CITIC 1616 Holdings Limited 中信 1616 集團有限公司 (Stock Code: 1883) Annual Results Announcement for the year ended 31 December March 2009

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Hillary Glenn
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1 Holdings Limited 中信 1616 集團有限公司 (Stock Code: 1883) Annual Results Announcement for the year ended 31 December March 29

2 Highlights for the Year Ended 31 December 28 Profit attributable to the equity holders of the Company increased by 26.4 % to HK$332.1million, as compared against last year Excluding the interest income from IPO in 27, net profit surged by 49.5%, as compared against last year Turnover recorded a strong growth of 67.3% as compared against last year Revenue generated from Voice services amounted to HK$1,613.4million, representing a 38.8% increase as compared against last year Revenue generated from SMS Services rose 32.3% compared against last year to HK$247.1million Revenue generated from Mobile VAS rose 59.1% compared against last year to HK$94.5million CPCNet recorded remarkable profit growth. Net profit growth by 128.% as compared to 27 Completion the acquisition of China Motion s international voice business by 3 September 28 At 31 December 28, cash and cash equivalents was HK$795.million. No debt as at 31 December 28 Final dividend of 6.4 cents, together with interim dividend of 2 cents, the total dividend payment for the year of 8.4 cents, an increase of 14.9% as compared to 27 and represent a dividend payout ratio of 5.% 2

3 Financial Review 3

4 Turnover Turnover increased 67.3% to HK$2,486.4 million when compared with last year Turnover HK $m 2,5 2, , 1,5 1, , % 67.3% 1, 1,

5 Proforma Turnover Including full year of CPCNet and the 4 th quarter 27 of ChinaMotion NetCom ( CMN ) Proforma Turnover HK $m 2,5 4.7% 2, 4.5% 31.2% 31.2% 18.5% 1,5 17.9% 76.8% 1, 77.6% Turnover Turnover - CPCNet Turnover - CMN * After elimination the inter-company transaction 5

Turnover of Four Major Business Segments Voice Services SMS Services HK$ m 1,8 1,5 1,2 9 1,141.6 1,162.5 38.8% 38.8% 1,613.4 HK$ m 25 2 15 117.1 186.8 32.3% 32.3% 247.

6 Turnover of Four Major Business Segments Voice Services SMS Services HK$ m 1,8 1,5 1,2 9 1, , % 38.8% 1,613.4 HK$ m % 32.3% Mobile VAS Virtual Private Network and Others HK$ m HK$ m % 59.1% % 586.6%

7 Turnover Breakdown Turnover breakdown by Business Proforma Turnover Breakdown by Business HK$m 2,486.4 HK$m 2, ,5 3.8% 2,5 3.8% 2, 1,5 1, 1,47.2.1% 5.2% 4.6% 98..3% 3.9% 7.7% 1, % 5.5% 8.6% 1, % 12.6% 67.3% 67.3% 5.2% 21.4% 9.9% 2, 1,5 1, 1, % 21.1% 9.9% 31.2% 31.2% 21.4% 9.9% 5 9.1% 88.1% 83.7% 78.2% 64.9% % 64.9% Voice Services SMS Services Virtual Private Network and Others Mobile VAS 7

8 Profit Growth Net profit attributable to equity holders Proforma operating result HK$m Interest Income from IPO % 5% 5% HK$m % 28.5% : Excluded interest income form IPO, IPO related listing expense and share option expenses, and combined with CPCNet full year result & CMN 4 th quarter result (included 1% interest of CM Tel USA) 8 : Excluded intangible amortization in relate to acquisition of CPCNet & CMN and included 1% interest of CM Tel USA 8

9 Sustain Solid Margin (Proforma) 25% 2% 21.4% 21.5% 2.3% 15% 16.1% 16.3% 16.5% 13.3% 13.8% 13.7% 1% 5% EBITDA margin * Operating margin *# Net margin # * Excluding interest income from IPO, IPO related listing expenses, share option expenses and discontinued operations # Excluding intangible amortization, include full year result of CPCNet and the 4 th quarter result of CMN (included 1% interest of CM Tel USA) 9

10 Strong Liquidity and Capital Structure HK$m For the year ended 31 December Operating cash flow before changes in working capital & tax Net cash generated from operating activities Interest received Capital expenditure HK$m At 31 December Cash and cash equivalents Debt - NIL - - NIL - - NIL - - NIL - - NIL - Gearing ratio Net Cash Net Cash Net Cash Net Cash Net Cash 1

