27 March 2018

2017 Annual Results

Presentation

DisclaimerThis presentation and subsequent discussions may contain forward-looking statements and information that involve risks,uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals,strategies, future events or performance and underlying assumptions and other statements that are other than statementsof historical fact, including, but not limited to, those that are identified by the use of words such as "anticipates,'' "believes,''"estimates,'' "expects,'' "intends,'' "plans,'' "predicts,'' "projects'‘, “target” and similar expressions.

The information included is solely for the use in this presentation and certain information has not been independentlyverified. No representations or warranties, expressed or implied, are made as to, and no reliance should be placed on, thefairness, accuracy, completeness or correctness of the information or opinions presented or contained in this presentation.The performance and the results of operations of the Group contained within this presentation are historical in nature, andpast performance is no guarantee of the future results of the Group. Any forward-looking statements and opinionscontained within this presentation are based on current plans, estimates and projections, and therefore involve risks anduncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements andopinions.

Certain information in this presentation is extracted from Google Analytics and rounded to the nearest thousand. Thecomputation method and basis of which have not been verified. The data could be overlapping (a) between TVProgramme Platform and Online Shopping Platform if the same user is watching our TV programmes and browsing theonline shopping mall at the same time; (b) between different type of devices among TV Programme Platform and amongOnline Shopping Platform if the same user using more than one devices for watching TV programmes and/or browsing ourOnline Shopping Platform at the same time; (c) or the same user using HKTVmall app to browse the HKTVmall web-page;(d) if the same user using the same device to browse the online shopping mall through different channels/medias on thesame device. . The information for the same period can be changed at different point of time when capturing the data asGoogle Analytics performs the analysis on sampling basis. According to Google Analytics, the definition of “User” is “Usersthat have had at least one session within the selected date range, which includes both new and returning users.” Theabove data are unaudited and are not indicative of the Company’s business performance, financial condition or growthprospect. Readers should not place reliance on these data.

For figures generated from internal systems and relevant platforms, which were rounded up to nearest integral percentageor thousand, are unaudited and for reference only.

We are not required to correct or update any such statement or information to either reflect events or circumstances thatoccur after the date the statement or information is made or to account for unanticipated events or otherwise. 2

AgendaAgendaAgendaAgenda

•Operational and Financial ReviewBy Ms. Alice Wong, CFO

•Business Review and OutlookBy Mr. Ricky Wong, Chairman

•Q & A

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Operational and Financial ReviewOperational and Financial ReviewOperational and Financial ReviewOperational and Financial ReviewBY Alice Wong, CFO

4

5

Sustainable Growth Momentum

88.3 112.8

336.3

187.1

1,070.4

487.3

0

200

400

600

800

1,000

1,200

HK$mn HK$mn

GMV for order intake Turnover

2015 2016 2017

160%

218%

Remark:

GMV = Gross sales dollar value for merchandise sold excluding cash voucher sold, internal account sales, before deduction of mall level

discounts, rebated used, cancellation and returns of merchandise sold.

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• On 3 March 2017, HKTV completed the acquisition of acquired Groupon HK business and rebranded into HoKoBuy on 28

June 2017

• From 4 March 2017, Average Daily Order Number and Average Order Value are the combined results from HKTVmall and

HoKoBuy; while before 4 March 2017, it represented HKTVmall performance

• Transactions on HoKoBuy are on “deal” basis while HKTVmall are on “shopping cart” basis

Source: Internal systems and relevant platforms

Annualised Dec 2017, Building a growing HK$1.5 billion GMV Online Marketplace…….

~ 1,300

orders

~ 7,900

orders

7

Increasing Purchasing Power, Better Margin!

Remark:

Blended gross margin and commission rate is defined as GMV on Completed Orders after deduction of any discounts offered by the

marketplace, cost of inventories and payment to merchant after deduction of commission , and include delivery and other e-commerce

related income, divided by GMV on Completed Orders after deduction of any discounts offered by the marketplace. This is before

deduction of coupons used and grant of Mall Dollars, which are considered as marketing related elements under internal classification.

