Free Affidavit - District Court of Delaware - Delaware

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 1 of 18

EXHIBIT L

IT100: Hon Hai Precision Ind. Profile Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 2 of 18

Page 1 o f 2

Companies By Rank

...Alphabetical

The lnfor

n
Hon Hai Precision Ind.

Previous I Next Back to IT100 Home Page >>

Terry Gou
f

Hon Hai Precision Industry is the Taiwanese manufacturer that makes everything from PCs for Hewlett-Packardto cell phones for Nokia and Playstation 2 game consoles for Sony. Hon Hai, which consistently ranks high in BusinessWeek's Info Tech 100, has been closing the gap on its big North American electronics rivals and now boasts the title of No. 1 electronics manufacturer worldwide. While many Taiwanese companies are enjoying topline growth but suffering from slumping profits, Hon Hai remains an earnings machine. Anafysts expect 2005 profits to rise 24% to $1.2 billion. The company's New York-traded ADRs are up 74% since last June -- at a time when the stock prices of many other Taiwanese electronics makers have languished. Hon Hai employs about 100,000 people in China alone, and publicity-shy chairman Terry Gou isn't just counting on a presence there. in May, the company took control of an Australian plant from HP. In 2003, it bought Motorola's mobile phone factory in Chihuahua, Mexico. And now it has purchased a big piece of land for its new North American headquarters in Juarez, across the border from El Paso, Tex.

BIO

i Terry Gou serves as the Chairman

j and Chief Executive Officer of Hon
, Hai Precision Industry Co.

Company Info
STOCKINFO REVENUES" REVENUE GROWTH RETURN ON EQUITY TOTAL RETURN PROFITS* INDUSTRY NA $16.2 BILLION 34.4% 24.7% 53.5% $892.1 MILLION COMPUTERS AND PERIPHERALS

Company Snapshot
Hon Hai Precision Industry Co., Ltd. engages in the manufacture, processing, and sale of connectors, cables, enclosures, thermal products, and assemblies for the information technology, communication, automotive equipment, optical electronics, precision molding, automobile, and consumer electronics industries. It is the largest manufacturer of connectors for use in PCs in Taiwan, and a leading manufacturer of connectors and cable assemblies in the world.

NO. OF EMPLOYEES
NA

http://m.businessweek.com/it 100/2005/company/HONHI.htm

91111'2006

IT1 00: Hon Hai Precision Ind. Profile Case 1:04-cv-01338-JJF
CORPORATE WEB SITE All figures are for &e most recent available 12 months.
* Latest available data for the 12-

Document 571-5

Filed 09/19/2006

Page 3 of 18

page z or z

month period ended Dec. 31, Jan. 31, Feb. 29, Mar. 31, or Apr. 30. For companies that do not report quarterly, the most recent annual data were used. DATA PROVIDED BY STANDARD & POOR'S COMPUSTAT, BUSINESSWEEK

RELATED BW STORIES

Why Taiwan Matters Where Are They Now?

http://www.businessweek.com/it 100/2005/company/HONHI.htm

9/11/2006

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 4 of 18

EXHIBIT M

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 5 of 18

DATA M0NITO R

Hon Hai Precision Industry Company Limited

Company Profile
Reference Code: 12010 Publication Date: July 2006

~

w atamonitor.com d .
Datamonitor Europe Charles House 108-110 Finchley Road London NW3 5JJ United Kingdom t: +44 20 7675 7000 Datamonitor Germany , Kastor 8 Pollux Platz der Einheit 1 60327 Frankfurt Deutschland t: +49 69 9754 4517 t+496997544900 e: [email protected] Datamonitor Hong Kong 2802-2803 Admiralty Centre Tower 1 18 Harcourt Road Hong Kong
t: +852 2520 1177 f: +852 2520 1165 e: [email protected]

Datamonitor USA 245 5th Avenue 4th Floor New York, NY 10016 USA
t: +I 686 7400 212 f: + I 212 686 2626 e: [email protected]

t +442076757500
e: [email protected]

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 6 of 18

DATA N0N ITO R
ABOUT DATAMONITOR
Datamonitor is a leading business information company specializing in industry analysis. Through its proprietary databases and wealth of expertise, Datamonitor provides clients with unbiased expert analysis and in depth forecasts for six industry sectors: Healthcare, Technology, Automotive, Energy, Consumer Markets, and Financial Services. The company also advises clients on the impact that new technology and eCommerce will have on their businesses. Datamonitor maintains its headquarters in London, and regional offices in New York, Frankfurt, and Hong Kong. The company serves the world's largest 5000 companies. Datamonitor's premium reports are based on primary research with industry panels and consumers. We gather information on market segmentation, market growth and pricing, competitors and products. Our experts then interpret this data to produce detailed forecasts and actionable recommendations, helping you create new business opportunities and ideas. Our series of company, industry and country profiles complements our premium products, providing top-level information on 10,000 companies, 2,500 industries and 50 countries. While they do not contain the highly detailed breakdowns found in premium reports, profiles give you the most important qualitative and quantitative summary information you need - including predictions and forecasts.

