Upbest Group Limited

Capitalizing on

Macau Property Expertise

美建集團有限公司

FORWARD LOOKING STATEMENTS DISCLAIMER

• This material is for information purposes only. This presentation may contain forward-looking statements based on current assumptions and forecasts made by the Upbest Group Limited’s management.

• Various known and unknown risks, uncertainties and other factors could lead to substantial differences between the actual future results, financial situation, development or performance of the company and the estimates given here.

• The company accepts no obligation to continue to report or update these forward-looking statements or adjust them to future events or development.

Capitalizing on Macau Property Expertise

Dr. Wong King Keung, Peter(BBS, JP)

Chairman of Upbest Group Limited

Key messages today• Profit up from 38.1mn to 83.5mn (119%)• Dividend of 2.5 cents per share• Company has diversified into Macau

Property Investment and Development• Company purchased 3 properties in Macau,

1 Shopping Centre and 2 Green Fields for development

• Macau property plays an important role in the company’s future growth

• Acquisition of Gold-Face Finance• Stronger financial position

New Directions• Property Investment and Development in

Macau– Purchase Land and Develop mainly Residential

Buildings with some Commercial Space– Purchase completed buildings for investment

purpose– Joint projects with JV partners with other

developers or investors

• Grow and strengthen financial services businesses organically and through opportunistic acquisitions

Why Macau? (part 1)

• The Group has capabilities within Macau– Relationships with developers and land

bank owners– Directors’ experience with Macau property

transactions

Why Macau? (part 2)

Supply & demand driversMajor Economic Developments, Including:• 28% GDP Growth (2004)• Gaming Industry Expansion

– MOP140-165 billion planned investment

• Tourism Expansion – Visitor arrivals up 40% to 16.7mn visitors

Why Macau? (part 3)

Supply & demand driversWorkforce Developments, Including:• Requirement For New Manpower

– Driven from 15 new casino resorts and 17 new hotels

• Foreign Workers Influx– Unemployment at 10 year low (4.1%)– Ancillary professional services

• Immigration Laws encouraging foreign ownership • Disposable Income Increasing and consumption up

by 8.3%

Why Macau? (part 4)

Supply & demand driversProperty Developments, Including: • Demand for Retail Property Up

– Retail sales up 20% (2004)

• Demand for Residential Property Up– Transaction volume up 60%– 10,000 (2003), 16,000 (2004), 5,000 (1Q’05)

• Limited Residential Property Supply– 7% growth expected in stock in 2006 (1,200

units)

What the others say

Deutsche BankEquity Research

• “Strong demand; limited supply with the opening of the gaming industry to competition, Macau's economy has rebounded strongly in the past few years

• Limited supply is likely in the near term, and strong demand should be positive for transaction volume and prices”

What the others say

Merrill Lynch:

“We see at least another 128% upside to Macau’s housing prices over the next 3 years, and that will

not imply a bubble“

What the others say

Midland Realty:

“Home prices to rise more than 20% next year”

Ronald Cheung, Director

What the others say

Goldman Sachs:

“Macau retail property market has significant Long-Term growth potential”

What the others say

Savills:

highlighted that Macau is still very immature as a retail destination for Mainland tourists and therefore has significant growth potential

What the others say

Jones Lane LaSalle:

“Enormous sums of investment are and will be, flowing into Macao in the coming years”

Importance of Macau property to Upbest

• Net property assets form over 68% of the Group’s net assets

• Property related profits represent 60% of total pre-tax profit

• Macau Property Investment and Development will become an even stronger component of Upbest’s business going forward

2005 Highlights

• Acquisition of green field land in Macau Peninsula for residential development at HK$29mn on 3rd Jan 2005

• Acquisition of brown field land in Taipa Island, for purpose of residential development at HK$27mn on 3rd Jan 2005

• Top-up placement of $153mn on 18th Jan 2005 at $1.42 per share

• Acquisition of Chino Plaza, a shopping centre in Macau Peninsula at HK$128mn, on 25th January 2005

• Acquisition of Gold-Face Finance Ltd. for HK$28mn• Appointment of new Chairman Peter K.K. Wong on

24th Jan 2005

Property 1 Location inWest-side Macau

Property 1

Property 1 - Greenfield

• Overlooking the Marina, the site is a five-minutes’ walk from Ponte 16 on the West-side of the Macau peninsula

• Land area 5,371sf• Land cost HK$28.5mn• Last valuation HK$44mn (Jan/05)• Discount of 35%• Anticipated total CAPEX HK$89mn • 20 Storey Building with approx.

