PChome Online

Taiwan Leading E-commerce Group

Taiwan SMid Cap Corporate Access Day

Feb 2.17 -18
Singapore/ Hong Kong
PChome Group Company
Overview
 Company Profile
• Established: July 1998
• Public listing: Jan 2005(stock symbol:8044-TT)
• Capital:583 Mn TWD(18.2Mn USD)
• Main business: e-commerce
• HQ location: Taipei, Taiwan
• Employee:496 (Group:730)
• Business location: Primary Taiwan
• Founder:

Hung Tze Jan Arthur Lee

Chairman CEO
Company milestone
History

• 1998.07
1998
Established，Chairman H.T Jan，CEO Arthur Lee,
provided portal services.
2000
• 2000.06
Rolled out online shopping channel, started from 3C
products.
2002
• 2004.07
Cooperated with Skype，rolled out “PChome Skype”.
2004
• 2005.01
IPO– 網家(8044-TT)

• 2005.10
Rolled out online store B2B2C service

• 2006.06
2006 JV with eBay, launched Ruten auction site.

• 2007.01
Rolled out “PChome 24hr delivery” service.

2008 • 2008.04
Cooperated with BIG5 estate agencies, rolled out
“Rakuya”(樂屋網).

2010
• 2010.04
Spin off Store division to “PChome store Inc (4965-TT).,”
 PChome Group Structure (2011.Feb)

PChome
Parent Online
Company (8044-tw)

Portal Telecom E-commerce

Admin

Subsidiaries

Ruten Auction Rakuya PChome Store

Housing
IThome Weekly
100%
（4965-tw）
）
65% 16.7% ％
66.7％
2010 Revenue Breakdown

1.70%
6.60%

E-commerce

Telecom

Portal
91.60%

2010.1-3Q
 2008-2010 Quarterly
Net Sales (Unconsolidated)

3
2.9

2.7

2.5 2.4
2.3
2.2
2.1

2.0 2.0
2 1.9 1.9 1.9
1.8

1.5

1
Billion '08 2Q 3Q 4Q '09 2Q 3Q 4Q '10 2Q 3Q 4Q
（TWD）
） 1Q 1Q 1Q
 3 Major Business Models
of E-Commerce
Type B2C B2B2C C2C
Online Shopping Online Shopping Mall Online Auction

Business Model Shopping site → Online Store → Seller →

Consumer Marketplace platform→ Auction platform→
Consumer Buyer
Revenue General customer SME Professional seller/
Target Casual seller
Global Amazon.com Rakuten Ichiba eBay
Icon
PChome
E-commerce
Layout

Note Parent Company Subsidiary.(4965-TT) Subsidiary.

(8044-TT) Holding 66.7% Holding 65%
JV with eBay
Industry Introduction
US Online Shopping Market Scale

Source:MIC
US Online Shopping/Total Retail Scale
 Traditional Retail vs. E-retail

Walmart and Amazon

Revenue YoY Growth%
45%

40%
56%
50% 39 .
38 .
35%

30%
1 9%
29. 8 8%
1 6% 27.
25% 26.
6 7%
22.
20%
0% 0%
.4 .6
15% 11 % 11
80 %
9. 60
8. 20
%
10% 7.

%
5% 00
1.

0%
2005 2006 2007 2008 2009 2010

Walmart Amazon
 Traditional Retail vs. E-retail in US
Wal-Mart and Amazon Profit Ratio
40%

35%

30% 0%
% % % .8
7% 8% 43 .5
0 70 24
2 .9 3.0 3. 23 2 3.
2 2 2
25%

20% 00%
24. 90% 60% 0% 60% 35%
22. 22. 22.
3 22. 22.
15%

10%
% % % % %
. 65 . 64 27 40 34 56
%
5%
3 3 3. 3. 3. 3.
3% 7% 8% 7%
4.2 1% 3.6
7% 3.2 3.3 3.3
0% 1.7
2005 2006 2007 2008 2009 2010

