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July,2013 Berlin/Frankfurt, Germany 1. Investor Presentation Tianbao Holdings Limited 0. Disclaimer Pg.4 1. About us 1.1 Company Background Pg.5-9 1.2.

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Presentation on theme: "July,2013 Berlin/Frankfurt, Germany 1. Investor Presentation Tianbao Holdings Limited 0. Disclaimer Pg.4 1. About us 1.1 Company Background Pg.5-9 1.2."— Presentation transcript:

1 July,2013 Berlin/Frankfurt, Germany 1

2 Investor Presentation Tianbao Holdings Limited 0. Disclaimer Pg.4 1. About us 1.1 Company Background Pg.5-9 1.2 Management Group Pg.10-13 1.3 Company Organization Pg.14 1.4 Mission & Vision Pg.15 1.5 Business Strategy Pg.16 2. Business Model 2.1 Business Overview Pg.17 2.2 Business Operations Pg.18 2.3 Business Projects Pg.19-23 2.4 Project Locations Pg.24 2.5 Business Outlook Pg.25 2

3 Investor Presentation Tianbao Holdings Limited 3. Target Groups & Markets 3.1 Target Group and Markets 4. Schedule 4.1 Timetable 5. Financial Data 5.1 Profit forecast 5.2 Project summary 6. Reasons to Invest 6.1 Investing in Tianbao Holdings Limited 6.2 Investing in China 7. Partners 8. Contact 3 Pg.26 Pg.27 Pg.28 Pg.29 Pg.30-32 Pg.33 Pg.34 Pg.35

4 Cautionary Statement regarding forward-looking information This document does not constitute an offering document. Potential investors or shareholders should not rely on the information contained in this document before making an investment decision. Certain of the information contained in this investor presentation may contain "forward looking information'. Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of Henan Tianbao Real Estate Co. Ltd. (the Company"), or the assumptions underlying any of the foregoing, in this presentation, words such as 'may*, "would", "could", "will, likely", "believe", "expect", "anticipate "intend", "plan", "estimate" and similar wards and the negative form thereof are used to identify forward looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. These risks, uncertainties and assumptions include, but are not limited to, those described under "Risk Factors" in the Company's prospectus and could cause actual events or results to differ materially from those projected in any-forward looking statements. The Company does not intend, nor does the Company undertake any obligation, to update or revise any forward - looking information or statements contained in this presentation to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws. 4

5 1.1 Company Overview Henan Tianbao Real Estate Co. Ltd. was legally registered in Zhengzhou. Industrial and Commercial Bureau in Sep. 2005. The registered capital is ¥10,000,000 (EURO 1,158,296), and the corporate representative is Mr.Lian Haitao. The registered address is at 13Floor, International Development Building, NO.333,Yu Feng Road, Jinshui District, Zhengzhou City. As opposed to a typical property developer in China, Tianbao Holdings is an economically affordable housing manufacturer. The idea has full support of both central and local governments. This gives us an excellent advantage over risk control as the projects will not be vulnerable to property market volatility. 5

6 1.1 Company: Location Advantages Located in Zhengzhou, Henan Province Located in Zhengzhou, Henan Province The largest and poorest province in China with a population of approximately 100 million permanent inhabitants with a further 25 million transients. 6

7 1.1 Company: Location Advantages The Chinese Government ratified a five year plan in August 2011, authorizing the building of 11 million homes for the low income population, otherwise known as economic affordable housing, commencing in January 2012, and rising to 36 million homes being constructed in 2016. In 2012, 375,000 of those homes are to be built in Zhengzhou City, the capital of Henan province. The Governments intention is not merely to provide housing, but also employment opportunities in that district as a general poverty easing policy. 7

8 1.1 Company Qualification Tianbao Core Strengths: Focus Markets Quality The companys business model is a more risk- averse and less speculative than the pure property developer. The company works closely with the Chinese government in acquiring the land for new housing development. Quality guarantees for customers and achieved technology leadership. 8

