PDF《OUR BUSINESS》

OVERVIEW We are a rapidly-growing department store group in China with an emphasis on high-end and luxury products, which are generally targeted at high-income earners.

We position the majority of our stores in the market by offering a more sophisticated, upscale shopping experience consistent with the branding and image of the high-end and luxury merchandise in our stores. As at the Latest Practicable Date, we operate or provide management consultancy services to sixteen department stores and one outlet mall in Beijing and seven provinces in China. Among these, nine are our self-owned stores and we provide management consultancy services to the remaining seven department stores and one outlet mall. We own the properties on which three of the self- owned stores are located and have entered into leases or store cooperation agreements for the other six self-owned stores, including Scitech Plaza in Beijing, which we lease from our Controlling Shareholders. Our self-owned store operations include eight '

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巴黎春天'

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branded department stores and one '

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Scitech'

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branded department store. Our managed store operations include one store in each of Xiamen and Xian, five in the Guizhou province and one outlet mall in Beijing. Our managed store in Xiamen is a '

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PCD'

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branded store, and the store as well as our managed store in Xian use the '

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Fleur de Lys'

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logo. The Beijing Scitech Premium Outlet Mall to which we provide management consultancy services also uses the '

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Fleur de Lys'

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logo. Two of our managed stores, Guiyang Guomao and Guiyang Nanguo Huajin are in the process of rebranding and we expect these stores to start using the '

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Fleur de Lys'

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logo. Our other managed stores do not use the '

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Fleur de Lys'

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logo. Four of the seven department stores and one outlet mall to which we provide management consultancy services are operated by connected persons of our Group and the remaining three managed stores are operated by Independent Third Parties. Since January 1, 2006, our network of self-owned stores has increased from four to nine stores. The new additions include our PCD stores in Xiamen, Qingdao, Changchun, Nanning, as well as Scitech Plaza in Beijing. Since January 1, 2006, the total gross floor area at our self- owned stores has increased from approximately 66,485 sq.m. to approximately 192,527 sq.m. Our revenue and net profit in the year ended December 31,

2008 were RMB717.8 million and RMB174.1 million, respectively, representing an increase of 43.3% and 28.5% from revenue and net profit of RMB500.9 million and RMB135.5 million, respectively, in the year ended December 31, 2007. Our revenue and net profit for the six months ended June 30,

2009 were RMB358.9 million and RMB124.1 million, respectively. Scitech Plaza, a well-known shopping center in Beijing, is our major contributor of revenue and net profit. For the six months ended June 30, 2009, our audited consolidated revenue and net profit attributable to Scitech Plaza were RMB185.4 million and RMB73.2 million, respectively, which constituted approximately 51.7% and 59.0% of our total revenue and net profit, respectively, for the same period. Our department stores and outlet mall primarily target China'

s high-income earners, with the majority of our stores positioned as high-end and luxury department stores that offer a diverse collection of international branded goods under one roof and provide those customers a pleasant shopping experience in convenient locations. As of June 30, 2009, we carried over 1,600 brands in our self-owned stores, including Armani Collezioni, Burberry, Cartier, Ermenegildo Zegna, Hugo Boss, Ralph Lauren and Ports 1961, and we offered an extensive range of merchandise that can be broadly categorized into the following: . Ladies'