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BEFUT International Co., Ltd. Investor Presentation October 2011

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BEFUT International Co., Ltd.

Investor Presentation

October 2011

Safe Harbor

This presentation contains projections and statements relating to Befut International Co., Ltd. (“Befut”) that constitute “forward-looking statements.” These forward-looking statements may be identified by the use of predictive, future-tense or forward-looking terminology, such as “intends,” “believes,” “anticipates,” “expects,” “estimates,” “may,” “will,” or similar terms. Such statements speak only as of the date of such statement, and Befut undertakes no ongoing obligation to update such statements except to the extent required by applicable law. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of Befut, and its management with respect to, among other things: (1) trends affecting our financial condition, results of operations or future prospects, (2) our business and growth strategies, and (3) our financing plans and forecasts. Recipients of this presentation are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that, should conditions change or should any one or more of the risks or uncertainties materialize or should any of the underlying assumptions of Befut prove incorrect, actual results may differ materially from those projected in the forward-looking statements as a result of various factors, some of which are unknown. All forward-looking statements attributable to us or persons acting on behalf of us, are expressly qualified in their entirety by the foregoing cautionary statements and the various factors described herein and in the reports Befut files with the Securities and Exchange Commission.

2

Investment Highlights

3

Rapidly growing market for wire and cable products in China

New production facilities expand capacity three-fold with plans to further increase capacity to meet growing demand

Introducing high-margin specialty cable products

Strong historic financial performance with revenue increasing 77.9% and net income increasing 112.8% for fiscal 2011 ending 6/30/11

• Currently trading at 0.5x TTM net income

• Solid balance sheet and clean capital structure

Seasoned senior management; Chairman/CEO brings 26-years industry exp.

• Strong corporate governance with plans to list on national exchange

About BEFUT International

• Leading developer, manufacturer and distributor of wire and cable products in China

– Established in 1996 with headquarters in Dalian, China

– Over 300 employees, including 40 R&D staff

• New facilities at Changxing Island

– Current capacity of 2,400km of wire and cable

– Floor space of approx 45,000 sq. meters

– Commenced full production in April 2010

• Tier I customer base includes many of the largest conglomerates in China

– Customers span ship building, nuclear power, mining, petrochemical, etc.

• 17 approved patents and 45 pending

4 4

China’s Wire & Cable Industry

• China’s wire and cable industry estimated in excess of $140B in 2012

– 15% annual growth over the past 15 years – outpacing China’s GDP growth

– Chinese companies supply 90% of the domestic wire & cable market

– China’s share of world wire & cable market increasing rapidly

• Growth driven by construction and infrastructure development

– Increasing use of specialty cable in shipbuilding, telecommunication, etc.

– China’s stimulus program focuses heavily on infrastructure and energy

5

Products

• Products include:

– Traditional electric power system cable serving end user applications in construction, electrical utility, and transportation markets

– Specialty cable including marine, mining and petrochemical cable

• New specialty products including carbon fiber cable, submarine cable, and specialty cables for solar and wind energy industries

– Power distribution and control switches that complement cable product offerings

• Industrial applications:

– Infrastructure: electric grid, rail transportation, shipbuilding

– Energy: nuclear power, electric power

– Industry: petrochemicals, steel, mining

– Telecommunication: undersea transmission

6

Carbon Fiber Cable

• Developing new carbon fiber cables

– Composed of carbon fiber and metallic conductor

– Useful in upgrading China’s power grid

• Recently acquired 1,700 square meter facility

• Plans to cross sell the new, higher gross margin products to existing clients

Advantages of carbon fiber cable

– 2X intensity of the normal conducting wire

– High conductivity producing greater energy efficiency

– Low sagging ratio, improving safety and reliability

– 10-20% less weight

– Less corrosion and service life 2x higher than ordinary wire

Carbon Fiber Project

• Plans to expand capacity with a

300,000 sq. meter carbon fiber

composite material facility to be

completed in next couple years

• Locates in Dalian 30-Mile Fort Harbor

Industrial Zone

• Hired seasoned senior R&D staffs and

experienced workers to ensure our

leading technology

• Will adopt advanced management

experience to conduct quality control

Submarine Cable

New facility in Changxing Island:

— Floor space of approx 25,000 sq. meters

— Equipment investment of $13.8M with the imported

equipment for key process

— Near the dock and utility service available to use

Expected capacity and output value:

— Capacity of 1,000km of submarine and umbilical cable

— Output of $77 million in sales upon completion

Application of submarine cable and umbilical cable:

— Electric transmission for offshore wind power, coastal islands,

offshore oil platform, dock and harbor, etc.