9 1.1 Company Qualification Tianbao Strength and Opportunities: 9 Strength Strong professional and experience management team Good development progress with relevant government departments High industry entry barriers in the affordable housing business Opportunities Central government five-year plan since 2012 to build 10 million affordable houses Zhengzhou city plan to build 375,000 each year for affordable houses The Company had prepared deposit for a affordable houses Steady continue demand for affordable houses in Zhengzhou Government urbanization policy Huge population in Zhengzhou 9

10 1.2 Management Group Mr. Caesar Lian Chairman of the Board & CEO Mr. Lian obtained an MBA from Zhengzhou University. He ran and managed sales teams and developed unique marketing techniques. As a general manager of Taichi Real Estate Limited, Mr. Lian lead the development of the company since 2003. Mr. Lian has been awarded the following : 2001 "Ten remarkable young men" in Henan Province 2004 "Outstanding Entrepreneur in Henan province" 2007 "Outstanding Entrepreneur in Zhengzhou city" 2009 "Excellent Entrepreneur of Zhongyuan district" 10

11 1.2 Management Group Ms. Ruyin Zhang Deputy General Manager Ms. Zhang obtained a Bachelors Degree in Enterprise Management. Over the years of her career in various businesses, Ms. Zhang has developed exceptional management experience and operational skills. She is now responsible for daily administrative, project and resource managements for the Company and its wholly-owned subsidiary Henan Tianbao. 11

12 1.2 Management Group Mr. Hongda Ma Deputy General Manager - Engineering Mr. Ma works as the chief engineer in infrastructure department in Zhengzhou Construction Machinery and equipment Factory from 1987. He was Vice-president in Henan Yitong real estate co., Ltd. Since 2010, he joined Tianbao Holdings Limited as engineering Vice-president. 12

13 1.2 Management Group Mr. Yinchao Hu CFO Mr. Hu has a Bachelors degree in Financial Accounting. Mr. Hu subsequently joined an industrial company in Zhengzhou as CFO. From 1997 to 2009, he was the deputy director in one of the largest accounting firms in Zhengzhou, specialized in Chinese and international auditing, mergers and acquisitions and taxation. 13

14 Chief Executive Officer Department of Development Deputy General Manager - Engineering Chairman Deputy General ManagerCounsel Department of Engineering Department of Technology Department of Quality control Administrative Office Department of S a l e s & Market ing Financial Office Department of Legal Office of Investment & Financing Chief Financial Officer 1.3 Company Organization Tianbao has 62 employees, which include 2 architects, 3 engineers, 1 economist and 2 accountants. 95% employees have the college degree or above. B oard of Directors 14

15 1.4 Mission & Vision Mission Building common homelands for low –income citizens. Vision To support the general poverty easing policy of China government by manufacturing reasonable quality accommodation mainly for low-income labor class and creating job opportunities at the same time. 15

16 1.5 Business Strategy 1. Aim majority market of the labor class 2. Align with Central Government long term policy 3. Mitigate price risk of China property market 4. Obtain significant support from local Government 16

17 2.1 Business Overview To align with the Chinese central governments long term poverty easing policy to obtain support from provincial government. To develop economically affordable housing which is less speculative business model than the typical property developer. To build for Henan Provences poor and labor class residents and low- income transients, which is consider to be a high demand market. 17

18 2.2 Business Operations To acquire a piece of land To submit the detail plans that comprise information for both the construction and the infrastructure details of the project to provincial government for approval and obtain development licenses and relevant documents. The construction contractors would be preapproved by the government and the government would compensate the contractor with material price difference so that Tianbao could enjoy a steady construction cost (materials cost limited to a 10% price fluctuation only). Since the construction costs are stable, certain profit margins can be ensured from the project. 18

19 2.3 Business Projects Xinglong Pu The projected pretax profit for phase 1 is 1.07b RMB ( EURO 136.2m ). In addition the company will be the beneficiary of land which it will receive in the form of a grant with a current value of 1.3 b RMB (EURO 163m) when phase four development is completed. The company will have accumulated sufficient cash flow by the end of phase 1 to be able to develop phase 2 thru 4 and generating a cumulative profit of 2.21b RMB (EURO 276m ) pretax on the four phases. 19

