The TOM Group Y 2002 Third Quarterly Results

The TOM Group Y 2002 Third Quarterly Results Review 6 th November 2002

Review of the Quarter § Close to tripling of EBITDA q-o-q § 9% q-o-q growth in total revenue in line with market expectation § 13% offline revenue growth, 8% narrowband revenue growth § 24% growth in gross profit, with gross margin increasing from 39% to 44% § Achieved free cash flow after interest and taxes § Secured positive cash flow for the full year § Strengthened senior and divisional management teams 2

Part I Financial Analysis 3

Q-o-Q Review: 9% Revenue Growth with Significant Margin Increases 4

Y-o-Y Review: 2 x Revenue Growth, HK$68 M EBITDA Improvement Group Revenue Group EBITDA HK$’million 452 Offline 2. 4 x revenue increase 159 HK$68 M improvement Online 36% increase # Q 3 2001 EBITDA loss before restructuring costs 5

Q 3 2002 Revenue In Line With Market Estimates HK$’million 452 415 Offline 13% revenue growth Online Emphasis on gross profit growth 6

8% Increase in Online Gross Profit with 8% Point Gross Margin Improvement Online Revenue Online Gross Profit & Margin HK$’million 42% 34% Broadband Re-organised to focus on high margin businesses 27 25 Narrowband Steady growth of high margin businesses 7

Q 3 2002 EBITDA Almost Tripled HK$’million Positive EBITDA for first 9 months of 2002: HK$11 M 8

Segmental Review Q 3 2002 Revenue by Sector Sports & Entertainment 26% Online 14% Outdoor 17% Publishing 43% Q 3 2002 Revenue by Region Mainland China 47% Taiwan 40% Q 3 2002 Revenue by Type Non. Advertising 51% Advertising 49% HK 13% 9

Analysis of Net Loss Q-o-Q: Q 3 net loss entirely generated by D&A – Net profitability if D&A were stripped out + Y-o-Y: D&A increased by HK$36 M – Net loss would be dramatically reduced without D&A 10

Part II Operations Review 11

PUBLISHING: Continued Expansion into Mainland China Cross-fertilisation of Content among Group Publications § Business Weekly provides content to Sanlian’s flagship business monthly Advantage《競爭力 》 Content Licensing to Mainland Publishers § 《向左走向右走》by Grimm’s best-selling author (幾米) recorded sales of 140, 000 within 6 months § A series by Red Ink’s best-selling author (痞子蔡) sold over 680, 000 copies § Licensed Red Ink’s The First Intimate Contact《第一次親密接觸》 publishing and film rights § Licensed PC Home and Mom Baby simplified Chinese publishing rights – expected circulation of 150, 000+ per issue Total Content Licensing Arrangements: 135 book titles 7 magazine titles Import § Business Weekly cultivated 1, 000 Mainland-based subscribers since Q 2 2002 12

OUTDOOR: Adding Value Through Integration § Integration of sales operations to drive revenue synergies • TOM Outdoor Media Group secured HK$11. 5 M new sales, HK$26. 5 M year-to-date • Conducted a quarterly TOM outdoor sales conference • Aligned sales targets, strategies and service standards • Centralised some inventory with the Group’s sales team to maximise productivity § Differentiation through value-added services Case Study: Fench Media VAS Teams under Hold Co Client: Hong Ta Group Campaign: New product launch Value-Added Services: § Market, consumer, product & competitive analysis § Outdoor Media Creative Team Won a RMB 10 M nationwide contract § R&D Team (to innovate new outdoor assets & technology) § Market Intelligence Team § Comprehensive promotional strategy 13

SPORTS & ENTERTAINMENT: High Margins Achieved Contribution from Salem Open & Serena Williams Live § 60+ sponsors § 80+ hospitality box members § Syndicated to CCTV, Eurosport, TVB, etc. New TV Programme: Omega Golf Magazine § Major sponsors: Omega, Farmer’s Spring Water & Vinda § Syndicated weekly to 15 TV Channels in China New Sporting Right: § Marketing agent for Chinese Football Association (CFA) women’s soccer team § Preparing for women’s World Cup next year 14

ONLINE: Focus on Growing High Margin Businesses SMS User & Volume Growth No. of SMS Users Daily No. of SMS Messages 4. 7 M 2. 1 M 1. 2 M GP Margin: 85%+ 600 K 1. 2 M 200 K 350 K Mobile / Pay E-Mail Subscriber Growth 400 K 280 K 170 K GP Margin: 85%+ MMS (Multimedia Messaging Service) § First portal to be China Mobile’s MMS content provider § http: //mms. tom. com 68 K 6 K 15

Building A Strong Management Team: Publishing Division Management Team CEO Jan Hung Tze SDX Joint Publishing Wang Jixian § Former President & Chief Editor of China Map Publication House § “China’s Top 100 Publisher” award* § Published over 10 books & 100 papers * Awarded by the CPC Ministry of Propaganda, General Administration of Press & Publications, & Chinese Publishing Association Business Weekly James Jin Cite Ho Fei Peng Senior Advisor James Yang § 26 years of ad sales, circulation, editorial, BD, strategic planning & management experience with Taiwan’s United Daily News Group § Former CEO & Publisher of CUP Magazine & Managing Editor of Next Magazine PC Home Leon Tung Sharp Point Michael Huang Finance Director Quincy Tang § Senior management positions at HK-listed Leefung-Asco Printers Holdings for 10 years Corporate – Publishing Team Consulting Chief Editor (HK) Lau Sai Leung Yazhou Zhoukan Francis Tiong GM – Corp Dev Anthony Tse CNPIEC JV Wen Xiao-fan DGM – BD Jason Wong Popular Computer Group Chen Zong-zhou 16

Building A Strong Management Team: Outdoor Division Management Team President Robert Xie Senior Advisor Xu Zhiming § Held senior positions at China Resources Group § Experienced in management & operational restructuring, turnaround management, BD & strategic planning VP – Media Services Sam Lam § 10+ years with media agencies, including Zenith Media & Leo Burnett § Headed key outdoor media BD projects in Asia VP – Finance Alex Chu VP – BD Christopher Tan § Held senior finance positions with Coca-Cola (China); a HK-based group with Mainland operations; & a listed Australian company Corporate – Outdoor Team GM – Corp Dev Steven Wu GM – Finance Terence Hon China Operation Center Senior Advisor Tan Zhi Each of the 12 subsidiaries • General Manager • TOM appointed Financial Controller 17

Business Outlook: High Organic Growth on a Controlled Operating Infrastructure & Steady Cost Base HK$’million Critical mass achieved 18