GlobalChinaCapital (GCC) Co-Investment Fund Potential Investment Deal Flow

(Supporting Document)

June 2012
BY KC YOON & M BRANDT GLOBALCHINACAPITAL SHENZHEN, CHINA

Our Deal Sourcing ProcessProcessResearch & Deliberate Identification of Potential Targets

Drivers of Deal Success

Market + Industry Knowledge

GCCs Deal Sourcing Process Dom estic

Brand Com petitiveness Identify High Growth Chinese Consumer Segments

Leverage our domestic market & industry insights Combine global & domestic industry knowledge

Screen to Select Segments that would Benefitmost from Global Brand/Tech/Service Match Segments with Best Possible Regional Source of Deal flow Screen for Potential Target Companies from Region (work with partners where relevant)

Pre-Existing Relationship

Identify Globally Competitive regions for targeted segments eg. EU for Fashion Screen companies with best potential for China market + understanding company expansion strategy Reachout to top management or significant shareholders Build trust & develop deeper insights into company

Match Right Strategic Partners

Work with Partners in Platform to reach-out to key stakeholders in Target Company Build Relationship Sharing China Market Insights & Providing Advisory Secure Preliminary Interest from Target Company for Chinese Investment

Lack of Competition

As part of the deal prelim DD process- considerations of potential China market entry strategy; domestic partners & exit options are also factored

Identifying Attractive Consumer Segments to Target- Premium TargetPositioning due to Brand, Technology or Unique Service

>US$800 Bn Outbound Investments by 2016; Increasing No. Consumer-related Deals

Increasing Firepower of Outbound M&A (Corporates + PE Funds)

EUR 1 Bn

US$ 500M

US$ 900M

US$2.4 Bn

US$ 2 Bn

Outbound Drivers Government Support Meet Domestic Demand Cash-Rich Chinese Co. Friendly Target Countries

M &A Objectives Global Consumer Brands Consumer Technology Consumer Service Capability Industry Talent
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M arket Growth Potential

M arket size

Dom estic Brand Com petitiveness

Foreign Brand Valueadded

M arket Segment vs Screen Criterion

Fashion Apparel

Personal Care

Food & Beverage

Personal Device

Consumer Appliance

Edu & Knowledge Service

Food Service

Hospitality Service

Mobile & Web Service

Health care service

Market Size

4 4 4

3 3 3

4 3 4

3 4 3

4 3 3

4 4 4

3 3 4

4 3 4

4 4 2

4 3 4

Growth Potential Opportunity W Domestic Competition Foreign Brand Value-add

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Assessment Rating : 1 to 5 (5 being strongest)

Most Attractive Segments 6

Consumer Goods & Products

Mass Affluent Consumption Se gment
Fashion Apparel, Accessories & Sportswear Brands & Retail Personal Care & Cosmetics

Rationale

Potential Market

Domestic Industry

Value of Foreign Brands

Estab lished Glob al luxury b rands Glob al distrib ution

Re marks

Trade up strong Willingness to try new brands Large share of spend Increased casual time; niche activities 3rd largest & growing market Trade-up strong Chinese men also big consumers of personal care Increased concerns about food quality &safety makes foreign brands attractive Wealthy consumers willingness to spend on healthy well-being Snacking is increasing

RMB 1.3 trillion (2020e)

Fragmented market No clear leader; Few luxury-status domestic brands Limited local brands TCM-based products upcoming Fragmented industry- many small food processing co. Food safety issues

Attractive Segment for foreign b rands

RMB 255 billion (2015e)

Strong marketing R&D & Hi-tech in products High safety standards Advanced processing tech High QC & safety standards Premium b randing eg, wines, health supplements Glob al b rand status Worldwide service support Leading edge technology New technology Cutting edge appliance design

Regulatory hurdles key ob stacle to market entry Chinese Govt encouraging foreign co help upgrade domestic industry

Processed Foods, (snacks, diary, health food & drinks, organic food), Vitamins & Nutraceutical Personal Devices recreational, entertainment, communications Consumer appliances

Largest global market for dietary supplements (2020e)

Display of personal wealth & status Younger generation tech savvy Music, online gaming, online entertainment integral part of Chinese social live Urban living- seek convenience

