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2014/15 lnterim Results Corporate Presentation 19 December 2014.

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1 2014/15 lnterim Results Corporate Presentation 19 December 2014

2 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Disclaimer This presentation and/or these materials have been delivered to you on the basis of your representation that you are a person into whose possession this presentation and these materials may be lawfully delivered in accordance with all applicable laws of the jurisdiction in which you are located and you may not, nor are you authorized to, deliver this presentation and these materials to any other person. Any representation to the contrary could result in a violation of applicable laws and may be a criminal offence. By attending this presentation or receiving these materials, you certify to International Housewares Retail Company Limited (the “Company”) and BOCI Asia Limited (the “Sole Sponsor” or the "Sole Global Coordinator") that you are a professional investor (as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and rules made thereunder) and are a person located outside of the United States (within the meaning of Regulation S of the U.S. Securities Act of 1933, as amended (the “Securities Act”)). The information contained in this presentation and/or these materials is strictly confidential and has been prepared and provided by the Company. By attending this presentation or receiving these materials, you agree, acknowledge and/or undertake: (i) that you have read and agree to comply with the contents of this notice and disclaimer; and (ii) to maintain absolute confidentiality regarding this presentation and these materials and all the information disclosed in it. If you do not accept these conditions or give the certifications, confirmations, agreements, acknowledgements, representations and undertakings set out above and herein, please immediately return this presentation and these materials to the Company or its advisers. Any failure to comply with these restrictions may result in a violation of applicable laws, regulations or rules and material adverse consequences. It is not the intention of the Company, the Sole Sponsor, the Sole Global Coordinator or any other person to provide, and you may not rely on this presentation and/or these materials as providing, a complete or comprehensive analysis of the Company and its subsidiaries and proposed subsidiaries (collectively, the "Group"), its condition (financial or otherwise) or prospects. The information contained in this presentation and these materials has not been independently verified and is subject to verification, completion and change without notice. The information contained in this presentation and these materials is only current as of the date of this presentation and these materials. None of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, advisers, agents and representatives nor any other person is under any obligation to update or keep current the information contained in this presentation and these materials subsequent to the date thereof. No representation or warranty, express or implied, is made or given by or on behalf of the Company, the Sole Sponsor, the Sole Global Coordinator or any of their respective affiliates, nor by any of the directors, officers, employees, shareholders, advisers, agents or representatives of the Company, the Sole Sponsor, the Sole Global Coordinator or any of their respective affiliates or any other person as to, and no reliance should be placed for any purpose whatsoever on, the fairness, reasonableness, accuracy, correctness or completeness of the information contained in this presentation and/or these materials. By attending this presentation or receiving these materials, you agree and acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and the Group and that you will conduct your own analysis and be solely responsible for forming your own view of the Company and the Group, its condition (financial or otherwise) and the potential future performance of its business. None of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, nor any of the directors, officers, employees, shareholders, advisers, agents or representatives of the Company, the Sole Sponsor, the Sole Global Coordinator or any of their respective affiliates or any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or these materials or their contents or otherwise arising in connection with this presentation and/or these materials and/or their contents. This presentation and these materials contain historical information of the Group which should not be regarded as an indication of future performance or results. This presentation and these materials also contain or may contain forward-looking statements that speak only as of the date of this presentation and are, by their nature, subject to significant risks and uncertainties. These forward-looking statements, if any, reflect the Company’s current views, beliefs, plans, estimates and/or expectations with respect to future events and are by no means a guarantee of future performance or results. Actual results, performance or achievements of the Group may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, if any. Such forward-looking statements, if any, are based on numerous assumptions regarding factors such as the Group's present and future business strategies and the environment in which the Group will operate in the future, which are beyond the Company's control, and must be read together with such assumptions. Predictions, projections or forecasts, if any, of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of the Group, and the forecast financial performance of the Group, if any, is not guaranteed. You are cautioned not to place reliance on these forward-looking statements, if any. None of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, nor any of the directors, officers, employees, shareholders, advisers, agents or representatives of the Company, the Sole Sponsor, the Sole Global Coordinator or any of their respective affiliates or any other person shall have any liability for any inaccuracy, error or omission of this presentation or these materials or their contents nor for any loss, howsoever and directly or indirectly, arising from any use of this presentation or these materials or their contents or otherwise arising in connection with this presentation and/or these materials and/or its contents. In addition, none of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, nor any of the directors, officers, employees, shareholders, advisers, agents or representatives of the Company, the Sole Sponsor, the Sole Global Coordinator or any of their respective affiliates or any other person is under any obligation to provide any additional information or to supplement, amend or update this presentation or these materials or any