Walmart GP% Walmart NP% Amazon GP% Amazon NP %

 China Internet Company IPO on
NASDAQ & NYSE

2000 2003 2004 2007 2009 2010 2011 & after

Portal

Travel & Ticketing

Online Gaming

E-commerce
 China Internet Company Valuation
Company Sector Market cap P/E (ttm) EPS (ttm)
(USD) (USD) (USD)
Portal/Media 5.71Bn 13.32 7.00
Sina
Portal/Media 3.38Bn 24.53 3.62
Sohu
Portal/Media 5.70Bn 17.71 2.48
Netease

SNDA Game 2.57Bn 22.01 2.03

Game 200.52Mn -- -2.43

The9
Perfect World Game 1.07Bn 7.61 2.81

Game 1.92Bn 11.16 3.3

Cyou
Game 1.70Bn 8.38 0.71
SNDA Games
Ctrip E-commerce 6.16Bn 44.9 0.96

E-commerce 349.27Mn 137.02 0.10

eLong
E-commerce 1.98Bn 185 --
Dang
E-commerce 10.52Bn 70.61 0.23
Alibaba
E-commerce 162.60Mn 47.72 0.11
MCox
Source: yahoo finance.11.2.14, Reuters
 U.S. Internet Company Valuation

Company Sector Market cap P/E (ttm) EPS (ttm)

(USD) (USD) (USD)
Portal/Media 22.10Bn 18.72 0.9
Yahoo
Portal/Media 2.26Bn -- -7.34
AOL
Game 6.05Bn -- - 1.21
Electronic Arts
Game 13.00Bn 36.67 0.29
Activision Blizzard
E-commerce 85.35Bn 74.8 2.53
Amazon
E-commerce 44.81Bn 25.37 1.36
eBay
Expedia E-commerce 5.90Bn 13.69 1.56

Priceline E-commerce 22.36Bn 49.48 9.2

Source: yahoo finance.11.2.14

China Online Payment
Breakdown
 PChome
B2C Highlight
PChome B2C Business I

‧Founded：
：2000.6
‧http://shopping.pchome.com.tw
‧Service model: Non-inventory,
order transfer
‧Members：
：5millions
‧ + 800,000 products in wide
selection (includes PChome 24h shopping)
‧Coordinate with +5,000
suppliers
PChome B2C Business II

‧Launched：：2007.01
‧http://24h.pchome.com.tw
‧Service Model: Consignment in-
stock central warehouse
‧Items：：379,348 (’11.02)
‧On time rate：：99.67%
‧24 hrs delivery guarantee
Before
Traditional e-Commerce Model
Consumer (Order transfer model)
Day6 Day 5
Delivery Delivery

Day3 Delivery Buy

Products shipped
Provider Provider Provider by variety of providers

Products shipped
by
PChome within 24hrs
 PChome 24h Shopping Service
Customers:

Real-time order checking system

PChome 24h Shopping On Time Delivered :99.67%

4
1
3 5
2

7 6
9
8
 Subsidiary -
PChome Store Highlight
PChome Store Inc.

‧Spun off since 2010.5 (4965-TT)

‧Capital: NTD $129.4Mn
‧Service launched:2005.10
‧http://store.pchome.com.tw
‧Business: SME online shopping mall
‧# of Stores: 9,430 (’11,02)
‧# of items：：3,237,301 (’11,02)
‧HQ location: Taipei, Taiwan
‧Employee：：102
PChome Store SME Cloud

26
Lower Cost Brings Higher Profit

brick-and-mortar Online store

 # of Stores 2005 - 2010
10000 43
9,3
9000
43
8000 7,3

7000
72
6000 4,8
5000
43
4000 3,1

3000 45
1,5
2000
0
1000 11
0
2005 2006 2007 2008 2009 2010
# of Store
PChome Store Revenue Model

Online Store Annual Sales Value-add Payment

Set-up Fee maintenance Commission Service Methods
Fee
(one-time (by orders)
charge)

