2013 Interim Results Presentation

22 August, 2013

Agenda

Company Overview

Results and Analysis

Market Outlook

Q&A

1

Part 1. Company Overview

MOBI Technology

(Hong Kong)

MOBI Antenna

（Shenzhen）

MOBI Technology

(Xi’An)

100% 100%

100%

100%

MOBI Indonesia

（In Preparation）

(Indonesia)

MOBI New material and

Technology

(Xi’An)

100%

95%5%

RF subsystems R&D and production

Antenna R&D and production

Aesthetic antenna R&D and production

Shenzhen MOBI

Communication

(Shenzhen)

100%

Basic station production

Microwave antenna production

RF feeder R&D and production

International trade and funding

Die-casting and CNC processing

RF subsystems R&D and production

Antenna R&D

Terminal antenna R&D and production

Electroplate Communication system engineer

and technology service

Engineer and technology service

for Indonesia market

3

Company Structure Overview

MOBI Communication

(Ji An)

MOBI Development Co., Ltd.

(HKSE 0947)

We are committed to provide front end products for mobile communication.

Our business includes all series productions for base station equipment construction and related

coverage extension solutions.

We are extremely professional in base station RF.

4

Core System

Microwave

Transmission

Base StationCoverage

Extension

Mobile

Handset

Fixed-line TelephoneSwitching CenterMicrowave Transmission

Cable

RF Path

电缆

Structure of Mobile

Communication Base Station

Tower Mounted

Amplifier

Antenna System

Base Station Subsystem

Bias Tee

5

Company Business

Indoor/Outdoor Coverage Extension Solution Aesthetic Antenna

6

Company Business (Cont.)

Part 2. Results and Analysis

Sales Revenue

(RMB million)

Network construction of China Mobile’s TD Phase 6.2, increased Nokia Siemens’ new products orders

as well as bulk delivery in overseas market, making our 1H2013 revenue growth.

In 2H , China Mobile focuses on building 200,000 base stations, China Telecom launches TDD/FDD LTE

hybrid network, coupled with China Unicom plans to build TD-LTE test stations, Chinese 4G will enter a

rapid development era.

Meanwhile, we keep focusing on the further expansion of overseas operators for diversified and rapid

growth in the future.

8

Results Overview for 1H2013

(RMB ’000)1H2012 1H2013 Change (%)

Sales Revenue 342,833 377,469 10.1%

Cost of Sales 263,008 295,914 12.5%

Gross Profit 77,628 79,529 2.4%

Gross Profit Margin 22.6% 21.1%

Operating Profit 9,042 7,986 -11.7%

Net Profit 14,326 7,792 -45.6%

Net Profit Margin 4.2% 2.1%

In 1H2013, communication industry has recovered gradually and we tend to perform well. Due to the major

sales was of RF products, which are in a great competitive market, resulted in decline in gross profit margin.

However, to build up 4G Network, Chinese operators will demand more for base station antennas and LTE

products, our gross profit margin will perform better.

Because of the decrease in non-operating income and growth in development and management expenses in

1H2013, our net profit declined. There is a significant improvement compared with 2H2012 though.

1H2013 Key Financial Indicators

9

10

North America:1. Achieved steady growth,

2. All new products passed

client’s tests.

Latin America:Aesthetic antenna project in

Chile entered delivery phase.

Europe:1. Market demand increased due to the

economic recovery;

2. Expected to on the suppliers short

lists of Germany, French and Spanish

Telecom.

Africa:1. Working on breakthrough on

operators’ short lists;

2. 3G Network construction project in

process.

China:1. TD6.2 peak delivery period;

2. Operators start bidding for

LTE in 2H2013;

3. The TD-LTE license is

expected to be released in

the forth quarter .

Asia & Pacific:1. 3G and LTE network

construction in India;

2. Continued bulk sales in

Thailand for 3G construction;

3. Signed Global Procurement

Agreement with Japanese

equipment manufacturers .

10

Sales Network of 1H2013

Sales of Strategic customers

1H12 V.S. 1H13(RMB million)

ZTE’s volume purchasing of RF subsystems for China Mobile’s TD Phase 6.2 network construction,

boosting sales to Chinese equipment manufactures in high speed.

Chinese operators’ LTE network construction postponed to 2H caused revenue decrease on

year-on-year basis of Chinese operator customers.

The strong market growth in Thailand was offset by the decline in Japan and other markets.