additional information or to correct any inaccuracy, error or omission which may become apparent or otherwise. This presentation and these materials are for informational purposes only and do not and are by no means intended to constitute or form part of an offer, invitation or solicitation to acquire, purchase or subscribe for any securities of the Company in the United States or anywhere else. Securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and the applicable securities laws of any state or other jurisdiction of the United States. No securities described herein, if any, have been or will be registered under the Securities Act. No part of this presentation and these materials shall form the basis of, or be relied upon in connection with, any contract, commitment or investment decision whatsoever. Any decision to acquire, purchase or subscribe for any securities of the Company in any offering shall be made solely on the basis of the information contained in a prospectus or offering circular to be issued by the Company in connection with such offering. Neither this presentation nor these materials nor any part or copy of any of them may be taken or transmitted into or distributed in or into, directly or indirectly, the United States (including its territories and possessions, any state of the United States and the District of Columbia). Any failure to comply with these restrictions may constitute a violation of United States securities laws. The transmission or distribution of this presentation and/or these materials in any other jurisdictions may be restricted by law, and persons into whose possession this presentation or these materials come should inform themselves about, and observe, all such restrictions. This presentation and these materials are not directed at, or intended for transmission or distribution to or use by, and the contents of which are not to be accessed or read (whether concurrently or otherwise) by, any person or entity that is a citizen or resident in any jurisdiction where such transmission or distribution or use or access would be contrary to law or regulation or rule or which would require any approval or registration or licensing or other procedure within such jurisdiction. Neither this presentation nor these materials nor any part or copy of any of them may be taken or transmitted into or distributed in Hong Kong or anywhere else, and this presentation and these materials do not, and are by no means intended to, constitute an offer, invitation or solicitation to acquire, purchase or subscribe for securities in Hong Kong or anywhere else. Neither this presentation nor these materials nor any part or copy of any of them may be reproduced, distributed, disseminated or passed on, directly or indirectly, to any other person (whether within or outside your company/firm/organisation) in any manner or published for any purpose By attending this presentation or receiving these materials, you acknowledge, accept, agree and/or undertake with, and are deemed to have acknowledged, accepted, agreed and undertaken with, the Company, the Sole Sponsor, the Sole Global Coordinator and any and all of their respective affiliates and advisers that: 1. You are a professional investor (as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and rules made thereunder) and are a person located outside of the United States (within the meaning of the Securities Act). 2. You have the knowledge, experience and capability to conduct your own assessment of the market and the market position of the Company and the Group, that you have conducted or will conduct your own analysis and be solely responsible for forming your own view of the Company and its securities and the Group, its condition (financial or otherwise) and the potential future performance of its business, and that you have obtained or will obtain your own independent legal, financial, tax and other professional advice relating to investment in any securities of the Company. 3. You have not obtained and will not seek from the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, or any of the directors, officers, employees, shareholders, advisers, agents and representatives of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, any material information including forward-looking information (whether qualitative or quantitative) concerning the Group that is not: (i) reasonably expected to be included in the prospectus or offering circular to be issued by the Company; or (ii) publicly available. 4. This presentation and these materials do not constitute, and shall not be deemed to be, a prospectus, notice, circular, brochure, advertisement or document, or an extract from or an abridged version of a prospectus or document, offering any securities to the public in any jurisdiction, nor are they an invitation or solicitation to the public to make offers to acquire, purchase or subscribe for any securities, nor are they calculated to invite or solicit offers by the public to acquire, purchase or subscribe for any securities, and this presentation and these materials do not constitute or contain an invitation to the public to enter into or offer to enter into an agreement to acquire, dispose of, subscribe for or underwrite securities. This presentation and these materials must not be regarded as an inducement to acquire, purchase or subscribe for any securities, and no such inducement is intended. Neither this presentation nor these materials nor anything contained in any of them shall form the basis of or be relied on in connection with any contract or commitment whatsoever. 5. You will not publish, reproduce, distribute, disseminate, copy or otherwise transmit or pass on, directly or indirectly and in whole or in part, this presentation and/or these materials to any other person and in or into any jurisdiction. 6. None of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, nor any of the directors, officers, employees, shareholders, advisers, agents or representatives of the Company, the Sole Sponsor, the Sole Global Coordinator or any of their respective affiliates, makes any express or implied representation or warranty as to the fairness, reasonableness, accuracy, correctness or completeness of this presentation or these materials or any information in any of them, and none of them is under any obligation, legal or otherwise, to update or keep current this presentation or these materials or any information in any of them. 7. Each of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, and each of the directors, officers, employees, shareholders, advisers, agents and representatives of the Company, the Sole Sponsor, the Sole Global Coordinator and their respective affiliates, expressly disclaims any and all liability on the basis of this presentation or these materials or any information in, or omitted from, or any inaccuracy or error in respect of, this presentation or these materials or otherwise. 2

