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1 A New Breed of System Architects IPO Launch Presentation Fullerton Hotel, Ballroom 3 Monday, 9 December 2002

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Page 1: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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A New Breed of System Architects

IPO Launch PresentationFullerton Hotel, Ballroom 3Monday, 9 December 2002

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Presentation Outline

Deal HighlightsExecutive summaryCompelling growth storyCommitted & dynamic managementLeading technologiesConclusionsQ&A

Page 3: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Important Notice

This document does not constitute, or form any part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.Any offer of securities will be made in or accompanied by a copy of the prospectus or profile statement. Anyone wishing to acquire securities will need to make an application in the manner set out in the prospectus or profile statement.This presentation was prepared exclusively for the parties presently being invited for the purposes of discussion. Neither this presentation nor any of its content may be used without the prior written consent of DMX Technologies Group Limited.

For investor relations or information on our services and products, please visit our website at

www.dmx.com.hk(Information contained on our internet site does not constitute a part of the prospectus)

Page 4: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Website: www.dmx.com.hk

Page 5: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Executive Summary

By Giang PhungChief Executive Officer

DMX Technologies Group Limited

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Executive SummaryDMX is a Unique Systems Integrator

A system architect that can adapt best-of-breed vendor technologies with its own proprietary technologies to develop tailored solutions for customers.

Growing aggressively in China.

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Executive SummaryDMX is unique amongst traditional systems integrators.

Compelling Growth StoryRapid growth in revenues and profitsHighest growth – CHINA, MALAYSIATarget new markets – KOREA, THAILANDHigh margins – Own Networking I.P., Security, Software

Management Team with Proven Track Records8 high-powered, field operational managers formerly from DatacraftEstablished regional customer relationshipsHighly motivated, strongly committed and significantly incentivised

Leading TechnologiesInternet-based, proprietary technologies - glues to plug technology gapsPartner with Best-of-Breed vendorsBack by skilled professionals

Page 8: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Compelling Growth Story

Page 9: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Video >> Data >> voice

RelativeRelativeTrafficTrafficSizeSize

Voice (PSTN)Voice (PSTN)

DataData

VideoVideo

TimeTime2008200820002000

Page 10: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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VisionSystem Architects of Asia’s Digital EconomySystem Architects of Asia’s Digital Economy

SecuritySoftware

NetworkInfrastructure

Page 11: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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DMX Business

•Connectivity services•Value-added services

Enterprises

ServiceProviders

DMX Technologies

•Network infrastructure such ase.g. IP, MAN, B-DDN•Skills for Enterprise integration•Secure network services

• Internet Business solution:software, security and network

Page 12: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Potential Growth Markets

Also present in:

Planning entry into new high growth markets:

Malaysia, HK, and Singapore

Korea and Thailand

DMX has excellent coverage in ChinaBeijing, Shanghai, Guangzhou, Hangzhou, Fuzhou, Xi’an and Sichuan

Page 13: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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China MarketDMX’s core revenue center, has a compelling growth story.

Deregulation creates opportunities for DMX5+1 giant Telecom operators

China TelecomChina NetcomChina MobileChina UnicomChina RailcomChina Satellite

>100 CATV operators

Page 14: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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The China Effect

0

2

4

6

8

10

12

14

US$

m

1999 2000 2001 1H2002

North AsiaSouth Asia

Revenues are largely derived from operations in China, where further rapid growth is predicted.

NB: First half figures are unaudited

Page 15: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Revenue Growth

0.62.8

15.813.4

02468

10121416

US$ m

1999 2000 2001 1H2002

Some contracts secured in 1H2002….• China Telecom (Zhejiang) - US$0.9m• China Telecom (Gansu) - US$0.9m• China Telecom (Anhui) - US$0.8m• China Telecom (Guangdong) - US$0.8m• China Telecom (Qinghai) – US$0.2mSome contracts secured in Q3 2002….• Alunan Persada - US$3.3m• China Telecom (Anhui) - US$3.0m• ChinaCast Technology - US$2.2m• Suzhou Cable TV - US$0.7m• BOC - US$0.4m• China Customs - US$0.4m

NB: First half figures are unaudited

Page 16: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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PBT GrowthIncreasing returns to shareholders.

