Contents

1. Ipsos Marketing and China Economic Review Online Survey: The American investor in US-listed Chinese companies May 2011

2. Contents

3. Research background • In 2009, China became the world’s most active IPO market, and an increasing number of Chinese enterprises are now listing overseas. • What does the future hold for the development of Chinese enterprises, in particular following a listing in the US? On behalf of China Economic Review magazine, renowned international market research firm Ipsos conducted an online survey with the objective of exploring the backgrounds, attitudes, behaviors and profitability of US investors in US-listed Chinese companies, as compared to US investors as a whole. www.ipsos.com www.chinaeconomicreview.com

4. Research background • Aim: To assist Chinese companies listed in the US or with US-listing potential to understand the American investor • Objectives: • Understand stock investment behavior and habits • Gauge American investors’ perception of listed Chinese companies, and their future investment preferences • Evaluate the reputations of relevant Chinese enterprises

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6. Research methodology • Survey Method: Online Survey with ResearchNow Online Panel • Region: USA (nationwide) • Sample: n = 1000 • Access Object: American citizens • Stock investment behaviour • Quota requirement: Respondents who have ever owned Chinese stock listed in the US (at least 100 • samples: actual = 216)

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8. Who bought US-listed Chinese stocks?

9. American Stock Owners Profile Gender Male: 54% Female: 46% Age 18-29: 8% 30-49: 38% 50-65: 43% 65+: 11% Education High School or Below: 11% Junior College/Tech School: 23% Bachelor’s Degree: 43% Graduate Degree or Above: 23% Employment Full-Time: 48% Part-Time: 9% Self-Employed: 11% Not currently working: 32% Income Level (US$) < 20,000: 13% 20,000-39,999: 13% 40,000-59,999: 17% 60,000-80,000: 18% > 80,000: 31% Would rather not say: 8%

10. Female Male Demographics The majority of respondents were aged 30-65, with only a small percentage of investors under the age of 30 or retired. The sample had a relatively even gender split. Age n = 1000 65+ 18-29 Gender n = 1000 30-49 50-65

11. Demographics The respondents were well educated, with 89% educated beyond school. Almost half were employed full-time, and the majority earned “more than US$80,000 per year”. Education Income (US$) Employment n = 1000 n = 1000 n = 1000 High School or Below Graduate Degree or Above Not Currently Working Rather Not Say < $20,000 Full-Time Junior College/ Tech School $20k-$40k >$80,000 Self Employed $40k-$60k Part-Time Bachelor’s Degree $60k-$80k 11

12. Gender Female Age 7 18-29 32 30-49 47 50-65 14 65+ US-listed mainland Chinese stock owners vs. non-owners Owners of stock in mainland Chinese firms were on average younger, and a greater proportion than non-owners surveyed were male. US-listed Chinese stock owners n = 216 n = 784 Male Yes n = 216 n = 784 No

13. US-listed mainland Chinese stock owners vs. non-owners Compared to non-owners, Chinese stock owners have higher levels of education and a much higher rate of full-time employment. Non-owners US-listed Chinese stock owners Education n = 784 Yes Grad Degree or above n = 216 21 Bachelor’s Degree 41 Junior College/ Tech School 25 High School or Below 13 Employment n = 216 n = 784 44 Grad Degree or above No 9 Bachelor’s Degree 12 Junior College/ Tech School 35 High School or Below = Significantly Above Counterpart at 90% Confidence Level 13

14. US-listed mainland Chinese stock owners vs. non-owners While the income distribution of non-owners is well spread, Chinese stock owners are concentrated in the highest income bracket. US-listed Chinese stock owners Non-owners Yes n = 203 Income n = 706 31 $80,000 or more 20 $60,000-$79,999 20 $40,000-$59,999 15 $20,000-$39,999 Less than $20,000 14 No = Significantly Above Counterpart at 90% Confidence Level 14

15. Investment portfolio summary There is significant variation in the percentage of respondents’ investment portfolios allocated to stocks. Over thirty percent of respondents have 20-39% of their investments in stocks, while 14 percent invest only in stocks. Mutual Funds are the most popular method of portfolio diversification. 15

16. Investment portfolio summary 16

17. Past ownership 22% of the total sample have owned shares in US-listed Chinese companies in the US at some time. Yes Have owned US-listed mainland Chinese stock n = 1000 No 17

18. Buying and selling behavior

19. Investment sector familiarity for Chinese-listed stocks • The most common investment sectors are: • Electronics/Technology • Telecommunications • Energy • Consumer Goods • Finance • Healthcare/Pharmaceuticals 19

20. Investment sector familiarity for Chinese-listed stocks

21. Investment sector familiarity for Chinese-listed stocks

22. US-listed Chinese stock buyers/sellers in past 12 months Of the 216 respondents that owned Chinese stock, 66% had bought or sold Chinese stock within the past 12 months. Owners of mainland Chinese stock listed in the US n = 1000 Yes No

23. US-listed Chinese stock activity in past 12 months by sector The Electronics/Technology sector was the most active in the past year. Sold Bought n = 142 = % Respondents Bought stock in Sector = % Respondents Sold stock in Sector Q5. Which investment sector did you buy these US-listed mainland Chinese stocks in? Q7. Please indicate which investment sectors you have sold US-listed mainland Chinese stocks within the last 12 months: 23

24. US-listed Chinese stock activity in past 12 months by sector Q5. Which investment sector did you buy these US-listed mainland Chinese stocks in? Q7. Please indicate which investment sectors you have sold US-listed mainland Chinese stocks within the last 12 months: 24