Fast cheap copycats Increasing innovativeness e.g. mobile phone Strong domestic brands exist for general appliance

Apples iphone/ipad good case of foreign b rand winner

List is not meant to be exhaustive but represents major opportunities

Consumer Services
Mass Affluent Consumption Se gment
Education & Knowledge Services

Rationale

Potential Market

Domestic Industry

Value of Foreign Brands

Education technology Innovative teaching methods Brand & Mark eting Consistency Strong QC & management system Established hospitality brands Strong service culture, talent & management system Access to global supply chain & source of goods Advanced healthcare mgt Hi-tech

Re marks

Food Services & QSR Brands

Chinese traditional focus & willingness to pay for education Significant spend size Urbanisation trend 750M middle-class consumers 2020 dining-out rate still low vs. global Clean dining & safe food China top tourism destination by 2020 Chinese spending more time on leisure activities

RMB 900+ billion (2015e)

Fragmented & open market Strength in distribution and operations Fragmented market; few nationwide domestic QSR chains Service quality & standards not yet global par Fragmented, dominated by non-branded 2-3 star operators Dominated by domestic industry leaders Upgrade of service in progress

Chinese Govt k een on improving education standards Foreign QSR i.e. KFC are leading brands

Fast Food market RMB 400 billion (2015e) 2X Number of hotel rooms (2020e)

Hospitality, Leisure & Travel Services (Hotels, Amusement Parks, Car rentals, sporting events, etc) Mobile & Webbased Services (inc.eCommerce) Consumer Healthcare

Potential for mid-scale brand

Internet-savvy population eCommerce market rising exponentially Online gaming Upgrade of healthcare system Increasing elderly population

eCommerce RMB 1.5 trillion (2013e)

Combination of foreign network with domestic operations

List is not meant to be exhaustive but represents major opportunities

Establishing Platform to Access Deals- Partnering Dealswith Right Parties in Respective Segments

Combination of Relationships with Global PE Funds, Investment Firms, Senior Advisor Network
Global PE

Global Consumerfocused PE Funds

EU-Deals; Fashion + F&B Brands

Global PE

US-Deals; Education + QSR Brands+ Hospitality Services

Senior Advisor 1

Asia-Deals; Healthcare Services

Senior Advisor 1

Senior Advisor 2 Our Platform will bring from each region/partner deal flows of proprietary & globally competitive brands, technology & services most suitable for Chinese domestic market

* **

Brazil-Deals; Agro-Food Deals

Senior Advisor 2

Asia-Deals; F&B Brands; AgroFood + Leisure Deals

*Senior Advisor- ex-Macau Banker sits on Boards of Portuguese-leading banks with deep connections through Portuguese-speaking **Senior Corporate Leader with wide connections across Asia esp. HK, Singapore, Thailand & Indonesia- Potential to be Senior GP in Fund ( Both are KCYs ex-bosses from HK- Multi Family Office Fund)

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Identified Potential Brands within Global PE Funds Portfolio with Potential for China WIN for Global Fund WIN for GCC Fund

Partial Exit Opportunity through sale of Partial equity to Chinese Fund

Leverage on Global Fund Stronger Domestic Market Knowledge

Opportunity for Strong Growth & Value Creation with China Market Entry
We will also seek to partner with active sector-focused Corporate Investors (1) Pearson Education (2) (2) Parkway -Healthcare

Brings Global Consumer Expertise & Network to China

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Pipelineof Potential Deal flow - Leveraging Our Global Platform

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Co-Investment Fund Potentially can Invest between US$500-800M

Fashion, F&B Brands

Strong pipeline of Fashion deals from the EU

Education, Hospitality Brands

F&B Deals focused on health food & supplements

Consumer Products & QSR Brands F&B, Hospitality, Healthcare Services

Singapore-based Healthcare Services Attractive for China

Global QSR Brand Strong potential for China

Assumption: Chinese PE Funds take a Significant Minority stake in Target Companies i.e. 30% and Co-Investment Fund has Option to Invest upto 1/3 of the total amount invested on average.

