Pchome Presentation

PChome OnlineTaiwan Leading E-commerce Group

Taiwan SMid Cap Corporate Access Day

Feb 2.17 -18

Singapore/ Hong Kong

PChome Group Company Overview

• Established: July 1998• Public listing: Jan 2005(stock symbol:8044-TT)

• Capital:583 Mn TWD(18.2Mn USD) • Main business: e-commerce• HQ location: Taipei, Taiwan• Employee:496 (Group:730)• Business location: Primary Taiwan• Founder:

Company Profile

Hung Tze Jan

Chairman

Arthur Lee

CEO

Company milestoneHistory

• 1998.07Established，Chairman H.T Jan，CEO Arthur Lee, provided portal services.

• 2004.07Cooperated with Skype，rolled out “PChome Skype”.

• 2005.01IPO–網家(8044-TT)

1998

2000

2004

2008

2006

2002

• 2006.06JV with eBay, launched Ruten auction site.

• 2008.04Cooperated with BIG5 estate agencies, rolled out “Rakuya”(樂屋網).

• 2000.06Rolled out online shopping channel, started from 3C products.

• 2005.10Rolled out online store B2B2C service

• 2007.01Rolled out “PChome 24hr delivery” service.

2010• 2010.04Spin off Store division to “PChome store Inc (4965-TT).,”

PChomeOnline

(8044-tw)

AdminPortal Telecom E-commerce

IThome Weekly100%

Ruten Auction

65%

RakuyaHousing

16.7%

PChome Store

（（（（4965-tw））））66.7％％％％

PChome Group Structure (2011.Feb)

Parent Company

Subsidiaries

91.60%

1.70%

6.60%

E-commerce

Telecom

Portal

2010 Revenue Breakdown

2010.1-3Q

2008-2010 Quarterly Net Sales

1.9

1.81.9 1.9

2.0 2.0

2.12.2

2.42.3

2.7

2.9

1

1.5

2

2.5

3

'08

1Q

2Q 3Q 4Q '09

1Q

2Q 3Q 4Q '10

1Q

2Q 3Q 4QBillion

（（（（TWD））））

(Unconsolidated)

3 Major Business Models of E-Commerce

PChome

E-commerce

Layout

Professional seller/

Casual seller

SMEGeneral customerRevenue

Target

Subsidiary.

Holding 65%

JV with eBay

Subsidiary.(4965-TT)

Holding 66.7%

Parent Company

(8044-TT)

Note

eBayRakuten IchibaAmazon.comGlobal

Icon

Seller →

Auction platform→Buyer

Online Store →Marketplace platform→

Consumer

Shopping site →Consumer

Business Model

C2C

Online Auction

B2B2C

Online Shopping Mall

B2C

Online Shopping

Type

Industry Introduction

US Online Shopping Market Scale

Source:MIC

US Online Shopping/Total Retail Scale

Traditional Retail vs. E-retail

Walmart and Amazon

Revenue YoY Growth%

11.40%

9.80% 11

.60%

8.60%

7.20%

1.00%

22.67

%26.

16%

38.50

%

29.19%

27.88%

39.56%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2005 2006 2007 2008 2009 2010

Walmart Amazon

Traditional Retail vs. E-retail in US

22.97%

23.43%

23.50%

23.70%

24.80%

3.65%

3.64%

3.27%

3.40%

3.34%

24.00

%

22.90

%

22.60

%

22.30

%22.60

%

22.35

%

4.23%

1.77% 3.2

1%3.3

7% 3.68%

23.08%

3.56%

3.37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2005 2006 2007 2008 2009 2010

Walmart GP% Walmart NP% Amazon GP% Amazon NP %

Wal-Mart and Amazon Profit Ratio

China Internet Company IPO on NASDAQ & NYSE

2011 & after201020092007200420032000

Portal

Travel & Ticketing

Online Gaming

E-commerce

China Internet Company Valuation

Company Sector Market cap

(USD)

P/E (ttm)

(USD)

EPS (ttm)

(USD)

Sina Portal/Media 5.71Bn 13.32 7.00

Sohu Portal/Media 3.38Bn 24.53 3.62

Netease Portal/Media 5.70Bn 17.71 2.48

SNDA Game 2.57Bn 22.01 2.03

The9 Game 200.52Mn - - -2.43

Perfect World Game 1.07Bn 7.61 2.81

Cyou Game 1.92Bn 11.16 3.3

SNDA Games Game 1.70Bn 8.38 0.71

Ctrip E-commerce 6.16Bn 44.9 0.96

eLong E-commerce 349.27Mn 137.02 0.10

Dang E-commerce 1.98Bn 185 - -

Alibaba E-commerce 10.52Bn 70.61 0.23

MCox E-commerce 162.60Mn 47.72 0.11

Source: yahoo finance.11.2.14, Reuters

U.S. Internet Company Valuation

Company Sector Market cap

(USD)

P/E (ttm)

(USD)

EPS (ttm)

(USD)

Yahoo Portal/Media 22.10Bn 18.72 0.9

AOL Portal/Media 2.26Bn - - -7.34

Electronic ArtsGame 6.05Bn - - - 1.21

Activision Blizzard Game 13.00Bn 36.67 0.29

Amazon E-commerce 85.35Bn 74.8 2.53

eBay E-commerce 44.81Bn 25.37 1.36

Expedia E-commerce 5.90Bn 13.69 1.56

Priceline E-commerce 22.36Bn 49.48 9.2

Source: yahoo finance.11.2.14

China Online Payment Breakdown

PChome B2C Highlight

‧‧‧‧Founded：：：：2000.6

‧‧‧‧http://shopping.pchome.com.tw

‧‧‧‧Service model: Non-inventory, order transfer

‧‧‧‧Members：：：：5millions

‧‧‧‧ + 800,000 products in wide selection (includes PChome 24h shopping)