23.8%

20.0%

21.3%

2015 2016 2017

Group Blended Gross Margin and Commission Rate %

HKTVmall + HoKoBuy

8

Managed CAPEX for Sustainable Growth

Heavy construction CAPEX for new TKO headquarters was completed during 2017 and the

upcoming CAPEX is expected to be business driven and for sustainable growth, mainly

including:

a) HK$144.0 million robotic system to be delivered by 2 phases in 2018 and in 2019

b) Expansion of logistics fleet for increase in order intake

c) Renovation and equipment for new O2O shop opening

99

385

182

-

50

100

150

200

250

300

350

400

450

2015 2016 2017

CAPEX HK$'mn

Consolidated Income Statement12 months ended 12 months ended

31 Dec 2017 31 Dec 2016

HK$'000 HK$'000 HK$'000 %

GMV on Order Intake 1,070,359 336,261 734,098 218%

Turnover

- Ecommerce 485,229 185,826 299,403 161%

- Multimedia 2,028 1,245 783 63%

Total Turnover 487,257 187,071 300,186 160%

Cost of inventories (295,178) (140,289) (154,889) 110%

Other operating expenses (excluding major non-cash items) (474,615) (333,062) (141,553) 43%

- Talent Costs (230,648) (189,100) (41,548) 22%

- Advertising and marketing expenses (40,209) (29,290) (10,919) 37%

- Operating lease charges in respect of land and building (41,800) (28,429) (13,371) 47%

- Others (161,958) (86,243) (75,715) 88%

Operating loss before non-cash items (282,536) (286,280) 3,744 -1%

Other income, net 75,529 87,540 (12,011) -14%

Finance costs (2,011) (1,017) (994) 98%

Operating loss before major non-cash items (209,018) (199,757) (9,261) 5%

Marjory non-cash items 5,261 (57,285) 62,546 -109%

- Valuation gains on investment properties 80,500 6,700 73,800 1101%

- Depreciation (46,775) # (34,230) # (12,545) 37%

- Amortization on intangible assets (15,060) # (13,162) # (1,898) 14%

- Exchange gain/(loss) 18,701 (16,593) 35,294 -213%

- Provision for onerous contract/ other write off (3,300) - (3,300) 0%

- Equity-settled share-based transactions (28,805) - (28,805) 0%

Loss before taxation (203,757) (257,042) 53,285 -21%

Income tax expense (1,163) (74) (1,089) 1472%

Loss for the year (204,920) (257,116) 52,196 -20%

Variance

9

Key Highlight on Consolidated Income Statement

Improved net loss of HK$204.9mn in 2017 vs HK$257.1mn in 2016, a decreased by HK$52.2mn:

1. Increase in Gross Contribution by HK$145.3mn to HK$192.1mn in 2017;

2. Valuation gain in investment properties increased by HK$73.8mn to HK$80.5mn;

3. Increase in exchange gain by HK$35.3mn from an exchange loss of HK$16.6mn in 2016; net off by

4. Increase in Other operating expenses (excluding major non-cash items) by HK$141.6mn to HK$474.6mn in 2017 mainly caused by increase in talent costs and logistic and warehouse operating costs to cope with growth in order intake;

5. Decrease in Other income by HK$12.0mn mainly caused by reduced investment income due to realization of investment for operating and capital expenditure.

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Consolidated Statement of Financial Position

Solid balance sheet with strong liquidity - as at 31 December 2017,

1. Under Property, plant and equipment, included self-owned properties at TKO Headquarters of about

300,000 Sq. Ft. and investment and leasehold properties of about 153,000 Sq. Ft..

2. Strong liquidity with investment in Other Financial Assets and cash balance, net of bank borrowings at

HK$756.7 million.