11 Shareholding Structure at 31 December 28 Others 31.1% CITIC PACIFIC 52.6% Cornerstone Investors 8.3% Government of Singapore Investment Corporation Pte Ltd. 8.% 11

12 Business Review 12

13 Major Business Segment Voice Services Handled over 8.1bn mins voice traffic Voice Services 27 Voice Sales by customer (mn mins) HK$m 12, 2, 1, 8, 1, % 1, ,6 1,2 Rest of World 5.9% China 49.1% 6, 4, 2, 5.61 billion 44% 44% 8.1 billion Rest of World 49.3% China 5.7% Rev per min (HK$) Voice calls mins carried (LHS) Turnover (RHS) 13

14 Major Business Segment Voice Services Continue to expand the voice business with the China operators Completion of acquisition of China Motion Direct Connect to 6 Vietnam carriers with a strong growth in capacity Expand capacity into Japan and Singapore POP to meet business growth demand in the region Newly interconnect with 93 international customers for voice business established direct interconnections to Tanzania, UAE, Lao, Pakistan, Luxemburg, Nepal, Monaco and Mongolia Launched new business model of voice service outsourcing Challenge in the period - Price pressure of voice services 14

15 Major Business Segment SMS Services Handled approximately 1.77 bn SMS messages SMS Services (mn messages) HK$m 27 SMS Sales by customer 3, 32 % 25 2,5 2, , , Rest of World 56.8% China 43.2% 1,5 1, % 47.% 14.8% 12.2% 1.7% 2.2% 17.9% 14.9% Rest of World 57.1% China 42.9% Rev per message (HK$) Hong Kong (LHS) China Outbound (LHS) International (LHS) China Inbound (LHS) Turnover (RHS) 15

Major Business Segment SMS Services Further leadership in international SMS for all mobile carriers in China by providing 25 more destination countries SMS delivery.

16 Major Business Segment SMS Services Further leadership in international SMS for all mobile carriers in China by providing 25 more destination countries SMS delivery. Obtained GSMA recognized "Open Connectivity (OC)" SMS hubbing compliance. Signed agreement with O2 Group companies to provide international SMS service. Signed SMS agreement with international operators including WIND Italy, WIND Greece, NTS Indonesia, and Tyntec Germany. 16

17 Major Business Segment Mobile VAS Mobile VAS Benefits from the Olympics event in Beijing on increasing roaming voice and data activities. HK$m Mobile VAS Service extension to Korea and experience strong Growth for "Single IMSI Multiple Number (SIMN)" in Greater China region % 94.5 Signed agreements with Conexus Mobile Alliance member companies to extend "Prepaid Roaming Hubbing" service such as Philippines, Indonesia, Malaysia and Italy Extensive progress on GSMA OC Roaming hub initiative and trial been completed between mobile operator in Asia and Europe. 4 2 Signed Prepaid Roaming Hub agreements with operators such as Starhub Singapore, Smartone Macau, NTS Indonesia, O2 UK, WIND Italy, and Greece. Establish GRX peering with various operators such as i-basis, TDC and Tele 2. Commercial launch of New products under CDMA technology Turnover - Mobile VAS 17

18 CPCNet Business Review Business Review Number of MPLS VPN service sites over 3,2, representing a 19.7% growth when compared with the same period last year. Awarded the ISO 91:2 and 271 Information Security Management System Certification CPCNet snatched four accolades at The Asia Pacific Customer Service Consortium s 27 Customer Relationship Excellence Awards. Hong Kong Economic Digest Awards in best SME partner 28. HK$m , % % No. of VPN sites 3,212 3,6 3, 2,4 1,8 1,2 6 Profit (LHS) No of VPN Sites (RHS) 18

19 Prospects 19

20 Prospects Strengthen market development and exercise prudent cost control Well-prepared technically to support launch of 3G services, and actively work with 3G operators in China; watch closely 4G technology trend Continue business integration with China Motion for maximum synergies Voice services Strive to expand retail phone card business in new overseas market and speed up the growth of existing markets such as the United States, Japan and Singapore SMS Business and Mobile VAS Business Develop corporate SMS business, targeting large corporate clients Focus on the development in the United States, Canada and other emerging markets Virtual Private Network Business Increasing demand from enterprises provides new opportunities 2

21 Q&A 21

CITIC 1616 Holdings Limited 中信 1616 集團有限公司

CITIC 1616 Holdings Limited 中信 1616 集團有限公司 Holdings Limited 中信 1616 集團有限公司 (Stock Code: 1883) Interim Results Announcement for the six months ended 3 June 29 18 August 29 1 Highlights for the Six Months Ended 3 June 29 Profit attributable to the