Woongjin.comWoongjin.comNovember 2002

TableTable of Contentsof Contents

Company Overview

Business Outlook

Industry Overview

Financial Highlights

WOONGJIN.COMWOONGJIN.COM

Company OverviewCompany Overview

Investment Highlights

Company Milestones

Business Overview

Sales Revenue Breakdown

Ownership Structure

WOONGJIN.COMWOONGJIN.COM

Company Overview

Investment HighlightsPrivate Education Market in Korea - Higher reliance on private education - Market size : KRW 18,369 bn(2001) KRW 25,421bn (2005E)

Private Education Market in Korea - Higher reliance on private education - Market size : KRW 18,369 bn(2001) KRW 25,421bn (2005E)

1. A leading children’s publisher in Korea

- Target Age Group 0 to 12 years only

2. Constant growth since the establishment - No negative growth rate in 20 years of company’s history

3. Marketing-oriented company : 920 sales branches nationwide

- Exclusive sales agent : 17,000

- Tutors : 10,550

4. Cash-basis sales : Strong cash flow, No bad debt

5. Think Big : A fastest growing market player - CAGR : 25% - Subscribers (As of Dec 31, 2001) : 843,000

6. Decrease the debt level to zero (April. 2002) - The increase of operating margin results from organizational restructuring

7. CEO’s commitment to constant change and transparent management

8. Constant Innovation & Profit-Improvement as a result of new CEO

3

Constant innovation and growth in an ever-changing business environment.

To be the best publishing company

2001.4 Started Its English Education business(‘Englab’)

2000.4 Changed Company name to Woongjin.com

1999.6 Awarded Planning & Editing Award by Korean Publisher Association

1999.4 Launched its infant education business

1997.6 Awarded Bokwan Cultural Medal

1994.11 Listed on the Korea Stock Exchange

1994.4 Launched Think Big: Learning material and educational Service

1983.3 Changed company name to Woongjin Publishing.Co

1980.4 Established as a publishing house for infants and children

Company Milestones

Company Overview

4

2002.3 Merge of Edubig.com

2002.7 Nominated to Korean Industrial ‘Good Image’ Company

Educational service• Think Big (5~12)

• Infant Education(0~5)

Educational service• Think Big (5~12)

• Infant Education(0~5)

New Business

• Education Toys (0~7)

• On-line Education (0~12)

New Business

• Education Toys (0~7)

• On-line Education (0~12)

Publication• Series publications(0~12)

• Magazine (All)

• Separate Volume Publication (All)

Publication• Series publications(0~12)

• Magazine (All)

• Separate Volume Publication (All)

Innovative Leader In the Education and publishing industry

Innovative Leader In the Education and publishing industry

Business Overview

5

Company Overview

Sales Revenue Breakdown

Total of KRW 454 billion

2 0 0 12 0 0 1

6.4%

38.4%

47.3%5.9%0.3%1.7%

Think BigInfant EducationDoor-to-Door salesMagazine publicationsSeparate volume publicationsOthers

Total of KRW 291 billion

1 9 9 71 9 9 7

67.4%

23.3%7.0%0.1%2.2%

Think BigInfant EducationDoor-to-Door salesMagazine publicationsSeparate volume publicationsOthers

Company Overview

6

Paid in Capital KRW 18 Million

Market Capital: KRW 142 Billion

(As of November 4, 2002)

Outstanding shares : 35,857,210

Ownership Structure

Company Overview

24.8%

7.8%

21.5%

45.0%

0.9%

Chairman Yoon Seok-Keum

Foreigners

Special relations

Others

Treasury stock & fund

7

Business OutlookBusiness Outlook

Business Structure

Operating System

Door-to-Door Sales Division

Think Big Division

Infant Education Division

English Education Division

WOONGJIN.COMWOONGJIN.COM

Business Outlook / Business Structure

Business Structure (By Products)

AllMagazines Sales of 8 different magazines

(Enfant, My Wedding, Figaro ...etc)

Direct sales

/bookshops

- 363 kinds(1,235 titles) of general

interest

AllSingle Volume Publication

17,000

sales forces

- Home visit

- Direct sales/Membership

- 57 products of series publication0~12Door to Door Sales

Publication

(46%)

0~12Internet Education

- Home Visit - Monthly subscription

- Tutoring Services for 9 products

Mathematics Story, Gabe Wooden

Blocks

0~7Infant Education

- Home Visit & Study

room system- Monthly subscription

- Think Big Series (8 products) :

Korean, English, Maths etc.- Tutoring services

5~12Think Big

Educational

Service

(54%)