— Combines the functions of communication optical cable,

electric power cable, wind pipe, water pipe and oil pipe, and

can be used in different types of platforms

Product Mix

Types of Cable % of Sales (FY2010)

% of Sales (FY2011)

Gross Margin

Production Status

Traditional Electric Cable 41.4% 43.2% 16-20%

In production

Specialty

Marine Cable 21.1% 16.3% 34-40%

Petrochemical Cable

16.4% 20.1% 36-42%

Mining Cable 18.8% 16.5% 35-41%

New Energy Cable*

>40% In

planning Submarine Cable

> 60%

Other Cable Other NA NA

Switch Appliances

Other 2.3% 3.9%

* Recent acquisition of Dalian YuanSheng Technology Co., Ltd.

10 Hg\\hgg

Electrical Cable

Marine Cable

Nuclear Cable

Mining Cable

Petrochemical Cable

Technology/R&D

• Leader in material configuration and manufacturing processes for specialty cable

• Highly experienced technical team with key engineers from Shenyang Electric Cable Factory, formerly one of Asia’s largest electric cable makers

– Over 40 senior technical staff

– Increased R&D budget 10-fold in 2010

• Long-term research cooperation with:

– Dalian University of Technology

– Harbin Institute of Technology

– Shanghai Electric Cable Research Institute (SECRI)

• 17 patents for specialty cable manufacturing, accessories, and other components

– 45 pending patents (typically a 2-year process from the date of application)

11

Manufacturing Capabilities

• Recently completed major capacity expansion and commenced production at new modern facilities in April 2010

– Capacity to secure and service high-volume orders

– Over 50 sets of advanced wiring equipment

• Current capacity of 2,400km, more than 3 times previous capacity

– Floor space of approx 45,000 square meters provides room to grow

– Current capacity potential > US$150 million in sales (based on 4,000km)

– Increasing capacity to over 10,000 km by June 2013 (over 90K square meters)

Wire Drawing Machine

Drum Twister Type Cabling Machine

Continuous Vulcanization Unit

Plastics Extrusion Machine

Rubber Extrusion Machine

Phase II Changxing Island Project

• Phase II Changxing Island expansion project launched in April 2011 and expected to be completed by the end of 2012

– Floor space of 89,684 sq. meters

– Dedicated R&D building to enhance production capacity of specialty cable

– Over 50 sets of new and advanced equipment

• Increased capacity to 6,700 km that will allow a maximum output of $235M upon completion

• Integrates Changxing Island manufacturing base with submarine cable factory and carbon fiber cable factory for additional production synergies

13

Premier Customer Base

• Diversified tier I customer base

– 16 Mining and Metallurgy companies

– 11 Petrochemical companies

– 5 Shipbuilding companies

– 5 Nuclear Power companies

• Top 5 customers represent just 19% of total sales

• Shifting focus to specialty cable and high volume orders from both existing and new customers

14

Sales Strategy

• 14 branch offices located across China that manage sales and marketing to over 500 Chinese customers

– 24 full-time sales personnel located in Dalian and 20 full-time sales personnel in major cities

– Sales offices include Beijing, Shenyang, Tianjin, Jilin, Harbin and Benxi

– Partnerships with five leading third-party distributors

15

Growth Strategy

• Expand annual production capacity to 4,000km

• Add new sales reps and new sales offices

• Introduce new products and expand footprint within existing markets

– Grow specialty cable sales with higher gross margins (up to 60%)

– Increase production of carbon fiber cable for the power industry

• Expand into new markets, e.g. submarine and “new energy” cable markets

• Expand international sales through direct sales and new distributors

• Selective acquisitions of strategic wire and cable manufacturers and/or raw materials suppliers

16

New production facility at Changxing Island

Competitive Advantages

• Proven track record, established brand, and premier customer base

• Strong R&D capabilities and internal sales force

• Modern production facilities with excess capacity to support growth

• One of a select few manufacturers able to produce carbon fiber, marine and nuclear cables

• Solid foothold in the Northeast

– Strategically located close to key growth area for shipbuilding, nuclear, and mining