3 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Presenters 3 Peter Lau Co-Founder, Chairman, Executive Director Peter Lau Co-Founder, Chairman, Executive Director Lisa Ngai Co-Founder, Vice-Chairman, Executive Director Lisa Ngai Co-Founder, Vice-Chairman, Executive Director Dave Cheng Financial Controller, Executive Director Dave Cheng Financial Controller, Executive Director Edmond Lau Business Development Director Edmond Lau Business Development Director

4 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Content Business Review Financial Highlights Outlook and Strategies 4 Business Review by Market

5 5 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Business Review

6 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Solid and strong business growth in Hong Kong with diversifying business formats and future plans Rapidly growing Singapore business amidst challenging marketplace Key Performance Highlights Strong cash flow and financial position, raised dividend payout 6

7 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Results Highlights Hong Kong Business Remains Solid with a CSSG of 10% Gross profit margin increased to 47.1% Proposed Interim Dividend 4.9 HK cents per share Revenue in Hong Kong achieved a record high of HK$751.8 million Number of stores increased to 354, a net increase of 21 stores Revenue significantly grew 14.6% to HK$901.3 million 7

8 8 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Financial Performance

9 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Six months ended 31 October FY2015FY2014Change Turnover (HK$’000) 901,339786, % Gross Profit (HK$’000) 424,631367, % Profit attributable to equity holders (HK$’000) 44,82845,533*-1.5% Basic Earnings per Share (HK cents) *-22.2% Gross Profit Margin 47.1%46.8%+0.3pp Net profit margin 4.8%5.7%-0.9pp Interim Dividend # Basic 4.9 HK cents2.0 HK cents+2.9 HK cents Special -4.0 HK centsn/a Payout Ratio 80%55%+25pp Financial Performance – 1H FY14/15 9 * Excluding the one-off items of HK$Nil (1H 2013/14: Net gain of HK$33,500,000) # Proposed and declared final dividends of HK$96.0 million for the financial year ended 30 April 2013 which were paid in FY2013/14

10 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Six months ended 31 October FY2015FY2014Change CAPEX (HK$’000) 19,679 16, % Net Cash generated from Operating Activities (HK$’000) 81,27613, % Net Cash Balance (HK$’000) 502,193466, % Inventory Turnover (1) days Trade Payable Turnover (2) days Strong Financial Position 10 Notes: 1.Inventory turnover = Closing inventory / (Cost of sales x 2) x365 2.Trade payables turnover = Average trade payables / (Cost of sales x2) x 365

11 11 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Business Review by Market

12 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Revenue Breakdown Revenue breakdown by region Mainland China West Malaysia Macau Singapore Hong Kong 12.6% 30.4% 25.6% 28.5% Revenue growth by region % HKD’000 1,498,673 1,746,838 YoY: 17.3% YoY: 14.6% 786, ,349

13 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results New Stores Opened in 1H FY FY2012 Net change FY2013 Net change FY2014 Net change 1H FY2015 Hong Kong Singapore West Malaysia PRC Macau Total Number of directly-owned stores

14 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Six months ended 31 October Oct 2014Oct 2013Change Number of stores stores Comparable store sales growth (CSSG) 10%12%-2pp Hong Kong – Strong Growth and improved mix Developed different types of outlets during the review period: (1) MTR station retail store, (2) wet market store, (3) new City Life flagship store and so on Rental remains stable and sees signs of easier negotiation for street stores Improved sourcing mix allows higher flexibility in campaigns to drive customer traffic Imported and Private Label now accounted for >60% of sales 14

15 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Hong Kong Stable Cost Structure 15 Expenses as a % of revenue Note: “Other expenses” include auditor’s remuneration, air conditioning expenses, advertising and promotion expenses, amortisation of trademark, building management fees, delivery charges, depreciation expense, government rates, landing charges, legal and professional fee, rental expense of office premises and warehouses, goodwill written off, repair and maintenance, utility expenses, net exchange losses/gains, and others.