Marketing Channels

Sales MethodProducts/Business Model Target Age DivisionClassification

web sites- charge contents

-Profit from charged digital contents and marketing support for offline products

www.thinkbig.co.kr

www.uni-i.co.kr

www.semsemi.co.kr

9,200

Tutors

1,100

Tutors

Direct sales

/bookshops

9

Woongjin.com

Business Outlook / Operating Structure

Marketing Channel

Door-to-Door Sales force- 17,000

Teacher- Think Big : 9,200- Infant Education : 1,100

Operating System

Support System

Outside Vendors Customers

R&D - In-house development 60%- Licensing 40%

Training Programs

Printing & Binding

100% Outsourcing

Cash Sales (95%)

Installment Sales (5%)

Sales Commission

(48.6%)

Publications &

Educational Service

Cash Sales (95%)

Installment Sales (5%)

10

Business Outlook / Door-to-Door Sales Division

Door to Door Sales Division

Introduction• Products : Encyclopedia,Reference, Storybook, Picture book and 57 other products

• Marketing Channel : 17,000 sales forces visit customers' homes and offices

• Target Age : 0~12 Children

• Sales method : Cash sales (85%) , Credit sales (15%)

• Majority of sales forces are housewives : Closeness to customers

• New challenges to Door to Door sales : Pole Star Department

Competitiveness• Strong marketing channel throughout the nation (650 distribution channel)

• Positive brand image "Publishing Quality Books"

• Ability to satisfy different demographic market segment

112000 2001 2002(E) 2003(E) 2004(E)

(unit : KRW billions)

134

172156

173

208

Sales RevenueSales Revenue

CAGR 14.2%

Business Outlook / Think Big Division

Think Big Division

Introduction• Products : Think Big Series (Korean, English, Mathematics, Chinese Characters etc, 8 products)

• Target Age : Children aged between 5~12

• Marketing Channel : 9,400 tutors 'Home visit’ or 'Studyroom’ system(tutor's home) = 60% : 40%

• Tutoring Service : Once a week 30 minutes (KRW 24,000 ~ 32,000 per month) or

twice a week an hour (KWR 51,000 per month) 100% cash sales

• Increase in price (2002. 2. 1) : 8~10%

Competitiveness• Contents focused on creativity: Affiliates national educational standards

• Differentiated tutoring services : Twice a week tutoring services, Studyroom system

• Profit from integration of online and offline(www. thinkbig.co.kr)

• Qualified in tutoring and sales tutors : Since its launch in 1994, top ranked in the industry

12

1999 2000 2001 2002(E) 2003(E)

(unit : KRW billions) (unit : thousand people)

1999 2000 2001 2002(E) 2003(E)

122

165

215

266

340Subscribers

Instructors

Sales RevenueSales Revenue Subscribers & Instructors Subscribers & Instructors

500624

900

843

1,152

6

9.28.7

8

10.4

CAGR 29.3%

Business Outlook / Infant Education Division

Infant Education Division

• Products : 8 Educational series publication and Education Toys

• Target Age : Children aged between 0 ~ 7

• Marketing Channel : 1,100 tutors visit students' homes

• Sales method : Provide tutoring services to requested customers(KRW 35,000 50,000 per month)∼

• Launch of new market: Educational Toy (2002. 6)

Introduction

Competitiveness

• Generates revenue with Door to Door Sales Division

--> Door to Door Sales Division sells series publication and provides tutoring

services to the customers

• Operates quality training courses to educate tutors (Ehwa - Woongjin Academy)

131999 2000 2001 2002(E) 2003(E)

23

36

Sales RevenueSales Revenue

10

22

29

1999 2000 2001 2002(E) 2003(E)

Subscribers & InstructorsSubscribers & Instructors

16

34

73

58

103

1.11.21.3

1.21.6

CAGR 46.9%(unit : KRW billions) (unit : thousand people)Subscribers

Instructors

Industry OverviewIndustry Overview

Infant and Children Population

Private Education Market

Learning Materials Industry

Publishing Industry

English Education Industry

WOONGJIN.COMWOONGJIN.COM

Industry Overview / Infant and Children Population

Infant and Children Population

7,291 7,280

1999 2000 2001

7,071

1998 2002E 2003E 2004E 2005E

7,123 7,180 7,232 7,271 7,238

In thousands persons

Potential demand (80%)Potential demand (80%)

(in thousands) 1998 1999 2000 2001 2002 2003 2004 2005

Ages 0 ~ 4 3,648 3,601 3,575 3,535 3,502 3,463 3,419 3,374

5 ~ 6 1,359 1,407 1,415 1,429 1,428 1,424 1,417 1,404

7 ~ 12 3,832 3,896 3,985 4,076 4,159 4,227 4,264 4,270

Total 8,839 8,904 8,975 9,040 9,089 9,114 9,100 9,048

15

21,485

23,370

1999 2000 2001

13,632

1998 2002E 2003E 2004E 2005E

14,72517,254

18,369

19,686

In KRW billions

Private Education Market

25,421

Higher Reliance on private education than public education

High educational zeal: Parents are willing to pay

Private education market depends on quality of contents, not population

Higher Reliance on private education than public education

High educational zeal: Parents are willing to pay

Private education market depends on quality of contents, not population

Private Education Market

16

Industry Overview / Private Education Market

Leaning Materials Market

Sell Learning Materials (6 subjects including Korean, English, Mathematics, Chinese Characters) and provide Tutoring Service on monthly subscription basis

