Yuanta Core Pacific Securities

In the first half of 2003, the Taiwan stock market was overshadowed by the US-Iraq war and hit badly by the SARS epidemic. However, in the second half of the year, the overall economy rebounded and remained strong to the end of 2003, stimulating the market to make substantial year-on-year gains.

During 2003, Yuanta Core Pacific Securities delivered exceptional pre-tax earnings of NT$7.19 billion and eclipsed its competitors to the extent that Yuanta Core Pacific Securities pre-tax earnings were greater than the sum of pre-tax earnings of the next three largest securities firms. These accomplishments amply demonstrate the capabilities and dedication of Yuanta Core Pacific Securities' hardworking employees. Above all, dominance in many business sectors reflected the diversification

of Yuanta Core Pacific Securities' business and has created a solid foundation to build on, and meet the challenges that lie ahead.

To further expand the business, Yuanta Core Pacific Securities focused on improvements in its international investment operations and developing strategic alliances with key regional players. As a result, Yuanta Core Pacific Securities not only has succeeded in building an overseas network based in Southeast Asia, but also extending to global financial centers including New York and London. Moreover, the international operation accounted for 22.56% of the company's after-tax earnings in 2003, demonstrating the performance potential of international expansion.

In terms of Yuanta Core Pacific Securities outlook, the company is keeping the door open to opportunities that may arise to form or join an FHC (Financial Holding Company) with other elite financial institutions based on complementary strategies and a similar corporate culture. In the meantime, Yuanta Core Pacific Securities has started to grow its investment banking business as well. In addition, the company is strengthening the efficiency of internal cross-selling and will continue to engage in the development of innovative and profitable integrated products that enhance client service.

Yuanta Core Pacific Securities is also leading the industry in efforts to enhance corporate governance and elected two independent directors and one supervisor at its recent shareholders meeting. The two independent directors include corporate strategy expert, Professor Dah-Hsian SeeToo from NationalChengChiUniversity, and Jung-Hsien Huang, retired chairman of the Central Trust of China (CTC). The independent supervisor is Paul PK Chu, a certified public accountant and a founding director general of the Corporate Governance Association in Taiwan. By introducing these three independent financial professionals, Yuanta Core Pacific Securities will be able to enhance the transparency of its internal financial and auditing operations and further develop best practice rules and systems. All of these improvements will eventually accelerate Yuanta Core Pacific Securities' competitiveness as it continues to expand on an international basis.