Zungui Haixi Corporation held its annual special meeting on December 2, 2010. The company was founded in 1992 and introduced its ZUNGUI brand in 1995. It has since grown to over 2,000 retail outlets in its network. In fiscal 2010, the company completed an IPO raising $39.8 million and delivered consistent growth by expanding its operations and building strong consumer awareness of its brand. Going forward, the company's three-step growth strategy involves expanding its retail distribution channel, increasing brand awareness through advertising, and increasing its internal production capacity.

1. Zungui Haixi Corporation
Annual Special Meeting
December 2, 2010
Mr. Yanda Cai
Chief Executive Officer
Ms. Shelly Gobin
Chief Financial Officer

2. Opening Remarks – Yanda Cai
• Company founded in 1992 as OEM manufacturer
• Introduced ZUNGUI brand in 1995
• Opened first store in 2001
• Listed on TSX Venture on December 21, 2009
• At November 30th over 2,000 retail outlets in network
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3. Caution Regarding Forward-Looking Statements
This presentation contains “forward-looking statements” that are subject to risks and uncertainties. Where possible, words such as
p g j p ,
“may”, “would”, “could”, “will”, “anticipate”, “believe”, “plan, “expect”, “intend”, “estimate”, “aim”, “endeavour”, “project”, “continue”
and similar expressions have been used to identify these forward-looking statements. These statements reflect management’s
current beliefs with respect to future events and are based on information currently available to management. Forward-looking
statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause Zungui’s actual
results, performance or achievements to be materially different from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements, including, without limitation, those listed in the “Risk Factors” section of
forward looking Risk Factors
the prospectus. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-
looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or
implied by the forward-looking statements contained in this presentation. These factors should be considered carefully and
prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements
contained in this presentation are based upon what management currently believes to be reasonable assumptions, Zungui cannot
assure prospective investors that actual results performance or achievements will be consistent with these forward-looking
results,
statements. Such assumptions include the stability or improvement of general economic conditions, the secure and reasonably
priced supply of raw materials, timely manufacture of products, a stable workforce, validity of contractual rights, consumer
acceptance of the products, viability of the business model and stability of costs.
The forward looking statements contained in this presentation are expressly qualified in their entirety by this cautionary statement
forward-looking statement.
These forward-looking statements are made as of the date of this presentation and neither the company nor any other party
involved in the Offering intends to, or assumes any obligation to, update or revise these forward-looking statements to reflect new
information, events, results or circumstances or otherwise after the date on which such statement is made as to reflect the
occurrence of unanticipated events, except as required by law, including securities laws.
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4. Zungui Highlights – Fiscal 2010
• Completed initial public offering on December
21, 2009 raising gross proceeds of $39.8 million
• Strong financial performance
• D li
Delivered consistent growth
d i t t th
• Expanded operations with 63 distributor-
owned and 28 corporate-owned retail outlets
• Built strong consumer awareness
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5. Substantial Emerging Urban Growth
60 Number of Chinese cities with a population of
more than a million
379 M Increase in the size of China’s urban
population over the past 20 years
633 M China’s urban population today
1B China’s urban population 2030
Source: Globe and Mail Article September 17, 2010
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6. Distributor Retail Outlets - 1,762 at June 30th
We ll
W sell more than 11 million pairs of shoes annually
th illi i f h ll
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7. Competitive Strengths
• Strong brand recognition
• Efficient wholesale business model
• Strong corporate culture
• Experienced management team
• Received Top 100 Sports Brands in China
award (ranked #30 with brand valued at
RMB 2.31 billion (C$355.5 million)
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8. Zungui Retail Network Growth
Number of Zungui Retail Outlets
1,800
1,793
1,544
1,600
1,390
1 390
1,400 45% CAGR in
Total Retail Outlets
1,200 1,089
1,000
793
800
600
420
400 298
178
200
75
0
2001 2002 2003 2004 2005 2006 2007 2008 June 30,
2010
Sportswear Casual Line Total Retail Outlets
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9. Financial Highlights – C$
In thousands of C$ except p share data
p per
Year ended
30-Jun-10 30-Jun-09
Revenue 163,885 138,730
Cost of sales 119,373 101,323
Gross profit 44,512 37,407
Gross margin % 27.2% 27.0%
EBITDA 38,356 32,246
EBITDA margin % 23.4% 23.2%
Net income 26,976 23,047
Earnings per share $0.48 $0.46
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10. Revenue, EBITDA and Net Income Growth – RMB
Revenue EBITDA Net Income
RMB million RMB million RMB million
1061.3 174.6
248.3
815.6 135.9
227.4
724.7 121.1
170.1
540.1
540 1
117.9 82.1
353.3 83.6 57.9
23.7% 23.5% 23.4%
23.2%
23 2%
21.8%
2006* 2007* 2008* 2009 2010 2006* 2007* 2008* 2009 2010 2006* 2007* 2008* 2009 2010
2010 and 2009 are year ended June 30th EBITDA Margin
*Years ended December 31
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11. Strong Balance Sheet
As at June 30, 2010
In thousands of C$
Cash $ 85,876
Inventories $ 3,498
Property, plant & equipment $ 6,470
Total assets $ 131,705
131 705
Bank loan $ -
Shareholders’ equity $ 96,003
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12. Q1 2011 Highlights
• Revenue increased 17% to C$50.4 million and 23% in RMB to
RMB328.5 million
• Opened quarterly record 120 net new distributor owned and 15
new coxrporate-owned retail outlets
• Over 2,000 retail outlets in network at November 30th
• Increased expenditure on selling expenses to launch brand
recognition strategy
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13. Q1 2011 Financial Highlights – C$
In thousands of C$ except p share data
p per
3 months ended
30-Sept-10 30-Sept-09
Revenue 50,425 43,030
Cost of sales 37,731 31,288
Gross profit 12,694 11,742
Gross margin % 25.2% 27.3%
EBITDA 9,855 10,617
EBITDA margin % 19.5% 24.7%
Net income 7,056 7,657
Earnings per share $0.11 $0.15
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14. Three-Step Growth Strategy – Fiscal 2010
1. Invest C$16 Million to Expand Retail Distribution Channel
Open up to 350 stores in 2010 - Achieved
100 company-owned and managed stores
250 distributor-owned or distributor-supplied stores
2. Invest C$9 Million to Expand Brand Awareness
Television advertising
Event sponsorship
New brand positioning
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3. Invest C$ Million to Increase Internal Production Capac ty
est C$7 o c ease te a oduct o Capacity
New 10 storey manufacturing facility in Shishi City
7 production lines
Expands production capacity > 40%
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15. Questions
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