All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor plc. The facts of this profile are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability whatever for actions taken based on any informationthat may subsequently prove to be incorrect.

Hon Hai Precision Industry Company Limited

0 Datamonitor

Page 2

Case 1:04-cv-01338-JJF
TABLE OF CONTENTS

Document 571-5

Filed 09/19/2006

Page 7 of 18

HON HA1 PRECISION INDUSTRY

>DAIAM0N IT0R
4

TABLE OF CONTENTS Company Overview ....................................................... Key Facts........................................................................ SWOT Analysis ..............................................................

4
5

Hon Hai Precision Industry Company Limited
0 Datamonitor

Page 3

Case 1:04-cv-01338-JJF
Company Overview

Document 571-5

Filed 09/19/2006

Page 8 of 18

HON HA1 PRECISION INDUSTRY

DATAM0N IT0 R

COMPANY OVERVIEW
Hon Hai Precision Industry Company (Hon Hai) engages in the manufacture and sales of connectors and cable assemblies. Its products are used in PCs and servers. The company trades under the Foxconn name in the US. The company primarily operates in Taiwan, China, Europe and the US. Hon Hai is headquartered in Taipei, Taiwan and employs about 166,500 people. The company recorded revenues of TWD911.8 billion (approximately $27.8 billion) during the fiscal year ended December 2005, an increase of 68.3% over 2004. The operating profit of the company was TWD48.3 billion (approximately $1.5 billion) during fiscal year 2005, an increase of 46.6% over 2004. The net profit was TWD40.8 billion (approximately $1.2 billion) in fiscal year 2005, an increase of 37.1 % over 2004.

KEY FACTS

Head Office

Hon Hai Precision Industry Company Limited 2 Tzu Yu Street Tu-Cheng City Taipei Taiwan +886222683466 +886222686204

Phone Fax I Web Address Revenueslturnover (US$Mnl 1 Financial Year End Employees Taipei Ticker

I http://w.foxconn.com
27805

1 December
166509 T2317

Hon Hai Precision Industry Company Limited
0 Datamonitor

Page 4

Case 1:04-cv-01338-JJF
SWOT Analysis

Document 571-5

Filed 09/19/2006

Page 9 of 18

HON HA1 PRECISION INDUSTRY

SWOT ANALYSIS
Hon Hai is one of the largest manufacturers of connectors and cable assemblies in the world. Its manufacturing operations are based in Taiwan and mainland China. It has also set up production facilities in Europe and the US. The company's global production network gives it a competitive advantage. Intense competition, however, could adversely affect the company's market share.

I Strengths
Global production network Strong returns Patent portfolio

I Weaknesses
Dependence on few customers Declining margins

I

I Opportunities
Increasing mobile phone sales Rising demand for LCD monitors Expanding PC market in U S

I Threats
Intense competition Slowdown in U S and Eurozone Increasing copper prices

I

Strengths
Global production network Hon Hai has a global production network. Its principal manufacturing operations are based in Taiwan and mainland China. Hon Hai established its China operations in 1993, over seven years before any of its competitors, and gradually established operations in Beijing and Kunshan for its wireless business. The company has also set up production facilities in Europe and the US. The company is now in the process of setting up new production facilities in Ireland, and is also considering Central America as a production center. Hon Hai 's global production network gives it a competitive advantage. Strong returns The company has recorded strong returns in recent years. Its return on average assets, return on investments and return on average equity for the period 2001-2005 were 12.5%, 24%, and 26.9%, respectively, much higher than the industry averages of 2.2%, 3.3% and 7.2%. Competitive returns compared to the industry average

Hon Hai Precision Industry Company Limited
0 Datamonitor

Page 5

Case 1:04-cv-01338-JJF
SWOT Analysis

Document 571-5

Filed 09/19/2006

Page 10 of 18

HON HA1 PRECISION INDUSTRY

~ATA~ON lT0R

further strengthens the company's market position and increases the investor confidence. Patent portfolio Hon Hai's patents portfolio provides protection and an entry barrier for potential competitors. Hon Hai has applied for 17,000 intellectual property rights worldwide and owns more than 10,000 connector and cable patents worldwide. Hon Hai is the leader in terms of both the number of patent applications and approved patents in Taiwan in fiscal 2005. The company submitted 1,886 applications for patents and received approval for 1,018 patents in 2005. Patent portfolio provides Hon Hai with a strong competitive advantage.

