Gome Retail Holdings Limited · HKEX:493

Gome Retail — GOME Electrical Appliances Holding — Merger or Acquisition (July 2015)

20 slides from Gome Retail's merger presentation, July 2015

1. Slide 1: Investor Presentation

   Investor Presentation July 2015

2. Slide 2: Disclaimer

   Disclaimer This Presentation and the accompanying slides (the “Presentation”) which have been prepared by GOME Electrical Appliances Holding Limited (“GOME” or the “Company”) do not constitute any offer or invitation to purchase or subscribe for any securities, and shall not form the basis for or be

3. Slide 3: Agenda

   Agenda 1. Transaction Overview 2. Strategic Rationale 3. Target Group Overview 4. Q&A 3

4. Slide 4: Transaction Overview

   Transaction Overview

5. Slide 5: Transaction Background

   Transaction Background  GOME has proposed to acquire the home appliance retail business owned by the controlling shareholder to enable full integration  The controlling shareholder has fulfilled his commitment through the proposed transaction  Another important milestone for GOME shortly after th

6. Slide 6: Key Transaction Terms

   Key Transaction Terms  Total consideration: HKD11,268 million (1)  Cash:  HKD2.2 billion(1) to be paid with internal resources  Shares:  6.2 billion new shares(1)  Issued at a price of HKD1.39 per share  Lock-up period of 180 days  Warrants:  Warrants exercisable into a maximum of 2.5 billi

7. Slide 7: Key Approvals and Milestones

   Key Approvals and Milestones  Major and Connected Transaction  Whitewash Waiver  Anti-monopoly MOFCOM Approval  Circular (expected to be dispatched on or before 15 October 2015)  EGM  Independent Shareholders’ Approval 7

8. Slide 8: Strategic Rationale

   Strategic Rationale

9. Slide 9: Strategic Benefits to GOME

   Strategic Benefits to GOME 1 Integration Of Nationwide Retail And Supply Chain Operations 2 Retail Stores Are Strategically Located In Fast-growing Regions That Are Well Poised To Benefit From Favorable Government Policies 3 Integration Of Logistics And Warehousing Network 4 After-sales Service Plat

10. Slide 10: Integration of Nationwide Retail Operations

    Integration of Nationwide Retail Operations Retail footprint will grow from 269 cities to 436 cities(1) Illustrative Pro-forma Store Number (1) Illustrative Pro-forma Usable Area(1) (sqm)  Integration of nationwide 5,471,000 retail and supply chain 1,714 operations  Facilitates expansion in tier-

11. Slide 11: The Target Asset Provides Strong Growth Potential

    The Target Asset Provides Strong Growth Potential The Target’s retail network is highly complementary, and its retail stores are strategically located in regions that are well poised to benefit from favorable government policies, such as the “One Belt and One Road Initiative” and “Western China Deve

12. Slide 12: Integration of Logistics and Warehousing Network

    Integration of Logistics and Warehousing Network Targets to become one of the largest home appliance logistics platforms in China supported by a network comprising of regional, city-level and village-level warehouses Examples of Neighboring Regions Logistics Network Snapshot (2) 600+ 2,500+ 45,000+

13. Slide 13: Integration of After-sales Service Platform

    Integration of After-sales Service Platform Over 2,000 after-sales service locations in over 400 cities Targets to become one of the largest after-sales service platforms in China Service Quality Scope of Service Consumers’ Satisfaction Professional Services Network Coverage Service Coverage  Solvi

14. Slide 14: A Strengthened Procurement Platform

    A Strengthened Procurement Platform Expected to further enhance economies of scale, improve product offering capabilities and increase bargaining power; targets to become one of the largest home appliance procurement platforms in China An Enlarged Procurement Platform + Strategic Co-operations = Eff

15. Slide 15: Enhance Corporate Governance

    Enhance Corporate Governance   After Completion, the Target Group will become a wholly-owned subsidiary of the Group   The current arrangement agreement on management fees and purchasing service fees between the Group and the Target will be terminated at the earlier of, December 31, 2015 or Comp

16. Slide 16: Benefits to GOME's Shareholders

    Benefits to GOME’s Shareholders 1 Retail Network Expansion and Economies of Scale 2 Synergies  Expected cost savings from integration and sharing of Benefits to resources (logistics, after-sales, I.T., HR, etc) GOME’s  Expected improvement in product offering capabilities and Shareholders bargaini

17. Slide 17: Target Group Overview

    Target Group Overview

18. Slide 18: Store Network of the Target Group

    Store Network of the Target Group Target Group Target Group (2) 2015 Flagship Standard Specialized 2012(1) 2013(1) 2014(1) Region Total Q1(2) stores stores stores Henan 3 28 32 63 Zhejiang 6 10 47 63 Number of stores 561 510 556 578 Shanghai 17 18 16 51 First-tier market 315 262 272 281 Hunan 4 5 30

19. Slide 19: Summary Financials of the Target Group

    Summary Financials of the Target Group Revenue Consolidated Gross Profit (2) Net Profit (RMB million) (RMB million) Consolidated Gross (RMB million) Profit Margin(2) Management fees and purchasing service fees paid (3) 19.8% 18.8% 20,992 19,611 3,889 3,955 358 285 (1) (1) (1) (1) (1) (1) 2013 2014 2

20. Slide 20: Q&A

    Q&A 20

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