Diguang International Development Company Ltd. · OTC:DGNG
Diguang International Development — Investor Presentation (May 2007)
45 slides from Diguang International Development's investor presentation, May 16, 2007
Slide 1: Diguang Electronics Introduction
DIGUANG. ELECTRONICS FBT Introduction : "About| Diguang Electronics Diguang Electronics Co., Ltd,
Slide 2: Safe Harbor
~~. Safe Harbor This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, about Diguang_ International Development Company, Ltd... Forward looking statements are statements that are not historical facts. Such forward-looking
Slide 3: Corporate Snapshot
Corporate Snapshot Corporate HQ Shenzhen, China Ticker Symbol DGNG Exchange OTCBB Sector Technology Industry Electronic Components Price (May 14, 2007) $2.25 Market Capitalization (May 14, 2007) $51 million Shares Outstanding 22.59 million Public Float 5.59 million Fiscal Year Ends December 31 FY200
Slide 4: Diguang Worldwide
Diguang Worldwide Dongguan plant Diguang (TW) Sales rep office Diguang (HK) Office Diguang (DGNG) ‘Wuhan Diguang, Inhouse “or” Taiwan Tigey Dihao Yanzhou Factory ‘Shenzhen Diguang Co., Ltd-HQ
Slide 5: Vision and Mission
and Mission Vi: ion Through product inmovation, become the leading backlight manufacturer, of all sizes, in Mainland China. Mission Through our product and technological offerings, make the world brighter & more beautiful and connnunication clearer & quicker.
Slide 6: A backlight
A backlight. * Is the light source of an LCD screen * Is one of the most expensive components in an LCD product * Has a direct impact on an LCD product's * color gamut * brightness * light uniformity + power consumption Backlight ° life time * cost + environmental impact ———————_—
Slide 7: Backlight applications
© Small backlights ( < 10.4”) for: = Car navigation systems — DVD, GPS, PDA & CD players — Digital cameras = Camcorders — MP3 & MP4 players — Cell phones — Appliance displays ° Medium backlights (15”-19”) for: — Computer monitors ° Large backlights (20”-47”) under development for: — Televisions
Slide 8: History & Trends
History & Trends * The first backlight production facilities were in Korea and Japan — Produced 85% of all LCD technologies, including backlights, in 2000 = High quality — Cost initially not a significant factor 5 p.years ago, global production began to shift to China First to Taiwan, now to mainlan
Slide 9: Investment Thesis
Investment Thesis ° Target Market: critical application, large addressable market, turning to China ¢ Leading backlight producer in China with competitive edge © R&D approach helps maintain market leadership °¢ Experienced management to execute plan ° Strong financials to support growth * Significan
Slide 10: Target Market
Target Market ° Market is driven by innovations in consumer electronics * $8.4 billion global backlight market in 2006 growing at over 11% per year through 2009 Source: Displaybank Growing Global Backlight Market In USS thon
Slide 11: Target Market
Target Market © Industry-wide Pricing Pressure * Display manufacturers in search of high performance-to-price components ° Market is turning to China because of lower costs, high quality
Slide 12: Diguang is an Industry Leader in China
Diguang is an Industry Leader in China China Competitors International Competitors Region South China Taiwan BLU Sizes Mostly < 10.4” Mostly > 10.4” Radiant, Coretronic, Shian Yih, Key Competitors | None Waichi ) IT Competitor om + Large & established Characteristics | * 49"er price, lower + Higher
Slide 13: Diguang is an Industry Leader in China
. Diguang is an _ Industry Leader in China * Technology-Based — Has 11 patents on light enhancement, dispersal, and uniformity — New patents on large backlights pending — Continuous filing of new patents 6 High performance-to-price features: Value Creation — Low product structural cost due to inovat
