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Page 1: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

Page 1

Page 2: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Safe Harbor Statement

Important NoticeThis document is sole for reference only. Directors of Coolpad GroupLimited hereby confirm, both in a personal capacity and as representativeof the group, that the Directors have conducted thorough consultationregarding the truth of the contents of this document.

DisclaimerThis document does not constitute any recommendation or invitation tosubscribe to or sell shares of Coolpad Group Limited, nor should it be usedas the basis of any contract to buy or any pledge. Therefore, any decisionto buy or sell the company’s shares must be based solely on theprospectus published for the purpose of issuing shares.

Page 3: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Agenda

1. Industry & Company Introduction

2. Investment Highlights

3. Financial Performance

4. Future Growth Strategies

Page 4: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Global smartphone market shares by region

Source:GFK

Latin America8.9%

Central&Eastern Europ

5.7%

North Amercia14.5%

Emerging APAC12.2%Middle East

&Africa11.0%Western Europe

10.4%

China32.0%

Developed APAC5.3%

Latin America8.2%

Central&Eastern Europ

4.5%

North Amercia18.8%

Emerging APAC7.5%

Middle East&Africa10.3%

Western Europe14.6%

China26.0%

Developed APAC10.0%

Global smartphone sales by units Global smartphone sales by revenue

China was still the largest smartphone market in terms of both shipments volume and revenue in 2014. Its proportion of revenue was 6 percentage points lower than that of volume.

Page 5: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Variation of the smartphone market in China

New change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel will increase .

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

volu

mes

Variation of smartphone sale channels

in China in 2014 units

E-commerce channel

Open channel

Carriers channel

Jan Feb Mar Apr May Jun Jul Aug Sep

Source: SINO Reports

4.7 mln,13%

13.7 mln,39%

16.7mln,48%

7.7 mln,22%

16.1 mln,47%

10.8 mln,31%

Page 6: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Market structure of 4G smartphone in China

Source:Sino

Coolpad gained the leadership in the 4G smartphone market as of the 3Q in 2014. However, the competition in the market became more fierce in the 4Q.

-10%

0%

10%

20%

30%

40%

50%

60%

Q1 Q2 Q3 Q4

Quarterly 4G smartphone market share

COOLPAD

Apple

Samsung

OPPO

Lenovo

Huawei

MI

ZTE

Page 7: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Company Introduction

China’s leading 3G/4G smartphone developer & supplier An innovative wireless telecom product company with core technologies

Owns three smartphone brands (Coolpad, iVVi, Dazen)

Leads in China’s 3G/4G smartphone market with new models of all-network

Ranks first[1] in market shares within China’s 4G smartphone market as of the 3Q of 2014 interms of accumulative shipped volume

Pioneers in the dual-mode[2] smartphone market

Provides the Coolcloud solution in the PMCC (Personal, Mobile, Cloud, Computing)

Outstanding R&D capabilities in mobile’s software & hardware designs

Diversified sales channels in the smartphone market

[1] According to SINO-MR monthly reports in 2014[2] A phone carrying dual SIM cards, standby & working simultaneously

Page 8: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Business Introduction

Three major business units of the Group:smart terminals, finance, estate

Mobile Finance Service

Estate

Coolpad Group

Coolpad ivvi Dazen

manager and distributor

Micro-credit Company

100%40% 60% 55%45%100%

Page 9: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Channels structure of Coolpad in China

The Group’s smartphones with three different brands are sold through three different sales channels in China

Past: Mainly through carriers

channel

Now: Three channels to maintain the

leadership in China

Carriers channel Open channel E-commerce channel

Page 10: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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E-commerce channel of Coolpad in China

Coolpad Group

Coolpad online store

Coolpad E-Commerce LTD.

Provide the products

Third-party E-commerce platform

Customers

Provide the products and services

X-series

User-centric

F-series N-series

Targeted users: Students, Internet fans, the white-collar

Three series (F,X,N) of Dazen target the mid-and low-end smartphone market in the E-commerce channel in China.