– Ground Floor Commercial 4,800 sf– Upper Residential 96,000 sf– 30 Car parks

• New properties in this area currently sell for between 1,500-2,000 psf

Terreno Situado Perto DA AV. DO Almirante, Macau

Property 2 : Location Spectacular Views of the Cotai Strip

Cotai Strip

Property 2 - Brownfield

• Located in the centre of Taipa Island, opposite the popular property Kingsville

• The site is only minutes from the Macau-Taipa Bridge, with spectacular views of the Cotai Strip

• Land area 7,201 sf• Latest valuation HK$57mn (Jan/05)• Land cost HK$27mn, Discount of 53%• Anticipated total CAPEX HK$95mn• High-rise Building with approximately:

– Ground Floor Commercial 5,000– Upper Residential 108,000 sf – 30 Car parks

• New properties in this area currently sell for between 1,500-3,000 psf

Companihia de Desenvolvimento e Fomento, Taipa, Macau

Property 3 Location inWest-side Macau

Property 3

Property 3: Chino Plaza

• Shopping Centre on G/F & 1/F + 51 car parks

• Mostly rented• CAPEX $127.5mn• Marketable area

over 100,000 sf• Latest valuation

HK$170mn (Mar/05)

Gold-Face Finance• Agreement to acquire Gold-Face Finance Ltd. • Acquisition cost HK$28mn• Gold-Face is a finance company with loan portfolio of

around HK$110mn• Portfolio comprises mainly of second mortgage

loans, and also contains some unsecured personal loans

• Long Stop date extended until 31 Aug 2005 as certain conditions are still to be fulfilled

• Assuming successful closing of transaction, this acquisition will bring recurring revenues to the company and will be a contributor to 2006 profit

Financial Highlights• Profit up 119% to $83.5mn• Dividend HK$2.5 cts/share (up 150%) with a

scrip option. Dividend payout ratio is 37%• Charles Cheng, the controlling shareholder,

to take all his dividend in the form of stock to allow the company to use these funds for further opportunities

• Top-up placement raised HK$153mn at $1.42/share in Jan/05

• Currently no borrowing for the purpose of the property acquisitions

• Very low write-off on bad debts of 200k

Summary of Profit & Loss

Financial Highlights

Change 2005 2004 2003

Turnover -22% 58,175 74,185 50,790

Macau Property Income +∞ 54,137 - -

Profit from Operations 88% 92,937 49,500 19,200

Profit before Taxation 94% 90,039 46,441 16,005

Net Profit 119% 83,488 38,144 13,123

Dividend per share (cts) 150% 2.5 1 0.48

EPS (cts) 115% 7.3 3.4 1.2

Brokerage5%

Financing33%

Macau Property60%

CorporateFinance

1%

AssetManagement

1%

2005 Profit Drivers (pre-tax basis)

Summary of Balance Sheet

Financial Highlights

Change 2005 2004 2003 2002

Non-current Assets 1422% 180,648 11,867 12,753 33,687

Current Assets 20% 570,487 474,183 508,214 431,303

Current Liabilities 13% 352,202 311,940 379,445 279,771

Net Current Assets 35% 218,285 162,243 128,769 151,532

Equity 129% 398,933 174,110 141,342 135,219

Asset Growth

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CAGR: 17%

Financial Ratios

• ROE 21%• Current P/E 15.3• Overall gearing down from 90% to 38%• No gearing on property business• Interest covered over 11 times• Market Cap HK$1.28bn• Outstanding Shares 1.229bn• Dividend Payout Ratio 37%

Financial Highlights

Profit and Dividend

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Financial Highlights

Future Direction• Bullish property market in Macau -> further

investment opportunities for short term and medium term profit

• Further opportunities for medium term(18-36 months) development opportunities

• Macau is a hot market for investors and the company is pursuing JV opportunities with investors for development and investment opportunities

• Organic growth of financial services business• Opportunistic approach re. acquisitions of

possible assets in the financing business

Thank you!

Q & A Session