample tests completed with positive results - Expected to start business from May ‘03 - Expected to start business from June ‘03 LG Electronics Telson - Sample tests completed with positive results - Sample tests completed with positive results - Expected to start business from April ‘03 - Expected to start business from June ‘03 8

  10. EL Business 2. Competitive advantage Competitors - DEL: Han Ul (Relatively small firm) - KEL: No significant competitors Technology - Noise problem solved (Patent) - Long life and high brightness (Patent) Competitive advantage Capacity - DEL: 5,200Kpcs/month - KEL: 500Kpcs/month (Dec. ‘02) 3,000Kpcs/month (Oct. ‘03) Market share - DEL: 60% in domestic market - KEL: 80% in domestic market (Plan) Positive market results 9

  11. EL Business 3. Superiority of EL Keypads Characteristics EL Keypads LED Keypads Uniformity Color Heat Power consumption Unit price Work-efficiency Noise Reliability Good Various color applicable No Low (7~15mA; Similar to the power consumption of LED 1pc) App. 30% lower than Blue LED keypads Good Solved (Patent in registration) Good Not good Only single color applicable (Yellow, Blue) Yes 50 ~ 150mA (10mA/LED, 13 LED: 130mA) Expensive than EL Keypads Required SMD technology, Works for defects are complicated Solved Good Comparison 10

  12. BLU Business 1. BLU Business performance (Unit: Million KRW, Kpcs) 2002 2003 2004 2005 Remarks Sales Amount 96 41,700 136,800 261,800 Quantity204 8,500 29,750 59,500 Mono BLU for ‘02 Unit price 470 4,900 4,600 4,400 Unit: KRW 11

  13. BLU Business 2. Competitive advantage Domestic market (Major business only) Overseas market 1. Samsung SDI - Started business from Feb. ‘03 (3 models) - New projects in progress (13 models) 2. Dots Tech - Started business from Nov. ‘02 3. DTC: Start business from Mar. ‘03 Vigorous business developments are being are being discussed with well known firms such as Seiko Epson, Philips, Sharp, Matsushita, Wintek etc. Competitive advantage World class LGP (Light Guide Panel) technology: Competitive pricing, Competitive Leadtime Excellent production facilities (State-of-the-art equipment, Clean rooms ) Cavity design capability: Competitive leadtime for customers Good knowledge about the market thanks to the experience of EL business: Similar market thus good business relationship with big buyers (Samsung Electronics, Samsung SDI, Pantech & Curitel) Superior quality (Single PPM) 12

  14. CCM Business 1. Current status and future plan ( Unit: Million KRW, Kpcs ) 2002 2003 2004 2005 Remarks Sales Amount 55 33,900 80,000 150,000 Quantity 50 32,000 84,000 16,700 (PLCC Package) (10,500) (9,500) (9,000) • <Current status> • Official contracts made with: Asetelecom, Inostream • Official contacts in progress: Korean located big mobile phone manufacturers (L, P, T, S) • Business developments are vigorously progressed with the other manufacturers in Korea and Taiwan • Mass production and delivery from 2Q ‘03 is expected <Competitive advantage> Cost advantage: Mass production Vertical integration: Design ( CCM ), testing (Sensor evaluation) to Assembly (Packaging) Stable Wafer supply: Strategic partnership with a Wafer supplier Synergy effect: Hansung Elcomtec provides customers key parts for mobile phones (EL products, BLU, Vibration motors and CCM) 13

  15. CCM Business 2. CMOS vs CCD . Function & etc. CMOS Image Sensor CCD Image Sensor CMOS is getting popular thanks to its technical convenience and improved technology while CCD provides better resolution currently. CMOS is preferred by mobile phone applications due to technical superiority. CCD is produced by few companies in the world such as Sony, Sharp, Matsushita etc . rate for CCD is Camera components PCB+Chip+Lens PCB+multiple chip+Lens Power consumption Low High Response Better than CCD Moderate Speed Fast Moderate Module size Small Moderate Resolution/Fine Moderate Good Price Low High 14