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Fashion Consumer Segment

Brand Origin Competitive Strengths
Dynamic youthtarget premium brand with UKJapanese heritage

Value to C hinese Market

Carve premium brand niche

Ownership Status
SGP: LSE US$355M

Co-Invest Co Amt. Est.*

US$40M

Desire for Chinese Investment

Seeking China Market Entry Share price at low- need growth markets

Superdry

UK

Etam

France

Established brand & distribution channels in China Historical Outdoor clothing brand

Etam brand established in China market

CAC US$150M

US$30M

Under-valued BUYOUT Re-listing on HKSE No presence in China Needs cash infusion to grow

Barbour

UK/ Global

Brand with significant history

Private US$150M

US$20M

List is not meant to be exhaustive but represents major opportunities

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Consumer-care Products Segment

Brand Origin Competitive Strengths
Professional Hair Salon brand

Value to C hinese Market

Premium haircare brand

Ownership Status
PE-owned TSG Consumer US$200M(E)

Co-Invest Co Amt. Est.*

US$20M

Desire for Chinese Investment

Potential to develop consumerpremium brand

Kenra/Sexy Hair

US

CoverFX

US

Global cosmetic brand & distribution network

Safe global cosmetic brand

PE-owned Catterton PE US$300M(E )

US$40M

No presence in China Cosmetic growth at 40-50% CAGR in China

List is not meant to be exhaustive but represents major opportunities

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F&B/QSR Consumer Segments

Brand Origin Competitive Strengths
Strong BrandsBrands Essence

Value to C hinese Market

SE Asia/Aust+NZ Distribution network

Ownership Status
SGX: US$1.2BN

Co-Invest Co Amt. Est.*

US$150M

Desire for Chinese Investment

No significant success in China market Low P/E 8-9X

Cerebos

SG/ SE Asia

Glanbia

Ireland

Global health supplement brand Global Brand

Etam brand established in China market Lack of leading Chinese QSR brand Learn from best global QSR know-how

CAC US$150M

US$30M

Under-valued BUYOUT Re-listing on HKSE China entry on strategic expansion plans after successes in SE Asia

Texas Chicken

US/ Global

PE Owned Friedman, Fleischer & Lowe Est.US$2BN (P/S 1.0 Ind)

US$200M

List is not meant to be exhaustive but represents major opportunities

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Hospitality Consumer Segments

Brand Origin Competitive Strengths
Premium Asian Resort Brand

Value to C hinese Market

Strong growth in premium resort & spa services Improve hospitality service standards

Ownership Status
SGX: US$300M

Co-Invest Co Amt. Est.*

US$50M

Desire for Chinese Investment

No

Banyan Tree

SG/ SE Asia

List is not meant to be exhaustive but represents major opportunities

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Healthcare Products & Services Consumer Segments

Brand Origin Competitive Strengths
Leading AsiaTCM Brand

Value to C hinese Market

SE Asia/Aust+NZ Distribution network

Ownership Status
SGX: US$220M

Co-Invest Co Amt. Est.*

US$30M

Desire for Chinese Investment

Chinese market demand for highquality healthfoods

Eu Yan Sang

SG/Asia

Singapore Medical Group Healthway Medical Group

SG

Specialty clinics

Demand for highquality healthcare Clinic development next segment of China healthcare industry growth

SGX US$120M

US$20M

Expansion in Chinese market

SG

Singapores largest retail clinic chain

SGX US$150M

US$30M

China market expansion

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Education Segments
Brand Origin Competitive Strengths
Leading Global higher education technology & systems provider

Value to C hinese Market

Platform for improving University education infrastructure Higher education in China needs upgrade in learning infrastructure

Ownership Status
PE-owned Providence US$1.6BN

Co-Invest Co Amt. Est.*

US$150M

Desire for Chinese Investment

Blackboard already present in China with close to 250+ Universities on its platformincluding prominent Universities like Peking U.; Sun Yat-sen U; Rep in China Cerbibo

Blackboard

US/ Global

List is not meant to be exhaustive but represents major opportunities

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Additional Datapoints

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Brand

Fashion Apparel, Accessories & Sportswear

Attractiveness & Value of Foreign Brands

Market Opportunity

Brand story & history (esp. European brands) Strong design and material technology content Bring brand management skills Established fashion design & output cycle linked to global fashion trends Established global marketing & distribution network Strong links to global media and entertainment industry