Weaknesses
Dependence on few customers Hon Hai is dependent on a small number of companies for a majority of its sales. Its major clients for full-service components include Dell, Hewlett Packard, Intel, Acer, Apple, UTStarcom, Cisco, Sony and IBM. Hon Hai's revenue and earnings depend largely on the business performance of these large customers. For example, slower than expected uptake of LGA775 CPU socket, market share loss and inventory problem at UTStarcom, and the rise in inventory at Cisco adversely impacted Hon Hai's earnings in the second half of 2004. Heavy dependence on a few customers increases business risk. Declining margins Over the past five years, the company's operating and net profit margin have declined. The company's operating margin and net profit margin declined from 9.2% and 8.5%, respectively, in 2001 to 5.3% and 4.5% in 2005. The company often resorts to price cuts to secure new orders. However, Hon Hai is unable to bring down costs at the same pace, resulting in lower margins. This inability to control costs could adversely affect its financial performance.

Opportunities
Increasing mobile phone sales Annual mobile phone sales are expected to reach one billion in 2009. The Asia Pacific region accounted for one in four mobile phones in fiscal 2005. This proportion is expected to increase to one in three in fiscal 2009. China and India alone will account

Hon Hai Precision Industry Company Limited 0 Datamonitor Page 6

Case 1:04-cv-01338-JJF
SWOT Analysis

Document 571-5

Filed 09/19/2006

Page 11 of 18

HON HA1 PRECISION INDUSTRY

DATAMO N170R

for nearly 200 million units in 2007, with the Indian market surpassing China in 2009 to reach 139 million units. A positive regulatory environment, affordable services and increased geographic penetration of networks will drive mobile penetration in India. Hon Hai, engaged in manufacturing handsets for original equipment manufacturers such as Nokia and Motorola, would benefit from growing sales of mobile phones. Rising demand for LCD monitors Worldwide demand for liquid crystal display (LCD) products is expected to reach 36 million units in 2006. Hon Hai, through affiliate Innolux, manufactures LCD monitors. So far the demand for LCD monitors has been largely limited to developed markets. In the coming years, however, a large share of demand for LCD monitors is likely to come from emerging markets such as India and China. In these countries, economic growth is boosting personal incomes, which is boosting PC penetration levels. With strong operations in the Asia Pacific, Hon Hai is likely to benefit from growing demand for LCD monitors. Expanding PC market in US The demand for personal computers is increasing in the US. The consumer PC market is expected to grow at a rate of 8.4% in 2006 and 10% in 2007. The corporate PC market is projected to grow 5.9% in 2006 and 7.8% in 2007. The expanding PC market in the US provides an opportunity for the company to further expand its PC enclosures business.

Threats
Intense competition Han Hoi faces intense competition in most of the markets it operates in. In the desktop PCs and notebook PCs markets, the company competes with Asustek, Mitac, Quanta, Compal, Wistron, Inventech, among others. Its consumer electronics, handsets and networking business also faces stiff competition from Alpha network, Accton, Taiwan Green point, Molex and Inventec. All of these companies are powerful organizations with worldwide distribution setups and a large financial base. Intense competition can adversely affect the company's market share. Slowdown in US and Eurozone The US has seen 16 successive interest rate hikes over the past few years leading to the current high of 5%. Inflation fears in US may lead to another raise in the shortterm. According to International Monetary Fund's World Economic Outlook 2005, the

Hon Hai Precision industry Company Limited 0 Datamonitor Page 7

I

*

b

Case 1:04-cv-01338-JJF
8

Document 571-5

Filed 09/19/2006

Page 12 of 18

HON HA1 PRECISION INDUSTRY
SWOT Analysis

+ DATAMONIT0 R )

US real GDP growth could fall from 3.5% in 2005 to 3.3% in 2006. In the Eurozone, any additional interest rate increase could halt an economic recovery that just started in the last half of 2005. The US and Eurozone are key markets for the company. A slowdown in the US and Eurozone economy would lead to reduced demand for the company's services due to reduced corporate spending.

