SUNDAY Communications Limited

2003 Interim Results Announcement

10 September

Interim Results10 September, 2003

Good News

Presenter

Bruce Hicks Group Managing Director

Business Overview

SUNDAY Overview

Net profit of HK$13 million

Successful launch of segmentation initiatives

Further debt reduction

SUNDAY Profitability

HK$13 million net profit

EBITDA up 57% to HK$160 million

Difficult environment

Profitability - Revenues

Revenues stable, with mobile services revenue down 2% to HK$582 million

Subscriber numbers rose to 650,000

Profitability – Efficiency

Benefit of changes in 2002, including China operation

Raised efficiency

Operating costs (ex depreciation) down 19% or HK$74 million

Profitability - Quality

Customers demand quality

Raised quality standards in:

•Coverage

•Pre-sales service

•Customer care

SUNDAY competes on quality

The New Marketplace

Market maturity / saturation

Little growth in numbers

Value comes from creativity and segmentation

SUNDAY and Creativity Integrated approach

Leader in location-based data services:

• Family Watch

•SARS updates

Responding creatively to price pressure:

•Unlimited GPRS

•Rollover airtime

•All-Star Pack

SUNDAY and Segmentation Requires organisational

change Segmenting by :

•Demographics•Geography•Usage

Two services launched in Q2:• U Decide youth plan• Pinoy service

3G will accelerate this trend

Prospects – 2H Improving macro environment

Drive profitability through:

•Efficiency and quality

•Creative data services

•Market segmentation

Examine China opportunities

Prospects – 3G Critical to survival in changing

mobile world SUNDAY has:

• Strategy • License

Now planning systems for:• Network• IT • Service delivery

In positive discussions on: • Technology• Financing

Conclusion

SUNDAY is:

Profitable

Competitive

Poised for growth

Presenter

Janet Fung Group Director, Finance

Financial Overview

(HK$ million except for profit/(loss) per share) 2002 1H 2002 2H 2003 1HYoY HoH

2002 1H 2002 2HTurnover

- mobile services 594 624 582 -2% -7%- sales of mobile phones & accessories 63 52 65 3% 25%- others 7 2 1

664 678 648 -2% -4%Cost of inventories sold and services provided (170) (164) (171) -1% -4%

Gross profit 494 514 477 -3% -7%

Other revenues 1 1 1 Operating expenses (392) (378) (318) 19% 16%

EBITDA before restructuring costs 103 137 160 55% 17%

Restructuring costs (1) (25) 0

EBITDA after restructuring costs 102 112 160 57% 43%

Depreciation (130) (126) (117)Finance costs, net of interest income (27) (29) (26)Share of loss of a joint venture (11) (8) (4)

Profit / (loss) for the period (66) (51) 13

Profit / (loss) per share (in cents) (2.2) (1.7) 0.4

Gross profit margin 74% 76% 74%EBITDA % on total turnover 15% 17% 25%Operating expenses % on mobile services revenue 66% 61% 55%

Improved by % vs

Consolidated Profit & Loss StatementHalf Year Ended 30 June 2003

Net Profit Turned from net loss to net profit of $13 million

Improved by $79 million YoY, and $64 million HoH

Achieving net profit on a month-to-month basis despite the outbreak of SARS and price war

13

(51)(66)-80

-40

0

40

2002 1H 2002 2H 2003 1H

( HK$ million )

EBITDA After Restructuring Costs Improved by $58 million (57%) YoY & $48 million (43%) HoH

160

102112

0

100

200

2002 1H 2002 2H 2003 1H

( HK$ million )

594624

582

7 2 152

6563

0

200

400

600

800

2002 1H 2002 2H 2003 1H

( HK$ million )

Mobile services Mobile phones & accessories Others

-7%

Mobile Services

5%

Mobile

Services

Turnover slight drop in mobile services revenue due to the outbreak of SARS and price war Increase in handset sales for new MMS phones

Gross Profit Slight drop in mobile services gross profit Stable mobile services gross margin at 82%

485512

480

7 2 00 -32

-100

0

100

200

300

400

500

600

2002 1H 2002 2H 2003 1H

( HK$ million )

Mobile services Mobile phones & accessories Others

-6%

Mobile Services

6%

Mobile

Services

Hong Kong Mobile Market

4,237 4,208 4,241

1,506 1,6141,202

388625

505

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jun 2002 Dec 2002 Jun 2003

( in thousands )