NT$36,000 No Annual 2% (3% NT$50~ ATM

maintenance after 2nd NT$5,000 Credit Card
Fee year) (Web Ads and CVS Kiosk
extension courses)
+ payment COD
surcharge

(2011.01)
Financial Highlight
 2010 3Q PL vs. 2009 3Q PL
(unconsolidated)
NTD:000
2010 3Q 2009 3Q Variance YoY Growth
Operating Revenues 2,680,567 2,147,342 533,225 24.83%

Gross Margin 386,984 318,624 68,360 21.45%

Gross Margin Rate 14.40% 14.84% -0.44% -2.96%

Total Operating Expenses (329,399) (296,432) (32,967) 11.12%

Operating Profits 57,585 22,202 35,383 159.37%

Non-Operating Profits 70,622 11,631 58,991 507.19%

Net Profit before Income Tax 128,207 13,356 114,851 859.92%

Income Tax (20,079) 13,810 (33,889) -245.39%

Net Profit after Tax 108,128 27,166 80,962 298.03%

2010 1-3Q PL vs. 2009 1-3Q PL
(unconsolidated)

NTD:000
2010 1-3Q 2009 1-3Q Variance YoY Growth

Operating Revenues 7,405,987 6,092,928 1,313,059 21.55%

Gross Margin 1,124,060 902,157 221,903 24.60%

Gross Margin% 15.20% 14.80% 0.40% 2.70%

Total Operating
(941,193) (836,153) (105,040) 12.56%
Expenses
Operating Profits 182,867 66,004 116,863 177.05%
Non-Operating
86,107 5,173 80,934 1564.55%
Profits
Net Profit before Tax 242,897 71,177 171,720 241.26%

Income Tax (26,077) 13,966 (40,043) -286.72%

Net Profit after Tax 216,820 85,143 131,677 154.65%

2010 1-3Q PL VS. 2009 1-3Q PL
(consolidated)
NTD:000 (Consolidated)
2010 1-3Q 2009 1-3Q Variance YoY Growth
Operating Revenues 7,637,597 6,163,291 1,474,306 23.92%

Gross Margin 1,250,910 927,333 323,577 34.89%

Gross Margin Rate 16.38% 15.05% 1.33% 8.85%

Total Operating Expenses (1,062,994) (913,523) (149,471) 16.36%

Operating Profits 187,916 13,810 174,106 1260.72%

Non-Operating Profits 74,721 30,613 44,108 144.08%

Net Profit before Income Tax 262,637 44,423 218,214 491.22%

Income Tax (28,315) 14,186 (42,501) -299.60%

Net Profit after Tax 234,322 58,609 175,713 299.81%

EPS
Before Tax 4.63 1.27
After Tax 4.18 1.52
 Annual Revenue (consolidated) vs.
Group Employee
NTD:mn
12,000 2,000

1,800
10,000
1,600
8,412
1,400
8,000 7,589
6,851 1,200
6,235
6,000 1,000
4,690
807 800
711 730
4,000 657 695
600
473
400
2,000
200

0 0
2005 2006 2007 2008 2009 2010 employee

Revenue employee
2011 New Business
& Movements
China & Global Market

Launched in July 2010

Http://global.pchome.com.tw
#of Items:225,225
Deliver to 105 Countries

Language version:
Traditional /
Simplified Chinese

Population:22Mn Payment:Taiwan credit card,

 2011 PChome Group Structure
PChome
Parent
Company Online
(8044-tw)

Portal E-commerce
Admin

Subsidiaries IPO in 2011 1H Spin-off in 2011 Mar.

Ruten Auction Rakuya PChome Store PChome Skype

IThome Weekly Housing
100%
(4965-tw)
65% 16.7% ％
66.7％ ％
100％
 Thank you
Contact: Vicky Tseng
Email: vicky@staff.pchome.com.tw
Skype:cookiecat86
TEL:+886-2-2700-0898 ext 879
Mobile:+886-958-915-256