HTC Investors

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Convening of an investor conference concerning Q2 07 Business Review
1.Date of the investor/press conference:2007/07/27

2.Location of the investor/press conference:Conference call

3.Financial and business related information:
2nd Q PERFORMANCE:
(1)2ndQ Revenue reached NT$26.86B, in line with guidance.
(2)2ndQ NPAT was NT$5.9B. NPBT margin and GPM exceed guidance. Better GPM was due to effective cost control and an extra-ordinary gain in royalty.
(3)Higher SGA expenses were due to a one-time NTD$ 399M adjustment in warranty expenses and an increase in warranty service  provision by 0.25 percentage points to revenue to reflect the higher non ODM business. Excluding these adjustments SG&A expenses ratio came in line with guidance.
MANAGEMENT INITIATIVES:
(1)Launched HTC Touch in Europe and Asia.
(2)HTC Touch delivered our business objectives in
*Addressing consumer market
*Lower cost structure
(3)Invited two independent directors into board
(4)Established compensation committee under the board
(5)Ex-dividend dated is Aug 14
(6)Bought land near Shanghai area to expand mfgr. 
capacity
3rd Q BUSINESS GUIDANCE:
(1)Quarterly revenue YoY growth rate is likely to be high single digit due to stronger non ODM  business. Sales momentum picks up month by month beginning from August.
(2)GPM is likely to slide down to reflect the one-time gain in 2nd Q.
SG&A expenses ratio will be slightly higher than the guidance given before to reflect the consolidation of Dopod Int’l and increase in warranty provision. NPBT margin is expected  to sustain
(3)CDMA products begin shipment in the US
(4)Qualcomm and Broadcom event impact manageable

4.Any other matters that need to be specified:None