2015 Interim Results

August 2015

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The context of the presentation shall not constitute any offer to buy

or sell any securities, or constitute the base on which any contract or

commitment shall be relied. The presentation may contain some

forward-looking statements, potential investors should be aware that

real performances may be materially different from the forward-

looking statements.

The context of the presentation has not been verified by independent

third parties, and their fairness, accuracy and completeness shall not

be guaranteed and should not be relied upon. The information

contained here should be interpreted based on the prevailing

circumstances. No update has been or shall be made to reflect any

material changes post the completion of this presentation. None of

the employees, agents and advisors of our Company shall be

responsible for the context of the presentation at any time, and they

shall not be held liable for any losses resulted in from the using of the

presentation.

Disclaimer

2

Table of Content

Financial Performance

Business Review

Future Development

1

2

3

3

1 Financial Performance

5

Jun 30, 2015 Jun 30, 2014

Assets

Inventories 437 401

Trade and other receivables 214 234

Cash and cash equivalents 405 218

Time deposits 338 734

PP&E 648 607

Others 823 443

Total assets 2,865 2,637

Liabilities

Trade and other payables 207 199

Short term borrowings 539 467

Others 190 68

Total liabilities 936 734

Shareholders’ equity 1,929 1,903

(RMB million)

1H2015 1H2014

Sales revenue 786 883

Growth rate (10.9%) 6.1%

Gross profit 489 547

Gross margin 62.2% 61.9%

SG&A expenses 356 366

Other income / gain – net 5 7

Operating profit 138 188

Operating margin 16% 21.3%

Net profit for the year 100 140

Growth rate -28.5% 9.1%

Net profit margin 12.7% 15.8%

Income Statement and Balance Sheet

6

Sales Revenue Breakdown

Note: (1) Including revenue from restaurants and management service

1H2015 1H2014

（RMB million) Sales Revenue % of total

revenue Sales Revenue

% of total

revenue % Change

Tea 541 68.8% 637 72.2% (3.4%)

Tea Snacks 108 13.7% 101 11.4% 2.3%

Tea Ware 106 13.5% 117 13.2% 0.3%

Others(1) 31 4.0% 28 3.2% 0.8%

Total 786 100% 883 100.0%

7

Stable Revenue and Net Profit

Sales Revenue Net Profit (RMB million) (RMB million)

786

883

700

750

800

850

900

950

1000

1H2015 1H2014

100

140

110

115

120

125

130

135

140

145

150

155

160

1H2015 1H2014

8

Gross Profit Operating Profit

Continuous Level of Profitability

(RMB million) (RMB million)

489

547

450

470

490

510

530

550

570

590

1H2015 1H2014

138

188

150

160

170

180

190

200

210

220

1H2015 1H2014

1H2015 1H2014

9

Effective Operating Cost Control

Distribution Costs Administrative Expenses (百万元人民币) (百万元人民币)

Employee Compensation (百万元人民币)

Net Interest Income (百万元人民币)

261 237 253

29.5% 29.4% 32.2%

-50.00%

-30.00%

-10.00%

10.00%

30.00%

50.00%

0

100

200

300

400

500

1H2014 2H2014 1H2015

分销成本 占销售比率

106 99 103

12.0% 12.3% 13.1%

(10.0%)

(5.0%)

0.0%

5.0%

10.0%

15.0%

20.0%

0

50

100

150

200

1H2014 2H2014 1H2015

行政开支 占销售比率

5

10

7

0

2

4

6

8

10

12

1H2014 2H2014 1H2015

151 135 143

17.1% 16.8% 18.2%

(20.0%)

(10.0%)

0.0%

10.0%

20.0%

0

50

100

150

200

250

300

1H2014 2H2014 1H2015

人力成本 占销售比率

(RMB million)

10

Stable Working Capital Efficiency

Average Inventory Days Average Account Receivable Days Average Account Payable Days

(Turnover Days) (Turnover Days) (Turnover Days)

97

106

1H2015 1H2014

64

68

1H2015 1H2014

221

1H2015 1H2014

Strong Cash Flow and Payout Ratio

11

(百万元人民币)

Operating Cash Flow Capital Expenditure

Free Cash Flow Payout Ratio

(百万元人民币)

(百万元人民币)