  16. Appendix 1. Investment plan ( Unit: Billion KRW) I T E M I N V E S T M E N T CAPEX R E M A R K S E L KEL EXTENSION ( 500K 3,000K / M ) 2,000 WITHIN 2003 OTHERS 200 Color BLU PRODUCTION LINE EXTENTION 800 WITHIN 2003 ( 1,000 K 3,000 K / M ) C C M FIRST LINE EXTENTION 2,000 WITHIN APR , ’03 ( 500K 1,000K / M ) SECOND LINE EXTENTION 4,000 WITHIN OCT , ‘03 ( 1,000K 2,000K / M ) R & D CCM INVESTMENT PROGRAM 1,000 WITHIN 2003 / 1.3M T O T A L 10,000 15

  17. Appendix 2. Balance sheet (Unit: Million KRW) I T E M 2000 2001 2002 (E) 2003 (E) CURRENT ASSETS 18,446 21,571 25,982 35,000 FIXED ASSETS 15,592 29,875 41,603 45,700 TOTAL ASSETS 34,038 51,446 67,585 80,700 CURRENT LIABILITY 12,379 21,513 18,289 15,000 FIXED LIABILITY 1,584 2,473 10,103 8,067 TOTAL LIABILITY 13,963 23,986 28,392 23,067 CAPITAL 3,000 4,620 4,620 4,620 CAPITAL SURPLUS 10,920 15,863 18,443 18,443 PROFIT SURPLUS 6,155 6,977 16,130 34,570 SHARE HOLDERS’ EQUITY 20,075 27,460 39,393 57,633 TOTAL CAP. & LIAB. 34,038 51,446 67,585 80,700 DEBT RATIO 69.55% 87.35% 72.44% 40.02% LIQUIDITY RATIO 149.01% 100.27% 142.06% 233.33% 16

  18. Appendix 3. Income statement (Unit: Million KRW) I T E M 2000 2001 2002(E) 2003 (E) S A L E S 23,553 38,008 59,494 126,290 COST OF SALES 19,116 30,538 43,118 87,150 GROSS PROFIT 4,437 7,470 16,376 39,140 SG & A 3,024 4,010 7,810 12,700 OPERATING PROFIT 1,413 3,460 8,566 26,440 NON - Op. PROFIT 2,511 2,644 2,886 3,350 NON – Op. EXPENSE 972 1,056 2,487 2,790 ORDINARY 2,952 5,048 8,965 27,000 INCOME TAX 681 1,053 1,793 7,560 NET INCOME 2,271 3,995 7,172 19,440 NET PROFIT MARGIN 9.6% 10.5% 12.05% 15,39% FINANCIAL CHARGE 1.5% 1.2% 0.95% 0.9% 17

  19. Appendix 4. Management HAN, Wan Soo BEng (Engineering) at Seonggyunkwan University (CEO) Worked at Samsung as a strategic planning manager (‘72-’83) Established Hansung Elcomtec Co., Ltd. (‘83) Established Hansung Enertec Co., Ltd. (‘90) Established Tianjin Hansung Elcomtec Co., Ltd. (‘94) Established Hansung Heavy Electric Co., Ltd. (‘98) KO, Ho Seok BA (Law) at Jeonnam National University (President, Display) Worked at Hansung Elcomtec (‘85-) LEE, Dae Hoon BEng (Engineering) at Seoul National University (President, MEng (Engineering) at Seoul National University Semiconductor) PhD (Engineering) at University of Texas at Austin Worked at Hynix as a Senior director (‘87-’02) HAN, Sam Soo BA (Business administration) at Wonkwang University (President, Tianjin Co-founder of Hansung Elcomtec Co., Ltd. Hansung Elcomtec, Worked at Hansung Elcomtec (‘83-) Dooco Electronics) 18

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