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Incorporated in the Cayman Islands with limited liability HKEX Stock code: 6822 December 2014 Sole Sponsor

December 2014 Road Show Presentation.pptx [ Ū]) 2014 Road Show Presentatio… · Issue Statistics and Timetable Issuer King’s Flair International (Holdings) Limited (“King’s

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Page 1: December 2014 Road Show Presentation.pptx [ Ū]) 2014 Road Show Presentatio… · Issue Statistics and Timetable Issuer King’s Flair International (Holdings) Limited (“King’s

Incorporated in the Cayman Islands with limited liability

HKEX Stock code: 6822

December 2014

Sole Sponsor

Page 2: December 2014 Road Show Presentation.pptx [ Ū]) 2014 Road Show Presentatio… · Issue Statistics and Timetable Issuer King’s Flair International (Holdings) Limited (“King’s

DisclaimerDisclaimer

This document has been prepared by King’s Flair International (Holdings) Limited (the “Company”) solely for use in the presentation(s) toinvestors held in connection with the proposed initial public offering on the Main Board of The Stock Exchange of Hong Kong Limited by theCompany.

The information contained in this document has not been independently verified. No representation or warranty expressly or impliedly is madeas to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein.The information contained in this document is subject to change without notice and will not be updated to reflect material developmentswhich may occur after the date of the presentation. None of the Company and Baron Global Financial Services Limited (the “Sole Sponsor andBookrunner”), nor any of their respective affiliates, employees, advisers or representatives shall have any liability whatsoever (in negligence orotherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.

This document contains forward-looking statements. These forward-looking statements express the Company’s current views, projections,beliefs and expectations with respect to future events as of the respective dates indicated herein, involve predictions and are not a guaranteeof future performance. The Company gives no assurance that those views, projections, beliefs and expectations will prove to be correct and theanticipated results will be achieved. These forward-looking statements are based on a number of assumptions about the Company’s operations

11

anticipated results will be achieved. These forward-looking statements are based on a number of assumptions about the Company’s operationsand factors beyond the Company’s control and are subject to significant risks and uncertainties, and, accordingly, actual events or results maydiffer materially from these forward-looking statements and the forward-looking events discussed in this document might not occur.Prospective investors are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation toupdate or revise these forward-looking statements for events, information or circumstances that occur subsequent to such dates. Moreover, anystatements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

By accepting this document, you are agreeing to maintain absolute confidentiality regarding the information contained in this document. Thesematerials are given to you solely for your own use and information and no part of this document may be copied or reproduced, or redistributedor passed on, directly or indirectly, to any other person (whether within or outside your organization/firm) in any manner or published, inwhole or in part, for any purpose. Unauthorized copying or reproduction, or redistribution of this document or any information contained hereinto any person, could result in material delay to, or otherwise prejudice the success of, the Global Offering of the Company. No part of thisdocument may be distributed, reproduced, taken or transmitted into the United States, Canada, Japan or the People’s Republic of China. Youare aware that monetary damages shall not be a sufficient remedy for any breach of the confidential obligation undertaken by you, or by any ofyour directors, officers, employees, legal counsel, accountants or tax advisers, agents, consultants and other representatives. You also agreethat, in addition to all other remedies, the Company shall be entitled to specific performance and injunctive relief, or other equitable relief, asa remedy for any such breach.

This document does not constitute an offer or invitation to subscribe for any shares and, save as expressly mentioned herein, no part of it shallform the basis of or be relied upon in connection with any contract or commitment whatsoever.

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Roadshow TeamRoadshow Team

Mr. Wong Siu Wah

Chairman and Executive Director

Ms. Wong Fook Chi

Executive Director

22

Mr. Dennis Wong

Executive Director

Mr. Ronnie Po

Financial Controller &Company Secretary

Page 4: December 2014 Road Show Presentation.pptx [ Ū]) 2014 Road Show Presentatio… · Issue Statistics and Timetable Issuer King’s Flair International (Holdings) Limited (“King’s

AgendaAgenda

Company Overview22

Industry Overview33

Issue Statistics and Timetable 11

33

Investment Highlights44

Financial Highlights55

Development Strategies66

Open Forum77

Page 5: December 2014 Road Show Presentation.pptx [ Ū]) 2014 Road Show Presentatio… · Issue Statistics and Timetable Issuer King’s Flair International (Holdings) Limited (“King’s

Issue Statistics and TimetableIssue Statistics and Timetable

IssuerKing’s Flair International (Holdings) Limited (“King’s Flair” or the “Company”)

