Agenda. Major Achievements in the FY2000. Operating Results for the FY2000. Financial Results for the FY2000

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2 Agenda Major Achievements in the FY2000 Operating Results for the FY2000 Financial Results for the FY2000 1

3 Major Achievements in the FY2000 Continued Rapid Business Growth 2000 Acquisition and Financing Successfully Completed Encouraging Start-up of Wireless Data Services Strategic Alliance with Vodafone 2

4 A Three-Pronged Business Strategy Core Mobile Business Further Acquisition Opportunities New Opportunities in the Broader Telecoms Market in China 3

5 Strong Business Growth (I) Up by 189% Up by 68% Up by 74% Up by 276% Total Subscribers 45 million Total Revenue RMB 65 billion EBITDA RMB 37.5 billion Net Profit RMB 18 billion Note: Included operating results of 7 new subsidiaries from Nov. 13, 2000 (date of acquisition) 4

6 Strong Business Growth (II) Total Revenue EBITDA Net Profit* Before write-down and write-off After write-down and write-off RMB 92.2 Billion RMB 52.6 Billion RMB 25.7 Billion RMB 24.7 Billion Note: Included financial results of 7 new subsidiaries from Jan. 1, * After deducting the nominal interest expenses incurred or interest income foregone relating to the financing of the acquisition. 5

7 Market Leadership 22.5% Revenue 11.7% CMHK 77.5% CMHK 88.3% Subscribers Note: Subscriber number at Dec. 31, 2000 Revenue for the year end Dec. 31,

8 Promoting Excellence in Corporate Governance Promoted international best practices of Corporate Governance Enhanced internal control Implemented full scope performance appraisal schemes for subsidiaries and staff Enhanced market-oriented, performance-based incentive scheme Broadened application of employees share option scheme Achieved improved transparency and improved communication with investors 7

9 Outperforming Forecasted Results Post-Acquisition Net Profit RMB 8.3 billion RMB billion EBITDA RMB 17.9 billion RMB billion Total Revenue RMB 33.4 billion RMB billion Subscribers 17.3 million million Forecasted Outperforming Note: Above data is results of 7 new subsidiaries 8

10 The Second Largest Mobile Operator by Subscriber Number Subscribers (mm)* ** Vodafone China Mobile (HK) NTT DoCoMo Verizon Telefonica Moviles TIM Cingular China Unicom AT&T Wireless SK Telecom Sprint PCS * As of December 31, 2000 ** On a proportionate basis 9

11 New Revenue Streams in the Broader Telecoms Market in China Moving up the Value Chain Mobile Commerce Solution Mobile Info Service Centre Mobile Portal 3G GPRS CMNet WAP Internet Access VoIP SMS Voice Wireless Portal, m-commerce and Content Aggregation Wireless Broadband Internet Access/Services IP Based Voice and Data Services Core Mobile Communications Services 10

12 Strategic Alliance with Vodafone Extensive multi-faceted cooperation Working with us to introduce advanced management mechanisms Sharing operational experience Implementing joint research and development of advanced technologies Working to sharpen competitive edge 11

13 Future Acquisition Possibilities The remaining 18 provincial operators of CMCC as of December 31, million subscribers 4.3% penetration Subscriber CAGR 75.1% ( ) 52% of national population 12

14 3G Strategy Management believes that CMHK may become the largest wireless ISP in China Low PC penetration rate Basic messaging and services are the driving force Migration towards GPRS SMS has achieved considerable scale WAP services are increasingly popular Successful GPRS trials Development of Chinese content and application is crucial Wireless Data Evolution Strategy Focus on the roll-out and implementation of GPRS Closely monitor developments in 3G technology and services 13

15 Core Mobile Business A World-Class Global Wireless Multimedia Services Provider New Opportunities in the Broader Telecoms Market in China Further Acquisition Opportunities 14

16 Operating Performance 15

17 Operations Review Operating Statistics Total number of subscribers (Millions) Contract subscribers Prepaid subscribers* Market share 77.5% 86.6% Total minutes of usage (Billion min.) MOU (min.) Contract subscribers Prepaid subscribers ARPU (RMB) Contract subscribers Prepaid subscribers 87 - Note: Above data is on a proforma basis * Including contract prepaid subscribers 16

18 Rapid Growth ( 000) Total Subscribers (Billion min.) Total Usage CAGR 69.6% 9, , , ,133.9 CAGR 49.4% Note: Above data is on a proforma basis 17

19 Strong Performance of Original 6 Subsidiaries Total Subscribers Total Usage ( 000) CAGR 69.8% 15, ,148.0 (Billion min.) 48.9% , , Note: Above data is on a proforma basis 18

20 Outstanding Performance of 7 New Subsidiaries ( 000) Total Subscribers CAGR 69.4% 3, , , ,985.9 (Billion min.) 14.0 Total Usage CAGR 50.3% Note: Above data is on a proforma basis 19

21 Exceptional Synergistic Effect Productivity Rate (Subscribers / Employee) (%) Bad Debt Ratio Note: (1) Above data is on a proforma basis for 7 new subsidiaries Bad debt provision (2) Bad Debt Ratio= Revenue (excluding connection fees) 20

22 MOU / Total Minutes of Usage (Total Minutes of Usage : Billion min.) (MOU : min.) Total Minutes of Usage MOU Note: Above data is on a proforma basis 21

23 MOU and ARPU MOU (min.) ARPU (RMB) Prepaid Contract Blended Prepaid Contract Blended Note: Above data is on a proforma basis 22

