1. Jefferies & Company, Inc. State Of The U.S. Capital Markets July 11, 2005 CONFIDENTIAL DRAFT
2. Table of Contents U.S. Capital Markets Environment 1 M&A And Private Investment Environment 9 Issues Facing New Public Companies 15 Jefferies Broadview Overview 17 i
5. U.S. Market Overview (1) Source: Equidesk and Jefferies Equity Market Overview. Excludes REITs, close-end funds and private placements. (2) As of June 24, 2005. ($Billions) 3
6. U.S. IPO Market Overview Note: Technology defined per SDC Platinum high technology industry classification. (1) As of June 24 2005. There are currently over 55 Asian companies listed on U.S. exchanges. Approximately 20 of these companies went public in the last 18 months 4
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10. Only 6 Non-Chinese Asian Technology Companies Have Gone Public In The U.S. Since January 1, 2004 8
12. Private Equity / VC Investment Activity For Chinese Technology Companies Continues To Be Strong Representative Chinese Technology Investments Over The Past 12 Months ($Millions) While the majority of investment activity has been in the sub-$20 range, investors are increasingly gaining a higher level of comfort and looking to put more money into larger enterprises VC firms raised a total of U.S.$699 million in 2004 for investing in Mainland China, according to Zero2IPO 10 Japan-China Bridge $6.0 BeyondSoft Jun-05 Carlyle Group $20.0 Target Media Jun-05 Apax, Greylock $20.0 Fiberxon Jun-05 Legend, Doll Capital $6.0-7.0 Worksoft Jun-05 Doll Capital, Walden $10.0 ApexOne Microelectronics Jun-04 IDG, Qualcomm, Tom Online $3.5 Great Wall Software Aug-04 Granite, Intel, International Finance, JAFCO $20.0 HiSoft Oct-04 McGraw-Hill, Tiger NA PRCEdu Jan-05 Granite, Venrock, NEA, Redpoint, Acer, JAFCO, Intel UOB $50.0 BCD Semiconductor Jun-04 DFJ, Google, Integrity, Peninsula Capital, Bridger, China Equity, China Value, Venture TDF $100.0 Baidu Jun-04 Warburg Pincus $70.0 Datang Microelectronics Jul-04 WanJie Group $12.1 King-Hope Jul-04 Carlyle, Qualcomm $3.0 Enorbus Jul-04 2b Holdings, strategic investors $8.3 Smartpay Aug-04 Carlyle $15.0 Target Media Sep-04 IDG $5.0 Any8.com Oct-04 NA $16.9 Soutec Nov-04 Goldman Sachs, 3i $30.0 Focus Media Nov-04 Carlyle, Chengwei Ventures, Pacific Venture $13.0 Huaya Microelectronics Dec-04 3i $20.0 GST Dec-04 Kongzhong $0.5 eFriendsNet / Yeeyoo Dec-04 Carlyle, China Merchants, Fortune, Sino-Korea Wireless $14.0 9you Dec-04 Tiger Tech $11.0 Dangdang Dec-04 Siemens Mobile Acceleration, Morningside Tech $3.0 LinkRich Jan-05 Rensheng Fund $3.0 V516.com Jan-05 Softbank, Shanda $0.6 Blogchina Jan-05 Carlyle Group NA Easyeb Feb-05 TVG Capital, Temasek, Warburg Pincus, DragonTech $37.0 Harbour Networks Mar-05 IDG, Newbridge $12.1 HiChina / MyMai Mar-05 Jafco, Intel NA Pollex Mobile Mar-05 IDG NA wap.3g.net.cn Mar-05 TPG, General Atlantic, Newbridge $350 Lenovo Mar-05 IDG, Legend Capital $6.0 Zhongsou Mar-05 Union Fortune Investment $7.6 Gasoft Mar-05 IDG $10 Emay Softcom Apr-05 Legend, Fidelity, IDG $16.0 Zhongsou Apr-05 Gobi Partners, NTT DoCoMo, Dentsu $6.0 Digital Media Group Apr-05 IDG $4.0 Netmovie May-05 IDG $0.2 163888.net May-05 IDG, Sumitomo NA Tengwu Digi-Tech May-05 Dragon Groove $5.0 9you May-05 Investor(s) Capital Raised Company Date
