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Corporate Presentation

Corporate Presentation. February 2010 (1H2010). Presentation Outline. Business Overview 1H2010 Financial Review Outlook & Future Plans. Stock Information. Time Watch – A leading PRC watch retailer. Extensive retail presence and experience Started first PRC retail store in 1988

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Corporate Presentation

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  1. Corporate Presentation February 2010 (1H2010)

  2. Presentation Outline Business Overview 1H2010 Financial Review Outlook & Future Plans

  3. Stock Information

  4. Time Watch – A leading PRC watch retailer Extensive retail presence and experience Started first PRC retail store in 1988 2 house brands “Tian Wang” & “Balco” and PRC distributor of Italian brand “Police” 4 key business segments Manufacturing and Retailing OEM Manufacturing Watch movement trading Leasing of Shopping Mall

  5. Strong Brand Equity – China’s No. 1 Watch Brand Multi-brand strategy with two house brands; “Tian Wang” and “Balco” as well as PRC distributorship of Italian brand “Police” “Tian Wang” brand top among LOCAL watch brands in China in terms of sales value “Balco” brand of Swiss watches among top-selling foreign watch brands in China* Renowned actor Francis Ng is Balco’s spokesperson *Source: China National Commercial Information Centre, an agency governed by the Commercial Department of the PRC Government.

  6. Market Presence in PRC 962* outlets in over 35 cities Stores present in all regions except Qinghai & Tibet *As at 31 Dec 09

  7. Presentation Outline Business Overview 1H2010 Financial Review Outlook & Future Plans

  8. 1H2010 Performance Highlights Recorded 14.2% increase in profit attributable to shareholders to HK$37.9 million Net profit growth achieved on higher retail sales and continued contributions from high value-add retail sector Continued contributions from retail outlets in Hong Kong - accounting for 19% of Group sales in 1H2010 Opened 68 new stores in 1H2010, bringing total number of POS to 962

  9. Income Statement - Highlights

  10. Balance Sheet -- Highlights

  11. Cash Flow Statement -- Highlights

  12. Revenue by Business Segment Focus increasingly on high margin retail and OEM segments since 2007 Revenue from the manufacturing and trading of watches business segment grew by 52% to HK$347.5 million from sustained market demand for our timepieces in the PRC, as well as contributions from the Group’s Suzhou and Hong Kong operations

  13. Segment Profitability Reported a 15% growth in overall gross profit to HK$ 226.9 million Segmental profit inline with segmental revenue performance Watch movement segment has strategic importance to support retail and OEM segments

  14. Breakdown of Stores Total of 962 stores opened for Tian Wang, Balco and Police Total of 37 stores opened for Italian brand Police (PRC distributorship) .

  15. Improving PRC Performance Average store sales achieved HK$’000

  16. Presentation Outline Business Overview 1H2010 Financial Review Outlook & Future Plans

  17. Growing Size of PRC Middle Class & Watch Market Size of China’s middle class (earning between US$6,000-US$25,000 per year) to increase from 5% of urban households in 2005 to 43% in 2015 and 66% in 2025. Size of the affluent class (earning more than US$25,000 per year) is expected to comprise 2.3% of Chinese urban households by 2025. Source: McKinsey Global Institute Rapidly emerging middle class, along with rising discretionary spending power, to be the key fundamental driver of watch retail spending. PRC watch market size valued at RMB7.1 billion in 2008, reaching RMB8.3 billion by 2010 Source: Euromonitor

  18. Dual Expansion Plans 68 point of sale (POS) added in 1H2010 Continue to expand retail network to beyond 1,000 POS by June 2010 Increase average revenue contribution per store Expansion of Retail Point of Sales Expansion of Retail Formats To obtain additional distributorships in the PRC Replicate success of Hong Kong retail outlets to other regions within Greater China

  19. Summary Owns “Tian Wang”, the largest PRCwatch brand “Balco” and “Police” brands to supplement growth Ability to pump new brands into existing network to further fortify growth opportunity Vertically integrated model from manufacturer, trader and retailer to enhance margins Trading substantially below peers, An undervalued high-growth stock

  20. THANK YOU www.timewatch.com.sg

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