Slide 14: Major Customers
Major Customers LCM Customers OPTREX SI1@® @ic Hann = DESe SME VEvnex = Besser Oe vi mue
Slide 15: Major Customers
Ne Major Customers Branders or Integrators (KONKA — sisonsesai Aarco (husiek!’ AcTion Lis] Shinco™#. [Ganectip~
Slide 16: An R&D Approach
— An R&D Approach V In-house R & D Team Approx. 100 team members(engineers and technician) V Optoelectronic Technology Collaboration with the Center for Display Research, Hong Kong University of Science and Technology v LED BLU for TV Application Cooperation with major Chinese TV producers in the in
Slide 17: R&D Milestones
R&D Milestones 1995-1997 Side/Bottom LED B/L. 1998-2000), COFLB/L, Hi-bright White LED B/L 2001-2003 ), Medium-and-smaltsize CCFL/LED B/L 2004-2005 Large-size CCFL B/L for TV & MNT 2005-2006 Large-size LED B/L for TV & MNT Have gained 11 key Patents for B/Ls
Slide 18: Product Mix for 2007
Product Mix for 2007 Large Size Backlights Middle & Small-Size Backlights + Capacity: 10-15K per day Capacity: 150-250K per *+ Applications: day Televsions ard compar moniors_} |__* Applications: Portable DVD, DSC, IN-CAg TY, GPS, Digital Photo Fram, Production Mix « Capacity: 200K per day + Applica
Slide 19: CCFL Backlights Products
eS Products te CCFL Backlights for Medium-and-Small-size TFT-LCD Technical Parameters: Main Sizes (inches): 2.5 3.5 3.6 4.0 4.5 5.0 6.2 65 7.0 84 9.0 104 Brightness (cd/m?): 3000 - 10000 Uniformity: 80% Life Span: 20K-50K Hr. Visible Angle: 70°--160° ————————_—_—
Slide 20: Products
~~. Products
Slide 21: High-Brightness White LED Backlight Products
‘o} Rose Products High-Brightness White LED Backlight Under 10.4” Technical Parameters : Main Sizes (inches): 1.5 1.6 1.8 1.95 2.02.2 2.53.5 upto 104 Brightness (cd/m?): 2000 - 4500 Uniformity: >80% V7
Slide 22: Products
Products Technical Parameters Colors: red/orange/vellow/green/vellow-green/blueAvhite/amber, etc. Brightness (cd/m*): 5 - 3000 Uniformity: 275% Thickness: 21.0 mm Visible scope: Based on customers’ requirements
Slide 23: Product Presentation
Product Presentation Common Bottom LED Backlight Technical Parameters: Colors: red/orange/vellow/green/ yellow-green/bluehvhitelamber. ete. Brightess (ed/m2): 50 - 3000 Uniformity: >80%% Thickness: 24.0mm Visible Scope: Based on Customers’ requirements
Slide 24: Production Capacity
Production Capacity ¢ Existing production capacity is scaleable to substantial revenues = capacity varies based on size and type of backlight — 4.5 million to 6 million pieces of small (<10.4”) backlights per month = Availability of additional production capacity of approximately 400,000 pieces of m
Slide 25: State-of-the-art production campus in Dongguan
r + State-of-the-art production campus in Dongguan, South China - Leased + 65% ownership of a plant in Yangzhou, East China ~ Leased + In-house production at a customer facility in Central China - Leased Dongguan Campus v Personnel + Approximately 2,000 employees
Slide 26: Modern Manufacturing
~ Jace Modern Manufacturing DIGUANG: ELECTRO" Super Clean Assembling Injection Workshop(1K-10k/class) Workshop
Slide 27: Testing equipment
‘saree BM-7 BM9 2D Image 3D Image _ Projector Projector —————————————______—
Slide 28: Automatic Light Guiding Plate Cut & Shear Automatic
Automatic Light Guiding Plate Cut & Shear Automatic Soliding Molding Machine Machine Fix Chip Machine Machine
Slide 29: Modern Manufacturing
Lael _ Modern Manufacturing ee = AN ELECTRON eas Lead-Free Automatic Polishing Automatic Reflow Blending Machine ‘Silk-screen Soldering Machine Machine Machine V———————————_—_—_—____
Slide 30: Constant Temperature & Humidistat Temperature
Constant Temperature & Humidistat Temperature Machine Shock Machine ————————_—_—
Slide 31: Dedication to Quality