Business Model Products

Page 11: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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More focused on the management of Dazen fans

Ask PlayTell EnjoyChat

Deep demands

Basic demands

Satisfaction

Dazen cultureShowWatch

JoinRespect Communicate Honor Greedy

Discuss

Interaction Content Activity

Know

Information

Interest

Award

CoolU Community: 15.6 million

QQ Zone: 7.8 million

Baidu Tieba: 520 thousand

Wechat: 610 thousand

As of Feb, 2015Total number of Dazen fans:

24.5 millionDazenfansBaidu Tieba

CoolUCommunity QQ Zone

Wechat

Page 12: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Consolidated platforms for operating themobile internet business

• Consolidate the platform of the data generated from the applications preinstalled in the smartphone

• Consolidate the adv. platform to push the advertisements more effectively and precisely

• Consolidate the charging platform of the mobile games etc. preinstalled in the smartphone

• Consolidate all the user accounts and passwords of the applications preinstalled in the smartphone

• Users could enjoy the applications more conveniently

Consolidateduser accounts

Consolidatedcharging platform

Consolidateddata platform

Consolidatedadv. platform

Page 13: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Carriers channel of Coolpad in global market

Carriers-customized

Targeted users:Employees in enterprises and institutions, students, and workers

By virtue of our strong R&D capability and high brand recognition, Coolpad enjoys the advantage of cooperating with the global carriers directly.

Domestic Overseas

Page 14: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Open channel of Coolpad in China

Coolpad Group

Second Level

Coolpad MobileTechnology LTD.

Regional Distributors (provincial)

Provide the products

Retail Distributors

Customers

Provide the products and services

S-series

User-centric

V-series K-series

Targeted users: boss, self-employed individuals, high-end industry employee, fashion people

Three series (V,S,K) of iVVi target the mid-and high-end smartphone market in the open channel in China.

Business Model Products

Page 15: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Agenda

1. Industry & Company Introduction

2. Investment Highlights

3. Financial Performance

4. Future Growth Strategies

Page 16: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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1 Leading 4G smartphone market in China

4 Delicacy operation on mobile Internet& Service

2 Owning strong R&D capabilities

3 Competitive products and vivid features

Investment Highlights

CoolpadLTE for All

5 Enriched sales channels

Page 17: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Leading 4G smartphone market in China

The development strategy of “Coolpad LTE for all”

Both TD-LTE/FDD-LTE 4G commercial licenses were issued, and the 4G smartphones will become the mainstream in the market Coolpad Ranked first within China’s 4G smartphone market as of the third

quarter of 2014 in terms of accumulative shipped volume

Page 18: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Owning strong R&D capabilities

Number of patents (including both patents granted and patents in application)

More than 6,000 patents, 90% of which were invention patents

Zhenzhou

Global R&D centers leveraging cutting-edge technologies to make innovations for intelligent life

Page 19: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Competitive products and vivid features

More competitive smartphones were launched and more vivid features were presented to the users, such as the theme of the mobile security, the private custom carved on the cover, and the better experience of the dual rear camera.

Page 20: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Delicacy operation on mobile Internet& Service

Coolpad Dazen iVVi

Operationof fans

CoolU community

QQ zone

Wechat Third party

Value-addedoperation

Games Store Brower

CoolUI product

cloud desktop, browser, app store,CMS, player, etc.

Internet product

Cloud synchronization, Weather, etc.

Value-added platform Interactive platform Security platform

Basic service platform(Coolcloud)

Operationof productsfrom content

Coolcloud Weather

CoolUI

PlatformProducts

Operation

Brands

Page 21: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Set up CoolCloud eco-system

The Cloud Computing and Storage Service Platform Instant synchronization Cloud security Mass personal storage Cloud sharing

More opportunities for PMCC Larger mobile internet user base Mature mobile cloud service Better mobile application service

Mobile Device PC WEB

Page 22: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Enriched sales channels in China

Three sales channels with different brands of the Group respectively in China

Three channels to maintain the leadership

in China

Carriers channel Open channel E-commerce channel

Page 23: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Enriched sales channels globally

Global market strategy to cooperate with overseas telecom operators Being the certified supplier of the telecom operators in USA, Europe etc. Set up the R&D centers globally to provide localized user experience

Page 24: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Agenda

2. Investment Highlights

3. Financial Performance

4. Future Growth Strategies

1. Industry & Company Introduction

Page 25: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Financial Performance

HK$’000 2014A 2013A Change (%)

Revenue 24,900,471 19,623,652 ↑26.9

Profit before tax 606,629 437,373 ↑38.7

Tax 92,551 89,121 ↑3.9

Net profit attributable to owners of the Company 512,855 348,547 ↑47.1

Basic earnings per share (HK cents) (2013 restated) 11.94 8.29 ↑44.0

Gross profit margin (%) 12.1 12.9 ↓0.8ppt

%S&D 5.8 6.6 ↓0.8ppt

%G&A 5.0 5.0 -

Page 26: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Revenue by Products

The revenue of 4Gsmartphone and wirelessapplication service incomegained a substantial growth in2014, especially the serviceincome tripled that of 2013