Stock code: 6822.HK

Share Offers

175,000,000 Offer Shares , 25% of the enlarged issued share capital (before Over-allotment Option)

— Placing: 157,500,000 Shares, or 90% of the share offer(subject to reallocation and the Over-allotment Option)

— Public Offer: 17,500,000 Shares, 10% (subject to reallocation)

Over-allotment Option 26,250,000 Shares (representing 15% of the initial no. of Offer Shares)

Board Lot 4,000

Price Range HK$1.08 to HK$1.48 per Offer Share

44

Price Range HK$1.08 to HK$1.48 per Offer Share

Offering Size HK$189 million - HK$259 million

Listing Exchange Main Board of The Stock Exchange of Hong Kong Limited

Expected Timetable

Roadshow and bookbuilding: 24 Dec 2014 – 7 Jan 2015

Hong Kong Public Offer: 31 Dec 2014 – 7 Jan 2015 (12 noon, HKT)

Pricing: 8 Jan 2015

Allotment results: 15 Jan 2015

Listing: 16 Jan 2015

Sole Sponsor

Joint Bookrunners and Joint Lead Manager

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5555

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Established a distribution network covering over 80 point-of-sales in major cities in the PRC(As at 28 October 2014)

Commenced retail business of kitchenware products in the PRC

Established product design and development team

Established business relationship with Ignite USA

Became a strategic partner of Lifetime with the formation of a joint venture through

Major Milestones Major Milestones

2014

2003

1999

2011

2007

66

Became a strategic partner of Lifetime with the formation of a joint venture throughWorld Alliance

Chairman Wong began kitchenware business

Established business relationship with William Levene Ltd.(acquired by Diethelm Keller Brands AG)

Established business relationship with Lifetime, a North American based corporation,and Kai Corporation, a Japan based corporation

Founded by Chairman Wong

1999

1984

1989

1990

1992

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King’s Flair at a Glance King’s Flair at a Glance

Strategic relationshipsStrategic relationshipswith internationalwith international

brandownersbrandowners

Well established long-standing relationship of 10 to over 20 years with international kitchenware brandowner customers who possess recognised brand names

Strong productStrong product designdesignand engineeringand engineering

capabilities capabilities

Unique business model that competes on superior product design,development and engineering capabilities

A diverse range of modern, stylish products that appeal to high-end customers

Established reputation for quality, consistency and reliability

77

EstablishedEstablishedreputationreputation

Established reputation for quality, consistency and reliability

Strict compliance to standards in relation to food contact substance

Rapidly expandingRapidly expandingdistribution network distribution network

in Chinain China

A distribution network via retailers for retailing authorised kitchenware products in over 80 sales points in major cities in China (as at 28 October 2014)

Online sales channels via major e-Commerce platforms

VisionaryVisionarymanagementmanagement teamteam

Experienced and professional management team with an entrepreneurial spirit and a proven track record

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A Diverse Range of Products A Diverse Range of Products

Drinkwares Tools and gadgets

88

Storage and accessories Food preparation products Bakewares and accessories

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Our Business Model Our Business Model

Marketing Product design OrderingProduct

Massproduction

Design briefingDesign

developmentDesign

evaluationCommercialisation

Multiple evaluations and alterations throughout the process

99

Marketingand

trend capturing

Product designand

development

Orderingand

sourcing

Productengineering

productionby Production

Factories

Sales

Outsourced to manufacturers

Tests to ensure product quality and safety, include

1. Testing during product development

2. Testing of raw materials

3. Production line sample testing

Product quality further ensured by independent professional quality assurance firm

Strong control of intellectual property

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10101010

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The Global Kitchenware Market Overview The Global Kitchenware Market Overview

A highly fragmented market with a diverse range of brands and products

New sales in the global kitchenware market from 2009–2018: US$20.3 billion

China is expected to contributed 53.4% of these new sales

The Global Kitchenware Market

100,000

11,677 11,812 80,767

83,768 85,041 86,642 88,545 90,702 93,031

(US$ million)

1111

0

20,000

40,000

60,000

80,000

2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

27,154 28,951 30,170 31,569 33,366 33,978 34,699 35,452 36,247 37,062

6,622 7,617 8,884 10,063

11,318 12,374 13,499 14,707 16,020 17,450 28,681

28,486 28,348

28,142 27,937 27,428 27,058 26,856 26,758

26,707 10,288 10,523

10,974 10,993

11,147 11,261 11,386 11,531 11,677 11,812

72,74475,577 78,375

80,76783,768

US China Western Europe Others

Source: Euromonitor Report

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Global Market Trends Global Market Trends