24 Effective Control of Bad Debt (%) Bad Debt Ratio Note: (1) Above data is on a proforma basis Bad debt provision (2) Bad Debt Ratio= Revenue (excluding connection fees) 23

25 Tremendous Demand for SMS Number of SMS (Millions) % Note: Above data is on a proforma basis Q1 Q2 Q3 Q

26 Establishment of Aspire as a Wireless Data Technology Provider Aspire is a majority-owned subsidiary of CMHK established to focus on the development of wireless data enabling technologies and applications Aspire will spearhead the roll out of MISC platform: A standardized nationwide platform for wireless data for all CMHK and CMCC operators : A wireless portal / unified brand for all of CMCC s and CMHK s wireless data initiatives Aspire will continue to form strategic partnerships with leading technology players 25

27 Entering the Era of Digital Networks Ever-changing communications technologies have fostered digitalization A digital network can: improve operational efficiency lower operational costs better facilitate new services The Company has decided to write down and write off all analog assets to pave the way for the Era of Digital Networks 26

28 CAPEX (USD Billions ) E 2002E 2003E 27

29 Financial Results 28

30 Growth of Revenue & EBITDA (RMB Millions ) Revenue (RMB Millions ) EBITDA 80,000 70,000 60,000 50,000 40,000 30,000 20,000 CAGR 61% 26,345 15,488 38,623 64,984 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10, % CAGR 66% 8,180 12, % 21,603 37, % 57.7% 10, , EBITDA Margin Note: Data for 1997 is proforma combined results of GMCC and ZMCC 29

31 Net Profit (RMB Millions) 20,000 85% 19,061 15,000 10,000 7,088 10, % 18,027 5,000 4,955 6,900 4,797 Actual earnings Actual earnings prior to write-down and write-off of Analog Assets 30

32 Major Financial Data 2000 Proforma (RMB Millions) 1999 Proforma (RMB Millions) Comparison (%) Operating Revenue Usage Fees Monthly Fees Connection Fees Others 64,220 14,364 2,976 10,655 92,215 47,726 10,935 6,885 7,479 73,025 35% 31% (57%) 42% 26% Operating Expenses Leased lines Interconnection Depreciation Personnel SG&A 8,092 13,094 14,694 4,773 14,800 55,453 7,999 12,549 13,922 3,023 10,803 48,296 1% 4% 6% 58% 37% 15% Operating Profit 36,762 24,729 49% 31

33 Revenue Growth 6 Original Subsidiaries 7 New Subsidiaries (RMB Millions ) 63,000 54,000 45,000 35,516 36,000 23,853 27,000 CAGR 35% 46,641 58,802 (RMB Millions ) 36,000 27,000 18,000 CAGR 37% 18,859 12,977 26,384 33,413 18,000 9,000 9, Note: Above data is on a proforma basis 32

34 Revenue Composition 2000 (Proforma) 1999 (Proforma) 3% 11% 70% 10% 10% 65% 16% 15% Total Revenue RMB 92,215 Million Total Revenue RMB 73,025 Million Usage Fees Monthly Fees Connection Fees Others 33

35 Expenses Composition 2000 (Proforma) 1999 (Proforma) 27% 15% 24% 22% 17% 6% 26% 8% 26% 29% Total Expenses RMB 55,453 Million Total Expenses RMB 48,296 Million Leased Lines Interconnection Depreciation Personnel SG&A 34

36 ARPU ARPU (RMB) 1, ,025 Total Revenue (RMB Millions) 92, ,000 80, ,830 54,375 60, , , ARPU Total Revenue Note: Above data is on a proforma basis 35

37 Comparison of EBITDA Per Subscriber (US$) NTT DoCoMo CMHK Vodafone AT&T SK TIM Telefonica Wireless Telecom Moviles Orange Note: For CMHK, Telefonica Moviles and Orange, year-end 2000 figures are used. For other mobile operators, June 2000 or September 2000 interim results have been annualized. 36

38 Capital Structure December 31st 2000 Actual 1999 Actual (RMB Millions) Short Term Debt 13,100 6,199 Long Term Debt 24,369 7,285 Total Debt 37,469 13,484 Shareholders Equity 83,760 57,092 Capitalization 121,229 70,576 Total Debt / Capitalization 30.9% 19.1% Cash, bank balances and deposits 39,906 27,576 Net Cash Position 2,437 14,092 37

39 Robust Financial Profile 2000 Actual 1999 Actual EBITDA / Interest Exp. 45.5X 62.9X (EBITDA-CAPEX) / Interest Exp. 20.3X 28.0X Total Debt / Capitalization 30.9% 19.1% Total Debt / EBITDA

40 A World-Class Global Wireless Multimedia Services Provider Thank You

41 Breakdown of Subscriber Figures ( 000 subscribers) Contract Prepaid Total Guangdong 7, , ,213.5 Zhejiang 3, , ,025.1 Jiangsu 2, , ,481.1 Fujian 2, ,382.1 Henan 1, ,661.4 Hainan Beijing 1, ,807.6 Shanghai 1, , ,833.9 Tianjin ,000.9 Hebei 2, ,627.6 Liaoning 3, ,657.8 Shandong 2, ,571.7 Guangxi 1, ,486.5 Total 32, , ,134.0 As at Dec. 31, 2000 Note: In the above statistics, including and not limited to Gold and Kuaijietong in Jiangsu province, the numbers of subscribers under all local brands with similar tariff as the Group s Shenzhouxing are calculated as prepaid subscriber. 40 Appendix 1

42 41 Appendix 2a

43 42 Appendix 2b