1. twAAA twBB twAA Outlook: Taiwan’s Container Shipping Industry Daniel Hsiao Associate Director Corporate Ratings, Taiwan Ratings Corp. Sept. 8, 2005

2. twAAA twBB twAA Characteristics of Container Shipping Industry Growing Industry Highly Cyclical Capital Intensive Fragmented Structure Low volatility than other shipping industry (Dry bulk carriers)

3. twAAA twBB twAA Key East-West Container Market Indicators

4. twAAA twBB twAA Containership Orderbook by Size and Scheduled Delivery Year Source: Drewry Shipping Consultants Ltd. (March 2005). 7,1623,622223971,0011,289913Total 1231,16001612915251838,000+ 1,680921161172682302905,000-7,999 2,8191,12941013653892702,500-4,999 2,54041221877145170<2,500 TEUs Current global capacity (Jan. 2005) Total20092008200720062005 Unit: '000 TEUs

5. twAAA twBB twAA Outlook for Taiwan’s Operators Supply: Substantially increase in 2006 and in 2007 –Ports and inland transportation Congestion problems in the west coast of US and in Europe Demand: Global economic and growth driver in China Outlook for Taiwan’s Operators: –Impact on intra-Asia routes is limited –Volatility in long-haul routes (trans-Pacific routes) are higher –Financial strengths are strengthened –Capital expenditure remains high

6. twAAA twBB twAA Peer Comparison of Three Taiwan-based Shipping Companies

7. twAAA twBB twAA Outlook: Telecom Industry in Taiwan

8. twAAA twBB twAA Characteristics of Taiwan’s Telecom Market Fixed Lines: Monopoly (per se) Wireless: – Saturated Market – High Penetration Rate – Dominated by Three Operators – 3G Services and Mobile Number Portability

9. twAAA twBB twAA 40122New start-ups 608898Chunghwa Telecom Co. Ltd. 2004 4292New start-ups 589198Chunghwa Telecom Co. Ltd. 2003 3981New start-ups 619299Chunghwa Telecom Co. Ltd. 2002 International direct dial (%) Domestic long distance (%) Local call services (%) Market Share Comparisons Between Chunghwa Telecom Co. Ltd. and New Fixed-Line Start-Ups

10. twAAA twBB twAA Taiwan's Mobile Phone Market

11. twAAA twBB twAA 3G: Friend or Foe? 2G was revolution, 3G is just evolution. –Non-voice revenue accounted for only 5% of revenue Demand Function of 3G = f (Quality, Content, Price) –Quality: Rooms to improve at the start-up phase –Content: 3G are joked as Girls/Games/Gambling –Price: 3G handset still expensive Attitude of Major Operators: –Launch the service at the last moment –Targeted 3G subscribers only 50,000 to 120,000

12. twAAA twBB twAA MNP: Opportunity for New Start-ups Experiences from Other Markets in the Region –Hong Kong –Singapore Taiwan? –Transfer fee –Three dominated operators equally share the market –It is an opportunity for new start-ups, but at the expense of profit

13. twAAA twBB twAA Trends on Taiwan’s Telecom Industry Fixed Lines Market: – Dominated by One Incumbent – Potential Threat from VoIP Wireless Market: – Low growth – Limited competition from new entrants Outlook: Stable

14. twAAA twBB twAA 236.0212.0 Net cash Funds from operations/net debt (%) 21.039.022,654.0EBITDA interest coverage (x) 13.017.0 Net cashNet debt/capital (%) 48.047.055.0Operating margin (%) 55.265.5182.6Total revenue (NT$ bil.) 313435Mobile market share (%) 6.86.58.2Mobile subscribers (mil.) twAA/Stable twAAA/StableTaiwan Ratings Corp. rating Not ratedBBB+/Stable/--AA-/NegativeStandard & Poor's rating --As at Dec. 31, 2004-- Taiwan Mobile Co. Ltd. Far EasTone Telecommunications Co. Ltd. Chunghwa Telecom Co. Ltd. Major Telecommunications Operators in Taiwan