The finance service segmentcommences its operation inthe year of 2014 and engagesin provision of a range offinancing services in MainlandChina

0.15% 0.40%0.02%1.40% 0.50%

48.91%

96.50%

49.52%

2.60%

2014A 2013A

4G smartphone

3G smartphone

Wireless ApplicationService IncomeFinance Service

Others

4G

Page 27: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Financial Performance

7,340.5

14,390.2

19,623.7

24,900.5

0.0

4,000.0

8,000.0

12,000.0

16,000.0

20,000.0

24,000.0

2011A 2012A 2013A 2014A

HK$ 'MRevenue

Revenue increased 26.9% compared withthat of 2013

The revenue growth was attributable tothe strong increase in the sales of theGroup’s 4G smartphone as a result of itsleadership of 4G smartphone market inMainland China in 2014

Page 28: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Financial Performance

Net Profit

271.1

324.3 348.3

514.1

3.7%

2.3%1.8% 2.1%

0.0%

5.0%

10.0%

15.0%

20.0%

100.0

300.0

500.0

2011A 2012A 2013A 2014ANet Profit Net Profit Margin

HK$ 'M

Net profit increased from HK$348.3million to HK$514.1 million by 47.6%,as compared with the correspondingperiod in the year of 2013

The increase in net profit by HK$165.8million mainly due to the increase ofsales revenue as a result of anincrease in sales volume in 2014.

Page 29: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Higher Operational Efficiency Achieved

Better economies of scale Stricter controls on administrative and marketing expenses

6.4% 6.1% 6.6%5.8%

7.6%

4.7% 5.0% 5.0%

0.0%

10.0%

20.0%

30.0%

0

200

400

600

800

1000

1200

1400

1600

2011A 2012A 2013A 2014A

Selling & Distribution Costs

Administrative Expenses

% S&D of Total Sales

% G&A of Total Sales

(HK$'M)

Page 30: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Balance Sheet Summary

2014A 1H2014 2013A

Cash & Cash Equivalents (HK$’M) 2,959.1 2,360.1 1,628.3

Receivable Turnover Days 43.5 39.0 47.5

Payables Turnover Days 32.8 34.1 38.1

Inventory Turnover Days 44.4 52.2 46.4

Total Debt/ Book Equity 2.8 3.3 2.6

Gearing Ratio (%) 65.4 72.7 67.0

The balance sheets of the Group are healthy, and its free cash flow is relativelystrong

Page 31: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Agenda

1. Industry & Company Introduction

2. Investment Highlights

3. Financial Performance

4. Future Growth Strategies

Page 32: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Future Growth Strategies

Strengthen the capability of innovation, R&D, and enlarge the patent pool size

Launch more user-centric products to improve the user experience of Coolpadsmartphones

Explore new functions of the smartphoneto bring the users some unexpected features

Page 33: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Future Growth Strategies

1G(1980’s)voice

2G(1990’s)Voice&SMS

3G(2000’s)Data

4G(2010’s)Mobile Internet

5G(2020’s)Internet of

Things

Under the notion of “Opening and Sharing”, the Group will strengthen thecooperation with Internet companies to improve the business of wirelessapplication service.

Construct the “CoolLife” ecosystem, to bring the users a more comfortableexperience in the 4G network era.

Source:Internet

Page 34: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Vision of Coolpad E-commerce channel

• Combination of hardware & software• Combination of online & offline• Precise LBS• Personalized analysis of big data

CoolUIaaa

Csearch

More features of the E-commerce platform in future

Page 35: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Future Growth Strategies

Continue to expand the overseas markets by exploring cooperation with more foreign telecommunications operators

Execute the delicacy management to improve general operating effectively and control the overall cost

Cooperate closely with the upstream components suppliers to ensure on-time delivery of components

Page 36: file.irasia.comfile.irasia.com/listco/hk/coolpad/cpresent/pre150324.pdfNew change: Because of the subsidy cut, the proportion of carriers channel will decline, E-commerce & open channel

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Q & AMr. Andrew Cao(曹遠福)

Tel: (86 755) 3302 3607 Email: [email protected]

Investors Relations DepartmentCoolpad Group Limited

地址:深圳市南山區高新技術産業園北區夢溪道2號酷派信息港Address: Coolpad Information Harbor, 2nd Mengxi Rd., Hi-Tech Industry Park

(North), Nanshan District, Shenzhen, the PRC