Impact on Domestic Market

O Fashion houses start to build & own portfolio of brands O Closer interaction and collaboration between brands within Chinas domestic fashion industry O Chinas fashion industry slowly integrates into global fashion ecosystem as original brands

BCGs Analysis of brands with niche market potential

Global brands continue to enter the Chinese market- Recent cases- GAP (2011), A&F (2012), IZOD (Licensed)

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Fashion Apparel, Accessories & Sportswear

Target Market Segments

Female lingerie Female/male office wear Female/male premium casualwear Sports performance brands Board, surf and street wear brands Fast Fashion Premium Mass-premium accessories- Fashion jewellery

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Brand

IndustryFood & Food Industryrelated Products

Technology

Attractiveness & Value of Foreign Brands

Market Opportunity

Global branding brings consumer confidence in China Advanced food processing technology Higher quality control & food safety management standards Access to foreign food production resources Established global marketing & distribution network
Food 2020 Report

Impact on Domestic Market

O Consolidation of domestic food processing industry O Demise of weak brands O Upgrade in overall food industry technology, QC & Food safety standards O Consumers gain access to wider choice of packaged & processed food
Deloitte market analysis 2010

Chinese companies have been actively investing in agro-production resources, food brands esp. in the diary sector

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IndustryFood & Food Industryrelated Products

Target Market Segments

Dairy products esp Milk Powder Organic food Nutraceutical food supplements Health, Energy Drinks & Juices Snacks- chocolate; nut-related snacks Wine & Premium Beers

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Educational & Knowledge Services

Service Expertise

1
Technology

Attractiveness & Value of Foreign Brands

Market Opportunity

Bring world-class teaching methodologies; educational programs & technology Access to educational talent Access to global business leaders for management education Established global marketing & distribution network Strong links to global education ecosystem
BDA market analysis 2010 Chinas (2010-2020) plan for education reform will significantly increase the student throughput through the system (see below)

Impact on Domestic Market

O Consolidation to create industry leaders- nationwide education service provider O Inflow of global educational methods & teaching technology into the market

Pearson PLc recent acquisition of Chinese English Educational Provider Global Education & Tech Group (NASDAQ:GEDU)

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Educational & Knowledge Services

Target Market Segments

Kindergarten-pre-school + K-12 Tutoring Service-industry focused higher & professional education Creative Media & IT training Business Management Education & Seminars Education Tools & technology + e-learning platforms

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Service Expertise

Hospitality & Leisure Hospitality , Recreational Services & Leisure Services

Brand

Attractiveness & Value of Foreign Brands

Market Opportunity

Global hotel management knowhow & technology Strong service & talent grooming culture Global marketing & distribution network Brand familiar to foreign visitors/tourists to China

Impact on Domestic Market

O Consolidate non-branded fragmented players into larger nationwide branded chains O Upgrade overall industry service standards

Thayar Lodging Group Report 2010

Recent several cases of acquisitions of foreign hotels & resort brands by domestic companies

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Hospitality, Recreational & Leisure Services

Target Market Segments

Mid-scale Hotel Brands Themed Resort Chains Theme Parks Beauty & Spa Brands Service providers/Media platform in the global travel ecosystem Fitness Clubs & Sports Academy

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Service Expertise

Consumer Healthcare

Technology

Attractiveness & Value of Foreign Brands

Market Opportunity

Hi-tech Innovative technology Significant R&D invested Well-designed & ergonomically superior High quality and reliability Better service level provider Global after-sales support

Impact on Domestic Market

O Improve overall standard and accessibility to healthcare O Bring mobility to healthcare

Target is that by 2020 Universal healthcare will be available to all Chinese citizens

Investment interests from foreign players in Chinese healthcare industry

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Consumer Healthcare

Target Market Segments

DIY Healthcare personal devices In-home Monitoring/Homecare Network Online healthcare services Lifestyle health services i.e. cosmetic surgery, TCM acupuncture, massage therapy, dental OTC Drug retail Mobile healthcare eg. iphone-based apps

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