20 2.3 Business Projects Xinglong Pu Xing Long Pu project consist of total land area of 270,000 square meters. Whole project divided into 4 phases. Xing Long Pu Development Plan Summary No.TermsPhase 1Phase 2Phase 3Phase 4Total 1 Land Area ( ) 71,00068,40072,50058,099270,000 2Construction Ratio (%)4.724.584.764.61 3 Construction Area ( ) 335,095312,978344,941342,9411,335,955 4 Incl: Residential Area( ) 294,300286,378320,941268,1841,169,803 5 Commercial Area ( ) 5,00023,00032,000 - 60,000 6 School Area ( ) 18,00010,0002,000 - 30,000 7 Public Area ( ) 765600 - - 1,365 8 Total number of Flats3,6983,3664,1103,14814,322 9 Parking Spaces1,5001,2501,5007505,000 20

21 2.3 Business Projects Zhongyuan West Road The project is located on a junction of two major roads cutting across Zhengzhou City. The project has a land area of 2.84 acres (11,473.91 m 2 ). Two tower blocks and a shopping mall will be built and completed on or before December 2014. The first being a 26 story office block comprising of 12,800 m 2 of office space. A second tower has been designated to house a four-star hotel with 280 rooms, banqueting rooms and conference facilities. The hotel will have to be operated by an acceptable operating company. The shopping mall has a letter of intent from a triple A tenant to lease the whole area with 20% below market. The properties upon completion as estimated by the company will be worth at least EURO 48 Million. 21

22 2.3 Business Projects Jinshui District This project in Jinshui District, Wangzhuang Village. It is located at the central business district of the city. The project has a land area of 11.81 acres, which gives a construction area of 301,434m 2. The estimated sales proceeds is RMB 2.26b (EURO 285m) of which RMB 754m (EURO 94m) is profit. The project will built 3,349 residential units. 22

23 2.3 Business Projects Xushui County The project is located at the junction of Zhengshang Road and Kaixuan Road, which is the way to ancient capital Luoyang city. This project would have a construction space of 533,360 m 2 from the 32.95 acres of land. The estimated sales proceed is expected to be RMB 1.87b (EURO 235m) with a profit of RMB 531m (EURO 67m). The project has a plan to build 5,926 residential units. 23

24 A C D B 2.4 Project Locations A= Xing Long Pu B= Zhong Yuan West Road C= Jin Shui District D= Xu Shui County 24

25 2.5 Business Outlook Xing Long Pu Project phase 1, Tianbao will build 12 apartment blocks of residential units as well as 5,000 sq meters of retail space and 1,500 parking spaces. 25

26 3.1 Target Group and Markets The Target group aimed by the company are those transient, poor and low-income labor class families and as well as pre-marriage young generation groups. Since the demand for affordable houses cannot be satisfied in view of the rapid growth in Zhengzhous population. For the next five years the market of affordable houses will assume substantial growth. 26

27 4.1 Timetable The Zhongyuan Westroad project will start at August 2013 and finished on or before March 2015. There will be a shopping mall, hotel and commercial office tower. The Jinshui District project will start at April 2015 and will be finished at Dec 2016. There will be a total of 15 buildings with 3,349 apartments. The Xushui County project will commence construction Nov 2016 and will be finished at Sep 2019. There will be a total of 39 buildings with 5,926 apartments. At the same time, Tianbao would acquire more lands to develop new projects. 27

28 5.1 Financial Statements (Calculated based on exchange rate of 7.96 RMB to 1 EURO) * Awaiting for capital injection and the proceeding of documentations with government. 28 Years Ended 31 March 2011, 2012 and 2013 (Stated in Million of EURO) 201120122013 Gross Revenue 47 - * 10 Total Costs 22 -1 EBITDA 25(0.6) 9 Net Earnings 180.2 10 Issued Shares 25 Earnings Per Share 0.720.008 0.36 Net Asset Value 20 29

29 5.2 Profit forecast (Calculated based on exchange rate of 7.96 RMB to 1 EURO) 29 Years Ended 31 March 2015 to 31 March 2019 (Stated in Million of EURO) 20152016201720182019 Gross Revenue 181 174 313 363 506 Total Costs 68 107 177 207 354 EBITDA 113 67 136 157 152 Net Earnings 60 75 102 118 114 Issued Shares 25 Earnings Per Share Net Asset Value 114 164 267 385 499