– Proximity to raw materials and manufacturing inputs, e.g. coal, oil and copper

• Certified by PRC government’s Mining Products Safety Approval and Certification Center to provide cable for the coal mining industry

17

Famous Brand of Dalian City

Senior Management Team

• Mr. Hongbo Cao, Chairman & CEO – CEO of Befut International since 2002 – Formerly CEO of Dalian Xincheng Power Equipment Co. for 17 years

• Mr. Tingmin Li, Founder – Founder and former Chairman of Befut – Formerly State Grid Corp executive for over 39 years

• Ms. Mei Yu, CFO and Director – Befut Director of Finance since 1997 and 17+ years finance and accounting – Formerly Director of Finance for Samsung Group Dalian Branch

• Mr. Haiyang Lu, Board Secretary – Head of Strategic Development for Befut since 2006 – Formerly manager at Yuandian Advertisement and Tianwei Medicine Co.

• Mr. Steve Xia, Vice President of Finance – Extensive financial experience in both the US and China – Previously served as a Portfolio Manager at TIAA-CREF & Citi Group

• Ms. Ling Yan, Financial Controller – 5 years experience in auditing at Ernst & Young Hua Ming – Accounting degree from Dongbei University of Finance & Economics / member of CICPA

18

12 Month Financial Highlights

Twelve months ended

June 30,

2011 2010

Sales revenue $ 55,597,912 $ 31,258,662 77.9%

Gross profit 14,917,206 8,301,954 79.7%

Gross profit margin 26.8% 26.6%

Income from operations 8,995,894 4,340,209 107.3%

Operating profit margin 16.2% 13.9%

Net income $ 9,602,026 $ 4,512,176 112.8%

Net profit margin 17.3% 14.4%

Earnings per share $ 0.33 $ 0.15

Diluted shares outstanding 29,761,290 30,110, 241

19

$19.3

$31.3

$55.6

$2.3 $4.5

$9.6

$0

$10

$20

$30

$40

$50

$60

2009 2010 2011

Sales

Net income

Historic Financial Performance

20

$ M

illio

ns

Balance Sheet Highlights

• Over $11.8 million working capital and $50.9 million shareholders’ equity

June 30, June 30,

2011 2010

Cash and cash equivalents* $ 6,290,005 $ 2,500,268

Total current assets $ 40,193,115 $ 17,816,002

TOTAL ASSETS $ 93,582,412 $ 67,485,770

Total current liabilities $ 28,381,521 $ 12,982,886

TOTAL LIABILITIES $ 42,149,821 $ 27,418,286

TOTAL STOCKHOLDERS' EQUITY $ 50,851,804 $ 39,025,642

21

*Includes restricted cash of $3.6M and $1.2M for 2011 and 2010, respectively.

Operational Goals

• Goal to achieve organic revenue growth of at least 30-50% annually

• Plan to achieve gross margins of at least 26% and operating margins of at least 18%

• Generate strong free cash flow to internally fund organic growth

• Highly selective acquisitions of smaller and profitable wire and cable manufacturers

• Maintain clean capital structure

• Plan to list on a senior exchange

22

Equity Snapshot

23

Ticker: BFTI

Exchange: OTCBB

Share price (as of 10/10/11): $0.16

Common share outstanding: 29.7 M

Market Capitalization: $4.8 M

Revenue (FY 2011) $55.6 M

Net Income (FY 2011) $9.6 M

Price-to-Earnings Ratio (FY 2011) 0.5x

Working Capital $11.8 M

Shareholders’ Equity $50.9 M

Fiscal year-end: June 30

Insider ownership: 94%

Investment Highlights

24

Rapidly growing market for wire and cable products in China

New production facilities expand capacity three-fold with plans to further increase capacity to meet growing demand

Introducing high-margin specialty cable products

Strong historic financial performance with revenue increasing 77.9% and net income increasing 112.8% for fiscal 2011 ending 6/30/11

• Currently trading at 0.5x TTM net income

• Solid balance sheet and clean capital structure

Seasoned senior management; Chairman/CEO brings 26-years industry exp.

• Strong corporate governance with plans to list on national exchange

BEFUT International Co., Ltd.

Investor Presentation

Investor Relations: Crescendo Communications, LLC David Waldman, Vivian Huo, Klea Theoharis Tel: (212) 671-1020 Email: [email protected]

Thank you.