Increasing copper prices The price of copper, a key raw material, for manufacturing electronic products has increased sharply in recent years. Copper prices have increased by five times (as of May 2005), compared with 2001 levels. During the first five months of 2006, copper prices have risen sharply by over 77%. The company uses copper extensively in its products. Continued increase in copper prices would adversely affect the company's cost structure.

Hon Hai Precision Industry Company Limited
0 Datamonitor

Page 8

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 13 of 18

Copyright o f Hon Hai Precision Industry Company, Ltd. SWOT Analysis is the property of batamonitor PIC and its content may not be copied or emailed t o multiple sites o r posted t o a listserv without the copyright holder's express written permission. However, users may print, download, o r email articles f o r individual use.

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 14 of 18

EXHIBIT N

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 15 of 18

Hon Hai Precision (2317 TT)
EMS
Company Update

Roadmap to NT$1 trillion sales in 2007
MasterLink Research
886.2.2754.4500
[email protected] Tech Analyst Eric Chang

An EMS conglomerate. Hon Hai Precision (Hon Hai), who recently have improved its relationship, from OEM to partner, with HPQ and was reported to receive Sony's PSP and Dell's printer orders, has been Taiwan's largest electronics manufacturing service (EMS) provider. Its main customers are mostly the leaders in their respective areas. Successful vertical integration. Hon Hai was able to maintain its first-tier status in EMS through the successful vertical integration, which lowers its cost and increases its market share. The company has four main divisions, Hon Hai (PC, consumer electronics, WiFi), Foxconn (handset, wireless communication), Foxconn Technology (casing, cooler), and lnnolux (panel), covering from upstream components to end products. Targeting for NT$I trillion sales in 2007. Hon Hai expects the group's sale momentum will come from consumer electronics, wireless communication, and printer assembling. Hon Hai's merit of speed, flexibility, and cost-down ability, allows the company to mass produce trendy consumer electronics, such as iPod and PSP, in a timely basis. The company further plans to set up PDA operation and printer assembling operation, respectively, in its wireless communication department and PC business.

Hold

Date
Share Price (NT$) Pnce Target (NT$) Percent Change

June 24, 2005

171 0

164 0
(4 09%) 173 0-107 5 6340 69

52-wk range (NT$)
TWSE

Capital Size (NTS): Market Cap (NTS): Market Cap (US): Outstanding Shrs: Free Floating Shrs: PER ('05E): PBR ('05E) Foreign Ownership:

32.31bn 552.50bn 17.62bn 3.231bn 96.56%
15.6%

4.14~ 56.48%

Major Shareholder: Chairman T. Kuo 16.37%

Absolute (%) RelabvetoTAIEX

11 40
383

2391 17 29

2302 1679

Recommendation Price Target (NT$) Revenue (NT$mn)

Hold

NA

164.0 741,466
11.0%

NA
NA NA NA N A
10.000

Hold. Hon Hai historically has been traded between 2.7-4.8~ PBR and 11.520.5~PER. Due to 1) the successful vertical integration, 2) robust sales growth, and 3) promising Foxconn Technology outlook, we estimate a consolidated 2005 sales revenue of NT$741.47 billion, up 36.9% YoY. However, as 1) EMS industry approaching the peak, 2) the YoY sales momentum begins to slow down, sliding from 56% in 1H05 to 40% in 2H05, and 3) lack of near-term price catalyst, we believe the recent surging stock price has already reflected the market. Therefore, we have a Hold recommendationfor Hon Hai and conclude a target price of NT$164 based on a conservative PER of 15x our 2005E EPS of NT$10.9, implying a 4.09% downside potential.
Average dailyvolume (WO, LHS) and share price (NTS, RHS)

Gross Margin (%)
Oper. Margin ( O h ) EPS (NT$)

6.13% 10.9

4 180
150 120
90
60

30,000
10,000
10,000
n

(+) Rosy outlook till 2037

(-) YoY sales growth slowing down

Asustek (2357 TT) Quanta (2382TT) Hon Hai (2317 TT)

Sep 03, 2004
Jul 21, 2004 Jun 07, 2004

June 24,2005

m-research@?masterlink.com.tw

Page 1 of 4

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 16 of 18

Investment Keynotes
Company background
Hon Hai Precision (Hon Hai), who recently have improved its relationship, from OEM to partner, with HPQ and was reported to receive Sony's PSP and Dell`s printer orders, has been Taiwan's largest electronics manufacturing service (EMS) provider. its main customers are mostly the leaders in their respective areas. For example, Hon Hai does PC EMS for Dell, HPQ, and Acer, communication EMS for Cisco, Nokia, and Motorola, and consumer electronics for Apple and Sony. Hon Hai's major competitor, Flextronics, was recently reported to seek cooperation with Taiwan's ODM companies. We believe this should only have a limited impact, if any, on Hon Hai`s current sales, and future sales influence should be clarified starting from 2006.