50% 50%

1H2014 1H2015

152

181

1H2014 1H2015

112

60

1H2014 1H2015

40

1H2014 1H2015

2 Business Review

12

Nationwide Sales Network

Tenfu maintains a large nationwide multi-channel sales and distribution network

Nationwide distribution network Retail network breakdown by store type

Store count by type (as of Jun 30, 2015)

Self-operated retail outlets and retail points

Third-party operated retail outlets and retail points

Xinjiang

Tibet

Qinghai Gansu

Beijing

Shandong Shanxi

Hebei

Jilin

Heilongjiang

Inner Mongolia

Henan Jiangsu Xiaxi

Ningxia

Anhui

Sichuan

Yunnan

Guizhou

Hubei

Hunan

Zhejiang

Fujian

Guangdong

Guangxi

Hainan

Jiangxi

Shanghai

Liaoning

Tianjin

Chongqing 44 21

21 4 6 6

11 9 80 13

7 3

79 28

41 12 12 6

26 19 20 10

24 4

20 8 47 72

102 48

47 40 47 14

26 11

17 16

29 18

12

8

3

29 45 56 29

24 15

27 5

3

18 6

1

11

Self –operated retail outlets and retail points

Third-party operated retail outlets and retail points

13

1

5

14

Multi-Category: balanced portfolio and tea varieties to cater to different consumer needs

Multi-Brand: cater to multiple channels and consumers with different levels of purchasing power

Revenue segment by product

Sell private label tea and tea products to consumers through

direct ownership as well as third party retail outlets

Sell tea products to consumers through

hypermarkets and online platform

Revenue by sales channel

“Tea-Department-Store” Model Continuous execution of the multi-category and multi-brand product strategies

2014 1H2015

TenXi’s TEA

Tea69%

Tea ware13%

Tea snacks14%

Others4%

56.8

6.5 1.7

1

29.9

4.1

1H2015

Retail

Hypermarkets

E-commerce

Funnew Spot

Wholesale

Others

Tea72%

Tea ware13%

Tea snacks12%

Others3%

3 Future Development

15

Development and Expansion

Set up Xiamen Daily Plus Food Beverage Management Co., Ltd., a joint venture with Ten Ren Tea (Hong

Kong) Limited, to engage in catering management, beverage production, sales and wholesale of pre-

packaged food

Entered a joint venture agreement with Rise General Trading LLC, in June 2015 to undertake wholesale,

blending, packaging and trading of tea in the Middle East; with potential to replicate and develop globally

Adjustment and focus to further develop mid to low-range, accessible products, as opposed to previous

weight given to high-end products

Successful expansion of facility in Zhangzhou ensures the optimisation of production and storage to meet

with demand; acquisition opportunities also help with competitiveness of procurement costs

Ranked #1 in the “2013 Chinese Tea Industry Top 100 Award”

Tenfu mooncakes won the title of “China’s Famous Pastry” at the “2014 Chinese Mooncake Cultural

Festival”

Designated for the fifth time, as a recognised enterprise, to participate as sponsors for the APEC

meetings in 2014

Business Outlook and Plan

Major Achievements

16

Successful Development of Funnew Spot Tea

Stores

Advantageous Marketing

Expand the domestic network mainly through franchisees

As at June 2015, Funnew Spot has 126 stores in over 50 cities

in China, including Xiamen, Quanzhou, Chengdu, Wuhan,

etc.

Funnew Spot is an extension of the existing Tenfu business,

further showcasing the Tenfu retail-chain business model

nationwide Tenfu’s existing position

leverages entry into the tea drink industry

The tea drink industry has a

high growth rate and potential Funnew Spot products are

easily made popular, suited for nationwide replication and

expansion “Customers come first”; Funnew

Spot recognizes customer feedback and projects a fresh,

youthful image

Products

Funnew Spot promotes the principles of “natural” and “healthy”, offering a

variety of tea drinks, baked goods, ice cream, etc. to consumers

Focuses on providing high quality and unique products

Leverages Tenfu’s retail experience, thereby providing support and

uniformity in employee training and

standardized marketing campaigns

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Focus on development of online sales channels

Strengthen tea sales network coverage

Extension of existing tea business through the online platform, penetrating all city tiers

and injecting Tenfu brand awareness Unique online promotion methodology to

attract the younger customer base Online sales channels has great market

potential and rapid growth Since inception of e-commerce platform, it

has accountef to nearly 2% of sales

revenue Being the social media era, we utilise the

online platform and mobile phone culture to further acquaint ourselves with consumers,

and better analyse the customer base