Target Age : Children aged between 5~12

Research done by Korean Education Development Institute (‘2001)

• Size of Education Materials Market

: KRW 3,120 Billion

• Expected Annual Average Growth Rate

13% by 2005

(Woongjin.com’s annual growth rate:30%)

2000 2001 2002(E) 2003(E) 2004(E) 2005(E)

• Size of Educational Material Market

• (in KRW billions)

2,8413,120

3,510

4,030

4,680

5,330

Industry Overview / Learning Materials Industry

17

Publishing IndustryMain products are series publication, single volume publication, learning materials, video, CD and Cassette Tape

- Single volume books are sold through wholesalers and domestic retailers- Series publications, educational materials are sold through door to door sales system

[Usually purchased after long consideration rather than impulsive buying]

Target Age : Aged between 0 ~ 12

Research done by Korean Education Development Institute('2001)

• Size of Publication Market : KRW 2,730 Billion

• Expected Annual Average Growth Rate

10% by 2005

(Woongjin.com's annual growth rate: 13%)

2000 2001 2002(E) 2003(E) 2004(E) 2005(E)

• Size of Publication Market

• (in KRW billions)

2,470

2,730

2,990

3,2503,510

3,900

Industry Overview / Publishing Industry

18

Financial Highlights

Financial Projection

Profitability Enhancement Strategy

Financial Stability

Affiliate Status

Financial Projection

Financial Highlights

2002 (E) 2004 (E)2001

45420

490

753

2003 (E)

588

2005 (E)

978

SalesNet Profit

(KRW Billion)

Number three player in the learning materials industry (0.84million Think Big subscribers)

Infant Education business to turn black (BEP sales KRW 20 billion)

Running of the business without bo

rrowings

Successful launch of Educational T

oys market

1.2 million Think Big subscribers

Market Leader in Study Material’s

Market

Number two in the learning materials

industry

Stabilize online education business

Find opportunities in

emerging education market including China

Attain 1.7 million Think Big subscribers in the learning materials market

Door-to-Door sales reach KRW 336 billion in sales

20

Financial Stability

Borrowings (KRW billions)

98 99 00

01

02E 03E

138

6369

38

NO Debt

Short term debtsLong term debts

Total

98 99 00

-69

-5-0.3

35

50Net Cash

1998 1999 2000 2001 2002(E) 2003(E)

Cash 8 10 16. 1 22 18 25Short term deposit 53 41 50. 2 7 11 15Long term deposit 8 7 2. 4 4 6 10

Total 69 58 68. 7 33 35 50Net Cash Flow - 69 - 5 - 0. 3 - 5 35 50

Account 1998 1999 2000 2001 2002(E) 2003(E)

Short term debt 93 43 44 28 0 0

Long term debt 45 20 25 10 0 0

Total 138 63 69 38 0 0

(KRW billions)

01 02E 03E

Financial Highlights

21

-5

Affiliate Status

Financial Highlights

(KRW billion)Paid-incapital

Totalassets

Totalliabilities

SalesNet

profitStake(%)

AcquisitionValue

Paymentgaurantee

Businessdescription

Woongjin Food 14.5 73.0 64.0 260.4 4.2 20.0 2.9 0.0 Beverage manufacuturing & sales

Woongjin Coway Development 19.9 425.6 367.2 526.0 21.2 10.0 2.2 4.3 Water purifier sales

Woongjin Coway 12.1 154.3 79.1 165.5 17.2 17.4 4.0 0.0 Water purifier manufacturing

Korea publication distribution 17.1 62.5 48.7 66.0 1.1 28.6 5.8 0.0 Book distribution

Happyall.com 5.3 3.1 1.9 4.3 -3.3 44.4 2.4 0.0 On-line services, women's portal

Total 68.9 718.5 560.9 1,022.2 40.4 17.3 4.3

(Dec. 31, 2001)

OthersWoongjin Coway

Woongjin CowayDevelopment

Woongjin Food

Sales

Net Profit(KRW billion)

1.418.9 10.755.8

116.9

220.9

300.5

748.8

2002 Sales & Net Profit (E) Payment Guarantee

[71]

[59]

[22]

[4]

2001200019991998

(KRW billion)

22

2002(E)

[0]

Disclaimer

The materials may contain inaccuracies,errors and subject change without notice. It does not constitute an offer, or an invitation or an recommendation to enter into any transaction. Before entering any transaction, you should take steps to ensure that you understand the transaction and have made an independent assessment of the appropriateness in the light of your own objectives and circumstances. It is strongly advised that any reliance o

n the information shall be at your risk.

Disclaimer