-1

-0.5

0

0.5

1

1.5

2

US$

m

1999 2000 2001 1H2002

NB: First half figures are unaudited

1.2

1.9

(0.7)

PBT margin = 7.8 %

PBT margin = 14.5 %

Page 17: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Balance SheetHealthy AR ageing profile

AR of US$7.8M as at 30 Jun 02 (compared to US$8M as at 31 Dec 01, despite revenue jump in 1H02)

As at 31 Oct 02, 50% of this US$7.8M has been received, with AR over 180 days at a mere US$74,000/-

Net Current Assets improved to US$12.4M (compared to US$10.3M as at 31 Dec 01)

Net Cash of US$5.3M

Shareholders’ equity improved to US$13.1M (compared to US$11.5M as at 31 Dec 01)

Page 18: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Managing Future Risks

Geographical diversityNo single vendor dependencyProactive managementBuild contingencies in business plansClosely monitor ratios– Expenses– Receivables

Page 19: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Committed & Dynamic Management

Page 20: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Founder’s Shares

InvestorsFast Worth

DMX Technologies Group Limited

Management

45.51% 28.77%25.72%

13 highly motivated managers hold founder’s shares, plus7 top managers has Fast Worth’s management performance incentives

DMX Malaysia

DMX (BVI)

DMX Hong Kong

100%

100%100% 100%

DMX Singapore

Page 21: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Management Performance IncentiveA Call option granted by Fast Worth on existing shares to the Management, to achieve:

Short-term growth targetsLong-term alignment to shareholders’ interest

Performance Targets No. of incentive

shares

Mgmt holdings post IPO

Mgmt holdings post IPO, after

exercising option

22,755,765 20.20%

23.77%

25.55%

29.12%

US$3.2m < FY02 PAT < US$3.39m 9,102,306 20.20%

US$3.4m < FY02 PAT < US$3.69m 13,653,459 20.20%

FY02 PAT > US$3.7m

Page 22: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Our Management Team

CFOJismyl Teo

GM, HKMichael Mak

Regional DirectorNorth Asia

Michael Mak

GM, ChinaJohn Fan

Regional DirectorChina

Victor Yu

GM, SingaporeY H Tang

GM, MalaysiaDesmond Kan

Regional DirectorSouth AsiaY H Tang

CEOGiang Phung

Emmy WuChairman

Page 23: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Management TeamGiang PhungPosition CEO

Previous Datacraft: Chief TechnologistDatacraft: VP, i-Commerce DivisionQPSX: Co-founderTelstra: Network Specialist

AchievementsArchitect of Datacraft’s Telco Business: >US$100MContracts at Datacraft:

China Telecom Fujian (PRC): US$ 12MCelcom (Malaysia): US$ 10MEastern Broadband Telecom (Taiwan): US$ 10MGlobe Telecom (Philippines): US$ 6.2MHutchison Telecom (HK): US$ 8M

Acquisition experience: Planet TechnologiesMember ITU-TSG XVIII, ATM Forum, Frame Relay Forum, IEEE 802.6

Page 24: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Management TeamEmmy WuPosition Non-executive Chairman

Previous Datacraft: Director of sales, Datacraft AsiaRegional Director, North AsiaManaging Director, Datacraft China

AchievementsMitsubishi-Ryoden, Data General, DatacraftContribute US$200M annual revenue to DatacraftManagement experience: >380 staffAdvisor to Datacraft Japan’s President

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Management TeamJismyl TeoPosition CFO

Previous TVH: CFODatacraft: Regional Director of Operations

AchievementsRegional finance

Ernst & Whinney (Singapore), Chin & Lim (Australia), Datacraft (Singapore, HK, China, Taiwan)

Operations experienceGrow staff strength to 380 from 100

Page 26: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Management TeamDay-to-day operations are led by seasoned industry players with strong business relationships.

John FanPosition General Manager, DMX ChinaPrevious Chief Representative, Datacraft ChinaAchievements Contributed cumulative US$ 50 m in 7 years to Datacraft

Victor YuPosition Regional Director, DMX ChinaPrevious Sales Director, Datacraft ChinaAchievements Contributed US$30m p.a. to Datacraft’s sales

China Telecom Group in 9 provinces20 years’ industry experience, including 11 in PRC sales

Page 27: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Management TeamY H Tang Position Regional Director, DMX South Asia Previous Regional Director, Datacraft Central Asia Achievements Contributed US$ 30 m p.a. to Datacraft

15 years’ industry experience

Michael Mak Position Regional Director, DMX North Asia Previous General Manager, Datacraft HK Achievements Contributed US$ 50 m to p.a. Datacraft

18 years’ sales and management experience in HK Desmond Kan Position General Manager, DMX Malaysia Previous Regional Manager, Datacraft Services Achievements Contributed half of Datacraft’s central Asian profits (from

services income) 20 years’ industry experience

Page 28: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Leading Technologies

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Superior PositioningAdapting vendor technologies and designing new products sets DMX apart from system integrators.

