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China Foods Limited (00506.HK ）

2008 Interim Results Announcement

22 September 2008

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DisclaimerThe slides herein are prepared by China Foods Limited (the "Company") solely to be used as a support for oral discussions of its interim results for the year 2008. They may not be distributed, reproduced or re-distributed or passed on, directly or indirectly, to any person, in whole or in part, for any purpose. By participating in this presentation, you agree to be bound by the forgoing restrictions. Any failure to comply with these restrictions may constitute a violation of applicable laws and regulations.

 

The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis for or be relied on in connection with any contract or commitment whatsoever.

 

This presentation may contain forward-looking statements. Prospective investors are cautioned that actual results may differ materially from those set forth in any forward-looking statements herein.

 

The information contained in these slides herein has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. The information contained in these slides should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. None of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable for any loss arising from use of the information contained in these slides herein or otherwise arising in connection therewith.

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Contents

2008 Interim Financial Performance

2008 Interim Business Review and Analysis

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China Foods Limited (00506.HK ）

2008 Interim Financial Performance

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COFCO

COFCO (Hong Kong)

100%

74.25%

China Foods Limited (0506.HK)

ConfectionaryWines

COFCO Le Conte Food(Shenzhen) Co., Ltd.

Shenzhen Le Conte

Marketing Services Co., Ltd.

100%

90%

COFCO Foods Sales and Distribution Co., Ltd.

COFCO Huaxia Great wall Wine Co. ， Ltd.100%

100%

80%

100%

55 ％

Business Structure

100 ％

100%China Great WallWine Co. ， Ltd.

100％

100％

COFCO Shaoxing

Winery Co., Ltd.

COFCO Greatwall Winery(Yantai)Co. ， Ltd.

COFCO Wines and

Spirits Co. ， Ltd.

COFCO Huaxiahong Wines

and Spirits (Shenzhen) Co.,Ltd.

COFCO Junding Vineyard Co. ， Ltd.

Qinghuangdao Huaxia Greatwall Wines & Spirits Co., Ltd.

100％

100％Yantai Greatwall Wines

and Spirits Co., Ltd.100％

BeveragesCOFCO Coca-Cola Beverages Limited

65%

Hunan COFCO Coca-Cola Beverages Co.,Ltd.

Tianjin Coca-Cola Beverages Co., Ltd.

Qingdao Coca-Cola Beverages Limited

Zhanjiang COFCO

Coca-Cola Beverages Limited

Hainan COFCO Coca-Cola

Beverages Company Limited

80%

Gansu COFCO Coca-Cola Beverages Co.Ltd.

COFCO Coca-Cola Beverages (Xinjiang )Co. Ltd.

Other associated Companies

50％

75％

100％

100％

100％

Consumer-pack

Edible Oil

COFCO Coca-cola Beverages (Jiangxi) Limited

100％

Jinan Coca-cola Beverages Limited

75％

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Turnover HK$8,156mm HK$4,294mm HK$9,743mm

Operating Profit HK$361mm HK$322mm HK$544mm

EBITDA HK$466mm HK$391mm HK$699mm

HK$242mm HK$202mm HK$361mm

Earnings per share HK8.65cents HK7.25cents HK12.9cents

ROE 5.1 % 5.1% 8.6%

2008 1H 2007 1H 2007

Financial Results Highlights

Profits after Tax & MI

Note 1: 2007 1H and 2007 results are Pro Forma figures.

Note 2: Half year ROE for 2008 1H and 2007 1H.