Strategic Customers Sales

Structure in 1H2013

11

Sales Structure of Strategic Customers in

1H2013

0

20

40

60

80

100

120

140

160

180

Chinese Equipment

Manufactures

Chinese Networks Operators

International Equipment

Manufactures

Overseas Direct Sale

1H12

1H13-28.4% -20.0%

41.8%

27.6%

24.0%

6.6%Chinese Equipment Manufactures

Chinese Network Operators

International Equipment Manufactures

Overseas Direct Sale

56.1% 44.3%

The sharp increases in both domestic and overseas markets are partially offset.

The domestic market growth is expected to accelerate in 2H2013.

Because of the construction of 3G and TD-LTE network, our market share in China is believed to

be increased. Both of Nokia Siemens’ and Thai Markets have been multiplied.

Customer

（RMB ’000)1H2012 Percentage 1H2013 Percentage Change

ZTE 97,503 28.4% 153,123 40.6% 57.0%

China Mobile 48,100 14.0% 54,192 14.4% 12.7%

China Unicom 82,365 24.0% 41,720 11.1% -49.3%

China Telecom 10,245 3.0% 5,324 1.4% -48.0%

Nokia Siemens 12,719 3.7% 43,711 11.6% 243.7%

Alcatel – Lucent 43,994 12.8% 44,109 11.7% 0.3%

Japanese Market 21,790 6.4% 3,149 0.8% -85.5%

Thai Market 4,715 1.4% 18,646 4.9% 295.5%

Others 21,402 6.2% 13,495 3.6% -36.9%

Total 342,833 100% 377,509 100% 10.1%

12

Sales of Major Customers in 1H2013

Telenor is the sixth

largest multi-national

network operator among

the world. Mobi has

signed procurement

framework agreement

with Telenor in 2011 and

become one of the three

antenna suppliers for

Telenor in three years.

In 2012, the products

trial went smooth and

has bulk sales delivered

to its Pakistan

subsidiary. In 1H2013,

there has been an on-

construction trial in its

Malaysia subsidiary.

One of the major mobile

network operators in

Latin America required,

as regulated by local

laws, that the base

station needs coverage

extensive and aesthetic

antenna solution.

Mobi’s trial solution has

been approved by the

client and has received

the first batch of order.

In 1H2013, Mobi has

realized bulk sales of

aesthetic antennas in

Chile .

In October 2012,

telecom operators AIS

obtained the WCDMA

license during the 3G

operators’ license

auction in Thailand.

Mobi has realized bulk

sales to AIS since

October 2012. The

sales in 2013 remained

positive growth.

日本电气兴业株式会社(DKK)是日本知名通讯设备商，拥有日本本土和亚洲运营商客户。

摩比发展于2011年通过该司的审核和测试，产品将直接用于日本本土移动网络建设。

2012年全年，摩比向DKK销售规模约2200

万人民币。

BSNL is a well-known

telecom operator in

India.

In 2012, Mobi became

their exclusive antenna

supplier for GSM/UMTS

expansion in both

Northern and Southern

district.

In 1H2013, Mobi has

become its exclusive

antenna supplier for

expansion in Eastern

district.

Development of the Strategic Customers in

1H2013

13

1414

(RMB million)

Revenue by Products in 1H13Revenue by Year

RF subsystem products are mainly sold to telecom equipment manufacturers, which mainly for China

Mobile’s TD Phase 6.2 network construction, thus gained significant growth in revenue.

In 2H2013, China Mobile’s Phase 6 and LTE network construction, along with China Telecom's LTE

network construction, will significantly increase the proportion of the antenna system products.

14

Sales Structure of Products in 1H2013 (1)

0

50

100

150

200

250

300

1H09 1H10 1H11 1H12 1H13

Antenna System

Base Station RF subsystem

Coverage Extensive solution

39.7%

53.4%

6.9%Antenna System

Base Station RF subsystem

Coverage Extensive solution

1515

(RMB ’000)

1H13 Revenue ProportionRevenue Comparison

1H12 V.S. 1H13

Investment on 2G network decreased in 1H2013, the operators focused on 3G and LTE construction.

Therefore, our 2G products dropped significantly, on the contrary, 3G and LTE products enjoyed remarkable

increase.

China Mobile focused on TD Phase 6.2 construction in 1H2013, thus 3G products took up the major portion.

15

Sales Structure of Products in 1H2013 (2)

25.3%

58.2%

16.5%

2G

3G

LTE

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2G 3G LTE

1H12

1H13

53.4% 77.6% 915.6%

16

Gross Profit Margin & Net Profit Margin

In 1H2013, as demand for antenna system products with higher margin decreased, while demand

for RF subsystem products with lower margin increased significantly, our overall gross profit

declined. We believe, with changes in sales structure, the gross margin is expected to be

supported in 2H2013.