13. While Cross Border M&A Market In China Is Nascent, Deal Frequency Is On The Rise Representative Chinese Technology Cross Border M&A/Strategic Investments Over The Past 12 Months ($Millions) Date Announced Target Name Acquiror Name Transaction Value Transaction Type 4/21/05 PCHome CNET Networks Inc. 11.0 Acquisition 3/30/05 Three-Five System International DisplayWorks 10.4 Acquisition 2/3/05 ChinaHR Monster.com 50.0 Minority Investment 1/25/05 PRCInvestment.com Reed Elsevier NA Acquisition 1/25/05 PRCEDU Corporation McGraw-Hill Education NA Minority Investment 1/13/05 C-Valley THQ Wireless NA Minority Investment 12/27/04 Digital Media Group NTT DoCoMo 4.2 Minority Investment 12/17/04 Indiagames Tom Online 17.7 Acquisition 12/7/04 IBM PC Business Lenovo Group Ltd. 1,750.0 Acquisition 11/29/04 Actoz Shanda 91.7 Minority Investment 11/25/04 Konka Thomson 19.0 Minority Investment 10/14/04 Zhongguancun On Line Corp CNET Networks Inc. 15.0 Acquisition 10/14/04 Fengniao Photography On Line CNET Networks Inc. 1.0 Acquisition 8/19/04 Joyo.com Ltd Amazon.com Inc 75.0 Acquisition 7/26/04 eLong.com IAC/InterActiveCorp 60.0 Minority Investment 7/5/04 Davidhill Capital Inc Sina Corp 36.0 Acquisition 6/21/04 Ctrip.com Rakuten, Inc. 109.6 Minority Investment 6/15/04 Baidu.com Google Inc. 10.0 Minority Investment 5/11/05 Tsinghua-Shenxun (certain assets) Microsoft Corp. NA Acquisition 3/16/05 Skyinfo Index Corp. 80.0 Acquisition 11
14. Select Cross Border M&A Transactions Involving Asian Technology Companies Representative Asian (ex-China) Technology Cross Border M&A/Strategic Investments Since 1/1/2004 ($Millions) 12
15. Select Cross Border Indian Technology Deals In 2004 ($Millions) 13 Ygyan Consulting Ltd Moirai Media Solutions Inc Oramasters Inc Afrocom Technologies Pvt Ltd Daksh eServices Pvt Ltd Paral System Software Pvt Ltd e-Serve International Ltd Webneuron Services Ltd Ivega Corp Pvt Ltd Hughes Software Systems Ltd Netkraft Pvt Ltd Bennett Cole & Co Ltd-Assets EAP Global India Software Group Soft Systems Ltd Future Software Ltd Majoris Systems Pvt Ltd Smart Yantra Technologies Pvt iNuCom Inc EXIMSOFT Technologies Pvt Ltd In-Reality Software Pvt Ltd Mensamind GE Capital International Target Name 2.0 Cognizant Technology Solutions 2/20/04 NA DG2L Technologies Inc 3/17/04 NA Kenexa Corp 4/2/04 NA Financial Objects PLC 4/6/04 150.0-200.0 IBM Corp 4/7/04 3.1 Kewill Systems PLC 4/8/04 .03 Citibank Overseas Invest Corp 4/10/04 8.7 Monster.com 5/23/04 NA TCG Software Services Inc 6/2/04 226.5 Flextronics International Ltd 6/8/04 12.0-15.9 Adea Solutions Inc 6/10/04 NA BBC 6/25/04 NA Sight & Sound Education Ltd 7/6/04 NA Novasoft Information Tech 7/25/04 NA iSmart International Ltd 8/22/04 25.0 Flextronics International Ltd 8/26/04 5.8-10.2 Valtech SA 9/9/04 NA Genesis Microchip Inc 9/16/04 0.3 Ascential Software Corp 10/4/04 NA Trianz Inc 10/6/04 NA Symphony Services Corp 10/19/04 NA Alliance Consulting 10/27/04 NA Investor Group 11/8/04 Transaction Value Acquiror Name Date Announced
23. Substantial Public Equity Issuance Track Record Focused On High Growth Companies Since 1993, Jefferies has raised over $29 billion through over 240 IPOs and follow-on offerings April 2005 $40,842,000 Follow - On Offering Co - Manager April 2005 $40,842,000 Follow - On Offering Co - Manager $99,000,000 May 2005 Initial Public Offering Co-Manager May 2005 $554,200,000 Initial Public Equity Offering Co-Manger 21 November 2004 $257,933,296 Initial Public Offering Co - Lead Manager November 2004 $257,933,296 Initial Public Offering Co - Lead Manager $78,000,000 March 2005 Initial Public Offering Co-Manager
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27. Jefferies’ Equity Research Ranks 2nd in The Wall Street Journal's “Best on the Street 2005 Analysts Survey” Source: The Wall Street Journal 13 th annual “Best on the Street”, May 16 th , 2005 25 0.833 6 5 Avondale Partners 15 0.133 45 6 UBS 0.133 45 6 Banc of America Securities 13 0.171 35 6 Deutsche Bank 12 0.250 24 6 Legg Mason 11 0.261 23 6 Robert W. Baird 10 0.175 40 7 Standard & Poor’s 9 0.184 38 7 A.G. Edwards 8 0.212 33 7 Raymond James 7 0.219 32 7 Wachovia Securities 6 0.259 27 7 Friedman, Billings, Ramsey 5 0.318 22 7 Piper Jaffray 4 0.157 51 8 J.P. Morgan Chase 3 0.421 19 8 Jefferies 2 0.169 59 10 Merrill Lynch 1 Batting Average No. of Qualifying Analysts Total Awards Firm Rank