1212

As the urbanization rate of a region increases, the expenditure per household on kitchenware products also increases

Multigenerational households are becoming less common in urban areas

More single and two person households lead to increased demand for kichenware products

Growth of disposable income is correlated with the growth of the kitchenware market

Kitchenware market growth forecast(2014-2018 CAGR)

— US: +1.2%

— W. Europe: –0.9%

— China: +9.0%

Individuals living in urban areas increasingly view kitchenware as lifestyle accessories

Celebrity endorsed products fuel growth

Increasingly influenced by the younger generation: consumers are often willing o buya new product simply because its unique style

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China Market — the Growth Driver China Market — the Growth Driver

China’s share in the global market increased from 9.1% in 2009 to 13.5% in 2013, and is expected to grow to 18.8% by 2018

� Grow at a CAGR of 9.0% from 2014-2018 on the back of 10.7% household disposable income growth

China market value forecasted to increase by US$1,056 million from 2013-2014, accounting for 85.3% of all new global growth that year

The China Kitchenware Market

20,000

(US$ million)

1313

0

5,000

10,000

15,000

20,000

2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

6,622 7,617

8,884 10,063

11,318 12,374

13,499 14,707

16,020

17,450

Source: Euromonitor Report

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Investment HighlightsInvestment Highlights

Strong product design and engineering capabilities22

Reputation for quality, consistency and reliability33

Long-standing strategic relationships with international kitchenware brandowners

11

1515

Reputation for quality, consistency and reliability33

Strict compliance with standards for food contact substances44

Fast-growing retail business in China55

Experienced and professional management team66

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1. Long-standing Strategic Relationships with International Kitchenware Brandowners

1. Long-standing Strategic Relationships with International Kitchenware Brandowners

Well-known customers base

Established long-standing relationships with several international kitchenware brandowner customers

Business relationships with top

Comprehensive service

Product design and development

Production engineering solutions

Stringent quality control and production control

Stable delivery of high quality

1616

Business relationships with top five largest customers ranged from 10 to over 20 years

Stable delivery of high quality products, and

Timely completion of customers’ orders

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2. Strong Product Design and EngineeringCapabilities

2. Strong Product Design and EngineeringCapabilities

In order to keep abreast of the trends in kitchenware products, we analyse and monitor market trends, new materials, colour trends and design updates on products

Design briefingDesign

developmentDesign

evaluationCommercialisation

• Decision of basic design requirements

• Ideas and conceptsgeneration

• 2-dimentional

• Prototype creation

• Mechanical designand testing, and

• Packaging design

• Samples tocustomers

1717

Multiple evaluations and alterations throughout the process

• 2-dimentionalappearance design

• 3-dimentional design

• Mechanical design

and testing, andengineering evaluation

• Marketing evaluation

customers

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Raw material sourcing

3. Reputation for Quality, Consistency andReliability

3. Reputation for Quality, Consistency andReliability

Stringent quality control procedures have been established throughout the entire production process so as to ensure that the kitchenware products are manufactured with consistent, reliable and high quality standard

Quality control and production control

Selecting qualifiedproduction factories

• Selecting criteria:

— factory scale

— factory facilities and

• Imported from overseas markets such as the U.S., South Korea, Germany, Australia, Taiwan and Japan

• Under supervision by quality assurance team together with a quality assurance firm

1818

— factory facilities and equipment quality

— standard management skills

— financial stability,

— production capacity and location

South Korea, Germany, Australia, Taiwan and Japan

• Procured from over 15 suppliers

• Established business relations of over 5 to 10 years

a quality assurance firm

• Provide training to the quality assurance personnel on the quality assurance guidelines, methods and procedures

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4. Strict Compliance with Standards forFood Contact Substances

4. Strict Compliance with Standards forFood Contact Substances

We assist the Production Factories to set up in-house component and product testing facilities to perform product testings during the production process

Prior to confirming orders placed by customers, our sales and marketing team communicates with the customer to understand and define their needs, expectations and specifications for products and to adopt or tailor-make a specific quality assurance plan (“QAP”)

Testing during

Quality Assurance Plan (“QAP”)

1919

Testing duringproduct

development

• Carry out tests on product samples before trial production

Raw material testing

• Production Factories or raw material suppliers to provide a material safety data sheet for the raw material used

