Hengxin Technology Ltd.

Financial ResultsSecond Quarter

Ended 30 June 2006

1 August 2006

Loo Wen LiehChief Financial Officerlwl@hengxin.comTel: +65 6536 4536Fax: +65 6536 2998

Key developments since listing

May 2006 Jun 2006 to date

• 11 May: Trading debut – Opening share price was S$0.405, 62% premium over issue price

• 24 May: Secures a RMB119 million dealwith China Mobile, to supply RF coaxial cables of about 3,100 km and other telecommunication equipment and accessories to 31 cities and provinces in China

• 29 May: FP2005 net profit doubles to RMB56.4 million. Recommends dividend of 0.33 Singapore cents per share

• 5 Jun: Kicks off FY2006 with 1Q net profit up 47% to RMB14.8 million

• 17 Jul: Secures first major overseas contract worth RMB2.5 million with Korea-listed Taihan Electric

• 17 Jul: 50% reduction in Enterprise Income Tax is extended for another 3 financial years starting from FY2010

• 19 Jul: China Mobile ups its contract with Hengxin Technology to RMB147 million, and the amount of RF coaxial cables to 3,500 km; designates the Company as the preferred supplier for 23 (up from 20) out of China Mobile’s 31 subsidiaries

Financial Highlights

Financial highlights

Growth%

1HGrowth%

2QRMB’m

+ 71

+ 71

+ 36

+ 29

1.00

17.0

29.9

144.9

2005

1.71

28.9

40.7

186.7

2006

2.57

43.7

67.5

311.3

2006

+ 621.59Earnings Per Share (S$ cents)

+ 3849.0Gross Profit

+ 6227.0Net Profit

+ 41221.3Revenue

2005

Record growth in revenue and net profit

Results analysis

ProductionCapacity

CustomerDemand

CopperPrices

NewProduct

Annual production capacity of RF coaxial cables for mobile communications increased to 33,000 km as at 2Q 2006

Continued strong demand for its products from major customers, China Unicom, China Mobile, HuaweiTechnologies and ZTE Corporation

Successfully passed on increases in copper prices to customers

Started production of new product, RF coaxial cable connectors & jumpers – gross profit margins of 25% to 32%

15.6%35.9%42.6%14.4%

86.4%

57.4% 85.6%

64.1%

0

50

100

150

200

250

300

350

2Q 2005 2Q 2006 1H 2005 1H 2006

Revenue by product

RMB’m

221.3

311.3

RF Coaxial Cable Series for Mobile Communications

Other Telecoms Equipment

Proforma Actual

144.9186.7

ProformaActual

Order book as at 31 July 2006 for delivery in FY2006 is RMB276.5 million.

Gross profit margins - 2Q 05 vs 2Q 06

23.2

21.3

17.3

24.5

21.820.7

15

20

25

30

2Q 2005 2Q 2006

RF coaxial cable series for mobile comms Other telecom equipment Overall

%

Overall gross profit margin has improved

Gross profit margins - 1Q 06 vs 2Q 06

21.7

21.320.1

24.5

21.821.5

15

20

25

30

1Q 2006 2Q 2006

RF coaxial cable series for mobile comms Other telecom equipment Overall

%

Overall gross profit margin has improved

Strong profitability trend

27.3

4.2

56.4

43.7

10.0 14.8

28.9

17.0

0

20

40

60

FP 2003 FY 2004 FY 2005 1H 2006

RMB’m

26 Jun to 31 Dec

Proforma Proforma Actual Actual

CAGR = 266%

Consistently delivered strong profits

1Q

2Q

Key financial ratios

0.170.81Net Asset Value per share (RMB cents)[based on 336 million shares]

(3.6)(108.8)Net Debt (RMB’m)[Interest bearing debts minus cash]

56.4270.6Shareholders’ Equity (RMB’m)

153.6258.8Cash and cash equivalents (RMB’m)

80.8

31 Dec 200530 Jun 2006As at

78.0Capital Expenditure (RMB’m)

Key financial ratios

2.91.1

11714832

24.26.2

12.222.1

1H 2005

0.6Gearing ratio1.4Current Ratio

Liquidity Ratios (Times)

6.4Return on Total Assets16.2Return on Equity

14.0Net Profit Margin

98Average Trade Debtors’ Turnover

1H 2006Profitability Ratios (%)21.7Gross Profit Margin

12738

Efficiency Ratios (Days)Average Stocks TurnoverAverage Trade Creditors’ Turnover

Business Update

Production capacity

Our production capacity is estimated based on 25 operating days per month over 24 hours each day for our production facilities.

* There were certain months when our production facilities operated for up to 30 days per month in order to fulfil our customers’ orders.