Prepaid-inactivatedPrepaid-activatedPostpaid

25% 7%

-1% 1%

4%6%

Excluding prepaid-inactivated, 5,855k, penetration rate reached 87% in June 2003

5,827

6,219 6,480

Total growth ratePrepaid-activated growth ratePostpaid growth rate

Subscriber Numbers Total subscribers including MVNO - 662,000

420,000 414,000 414,000

189,000236,000

150,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Jun 2002 Dec 2002 Jun 2003

Postpaid Prepaid

26%25%

6%8%

603,000

650,000

570,000

-1%0%

Total growth rate

Postpaid growth ratePrepaid growth rate

Gross Churn – PostpaidAs a % of Opening Subscriber Numbers

7.9%

8.7%

6.5%

4.4%5.5%

0%

3%

6%

9%

12%

Jun 2001 Dec 2001 Jun 2002 Dec 2002 Jun 2003

Postpaid ARPU - Net Of Discounts & Incentives

200

211

208

217

220

150

200

250

Jun 2001 Dec 2001 Jun 2002 Dec 2002 Jun 2003

(HK$)

Data was around 5% of ARPU in 1H 2003

Consistently Improving Operating Efficiency

392 * 378 *

318

55%

61%

66%

0

250

500

2002 1H 2002 2H 2003 1H

(HK$ million)

50%

60%

70%

Operating expenses

Operating expenses as % of mobile services revenue

* Excludes one-off restructuring cost

Operating Expenses

2003 1H- $318 million

Network costs Salaries & related costs

Adv ertising, promotion & other selling costs Rental & related costs

Others

2002 1H - $392 million

Reduction of $74 million (19%) YoY, $60 million (16%) HoH

26 (8%)

23 (7%)

142 (45%)

73 (23%)

54 (17%)

29 (7%)

31 (8%)

66 (17%)

118 (30%)

148 (38%)

YoY increase / (reduction)

-5-16%

-6-21%

-6 -4%

-45-38%

-12-18%

Headcount - Hong Kong and Shenzhen

801737

510 519

239

173 201

791

0

200

400

600

800

1,000

Jun 2001 Dec 2001 Jun 2002 Dec 2002 Jun 2003

Hong Kong Shenzhen

791 801

976

720683

(HK$ million) Jun 2002 Dec 2002 Jun 2003

Prepayment for 3G licence fees 167 142 117 Fixed assets & others 1,260 1,219 1,153 Non-current assets 1,427 1,361 1,270

Current assets 507 450 383 Current liabilities (597) (590) (605)

Net current liabilities (90) (140) (222)

1,337 1,221 1,048

Financed by:

Share capital 299 299 299 Reserves 422 372 385

Shareholders' equity 721 671 684

Long-term bank and vendor loans 612 547 362

Other long term liabilities 4 3 2

1,337 1,221 1,048

Consolidated Balance Sheet

Cash and Credit Facilities

(HK$ million) Jun 2002 Dec 2002

Cash and bank balance (a) 231 208 173

Revolving facilities available for drawdown 637 481 329

Total 868 689 502

Bank and vendor loans repayable in

2002 98 - - 2003 238 238 119 2004 492 547 547

(b) 828 785 666

Net debt (b) - (a) 597 577 493

Net debt to equity ratio 83% 86% 72%

Jun 2003

Consolidated Cash Flow Half Year Ended 30 June 2003

(HK$ million)2002 1H 2002 2H 2003 1H

Operating activities (after finance costs) 73 56 130

Investing activities (51) (58) (44)

Financing activities- Cash drawdown 125 54 - - Repayment of long term loans (98) (97) (119) - Other financing activities (2) - -

25 (43) (119)

Net Cash Inflow /(Outflow) 47 (45) (33)

Changes in restricted cash deposits (1) (22) 2

Non-cash direct loan drawdown for capex 49 - -

Total cash and non-cash loan drawdown 174 54 -

Fixed Assets Additions

25 25 25

30

64

54

0

25

50

75

2002 1H 2002 2H 2003 1H

( HK$ million )

Capital Expenditure 3G Licence capitalised portion

SUNDAY Communications Limited

2003 Interim Results Announcement

10 September