r __ Dedication to Quality ISO 9001:2000 Iso/Ts16949: 18014001: OHSAS 18001 Management 2002 Management 2004 Health & Safe Certificate Certificate Environment Certificate Certificate —eee—<—<—$—_—<£=
Slide 32: Mr. Song Yi - Chairman and Chief Executive Officer
° Mr. Song Yi - Chairman and Chief Executive Officer 2 Extensive management and engineering background High-level authority in many related associations industry organizations: = Deputy Director of Working Committee of Shenzhen Electronics Communication Experts " Deputy Director of Shenzhen Optoelec
Slide 33: Experienced Management
erienced Management © Mr. Song Hong - Chief Operating Officer Experienced, results-oriented leader © Previously in management at China National Non-Ferrous Metals Industry Corporation and Beijing Engineering Design & Research Institute for Nonferrous Metals Industry (ENFI) © Joined Diguang in 2001 a
Slide 34: Experienced Management
rienced Management ° Keith Hor - Chief Financial Officer G. Extensive experience in top positions in corporate finance, treasury accounting, auditing, and financial planning for multi-national corporations G2 October 2006 to March 2007, financial controller overseeing corporate strategic. planning a
Slide 35: Strong Financials
~ Strong Financials March 31, 2007 Cash & Equivalents $16,323,012 Current Assets $ 32,628,355 Total Assets $ 39,825,888 Long Term Liabilities Total Liabilities $9,458,864 Shareholders’ Equity $ 29,289,129 Current 3.44X Quick 2.82X LT Debt/Equity 0%
Slide 36: Growth Opportunities Ahead
r wth Opportunities Ahead v Small Products (<10.4”): + New top tier customers, e.g. LPL, Panasonic v Medium Products (15”- 19”): + Order increase from existing customers + New Customers ¥ Large Products (20”-47”): + CCFL BLU + LED BLU
Slide 37: Growth Opportunities Ahead
Ka DICUARC tires Bees th Opportunities Ahead Introducing LED backlights to televisions v Improved Viewer Experience * Reduces motion blur, a key weakness of LCD displays "= Enhances color gamut "Increases contrast ratio Y Cost Savings * Saves power (dimming & dynamic backlights) = Lengthens life tim
Slide 38: Recent wins: in-house supplier status and new orders
VY Won in-house supplier status to one of the four Taiwan Tigers in the TFT-LCD industry, to supply 15”-19” BLU V Received order for 15”-19” BLU from another customer Y Jointly cooperate with the major TV producer partners for the semiconductor-related program under the current 5-year plan for LED B
Slide 39: Thank you and questions are welcome!
Thank you and questions are welcome!
Slide 40: BLU Unit Forecast by Lamp Technology
BLU Unit Forecast by Lamp Technology Expected 40"-44 By Insight Media ———
Slide 41: Business Philosophy
Business Philosophy i 3C(Customer/C Continuous Imp
Slide 42: Types of Backlights
Appendix Types of Backlights + LED (Light Emitting Diode) Backlights — Current Applications: Smail/medium sized applications including cell phones, PDAs, — digital cameras, ete. — Advaniages: Lower cost than other alternatives: long operating life: bright light ~ Disadvantages: High power consumptio
Slide 43: CCFL vs. LED
Appendix CCFL vs. LED Comparative Advantages/ Disadvantages of CCFL vs. LED CCFL LED + Low Cost + High color gamut + Established & stable + Faster response time technology + Linear dimming capability + Established & stable + Longer lifetime market + Color sequencing can ‘potentially eliminate need f
Slide 44: Plasma vs. LCD
Appendix ma vs. LCD PLASMA Electricity activates _ | Best in darker Better in larger tiny xenon or neon rooms because screens containers screens can achieve deeper black LeD Layers of liquid + Brighter picture | Better in small and crystal filers light |« Higher medium sizes definition * Good in lig
Slide 45: Titles and Honors
Diguang International Development — Investor Presentation (May 2007) on 6ix