16 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Singapore – At Steadfast Growth and Development Six months ended 31 October Oct 2014Oct 2013 Number of stores 6039 Comparable store sales growth (CSSG) -6.8%14.5% Total retail market is flat with sluggish property market Amidst rapid growth, the Group faced some merchandising challenges as our supply chain management and logistics operations lagged New stores are more productive than existing stores More mall stores are opened than HDB shop lots Ex-hypermarket merchandising director already joined the Group to systemize the process 16 HDB ShopsShops at MallsTotal Old shops still operating Newly-opened stores in the past 12 months 81321

17 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Other Markets West Malaysia: Shows signs of profitability in some stores, pending loss making stores to expire China: Stores are not productive yet despite strong CSSG West Malaysia and China: Will freeze expansion plan and close 4 to 5 stores in the coming 6 months Macau: Challenging property market amidst the booming gaming economy, changing strategy to small-to-medium size stores at high local traffic locations 17 Six months ended 31 October 2014 CSSG (%) West Malaysia -5.0% China 30.9% Macau 3.7%

18 18 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Growth Strategies

19 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results MTR Station Retail Store Expansion Continued expansion of MTR retail store along MTR route 19 First MTR retail store officially opened in early Nov in Siu Hong MTR station More MTR station retail stores to open based on its satisfactory results Smaller store size around 1,000 sq ft, with more handy and international products Attracts a broader range of customers with different needs in heavy-traffic area Offers one-stop shopping experience for quality household products along MTR route map Shop 32, Tuen Mun Siu Hong Station (From 9:am – 10pm ) 1 1

20 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results ELLA Integration Ella Mobile accessories Stationery Bags Toys and accessories Houseware products Jewels Acquisition of ELLA completed on 5 Dec 2014 Position: Personal Life Style Experience Shop Target: Teenage and younger customers between 20s and 30s Build ELLA counters at selected JHC shops to increase customer traffic Introduce internationally sourced products into ELLA’s product portfolio Current Product Range Acceleration of customer base expansion through partnership projects

21 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results 21 Offers a wide range of products, which include kitchenware, plasticware, household electronics and other household items for daily use Five brands serving Hong Kong community – One-stop convenience for everyone Provides higher-end alternative for higher income households looking for the same convenient shopping experience Caters to students and other younger customers and carry a wide variety of stationery items, small toys and accessories as well as travel accessories, books and household items Offers specialised items and a comprehensive kitchenware line of products to enhance its image as a kitchenware expert Targets teenage and young customers with a wide variety of stationery, mobile and fashion accessories Our Network in Hong Kong 8 shops in 12 months ELLA Counters in selected JHC stores

22 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Ichiban Programme and Property Investment Take advantage of depreciation of Japanese Yen Rolled out “Ichiban Japanese Products” programme : Selected Japanese special products at HK$29.9 for 3 items Expect at least 60 containers of Japanese products coming into warehouse in the next 2-3 months 3 3 Entered a Sell & Purchase agreement for a 2,500 sq ft shop at Caine Road for HK$39 million Seek possible property acquisition for strategically important locations 22 “Ichiban” programme Property investment

23 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results HomePass Membership Programme HomePass Membership Programme Launched on 12 Dec 2014 Target to recruit 250,000 members based on the strength in market penetration Fully integrated point rewarding system with Objective: Increase average ticket size (currently HK$57.30) How to become a member? Customers will be entitled “HomePass” on any purchase of HK$100 at any Japan Home Centre, City Life and EPO stores in Hong Kong What are the membership benefits? Buy more earn more Special promotion day – Exclusive VIP purchase with more discount Birthday promotion – Special birthday purchase benefits HomePass Membership Programme

24 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results 24 Bulk Discount Delivery to Designated Address Diversified Product Choice Launched e-commerce platform JHCeshop.com on 20 Dec 2014 Provides another convenient, highly flexible and accessible retail channel for diversified IH Retail’s products Captures more potential younger customers who prefer online shopping Offers both household products of physical stores together with some exclusive non-household products available online only Closely follows the market trend and expands to offer the genuine “one-stop” shopping convenience experience Poised to seize the enormous opportunities from Internet JHCeShop.com to boost O2O business E-commerce Platform – JHCeShop.com 5 5

25 Stock code: 1373 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Planned store expansion & estimated capital expenditures Expansion Plan and CAPEX 25 (net increase of number of stores)New FY2015 new FY2016By April 2016 Hong Kong (incl. Ella) Singapore West Malaysia0318 Mainland China0013 Macau2313 Total HKD’000FY2015FY2016 New store openings22,00028,000 Ongoing renovations of existing stores 15,00017,000 Property acquisition & Improvements to logistics90,000100,000 Total127,000145,000

26 26 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Q&A

27 27 International Housewares Retail Company Limited 2014/15 lnterim Results International Housewares Retail Company Limited 2014/15 lnterim Results Thank You!


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