HANSUNG ELCOMTEC CO., LTD.

Toward to a world-class IT firm

Investment Guide Book

2003 February

Company Profile Sales Plan and Business Performance Business Turnaround EL Business CCM Business BLU Business Appendix

CONTENTS

1

Company ProfileCompany Profile

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

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

1. Introduction1. Introduction

2. Shareholders2. Shareholders

2

Company ProfileCompany Profile

3. Organization3. Organization

3

Tianjin H ansung E lcomtec C o ., L td .O w n ersh ip : H an su n g E lco m tec 9 5 %

P ro d u cts : H igh V o ltage C ap acito rs fo r M icro w ave

D ooco E lectronics C o., L td .O w n ersh ip : H an su n g E lco m tec 6 5 %

P ro d u cts : V ib ratio n m o to rs fo r m o b ile p h o n es

B ranch office (Tokyo , Japan)B ranch office (B angkok, Thailand)

E L (E lectro lu m in escen ce) D ivis io nE L B ack ligh ts , E L K eyp ad s

M o d u le D ivis io nM o b ile p h o n es , LC D M o d u le assem b ly

B LU (B ack L igh t U n it) D ivis io nLE D B ack ligh ts fo r co lo r an d m o n o ch ro m e d isp lays

D isp lay B u s in ess U n it

C C M (C o m p act C am era M o d u le) D ivis io nC M O S cam era fo r m o b ile p h o n es

S em ico n d u cto r B u s in ess U n it

H A N S U N G E L C O M T E C C O ., L T D .

Sales Plan and Business PerformanceSales Plan and Business Performance

DEPT I T E M 1Q 2Q 3Q 4Q T O T A L DEPT I T E M 1Q 2Q 3Q 4Q T O T A L

DISPLAY

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%

(Unit: Million KRW)

1. 2003 Sales plan1. 2003 Sales plan

4

<Note > DEL : Display EL KEL : Keypad EL BLU : LED Back Light CCM : Compact Camera Module

I T E M 1Q 2Q 3Q 4Q T O T A L 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%

(Unit : Million KRW)

2. 2002 Business performance 2. 2002 Business performance

Sales Plan and Business PerformanceSales Plan and Business Performance

5

I T E M 1Q 2Q 3Q 4Q T O T A L 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%

3. 2001 Business performance3. 2001 Business performance

Sales Plan and Business PerformanceSales Plan and Business Performance

(Unit: Million KRW)

6

Business TurnaroundBusiness Turnaround

HVC - Excellent market share in the world (43%) - Established a factory in China for strategic competitiveness

EL - Good market share in domestic market ( 60%) - Market demands increased due to wider applications - 1st growth stage

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

World class IT firm - Manufacturing specialized IT parts - High value added products (Profitability) - Healthy financial status

Foundation

(’83 ~ ’00)

1st growth (’01 ~ ’02)

2nd growth (’03 ~ ’04)

World class IT firm (’05 ~ )

7

EL BusinessEL Business

(Unit : Million KRW) 1.Business performance1.Business performance

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

EL BusinessEL Business

Competitors- DEL: Han Ul (Relatively small firm)- KEL: No significant competitors

Competitors- DEL: Han Ul (Relatively small firm)- KEL: No significant competitors

Capacity - DEL: 5,200Kpcs/month- KEL: 500Kpcs/month (Dec. ‘02) 3,000Kpcs/month (Oct. ‘03)

Capacity - DEL: 5,200Kpcs/month- KEL: 500Kpcs/month (Dec. ‘02) 3,000Kpcs/month (Oct. ‘03)

Technology- Noise problem solved (Patent)- Long life and high brightness (Patent)

Technology- Noise problem solved (Patent)- Long life and high brightness (Patent)

Market share - DEL: 60% in domestic market- KEL: 80% in domestic market (Plan)

Market share - DEL: 60% in domestic market- KEL: 80% in domestic market (Plan)

Positive market resultsPositive market results

2. Competitive advantage2. Competitive advantage

Competitive advantage

9

EL BusinessEL Business

Characteristics EL Keypads LED Keypads

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

UniformityColorHeatPower consumption Unit priceWork-efficiency

NoiseReliability

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

3. Superiority of EL Keypads3. Superiority of EL Keypads

10

BLU BusinessBLU Business

1. BLU Business performance1. BLU Business performance

Sales Amount 96 41,700 136,800 261,800 Quantity 204 8,500 29,750 59,500 Mono BLU for ‘02 Unit price 470 4,900 4,600 4,400 Unit: KRW

2002 2003 2004 2005 Remarks

(Unit: Million KRW, Kpcs)

-

50,000

100,000

150,000

200,000

250,000

300,000

2002 2003 2004 2005

11

BLU BusinessBLU Business

2. Competitive advantage2. 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)

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. ‘023. 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.

12

CCM BusinessCCM Business

1. Current status and future plan 1. Current status and future plan

<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)

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

( Unit: Million KRW, Kpcs )

13

CCM BusinessCCM Business

.

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

Function & etc. CMOS Image Sensor CCD Image Sensor

2. CMOS vs CCD2. CMOS vs CCD

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

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AppendixAppendix

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

( Unit: Billion KRW)

1. Investment plan1. Investment plan

15

AppendixAppendix

I T E M 2000 2001 2002 (E) 2003 (E) 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%

(Unit: Million KRW)

2. Balance sheet2. Balance sheet

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AppendixAppendix

I T E M 2000 2001 2002(E) 2003 (E) 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%

(Unit: Million KRW)

3. Income statement3. Income statement

17

AppendixAppendix

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)

4. Management 4. Management

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