Figure 2: Hon Hai's supply chain

Source: Company data; MadekinkSecurities

Roadmap to NT$1 trillion sales in 2007
Hon Hai expects the group's sale momentum to come from consumer electronics, wireless communication, and printer assembling. The company, especially, is optimistic with the outlook of the trendy consumer electronics products, such as iPod, mac Mini, and PSP. Hon Hai's merit of speed, flexibility, and cost-down ability, allows the company to enter mass production in a timely basis. As a result, Hon Hai was able to meet the requirement for Apple and Sony's latest hits. Furthermore, Hon Hai has begun to join develop the next generation consumer electronics with both companies. We have high hopes and expect big growing potentials from this field. Hon Hai's wireless communication business started a new PDA operation due to the growing demand in WiFi (Wireless Fidelity). With Chi Mei Communication's handset design ability and Hon Hai's experience in PC integration, the new PDA operation will focus on the R&D in wireless communication. Meanwhile, Hon Hai's PC business will thrive in the upcoming seasons. In addition to its new NB assembling operation, which receives great feedbacks, a brand new printer assembling operation is underway in 2006. Furthermore, based on Hon Hai's current scale in various types of PC-used connector productions, we estimate its global market share will continue to grow and reach 15% in 2007.

Successful vertical integration
Hon Hai was able to maintain its first-tier status in EMS through the successful vertical integration, which lowers its cost and increases its market share. Currently, the company has four main divisions, covering from upstream components to end products. Foxconn Electronics (2038 HK, HK$5.45, NR), who has recently acquire 56% of Chi Mei Communication System, Inc. (unlisted), will focus on handset and wireless communication development. Innolux (unlisted), a LCD panel maker, will supply 40% of the panel demand in the group. Although market rumored Hon Hai may acquire other LCD panel makers, the company indicated it would rather focus on the vertical integration for LCD upstream components, especially in backlight module. The third branch, Foxconn Technology (2354 TT, NT$123.50, Hold), who recently has significant gain in market share, will produce the aluminum alloy case and the thermal solution for the group's products. Finally, the holding company of all, Hon Hai, will specialize in PC and consumer electronics products manufacturing.
Figure 1: Hon Hai's subsidiary and affiliate Company Foxconn Innolux Foxconn Technology Chi Mei Communication

Hon Hai`s ownership

loa%
-10%

-11%

56% ihrough Foxconn

Source: Company data; TEJ; MasterLinkSecurities June 24,2005

m-reserach~masterlink.com.tw

Page 2 of 4

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 17 of 18

Figure 3: Hon Hai's sales breakdown
,

Valuations and recommendation
Hon Hai historically has been traded between 2.7-4.8~ PBR and 11.5-20.5~ PER. Due to 1) the successful vertical integration, 2) robust sales growth, and 3) promising Foxxconn Technology outlook, we estimate a consolidated 2005 sales revenue of NT$741.47 billion, up 36.9% YoY. However, as 1) EMS industry approaching the peak, 2) the YoY sales momentum begins to slow down, sliding from 56% in I E to 40% in H 2H05, and 3) lack of near-term price catalyst, we believe the recent surging stock price has already reflected the market. Therefore, we have a Hold recommendation for Hon Hai and conclude a target price of NT$I 64 based on a conservative PER of 15x our 2005E EPS of NT$10.9, implying a 4.09% downside potential.
Figure 4: Hon Hai's P/B band
NIJ
240

.

.

....

...