‧‧‧‧Coordinate with +5,000 suppliers

PChome B2C Business I

‧‧‧‧Launched：：：：2007.01‧‧‧‧http://24h.pchome.com.tw‧‧‧‧Service Model: Consignment in-stock central warehouse

‧‧‧‧Items：：：：379,348 (’11.02)‧‧‧‧On time rate：：：：99.67%‧‧‧‧24 hrs delivery guarantee

PChome B2C Business II

Provider Provider Provider

Buy

Day 5Delivery

Day3 Delivery

ConsumerDay6 Delivery

BeforeTraditional e-Commerce Model

Products shipped by

PChome within 24hrs

Products shipped by variety of providers

(Order transfer model)

PChome 24h Shopping Service

Customers:

Real-time order checking system

PChome 24h Shopping On Time Delivered :99.67%

2

67

8

9

5

4

31

Subsidiary -PChome Store Highlight

PChome Store Inc.

‧‧‧‧Spun off since 2010.5 (4965-TT)‧‧‧‧Capital: NTD $129.4Mn‧‧‧‧Service launched:2005.10‧‧‧‧http://store.pchome.com.tw ‧‧‧‧Business: SME online shopping mall‧‧‧‧# of Stores: 9,430 (’11,02)‧‧‧‧# of items：：：：3,237,301 (’11,02)

‧‧‧‧HQ location: Taipei, Taiwan‧‧‧‧Employee：：：：102

PChome Store SME Cloud

26

Lower Cost Brings Higher Profit

Online storebrick-and-mortar

# of Stores 2005 - 2010

110

1,545

3,143

4,872

7,343

9,343

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2005 2006 2007 2008 2009 2010# of Store

PChome Store Revenue Model

NT$50~

NT$5,000(Web Ads and

extension courses)

Value-add

Service

ATM

Credit Card

CVS Kiosk

COD

2% (3% after 2nd year)

+ payment surcharge

No Annual maintenance Fee

NT$36,000

Payment Methods

Sales Commission

(by orders)

Annual maintenance

Fee

Online Store Set-up Fee

(one-time charge)

(2011.01)

Financial Highlight

2010 3Q PL vs. 2009 3Q PL

(unconsolidated)

NTD:000

2010 3Q 2009 3Q Variance YoY Growth

Operating Revenues 2,680,567 2,147,342 533,225 24.83%

Gross Margin 386,984 318,624 68,360 21.45%

Gross Margin Rate 14.40% 14.84% -0.44% -2.96%

Total Operating Expenses (329,399) (296,432) (32,967) 11.12%

Operating Profits 57,585 22,202 35,383 159.37%

Non-Operating Profits 70,622 11,631 58,991 507.19%

Net Profit before Income Tax 128,207 13,356 114,851 859.92%

Income Tax (20,079) 13,810 (33,889) -245.39%

Net Profit after Tax 108,128 27,166 80,962 298.03%

2010 1-3Q PL vs. 2009 1-3Q PL(unconsolidated)

NTD:000

2010 1-3Q 2009 1-3Q Variance YoY Growth

Operating Revenues 7,405,987 6,092,928 1,313,059 21.55%

Gross Margin 1,124,060 902,157 221,903 24.60%

Gross Margin% 15.20% 14.80% 0.40% 2.70%

Total Operating

Expenses(941,193) (836,153) (105,040) 12.56%

Operating Profits 182,867 66,004 116,863 177.05%

Non-Operating

Profits86,107 5,173 80,934 1564.55%

Net Profit before Tax 242,897 71,177 171,720 241.26%

Income Tax (26,077) 13,966 (40,043) -286.72%

Net Profit after Tax 216,820 85,143 131,677 154.65%

2010 1-3Q PL VS. 2009 1-3Q PL(consolidated)

NTD:000 (Consolidated)

2010 1-3Q 2009 1-3Q Variance YoY Growth

Operating Revenues 7,637,597 6,163,291 1,474,306 23.92%

Gross Margin 1,250,910 927,333 323,577 34.89%

Gross Margin Rate 16.38% 15.05% 1.33% 8.85%

Total Operating Expenses (1,062,994) (913,523) (149,471) 16.36%

Operating Profits 187,916 13,810 174,106 1260.72%

Non-Operating Profits 74,721 30,613 44,108 144.08%

Net Profit before Income Tax 262,637 44,423 218,214 491.22%

Income Tax (28,315) 14,186 (42,501) -299.60%

Net Profit after Tax 234,322 58,609 175,713 299.81%

EPSBefore Tax 4.63 1.27After Tax 4.18 1.52

Annual Revenue (consolidated) vs. Group Employee

4,690

6,235

6,851

7,589

8,412

473

657 695 730807

711

0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008 2009 2010

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Revenue employee

NTD:mn

employee

2011 New Business & Movements

China & Global Market

Population:22Mn

Launched in July 2010Http://global.pchome.com.tw#of Items:225,225Deliver to 105 Countries

Language version: Traditional /Simplified Chinese

Payment:Taiwan credit card,

PChome Store

(4965-tw)66.7％％％％

PChomeOnline(8044-tw)

AdminPortal E-commerce

IThome Weekly100%

Ruten Auction

65%

RakuyaHousing

16.7%

PChome Skype

100％％％％

2011 PChome Group Structure

Parent Company

SubsidiariesIPO in 2011 1H Spin-off in 2011 Mar.

Thank you

Contact: Vicky TsengEmail: [email protected]

Skype:cookiecat86TEL:+886-2-2700-0898 ext 879

Mobile:+886-958-915-256