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Total Assets HK$9,739mm HK$8,993mm

Total Liabilities HK$3,678mm HK$3,360mm

Minority interests HK$1,178mm HK$1,075mm

Net Assets HK$4,883mm HK$4,558mm

Cash on book HK$1,001mm HK$1,397mm

Total Liabilities/Total Assets 37.8% 37.4%

Interest Bearing Debt/Net Assets 9.0% 8.6%

No. of Shares Issued 2,791 mm shares 2,791 mm shares

30 June 2008 31 December 2007

Assets, Liabilities and Equities

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Wine 1,493 1,081 38.1%

Beverages 2,450 1,570 56.0%

4,101 1,516 170.6%

Confectionery 112 128 (12.2%)

Total 8,156 4,294 89.9%

(HK$mm) 2008 1H 2007 1H +/-%

Turnover Breakdown

Consumer-pack edible oil

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Wine 243.7 143.2 70.2%

Beverages 135.7 83.5 62.6%

(41.8) (6.9) —

Confectionery （ 68.3 ） （ 18.3 ） —

Consumer-pack edible oil

Consumer-pack

edible oil

Wine 316.5 211.8 49.4%

Beverages 178.6 124.6 43.3%

(39.6) (0.7) —

Confectionery （ 66.9 ） （ 14.4 ） —

(HK$mm) 2008 1H 2007 1H +/-%

Operating Profit

(HK$mm)

Net Profit

Operating Profit and Net Profit

20081H 2007 1H +/-%

10

Net Profit and EPS Growth

0

50

100

150

200

8.65

2008 1H2007 1HProfit Attributable to

Shareholders

242

2007 1H 2008 1H

+19%+19%

Earnings per share

1

2

3

4

5

6

7

(HK$mm)

(HK cents/share)

2027.25

250 8

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Total Assets and Net Assets by Business

Total Assets Net Assets

Confectionery

5.5 ％

Beverages

44.4%

Consumer

-pack

edible oil 10.0%

Others

3.7%Wine

36.4%

Confectionery

7.5 ％

Beverages

36.4%

Consumer-pack

edible oil

0%

Others

7.4%Wine

48.8%

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China Foods Limited (00506.HK ）

2008 Interim Business Review and Analysis

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•Turnover of the wine business in 2008 1H reached HK$1,493million, representing an increase of 38.1% over the same period of the previous year.

•Sales volume in 2008 1H was 57,700tonnes, 17.6% higher than that in 20071H.

•Attributable to the increase in average selling price and the reduction of the cost of raw materials, the gross profit margin of the wine business increased by 5.6% to 56.1%compared with the same period of the previous year.

•We have three wineries and two château at the best regions in China , Currently the capacity has reached 146,000 tonnes.

Wine business－ 2008 interim operation results overview

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Wine Business — Brand Positioning and Focus

Provide consumers with multiple choices with different styles based on different regions

Fine regions, Fine wines

Three regions are the core resources of the brand

Shacheng,Hebei

Changli,Hebei

Peng lai,Shandong

Fossil-Rich Land Coastal Area Volcano Mineral Land

Smooth and

Balanced

Region Location

Specific Character

Unique selling proposition

Structure & Style

The Wine Specialist Brand Positioning

Fresh and

Fruity

Rich and

Full-bodied

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Wine Business—Product Portfolio Pyramid

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Greatwall Sungod Chateau, Junding Chateau.

Huaxia Cru Vineyard.

Base on regions, i.e. Coastal series of penglai, Shangdong and Star series of Shacheng, Hebei.

With no regions specified. Planned to use another brand with “Greatwall” endorsement.

Table Wines

Major wine regions

Small cru vineyards

Chateau wines

ChangliShacheng Penglai

Elite-range

Premium-range

Mid-range

Economy range

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Wine businessWine business——New Sales platforms to have more control over the marketNew Sales platforms to have more control over the market

We have established new sale platforms in Beijing and Guangdong.

Sales Platform Features ：

•Develop and execute uniformed sales and promotion programme.

•Direct control of below-the-line promotion spending.

•Managing wholesalers by retail channels.

•Direct sales team covering retail promotion.

The sales platform will be replicated to other areas in China.

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The beverage business recorded a turnover of HK$2,450million for the 20081H, increased by 56% compared with the same period of last year.

The total number of bottlers under operation will reach nine after the Jiangxi and Xinjiang bottlers been put into production at year end.

