Annual Results 2014Corporate Presentation

March 2015

(Stock Code: 0814)

Business Review

Future Plans

Appendix

Financial Review

Contents

1

Financial Review

Financial Summary

(RMB ‘000) 2013 2014 +/- Change

Revenue from principal business 9,629,191 10,007,135 377,944 3.9%

EBIT 306,469 317,260 10,791 3.5%

Interest expenses 162,984 184,757 21,773 13.4%

Profit before tax 143,485 132,503 -10,982 -7.7%

Profit attributable to shareholders 57,056 41,330 -15,726 -27.6%

Basic EPS (RMB) 0.14 0.10 -0.04 -28.6%

3

4

-21.10%

3.52%

-39.05%

1.11%

-37.52%

-7.65%

-45.72%

-27.56%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

2013/12 2014/13

EBIT

#REF!

#REF!

#REF!

Operating Profit

PBI

Net Profit

Change Rate of Main Financial Figures

Financial Summary – gross profit & other income

(RMB ‘000) 2013 2014 +/- Change

Revenue from principal business 9,629,191 10,007,135 377,944 3.9%

Gross profit 1,325,350 1,331,557 6,207 0.5%

Other income 774,563 883,624 109,061 14.1%

Gross profit & other income 2,099,913 2,215,181 115,268 5.5%

(Gross profit & other income)/ revenue from principal business

21.8% 22.1% - 0.3p.p

5

6

-4.14%

4.60%

0.47%

5.50%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

2013/12 2014/13

Gross Profit

Gross Profit+ Other Income

Change Rate of Gross Profit and Gross Profit + Other Income

Financial Summary – cost breakdown

(RMB ‘000) 2013 2014 +/- Change

Selling and distribution costs & administration expenses

1,750,743 1,857,477 106,734 6.1%

(Selling and distribution costs & administration expenses)/ revenue from principal business

18.2% 18.6% - 0.4p.p

Including:

Labor cost 604,697 628,861 24,164 4.0%

Labor cost / revenue from principal business

6.3% 6.3% - 0

Advertisement fee 237,890 282,312 44,422 18.7%

7

Retail Business (directly-operated)

* Refers to the GP margin of directly-operated hypermarkets, supermarkets and convenience stores.

8

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2013 2014

Department Stores

Convenience Stores

Supermarkets

Hypermarkets

1,325

2,954

2,937

326 32954.6 52.3

1.1%

-4.3%

(RMB million)

1,182 12.1%

-0.6%

Revenue Breakdown by Retail Segments

Gross Profit Margin*

16.0% 15.9%

10%

11%

12%

13%

14%

15%

16%

17%

2013 2014

9

Change Rate of Same Store Sales Growth

Hypermarkets Supermarkets Convenience stores

-6.90%

-0.80%

-5.60%

-0.20%

-7.7%

-3.6%

-9.00%

-8.00%

-7.00%

-6.00%

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

Hypermarkets

Supermarkets

ConvenieinceStores

2013 2014

Retail Business (directly-operated)

Hypermarket Supermarket Convenience Store

For the year ended 31 December

2013 2014 2013 2014 2013 2014

Number of directly operated stores

12 12 77 73 100 115

Total operating area

(‘000 sq.m.)86.1 86.1 162.5 156.6 19.7 21.4

Average area per store

(’000 sq.m.)7.2 7.2 2.1 2.1 0.20 0.19

Revenue / Operatingarea / day (RMB)

41.3 48.2 62.3 62.7 63.5 57.9

Average valueper transaction (RMB)

72.3 74.8 47.4 49.6 20.9 21.0

10

2013 2014

Wholesale Business

* Refers to revenue from principal business recognised by Chaopi Trading and its subsidiaries including intersegment sales.

Revenue from principal business*

(RMB million)

+3.8%

11

5,645

5,858

2014

Online e-commercesuppliers business

Wholesalemerchant business

16.33%

83.67%

2013

Online e-commercesuppliers business

Wholesalemerchant business

5.11%

94.89%

9.0%

9.2%

9.4%

9.6%

9.8%

10.0%

2013 2014

9.9%

Wholesale Business

* Refers to gross profit recognised by Chaopi Trading and its subsidiaries including intersegment sales.