30 5.3 Project summary Project Total construction areas in sq. meter Sales proceed (EURO m) Total units Xinglongpu phrase I*316,3291763,698 Xinglongpu phrase II*302,3782223,366 Xinglongpu phrase III*342,9412724,110 Xinglongpu phrase IV*268,1841563,148 Xushui Town phrase I240,0121482,667 Xushui Town phrase II293,3481723,259 Jinshui Area Wangzhuang Village301,4342993,349 Total2,380,9552,96123,597 * Including 60,000 square meters rental shop area and 5,000 car park units 30

31 6.1 Investing in Tianbao Holdings Limited The company is focused on economically affordable housing; Steadily growing demand; In Zhengzhou, there are at least one million people who fall into the low income population, living in squalid conditions, and who are in need of homes; The GDP target of 12th Five-Year Plan in Henan province plans to be double; In the next ten years there will be a marriage boom causing housing demand to sharply rise; Henan Province announced a new policy – people purchasing first apartment may get up to 30% discount on interest rates. 31

32 6.1 Investing in Tianbao Holdings Limited The government is pushing in two directions as it seeks to slow price growth while avoiding a collapse. Its lowering borrowing costs for first-time homebuyers to encourage purchases while Central Government keeps curbs in place to stem the speculators who have helped drive home prices up by as much as 140 percent since 1998. Chinas 18 percent first-quarter drop in home sales contributed to the slowest economic growth in almost three years. The benchmark rate for mortgages in China is the five-year lending rate set by the Peoples Bank of China, currently 7.05 percent. (By Bloomberg News April 26, 2012 ) 32

33 6.1 Investing in Tianbao Holdings Limited China Steps Up Support for Some Home Buyers. The government has encouraged banks to offer lower mortgage rates for first-time home buyers, called on developers to increase construction of smaller and cheaper apartments, and provincial governments to loosen property restrictions at the local level. In addition to these sector-specific measures, it has also eased monetary policy aggressivelythe Peoples Bank of China cut interest rate last week, its first such move since December 2008and required banks to deposit less cash as reserves with the Central Bank. ( By The Wall Street Journal June 15-17, 2012 ) 33

34 6.2 China eyes more affordable housing next year 2012-12-25 07:39:28 GMT2012-12-25 15:39:28(Beijing Time) China will continue to build millions of affordable housing units and stick to control measures on the property sector next year, the minister of housing and urban-rural development said Tuesday. The country plans to start construction on 6 million affordable housing units and complete the construction of 4.6 million units in 2013, Jiang Weixin, the minister, told a national work conference here. He also urged "unswervingly" carrying forward with property controls. Differentiated credit and tax policies and purchase restrictions in the sector should continue in order to curb speculative and investment demand on the housing market, Jiang said. The remarks came as Chinese real estate developers' share prices surged on Tuesday over anticipation that strong housing demand will be generated by the country's urbanization process. Urbanization is considered as a main driver for domestic demand and will be actively and steadily pushed forward in 2013, according to a statement issued after the central economic work conference earlier this month, which set the tone for policymaking next year. 34

35 6.3 Investing in China China's economy can still maintain a rapid growth rate over next decade; Over the next ten years, steady appreciation of RMB appears to be a trend which will benefit foreign investors. 35

36 Stock Exchange : Berlin Stock Exchange, Frankfurt Stock Exchange Market Maker: Renell AG Clearing: Clearstream Auditors: Gregory Scott International CPA Bankers: HSBC (HK) Press Releases: IR World Press Finanzkommunikation GmbH 36

37 37 Frankfurt Stock Exchange Currency: Euro Ticker: 3TB Code Number: A1JGC2 ISIN: BMG887252085 Berlin Stock Exchange Currency: Euro Ticker: 3TB Code Number: A1JGC2 ISIN: BMG887252085

38 Tianbao Holdings Limited Address: 13Floor, International Development Building, NO.333, Yu Feng Road, Jinshui District, Zhengzhou City, China Post Code : 454000 Website : Email: Tel : 0086-371-86021713 Fax : 0086-371-86163673 38

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