Manufacturers e.g. Cisco

System Integratorse.g. Datacraft, Frontline, AsiaInfo

Resellers

Page 30: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Our Technologies

DMX + Juniper = Enterprise IP Network

DMX + Extreme = LAN or MAN

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Best-of-Breed PartnersDMX has developed a diverse supplier base to mitigate any change of strategy by the vendors.

Page 32: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Leading Technologies: Proprietary SolutionsDMX’s proprietary solutions and expertise span the entire spectrum of network services.

Software Applications EAI RoutersIntegrating internet applications

Network Security CEEProtecting China’s state enterprises

Networking Systems iBASDeploying of metro Ethernet

Page 33: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Video Portal ArchitectureResidential Services

Corporate Services

Integration Framework

ContentDistribution

Video Streaming

Conditional

Access

Training

Video Conf.

EntertainmentWebcastingDistanceLearning

Delivery System

Media Portal

Analog Feeds

DigitalAssetMgt

Storage Billing&Customer care

Page 34: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Secure e-Infrastructure

InternetCustomersCustomers

Hackers

Espionage

Internal SabotageDesktopsDesktops

RoutersRouters

DatabasesDatabasesWeb ServersWeb Servers

PartnersPartners

Page 35: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Today’s Enterprise Network

InternetInternet

Mix Enterprise private network with Partners and Internet

Use network security devices to overcome external security threats

BusinessBusinessPartnersPartners

HQHQ

Branch BBranch B

Branch ABranch A

Branch CBranch C

Page 36: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Tomorrow’s Enterprise Network

Separate Enterprise private network from eBusiness

Build or Lease eBusiness Data Centre

HQBranch B

Branch A Branch C

InternetInternet

eBusiness Data CentreCustomersCustomers

BusinessBusinessPartnersPartners

Page 37: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Internet

Core Switch

Distribution SwitchAccess Switch

RedbackSMSJuniperGatewayFirewall &NAT device

Metropolitan Area Network

Page 38: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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ATM/Frame Relay Network

ATM/FR/Ethernet Service Switch

DistributionATM Switch

Core ATM Switch

Page 39: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Broadband DDN Network

Access DDNSwitch

Core DDN Switch

Page 40: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Our achievements…so farDMX has rapidly assembled an enviable, multi sector, blue/red-chip client base.

Banking&Finance Education Telecoms United Asia Finance China Merchant Bank Wing Heng Bank Prudential Assurance Eagle Star Insurance

Vocational Training Council Guangdong Huanan Education Institute

China Telecom Zheijiang China Telecom Fujian China Telecom Shunde China Telecom Anhui China Telecom Hubei

Government Others China Telecom Jiangxi Hospital Authority Group Hong Kong Police Hong Kong Census Hong Kong ITSD

BAT Honeywell Hewlett Packard UK Automated System

China Telecom Hunan China Telecom Guangdong China Netcom Fujian China Netcom Gansu China Netcom Qinghai Suzhou CATV PCCW-HKT

Data Centres Utilities Internet Service Diyixian Hutchinson G.C. Sky Datamann

China Light & Power Hong Kong Electric Kowloon-Canton Rail

iTelco Communications Shanghai WebTV Digitel Group

Page 41: Fullerton Hotel, Ballroom 3 Monday, 9 December 2002dmx.listedcompany.com/misc/presentation_ipo.pdf · Fullerton Hotel, Ballroom 3 Monday, 9 December 2002. 2 Presentation Outline

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Growth StrategyGrowth StrategyIncrease market share in China and Malaysia

Establish a PRC wholly foreign-owned enterpriseMore strategic partners

Enter new marketsFocus on Korea and Thailand

New technology areasMetro-Ethernet etc.Web-based Digital TV services

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It’s my pleasure!