6,000

25,000 25,000

8,250

16,50014,836

6,604

19,665

23,757

5,940

89.980.1

78.7

99.0

93.0

0

5,000

10,000

15,000

20,000

25,000

30,000

FP2003 (Jul to Dec) FY2004 FY2005 * 1Q2006 1H20060

20

40

60

80

100

120

Production Capacity (km) Production Output (km) Utilisation Rate (%)

RF coaxial cable series for mobile communications

New product – RF coaxial cable connectors & jumpers

As at June 2006, monthly capacity for RF coaxial cable connectors and jumpers is about 100,000 units and 26,000

units respectively

Commenced production of connectors & jumpers

R & D developments and focus

24 new types of connectors

RF coaxial cables of 1/4″, 1/2″, 7/8″ already used in the domestic 3G TD-SCDMA networks [Qingdao, Baoding, Xiamen]

7/8″一字槽漏缆 (Leaky RF coaxial cable)

Aluminium-based type of RF coaxial cables

Anti-lightning equipment

Testing centre for leaky RF coaxial cables

Key Growth Drivers

Booming mobile communications industry in the PRC

China is the largest mobile market in the world

415 million mobile phone users as at April 2006Number grows by more than 5 million a monthRelatively low mobile penetration (about 30%), compared to developed countriesMobile phone users estimated to increase to 1 billion by 2015

Biggest mobile phonesubscriber base in the world

Second mobile operator in China

One of China's largest telecommunications manufacturer

Fastest growing global provider of telecommunications equipment

Booming mobile communicationsindustry in the PRC

“Nokia announced a $150 million deal to expand mobile phone coverage in Central China’s Henan province… It estimates that by 2008 the number of global mobile phone owners will grow to 3 billion, with some 80% of the growth in the emerging markets of China, India, Southeast Asia and Africa.”

3G – new market opportunities

Straits Times, 24 Dec 05

Business Times, 24 Mar 06

“China’s first round of investment on 3G this year could reach 10 billion to 20 billion yuan, according to Analysys…Every link of this industry chain will benefit from this market, including main equipments manufacturers, fiber and cable manufacturers… If one 3G licence will be released in 2006, the first phase of 3G network implementation should reach 10 million lines to 20 million lines to meet user demands.”

Growth potential in developing countries

Middle East

Africa

South America

India

“In India, mobile subscription is growing at the rate of about 4 million units a month, and exceeded 101 million (in May).”

– Dr Lee Boon Yang, MICA, S’pore

Business Times, 7 Mar 06

“.. ZTE has been selected by India’s Tata Teleservices to deploy an all-IP cdma2000 solutions for rural telecom networks throughout India in the next three years… the contract is worth “tens of millions of dollars.”… The Indian telecoms market has experienced phenomenal growth in recent years, with the mobile subscriber base now over 100 million, reports said.”

Telecom Asia, 7 Jul 06

Strategies for Continued Growth

Key growth strategies

Leverage on our 3G compatible products

Expand domestic network to Chengdu, Chongqing, Wuhan, Urumqi and Huhehaote by 2006; and Xining, Yinchuan, Changsha and Lhasa by 2007

Expand sales network to cover the overseas market within the next 1 to 2 years

Increase capacity by enhancing efficiency of production lines

Explore new opportunities to improve our technological capabilities and expand our business

Use of IPO Proceeds

Use of IPO Proceeds

S$18.1 m

S$3.1 m

S$3 m

S$4 m

S$8 m

BudgetedAmount

S$6.4 m

S$3.1 m

S$0.3 m

-

S$3 m

Use of Proceeds to Date

Total

Product development

General working capital requirements

Expansion of our sales and marketing network

Expansion of our manufacturing capacity and capabilities

Activities

In Summary

Key investment merits

• Expand capacity and diversify product range• Expand network in the PRC and overseas• Explore strategic investments

Clear Growth Strategy

• Booming mobile communications industry in the PRC• Market opportunities in 3G• Growth potential of developing countries

Strong Growth Drivers

• Strong revenue and profitability• Healthy gross profit margins

Robust Financials

• Market leader• Good reputation, award winning• Comprehensive sales and distribution network• Advanced, large-scale manufacturing capabilities• Strong R&D capabilities

Strong Market Position

Share price performance since IPO

174.7Market capitalisation (mn)336Shares outstanding (mn)

0.520Share price at close of 31 Jul 06Current Valuation of

• 19 July 2006: DBS Vickers Securitiesrecommends BUY call with one-year price target of S$0.62, pegged to 12x FY06 blended earnings

• 18 July 2006: KELIVE Researchmaintains BUY call and target price of S$0.71, at 15.8x PE (FY06E)

Research Coverage

Hengxin Technology31 July 2006 close: S$0.520

Shareprice

S$

S$0.520 (+108%*)

31 Jul 2006

31 Jul 0611May 06

* % gain in share price from issue price of S$0.25 at listing

Thank You