16

Outlook

Improve technology and optimize product structure.

Start Chinese LTE network construction. Realize

significant increase in sales.

Increase in portion of high margin products steadily:

Harvest in expansion of direct sales market among

overseas operators, raise in LTE and multi-band/multi-

system antennas sales; Ascend in aesthetic antenna

solutions in both domestic and overseas markets.

Strengthen cost control, includes industry transfer

and vertical integration; Explore overseas engineering

and services business; Improve cost control efficiency

and decline costs of key projects.

Profit Margin in 1H2013

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

FY08 FY09 FY10 FY11 1H12 1H13

GPM NPM

(RMB ’000)

1H2013 Change Reason

R&D Expense 15,936 6.8%

Enlarged input in R&D of

LTE and multi-band/multi-

system products

Administrative

Expense37,699 6.4%

Increased labor cost,

raised in social security

ratio and increased

exchange losses by the

appreciation of the RMB

Selling

Expense17,766 -1.7%

Enhanced cost control,

reduced operating

activities causing less

logistic expenses

Finance

Expense142 -11.8% Reduce loans from banks

Expenses in 1H2013

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1H12

1H13

17

Part 3. Market Outlook

China Mobile’s TD-SCDMA main equipment tender reaches 113,000 base

stations.

China Mobile’s TD-LTE Phase 1 has an unprecedented scale, to invest

over 20 billions, constructed 207,000 base stations and 550,000 fans.

0

5

10

15

20

25

30

35

Numbers of China Mobile Base Stations

LTE+TD-SCDMA tender：0.207m+0.113m=0.32m

Increased 146%

Domestic Market Opportunities in 2H2013

19Source: www.c114.net

0

2

4

6

8

10

12

2010 2011 2012 2013 LTE

China Telecom Tender Numbers

Plans to tender 100,000 LTE base stations in

2013, building TD/FDD LTE hybrid network .

100,000 base stations

Domestic Market Opportunities in 2H2013

LTE

20Source: www.c114.net

Increased 72.4%

LTE Supply Chain -

The key channels to LTE market are the main equipment manufacturers

Domestic Market Opportunities in 2H2013

turn-key

21

17.5%

47.5%

Domestic Market Opportunities in 2H2013

China Telecom:

RMB 4 billion

CDMA expansion investment

has solid supplier pattern.

TD-LTE Phase 1:

RMB 20 billion

The chart shows the

market share of suppliers.

We have great potential!

POSTCOM/

POSTEL/

FiberHome

23%

10%

13%

10%

13%

ZTE

Alcatel-

Lucent

22Source: www.c114.net

Leading TD-LTE antenna technologies in the nation

Experience in overseas LTE network constructions

Top

5

Leading

Japan Brazil Mexico

Domestic Market Opportunities in 2H2013

Advantages of MOBI

23

Work closely with the main equipment manufactures

Mobi is carrying network

examination for MTN, the

largest operator in Africa.

GSM / UMTS

network expansion

in India.

Orders from

Thailand

keeps good

momentum

as 1H,

Mainly for 3G

network

construction

projects.

The expansion of

GSM/UMTS network

in Ethiopia and

Angola is now

under key

negotiation period.

Rapid growth in LTE

network construction in

Europe and America.

Overseas Market Opportunities in 2H2013

24

Overall Outlook in 2H2013

Increase in

market share

Positive

outlook for

2H

Great potential

in overall

demand

Sales structure

optimization

25

Mobi’s

Customers

&

Product

Technology

RF subsystems and

TD-LTE antennas

Multi-band/multi-system antennas

3G and FDD LTE antennas

Aesthetic antennas

Expand multi-national operators and enter their supplier

short lists

Develop LTE and multi-band/multi-system

technologies

Increase customers and upgrade technologies simultaneously

Our Three-Year Strategy :

26

www.mobi-antenna.com

27

Disclaimer

This report is drafted and audited by MOBI Development Co., Ltd.

("Company"). The information contained in this report shall only be

disclosed under the permission of relevant laws, regulations and rules

and for the sole purpose of providing information and shall not

constitute any advertisement. The material, comment and forecast (if any)

contained in this report merely reflects Company's situation or opinion

at the date of initial disclosure of this report. Company may revise the

information contained in this report and suggest investors to

independently pay attention to related updates or amendments.

This report may contain some forward-looking statements. Such

statements are the description, analyzing or prospect of Company

employees with respect to Company or relating industries. Company

makes no promise or guaranty that the contents of such statements will

be consistent with Company or relating industries' future performance.

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