12

Gross Profit Margin*

9.4%

-12.50%

-1.57%

-14.00%

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

Change of Gross Profit *

2014/20132013/2012

Financial figures – turnover days

Retail Business Wholesale Business

2013 2014 2013 2014

Inventory turnover days 37 34 77 73

Debtor turnover days 2 2 99 104

Creditor turnover days 70 72 39 40

13

Business Review

Steady Expansion of Retail Network 26 retail outlets were newly opened, including:

18 directly-operated convenience stores and 8 franchise-operated convenience stores

15

Number and net operating area of retail outlets as at 31 December 2014

Department stores

Hypermarket Supermarket Convenience Stores

Total

Number of retail outlets:

Directly -operated 2 12 73 115 202

Franchise-operated - - 1 82 83

Total 2 12 74 197 285

Net operating area (square meters):

Directly-operated 39,742 86,089 156,619 21,422 303,872

Franchise-operated - - 880 15,077 15,957

Total 39,742 86,089 157,499 36,499 319,829

Rebuilding the advantages of physical retail stores by adjusting product mix

• To cater to the aging population and family miniaturization, the Group develops customizedmerchandise under the category of processed and semi-processed foods

• Imported goods procurement team was formed to develop more mid to high-end goods andimported foods

• Expanded product offering of private label, and further stepped up the introduction of newvarieties of vegetables, fruits and meat

Retail Business

16

Display of imported products

Customized merchandise

Retail Business

Diversified marketing approaches

• Launched featured promotional sales events leveragingtraditional and non-traditional festivals and hot social issues

• Launched food DIY activities with a new theme each week

• Jingkelong WeChat public service channel online since June 2014

• Major marketing events combining lucky draw, scratch card, scancode gifts, merchandise coupons and uploading of shoppingreceipts to win free chances, to attract young consumer traffic

17

WeChat Promotion

Retail BusinessImproved efficiency of logistics and distribution

• Dissembling and auto-sorting system of the normal-temperature merchandise logistics centergoes online, effectively improving efficiency, and further enhance the logistics operation modeltowards automation.

• Improved distribution services efficiency, with a focus on improving the inventory andturnaround of merchandise in stock, to further shorten the turnover days of merchandise

• made full use of the lower-cost advantage in terms of labor and land of the vegetableprocurement bases by completing primary processing in place of origin

18

Dissembling and auto-sorting system

Normal-temperature merchandiseLogistics Center

Processing area of vegetable bases

Expand business with e-commerce service providers

• Carried out in-depth studies on the characteristics of online spending in consumer and consumptionmodels, as well as their specific requirements in respect of warehousing, logistics and distribution

• Negotiated with upstream manufacturers to obtain online selling rights of merchandise for which theGroup acted as a distributor or an agent

• Deepened and broadened the channels and collaboration with e-commerce service providers tofurther expand the e-commerce supplier business

Wholesale Business

19

Self-operated e-commerce business websites of Chaopi

Wholesale Business

Extend to upstream to optimize product mix

• Brought in both new suppliers and new brands, as well as customized products and private labelproducts that are designed and developed in accordance with market demand

• Expanded channels for the introduction and sale of imported food

20

Chaopi’s products of private labels

Wholesale Business

Upgrade logistics and distribution

• Conducted a statistical analysis of logistics costs by means of logistic data system management toimprove efficiency and service standards

• System upgrade at the logistics and distribution center to execute the dissembling, sorting, scatteredgoods space management and consignment inventory management functions for providing solidtechnical support to the enhancement of warehousing services

21

Distribution Center of“Chaopi”

Future Plans

Integrate with mobile internet technologies to maximize advantages in

community-based physical retail stores

Future Plans

23

Products Show

Purchase & Pay Online

Customers’ Service

01

02

03

04 Group-buying & pre-sale

Main Function of Jingkelong

App

Carry out transformation of the wholesale business to adapt to new

changes in the e-commerce market

Future Plans

24

Chaopi’s major customers of e-commerce

Strengthen the logistics and distribution system

Future Plans

25

Layout of Transub sorter system in Normal Temperature Logistics Center

Appendix

Appendix I: Shareholding Structure

ChaoyangAuxiliary

Other DomesticShares *

H shares

40.61% 15.20% 44.19%

* 9.9% Domestic shares are held by the senior management and employees.

27

Retailing

Hypermarkets

Supermarkets

Convenience StoresNormal -Temperature

Logistics Center

Live and FreshProduce Logistics

Center

Wholesaling

Tianjin Distribution Center

Beijing Distribution Center

23 Subsidiaries

Department Stores79.85%

Appendix II: Business Structure

28