... ...
...
/Fa.......O

........ ........ .... ..-.. . ........-si. . ...-.a.
1 7

.."-.J

Source: MasterLink Securities

Foxconn Technology leads the way
We believe Foxconn Technology will play the leading role in Hon Hai group's performance. Foxconn Technology's sales momentum comes from the growth in thermal solution and aluminum alloy case. For the thermal solution operation, the company is likely be the cooling solution provider for Intel, who purchases CPU connectors and reference design from Hon Hai. Moreover, Foxconn Technology plans to lower its cost by strengthening vertical integration, especially in heat column cooler and other major components. We expect the effort for cost-down will start to pay off in late 2005. Secondly, affer achieving a significant market share in desktop heat sink, the company has begun shipping NB heat sink in 2005 at a 10 million units range. We estimate the NB heat sink shipment will continue to grow in 2006. Foxconn Technology's aluminum alloy case operation also expects a strong outlook. In addition to the current main customers Sony, Toshiba, and IBM, all of whom does NB assembling through Hon Hai, more aluminum alloy case orders are scheduled to begin shipment in 2Q05. Further sales in NB- and projector- used aluminum alloy case are also expected to jump in 2H05. The demand for aluminum alloy case, which are also applied to handset, Nintendo, and consumer electronics, are expected to surge due to its merit of environmental friendly metal and fashionable sense. As a result, Hon Hai has begun to construct a production base in Taiyuen, Shanxi Providence, China, and will focus on the vertical integration in upstream materials. The goal is to reduce the price gap between the metal case and the plastic case to US$3, which should speed up the replacement cycle and drive further demand in aluminum alloy cases.

Source: TEJ; MasterLinkSecurities

Figure 5 Hon Hai's PIE band
N9
24

I

Source: TEJ: MasterLinkSecurities

June 24,2005

[email protected]

Page 3 of 4

Case 1:04-cv-01338-JJF

Document 571-5

Filed 09/19/2006

Page 18 of 18

Figure 6: Consolidated Statement of Operations (NT$ mn) Year t o December 2002 Revenue 257,766 Cost of Goods Sold 219,769 Gross Profit 37,997 Operating Exp. 18,821 Operating Income 19,176 Total Nonop. Exp. 1,447 Total Nonop. Income 2,000 Pretax Income 19,728 Net Income 16,886 Adjusted EPS (NT$) 5.20 Source: MasterLink Securities Figure 7 Income Statement (%) Year to December Gross Profit Operating Exp. operatmg Income EBlT Source: MasterLink Securities

2003 371,467 323,038 48,429 24,670 23,759 1.438 3,800 26.120 22,829 7.10

2004 541,596 475,396 66,200 32,597

=,w

2005E 741,466

33,603
2,185 4,024 35,442 19,758 9.20

81,561 41,081 40,480 1,000 2,000 41,480 35'130 10.90

2002 14.74 7.30 8.73 7.65

2003 13.04 6.64 7.35 7.03

2004 12.22 6.02 7.07 6.54

2005E 11.00 5.54 6.1 3 5.59

~

Figure 8: Income Statement (% Growth) Year t o December Revenue Pretax Income Net Income Source: MasterLink Securities
~~~

2002 67.50 30.93 29.10

2003 44.11 32.40 35.19

2004

45.80 35.69
(13.45)

2005E 36.90 17.04

77.80

Figure 9: 2005 Quarterly Earnings Estimates (NT$ mn) 1QO5E Quarter 168,739 Revenue Cost of Goods Sold 150,566 Gross Profit 17,833 operating Exp. 9.565 Operating Income 8,486 Total Non-op. Exp. 544 Total Non-op. Income 426 Pretax Income 8,537 Net Income 7,227 Adjusted EPS (NT$) 2.24 Source: MasterLink Securities

2Q05E 177,086 158.255 18,265 9,= 8,661 152 451 9,149 7,749 2.40

3Q05E 182,488 162,216 20,445 10,104 10,269 152 505 10,568 8,951 2.78

4Q05E 213,153 188,868 25,018 11,566 13,064 152 618 13,226 11,202 3.48

MasterLink Securities -Stock Rating System

BUY: Total return expected to appreciate 10% or more over a 3-month period.
HOLD Total return expected to be between 10% to -10% over a 3-month period. SELL: Total return expected to depreciate 10% or more over a 3-month period. Additional Information Available on Request
02005 MasterlinkSecurities.All rights reserved

This informationhas been wmpiled from sources we believe to be reliable, but we do not hold ourselves responsible for its completeness or accuracy It r is not an offer to sell or solicitation of an offer to buy any securities. MasterLink and its affiliates and their officers and employees may o may not have a position in or with respect to the securities mentioned herein. This firm (or one of its affiliates) may from time to time perform investment banking or other services or solicit investment banMng or other business from, any company mentioned in this report.All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice. MasterLink has produced this report for private circulationto professionaland institutional clients only. All information and advice isgiven in good faith but without anywarranty.

June 24,2005

[email protected]

Page 4 of 4