Production line sample testing

• Randomly inspect and perform sample testing in the production lines

Final product testing

• Inspect and test the final products for defects before shipping

• Appoint international third party laboratories to perform food safety tests

Extra testing

• Conduct extra testing in addition to that set out in the QAP

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Operated a flagship store in Beijing

Agreements with over 20 retailers for retailing our kitchenware products in over 80 sales points in Beijing, Shanghai, Tianjin, Xi’an and other PRC cities

Online sales channels : www.taobao.com, www.amazon.cn, www.jd.com and www.tmall.com and was awarded by Amazon China as one of the top five partners within the kitchenware categories

5. Fast-growing retail business in China5. Fast-growing retail business in China

2020

as one of the top five partners within the kitchenware categories

A retail website (www.gourmetkitchen.hk) as an online sales platform to offer our kitchenware products in Hong Kong

Page 22: December 2014 Road Show Presentation.pptx [ Ū]) 2014 Road Show Presentatio… · Issue Statistics and Timetable Issuer King’s Flair International (Holdings) Limited (“King’s

Most of our Executive Directors and senior management have more than 15 years

of experience in the kitchenware industry

6. Experienced and ProfessionalManagement Team

6. Experienced and ProfessionalManagement Team

� Founder of the Group

� Approx. 30 years of management and operation experience

� Primarily responsible for the overall corporate strategic planning and corporate management of the Group

Mr. Wong Siu WahChairman, Executive Director and Chief Executive Officer

Ms. Wong Fook ChiExecutive Director

Mr. Wong Ying Wai, DennisExecutive Director

2121

Executive Director

� Over 8 years of experience in the managementand operation of kitchenware business

� Oversees the business operation and corporate strategy implementations of the Group

Executive Director

� Over 13 years of experience in the kitchenware industry

� Primarily responsible for the business operation and corporate management of the Group

Mr. Wong Chi ManSupply Chain and Logistic Manager

� Approx. 17 years experience in quality control and production coordination

� Primarily responsible for the overall supplier management and oversees the supplies network and production capacity

Mr. Chow Chi Wai, KevinRegional Manager, Sales and Marketing

� Approx. 10 years experience in marketing andmerchandising field

� Primarily responsible for the businessdevelopment and customer relationships of the worldwide (excluding China) business of our Group

Mr. Wong Lok HeyR&D Development Manager

� Approximately 6 years of kitchenware design and development experience

� Primarily responsible for product design andproduct development of the Group

Ms. Lam Hau FungRegional Manager, Sales and Marketing

� Over 9 years experience in marketing andmerchandising field

� Primarily responsible for the business and customer relationships of the worldwide (excluding China) business of our Group

Mr. Po Tien Chu, RonnieFinancial Controller & Company Secretary

� Over 10 years of experience in auditing and accounting field

� Responsible for financial and accountingmanagement, taxation and compliance of the Group

Mr. Chan Chi Man, ArthurQuality Assurance Manager

� Over 5 years experience in marketing and merchandising field

� Primarily responsible for the management of the quality control of the Group

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Financial StatementFinancial Statement

(HKD ’000)

For the year ended 31 Dec For the six months ended 30 Jun

2011 2012 20132013

(unaudited)2014

Revenue 968,505 1,077,351 1,236,284 505,466 624,715

Cost of Sales (844,675) (917,307) (1,048,295) (428,842) (520,228)

2323

Gross Profit 123,830 160,044 187,989 76,624 104,487

Distribution Expenses (14,758) (18,418) (23,403) (10,903) (11,001)

Administrative Expenses (47,321) (62,402) (84,900) (39,205) (48,249)

Operating Profit 66,289 84,545 90,651 35,211 50,450

Profit before Income Tax 65,308 83,725 96,483 34,996 50,278

Profit for the Year/Period 45,448 68,208 78,333 27,087 41,869

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Growing Revenue and Net ProfitGrowing Revenue and Net Profit

Total Revenue

1,000,000

1,200,000

1,400,000

968,505

1,077,351

1,236,284

(HKD ’000)

Profit for the Year / Period

80,000

100,000

68,208

78,333

(HKD ’000)

2424

0

200,000

400,000

600,000

800,000

2011 2012 2013 2013 2014

505,466

624,715

Year ended 31 Dec 6 months ended 30 Jun

0

20,000

40,000

60,000

2011 2012 2013 2013 2014

45,448

27,087

41,869

Year ended 31 Dec 6 months ended 30 Jun

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Effective Cost Control ImprovesGross Profit MarginsEffective Cost Control ImprovesGross Profit Margins