25. Reasons for buying/selling in past 12 months Consistent with overall reasons for investment, the growth potential of the Chinese economy is the leading cited reason for buying Chinese stock over the last year Q6. When you recently bought these US-listed mainland Chinese stocks, which factors motivated you to make this investment? Q8. What were your reasons for selling these US-listed mainland Chinese stocks? 25

26. Reasons for buying/selling Chinese stock in past 12 months Q6. When you recently bought these US-listed mainland Chinese stocks, which factors motivated you to make this investment? Q8. What were your reasons for selling these US-listed mainland Chinese stocks? 26

27. Net profit/loss in Chinese stocks in past 12 months Over the past year, investment in Chinese stocks proved a lucrative endeavor for those surveyed. The overwhelming majority realized positive returns on their investments. n = 142 Average Profit: $2,433 Max Profit: $9,999 Loss or No Profit $5k-$7.5k > $7,500 96.5% respondents made a profit $3k-$5k $1-$1k $1k-$3k Q10. Within the past 12 months, what was your overall net profit/loss for US-listed mainland Chinese stocks? 27

28. Reverse merger investment The majority of respondents had not invested in US-listed mainland Chinese reverse merger stocks Q20. Have you invested in companies that were the product of reverse mergers? 28

29. How are US-listed Chinese stocks perceived?

30. Overall attitudes toward US-listed Chinese stocks The survey revealed a positive perception of mainland Chinese stocks in the US. 88% of respondents labeled them at least a ‘hold’. This is consistent with the views highlighted on China’s potential for economic growth. Q1. Which of the following best describes your current overall attitude towards Chinese stocks listed in the US? 30

31. 3 Strong Buy 32 Buy 47 Hold 10 Sell 8 Strong Sell Attitudes to Chinese stocks by owners vs. non-owners Perhaps unsurprisingly, given the profit levels revealed before, US-listed mainland Chinese stock owners showed a much more positive attitude to the stocks than non-owners, though the majority of non-owners still believe the stocks to be a ‘hold’ or ‘buy’ US-listed Chinese stocks owners vs. non-owners Yes No = Significantly Above Counterpart at 90% Confidence Level Q1. Which of the following best describes your current overall attitude towards Chinese stocks listed in the US? 31

32. Changes in attitudes to Chinese stocks in the past 12 months The continued economic stability of the last year has not had much impact on confidence in US-listed mainland Chinese stocks. Half of the sample showed no change, while those who had grown more optimistic outnumbered those more pessimistic. Q3. How has your attitude changed in the past 12 months? 32

33. Changes in attitudes to Chinese stocks by owners vs. non-owners Owners of mainland Chinese stocks have seen a greater positive shift in perception than non-owners, who by and large retain a similar opinion to a year earlier US-listed Chinese Stocks Owners vs. Non-Owners n = 1000 2 Much more optimistic Yes 20 Somewhat more optimistic 57 No change Somewhat more pessimistic 16 Much more pessimistic 4 No = Significantly Above Counterpart at 90% Confidence Level Q3. How has your attitude changed over the past 12 months? 33

34. Reasons for investing in US-listed Chinese stocks S8. What factors do you consider when owning mainland Chinese companies listed in the US? S9. What are your main reasons for not owning any mainland Chinese stocks listed in the US? 34

35. US-listed Chinese stock sectors targeted for investment The sectors of Chinese stocks that most investors would consider buying are Electronics/Technology, Energy, Consumer Goods and Telecommunications Q11. Regardless of whether you’ve previously purchased mainland Chinese stock listed in the US or not, which of the following sectors would you be interested in making a mainland Chinese investment? [Please choose a maximum of 3 sectors that you would be interested in] 35

36. What media channels are used when investing in US-listed mainland Chinese stocks?

37. Media Channels used for Chinese stock investment activity The vast majority of respondents used the internet facilitate stock activity within the last 12 months, while the mobile phone was a relatively popular alternative method Q9. Please indicate which forms of media channels you used to buy/sell your mainland Chinese stock listed in the US within the past 12 months: [Please select all that apply] 37

38. Research methods for stock investment Respondents identified reading publications as their favorite method for researching potential investments. Seeking professional guidance was also identified as a key approach. They placed less confidence in more informal sources, such as blogs or peer recommendation S5. What research methods do you utilize when investing in stocks? [Please select all that apply] 38

39. Research methods for investment by owners vs. non-owners Blue = Significantly Above Counterpart at 90% Confidence Level S5. What research methods do you utilize when investing in stocks? [Please select all that apply]

40. Research methods for stock investment breakdown Stock owners utilize a greater range of independent research methods, with non-owners only matching them in their propensity to consult a financial advisor Research Methods US-listed Chinese stock owners vs non-owners = Significantly Above Counterpart at 90% Confidence Level 40

41. Value of US-listed Chinese companies’ interaction with investors The majority of respondents placed considerable importance on the company communicating with investors. Only 10% of the respondents felt it was unimportant. Value of Interaction n = 1000 Q18. How important to you is the level of interaction a stock company has with its investor?

42. Comparison of interaction levels between US-listed mainland Chinese companies and US-based companies The majority of respondents perhaps surprisingly believe that Chinese companies communicate at least as well as their US counterparts Interaction Comparison n = 1000 Q19. How do you feel about the level of interaction a mainland Chinese company listed in the US has with its investors compared to American-based companies listed in the US stock market?