Dec 2017 Dec 2016HK$'000 HK$'000 HK$'000 in %

Property, plant and equipment 1,152,387 917,048 235,339 26%Intangible assets 100,725 112,248 (11,523) -10%

Other financial assets (Fixed income and Equity investment)Non-current 675,161 828,019 (152,858) -18%Current 201,004 355,406 (154,402) -43%

Other receivable, deposits and prepayments 75,188 47,410 27,778 59%

Inventories 26,912 17,833 9,079 51%Tax recoverable 1,007 - 1,007 NAPledged bank deposits 3,905 - 3,905 NA

Cash at bank, in hand and term deposits 100,199 44,397 55,802 126%

Total Assets 2,336,488 2,322,361

Accounts payable 92,951 22,714 70,237 309%

Other payables and accrued charges 154,840 115,942 38,898 34%Deposits received 4,286 1,905 2,381 125%Bank loans 219,623 184,144 35,479 19%

Deferred tax liabilities 2,156 993 1,163 117%

Total Liabilities 473,856 325,698

NET ASSETS 1,862,632 1,996,663

Share capital 1,268,914 1,268,914 - 0%Reserve 593,718 727,749 (134,031) -18%

TOTAL EQUITY 1,862,632 1,996,663

Variance

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Business Review and OutlookBusiness Review and OutlookBusiness Review and OutlookBusiness Review and OutlookBy Ricky Wong, Chairman

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An Unbeatable Platform, as at 31 December 2017 (unless specified)

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4,280,000 registered email

subscriptions (source: 2)

3,571,000 Apps download (source: 3)

896,000 Facebook likes (source: 4)

Source:

1. Data on Unique Device is extracted from our internal system and rounded to the nearest thousand. The data is collected based on the tracking

cookies for web browser and the device advertising ID for app, which could be overlapping if (a) same device is used to browse the online shopping

web-page through different browsers; (b) same device is used to open online shopping app and to browse online shopping web-page; and (c) the

user amends the advertising ID of its device. These data are unaudited and are not indicative of the Company’s business performance, financial

condition or growth prospect. Readers should not place reliance on these data.

2. Internal system

3. Android Google Play Console and Apple iTunes Connect

4. Facebook

In aggregate, 1,129,000 Unique Devices

landing on PDP or performing search on

HKTVmall or HoKoBuy in December 2017(source: 1)

+ + + +

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Remarks:

1. The sites in the top sites lists are ordered by their 1 month Alexa traffic rank.

2. The 1 month rank is calculated using a combination of average daily visitors and page views over the past month. The site with the highest combination of visitors

and page views is ranked #1. The site’s metrics are estimated and based on traffic patterns across the web as a whole and using data normalization to correct for any

biases.

Are We the Largest and Most Popular Hong Kong Based Online Shopping Mall?

Top Sites in Hong Kong - as at 15 Mar 2018

Ranking in Hong Kong Sites

1 www.google.com.hk

2 www.youtube.com

3 www.google.com

4 www.facebook.com

5 www.yahoo.com

10 www.taobao.com

24 www.amazon.com

25 www.tmall.com

84 www.JD.com

102 www.hktvmall.com

172 www.ztore.com

461 Zalora.com.hk

581 www.hokobuy.com629 www.fortress.com.hk

752 www.parknshop.com

1425 www.sasa.com

1441 www.fingershopping.com (A fellow subsidiary of Circle K)

1515 www.wellcome.com.hk

1743 www.watsons.com.hk

20837 www.broadway.com.hk

Source: https://www.alexa.com/topsites/countries;2/HK

Multiple Growth Rate on Customers made purchases in the 12 months ended 31 December

15Source: Internal system

+ + + +

2015 2016 2017

Combined Unique Customers ( rounded to the

nearest thousands)94,000 163,000 477,000

-

100,000

200,000

300,000

400,000

500,000

600,000

Combined Unique Customers

193%

73%

Are We only a Online Supermarket?

In 2017, we sold…..

Mattress: 12,800 pieces soldVacuum Cleaner: 15,000

units sold

Sofa: 2,600 units sold

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JOIN HANDS IN STRENGTHJOIN HANDS IN STRENGTHJOIN HANDS IN STRENGTHJOIN HANDS IN STRENGTH

Collaboration with Google Partner to groom SME growth

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More precise target marketing in placing digital ad, this is our strength

brought by BIG DATA collected from HKTVmall and HoKoBuy!