Gross Profit

150,000

200,000

123,830

160,044

187,989

Gross Profit Margin

14.9%

15.2%

15.2%

16.7%

16%

18%(HKD ’000)

2525

0

50,000

100,000

2011 2012 2013 2013 2014

123,830

76,624

104,487

Year ended 31 Dec 6 months ended 30 Jun

12.8%

15.2%

10%

12%

14%

2011 2012 2013 2013 2014

Year ended 31 Dec 6 months ended 30 Jun

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For the financial year ended 31 Dec For the six months ended

30 Jun 20142011 2012 2013

Trade and Bills Receivables Turnover Days

45.7 39.7 47.3 54.9

Trade and Bills Payable Turnover Days

27.8 33.2 41.6 40.9

Return on Equity 29.7% 37.1% 39.6% 45.2%

Key Financial RatiosKey Financial Ratios

2626

Return on Equity 29.7% 37.1% 39.6% 45.2%

Return on Assets 12.5% 18.3% 17.1% 17.4%

As at 31 DecAs at

30 Jun 20142011 2012 2013

Gearing Ratio 28% 23% 18% 16%

Net-debt-to-equity Ratio N/A N/A N/A N/A

Current Ratio 1.58x 1.82x 1.66x 1.55x

Quick Ratio 1.57x 1.77x 1.62x 1.51x

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Use of ProceedsUse of Proceeds

Purchase and renovate office premises

Enhance product design, development and engineering capabilities

Establish flagship stores,with one flagship store in Shanghai by end of 2015,and expand retail sales

45%22%

photo

2727

Shanghai by end of 2015,and expand retail sales network and e-commerce business in the PRC

15%

10%

Working capital and general corporate purposes

Broaden customer base, expand penetration in existing markets and penetrate into new markets

3%

Enhance information technology infrastructure

5%

photo

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Development StrategiesDevelopment Strategies

Broaden existingcustomer base and

expand into new markets

Enhance design,development and

engineering capabilities

2929

Expand retail networksand e-commerce in China

Selectively pursueacquisition and strategic

alliance opportunities

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Broaden Existing Customer Base and Expand into New MarketsBroaden Existing Customer Base and Expand into New Markets

Leverage on our market presence and quality customer services to attract new international kitchenware brandowners in order to diversify our revenue sources

Further collaborate with existing customers to deepen penetration into existing markets

� Collaborate with existing customers to develop new series of kitchenware products in order to expand existing target markets

Enter into new markets(excluding Sanctioned Countries)

3030

(excluding Sanctioned Countries)with good potential such asEastern Europe, Africa andSouth America, by workingwith local importers andtrade agents when appropriate

3030

Eastern Europe

Hong Kong

South America

Africa

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Enhance Design, Development andEngineering CapabilitiesEnhance Design, Development andEngineering Capabilities

Continue to collaborate with major customers in product design and developmentprocess and further collaborate with existing customers

Enhance the variety of the designs and also to re-designkitchenware products that suit the preference and cookinghabits of our target markets, such as the PRC and South Africa

Continue improving production engineering quality by providing advancedengineering software and hardware and providing training, exposure andexperience to production engineers

3131

experience to production engineers

Design, develop and build toolings for approximately 10 categoriesof products such as storage, tools and gadgets andfood preparation by 2017 and apply for mechanicalpatents and design patents of such productscovering U.S., China, Europe and Japan.

3131

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Expand Retail Networks and e-commerce in ChinaExpand Retail Networks and e-commerce in China

Introduce various brands and selection of kitchenware products to the Chinese consumers in our flagship store in up-scaled shopping malls

Enhance our shop image and publicity by adopting marketing strategies

Establish one flagship store in Shanghai by end of 2015 to expose the brands and kitchenware products we supply in the Yangtze River region, and to establishmore flagship stores in the PRC after 2015

Expand our retail networks as to accelerate our PRC retail business and have our

3232

Expand our retail networks as to accelerate our PRC retail business and have our products sold in 120 and 250 sales points of our retailers by the end of 2014 and 2015 respectively

Enhance our e-commerce operations and sales by offering our productson more online shopping websites and building our own online shopping platform

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Selectively Pursue Acquisition and Strategic Alliance OpportunitiesSelectively Pursue Acquisition and Strategic Alliance Opportunities

Consider opportunities to acquire distribution platforms that complement our existing business and enter into strategic alliances with international brandowners

Criteria of selection of potential targets:

� Reputable management

� Solid track record

33333333

Enhance our competitiveness and further solidifyour market position

� Solid track record

� Good operating platform

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