Beverage Business

—2008 interim operation results overview

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Beverage Business

—More balanced products portfolio

0102030405060708090100

2006 20071H 2007 20081H

Still Drinks

Sparkling Drinks

14%

86%

17%

83%

18%

82%

21%

79%

•Coca-Cola have the most complete product portfolio ,compared with other beverage companies in China

•Due to the faster growth of The “Minute Maid” juice drinks and the “Original Leaf ” tea in recent two years, the proportion of the still drinks continuously increases, making a more balanced products portfolio.

%

proportion to total sales

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Beverage Business ——high efficiency sales network

Consumers

Wholesaler/Retailer

Outlet Delivery Partner

Wholesaler

Schools Restaurants Groceries Others

Bottlers/Operating House

Distributor

Wholesaler/Retailer

Direct Sale

Internet Bars

Multiple sales models can control the sales terminal with high value while cover the small sales terminal at the same time .Sales under direct control accounts for 55 ％ of total sales.

Super Markets

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CBL

SBL

CCCIL

Inner Mongolia

TianjinHebei

Xinjiang

Qinghai

GuizhouHunan Jiangxi

Hainan

Tibet

Zhanmao

ShandongNingxia

Beverage Business—Great grow potential in authorized regions

The population of our authorized regions accounts for 33% of the total population of China. The national drink volume per capita of Coca Cola products is 23.8 caps(8 ounce per cup) while the drink volume per capita is only 12.8caps in our authorized regions. There is huge room for future growth.

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Consuming pack edible oil

—2008 1H operating results overview

•The consuming pack edible oil business recorded a sales of HKD$ 4.1billion, representing an increase of 170.6% compared to the same period of last year.

•The sales volume increased by 79% to 312,000 Tonnes.

•The market share increased to 14.2% from last year 9.56%.

•In the first half year of 2008, We can not increase the price to pass the increased cost to the consumer due to the government temporary price control policy over the consuming pack edible oil , the gross margin of the business drop dramatically to 3.6% from 9.9% at the same period of last year. The business incurred loss.

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consumer-pack edible oil business—Huge development potential ahead

Big Cities(97M population)

Medium/small Cities(187M population)

Small cities / towns(211M population)

Villages Villages

(764M population)(764M population)

Mature market

Potential market

low

High

Demand for high-end edible oil products

•In the past five years, consumer-pack edible oil market experienced an average annual growth rate of 21% . we expect an 15% average annual growth for next three to five years .

•Consumers demand more high quality edible oil, that can be shown by the gradual decrease of the sales proportion of soybean oil, versus an increase of the sales proportion of blended oil ,and faster growth of peanut oil, sunflower oil and maize oil sales volume.

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2013

2008

2007 Covering 5,000 retail outlets

Covering 20,000 retail outlets

Covering 120,000 retail outlets

After the group restructuring done in 2007, COFCO foods sales and distribution Co.Ltd was formed to serve as the distribution, sales and marketing arm of consumer-pack edible oil products. This arrangement strengthened our sales network to reach more end users.

The consumer-pack edible oil business—Building comprehensive sales network

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The consumer-pack edible oil business— Extension of “Fortune” Brand

“Fortune ” kitchen series

Consumer-pack edible oil

Vinegar

Peanut oil

Maize oil

Colza

oil

Sunflower oil

Sesame oil Oli

ve oil

Sauce Others

Blended

oilSalt black bean sauce

Spicy Garlic sauce

Healthy mushroom

sauce

Sauce

2007 2008 2009

Soybean oil

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During the period under review, affected by the snowstorms in Southern China at the beginning of the year. Turnover decreased by 12% to HKD112 million compared with the same period of previous year.

This business recorded loss during the period under review.

By April 2008, company appointed a new management team for the confectionery business and is now actively carrying out strategy adjustments including product line rationalization, brand building, market positioning and distributors management.

Confectionery business—2008 1H Operating Results Overview

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Thank youThank you ！！