Case Sharing 1 – Small Merchant Partnership Programme

A new-joined small grocery shop by end of

January 2018-

• Selling (parallel import) baby goods, such as

diaper, cups, vacuum bottle, bathing oil etc.

• Annual Ad Budget: HK$100,000

• Ad Spent amount: HK$3,400 only in February

2018

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● Existing merchant conversion from February 2018

● Store selling sterilizing products, such as flea spray, hand sanitizer, floor cleaner, etc.

● From January 2018 to February 2018 :

○ Ad Spend amount: HK$2,100 onlyin February 2018

Case Sharing 2 – Small Merchant Partnership

Programme

HK$35,000

HK$40,000

HK$45,000

HK$50,000

HK$55,000

HK$60,000

HK$65,000

Jan 2018 Feb 2018

GMV

19

Become the Largest and “Profitable” Future Retail

In 2 -3 years’ timeframe, we need to

1) Increase Gross Profit Margin

2) Lower the Costs for Warehousing, Pick and Pack

3) Lower the Delivery Cost

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Increase Gross Profit Margin

A Volume Game, the more orders placed by customers, the better is our purchasing power!

When GMV increases by 3 – 4 xOur blended Gross Margin and

Commission Rate may increase

from existing 21% up to 27% to

33%, just like other Hong Kong

Retailers!

21

22

• Hong Kong’s largest robotic warehousing system, introduced from Germany, phase I installed at Tsing Yi hub, launched in Q1 2018

• Fully automated system for storage, on-site transportation and picking to enhance logistics efficiency

• To turn the current loss-making “highly manual fulfilment process” into a profitable “highly automated process” for a stable operating environment and substantially less reliance on human resources

• Phase II and III with committed CAPEX of HK$144mn, to install at Tseung Kwan O self-owned eFulfillment Centre, target to launch by Q4 2018 and Q2 2019.

Lower the Costs for Warehousing, Pick and Pack- Robotic Picking and Conveying System

Phase II and III of Robotic System in a Much Larger Scale at Self-

Owned TKO HeadquartersInvestment

(HK$)

Estimated Daily Capacity

(Number of Orders)

Estimated Launch

Date

Phase 1 29,000,000 8,000 to 10,0001Q 2018

(officially launched)

Phase 2 92,000,000 20,000 4Q 2018

Phase 3 52,000,000 30,000 2Q 2019Phase 3

Phase 2

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Lowering Delivery cost

Another Volume Game, the higher the density in each district, the shorter the delivery distance –and lower costs!

Now, ~ 180 in

operations

In 1 year’s

time ~ 300 in

operations

In 2 years’

time ~ 400 in

operations

In 3 years’

time ~ 500 in

operations

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25

A New Way of RETAILING – Offline Patronage -> Online Shopping -> Offline Pick-up

More than just an Online Marketplace…3 ways to monetise from the Online Business

� Big Data and Digital Advertising

�Strong digital capabilities to assist our suppliers and any advertisers to enhance the preciseness in predicting consumer needs so as to build stickiness, create demand and be able to capture the time of need.

�Automatic Warehousing and Logistics

�Delivery is the core for online shopping business

�In 3 years’ time, we believe we will become the largest delivery company in the residential areas in Hong Kong

�Electronic Wallet

�About 3.6 mn downloads of HKTVmall and HoKoBuy Apps

�A solid and ready base to tap into the e-Wallet world26

Update on Free TV Licence Application and Mobile TV Business

After deliberate consideration, we considered the changing landscape of the Free TV industry, in particular of the changing viewers’ behavior and preference, as well as the continued shrinkage of advertising revenue has caused huge difficultly to formulate a long term sustainable business plan for reasonable return to our shareholders.

In this regard, it is concluded that

1. We will not continue to pursue the application for a domestic free TV programme service licence, and its application submitted to the Communications Authority (“Authority”) on 11 April 2014 will be withdrawn.

2. We will surrender the Unified Carrier Licence (No.041) together with the radio spectrum of 678 – 686 MHz to the Authority and cease the provision of the broadcast-type mobile TV service on 31 March 2018 or such other date as the Authority may reasonably direct.

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Q&AQ&AQ&AQ&A

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