Wonhe Presentation 161115.pdf

7/23/2019 Wonhe Presentation 161115.pdf

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Initial public offeringpresentation

WONHE MULTIMEDIACOMMERCE LIMITED

ACN 607 288 755

ASX : WMC

November 2015

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Wonhe Multimedia Commerce Limited

This presentation has been prepared by Wonhe MultimediaCommerce Limited for professional investors. The informationcontained in this presentation is for information purposes only anddoes not constitute an offer to issue, or arrange to issue, securities orother financial products. The information contained in this presentationis not investment or financial product advice and is not intended to beused as the basis for making an investment decision. Thepresentation has been prepared without taking into account theinvestment objectives, financial situation or particular need of anyparticular person.

No representation or warranty, express or implied, is made as to thefairness, accuracy, completeness, or correctness of the information,

opinions and conclusions contained in the presentation. To themaximum extent permitted by law, none of Wonhe MultimediaCommerce Limited, its directors, employees or agents, nor any otherperson accepts any liability, including, without limitation, any liabilityarising out of fault. In particular, no representation or warranty,express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of anyforecasts, prospects or returns contained in this presentation nor isany obligation assumed to update such information. Such forecasts,prospects or returns are by their nature subject to significant

uncertainties and contingencies.

Before making an investment decision, you should consider, with orwithout the assistance of a financial adviser, whether an investment isappropriate in light of your particular investment needs, objectives andfinancial circumstances. Past performance is no guarantee of futureperformance.

Wonhe Multimedia Commerce Ltd was incorporated on 27 July 2015.The Company does not have any current operating or investmentactivities. As the Company forms part of Kuayu and the WonheGroup, comprising the Chinese subsidiaries, financial informationcontained in this Investor Presentation has been extracted fromSection 7 of the Prospectus.

Application for shares can only be made pursuant to the Prospectusissued by the Company and available from the Companys website(www.wonhe.net), the Lead Manager, Beer and Co Pty Ltd and fromthe ASX website.

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DISCLAIMER


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IPO SUMMARY (all $A)ASX : WMC

Capital Raising $3.0m (min) $4.0m (max)

Number of Existing Shares 135m 135m

Number of IPO Shares 15m (min) 20m (max)

Total Issued Shares 150m 155m

Offer Price of IPO Shares $0.20 per share

Capitalisation on List ing $30m $31m

Group Net Assets 30 June 2015 $45.9m $45.9m

Group Cash 30 June 2015 (pre IPO) $53.1m $53.1m

Offer Price PER (Price Earnings ratio)- based on Full Year 2014 NPAT $2.1m 14.3 times 14.8 times- based on annualised June 6 mths 2015 NPAT $6.3m 2.4 times 2.5 times

Proposed Annual Dividend based on payout of at least 10% of group NPAT - to

be paid approx Sept / Oct 2016 3


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Leading edge producer of internet relatedproducts

CEO, Jack Tong a leader of the ITcommunity in Shenzhen, the IT leader inChina

The Wonhe Commercial Router isbecoming a leading edge product

The Wonhe Router is sophisticated, usedwith free WiFi in large retail areas toaggregate data from consumers able tobe commercialised

Profits growing rapidly

NPAT for 6 months to June 2015 $6.3m Group cash 30 June 2015 $53.1m cash

per 20c share approx 35c

Planned unfranked annual dividends

An Australian listing will enable biggercontracts with SOEs

Strong future growth, profits, cash onhand and dividends is compelling

INVESTMENT HIGHLIGHTS

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Mr Qing Tong, Executive Director

Deep experience in capital investment,

capital raisings, enterprise management,marketing and Team building

Mr Jack Tong, Executive Director

Deep understanding of computertechnology, innovation and a Leader in IT inShenzhen

Mr Jun Li, Non-Executive Director

Considerable experience in cross borderfinance, international marketing and project

marketing

Mr Frank Cannavo,Non-Executive Director

Experienced Company Director, strongcapital raising skills and experience andstrong investor networks

Mr Raymond Lim,

Non Executive DirectorHolds qualifications in accounting, financeand law. Raymond is a Chartered

Accountant and Solicitor. He is also aChartered Tax Advisor of the TaxationInstitute of Australia

BOARD OF DIRECTORS

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CORPORATE STRUCTURE

WONHE High-Tech International Ltd(a Nevada company)

World Win International Holding Ltd(a British Virgin Islands company)

100%

Investors under ProspectusCapital Raising

WONHE Multimedia Commerce Ltd(an Australian company)

Existing MinorityShareholders

52.26%

Kuayu International Holdings Group Ltd(a Hong Kong company)

12.90% 34.84%

Shengshihe Management Consulting (Shenzhen) Co Ltd(a wholly owned foreign enterprise in China)

Shenzhen WONHE Technology Co Ltd(a PRC limited liability company)

100%

100%

100%PRC


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Shenzhen Wonhe China registered inNovember 2010

In 2012 launched the first home multimedia centre HMC 660

2013 High Speed Growth Award andInnovation Award by the Shenzhencomputer industry

Advanced Home Media Centrelaunched 2014

Domestic Router YLT-100Slaunched 2015

Commercial Router YLT-300Slaunched 2015

Following its ASX listing Wonhe willbe able to bid for major Chinese ITcontracts, backed by its leadingCommercial Router YLT-300S

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KEY MILESTONES OF WMC


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THE IT INDUSTRY IN CHINA

In China, internet penetration moving todeepening of user content

Broadband in China becoming themacro development strategy

Broadband access in developed citiesnow 100 Mbps

Demand for networking of mobilephones, tablets, smart TVs and other

devices growing fast Internet online video business

developing fast

All these factors underpin and enhancethe wireless Router market

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Figures in 10,000 units


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WONHE SALES NETWORKNOW AND FORECAST

Wonhe sells its key products, theWireless set top box and the Commercialrouter mainly in Guangdong Province

Wonhe sells most of its set top boxes to12 Electronics companies in Shenzhen

60 Distributors sell Wonhes products

into the Guangdong marketCompany is planning to increase itssales reach to the entire east coast citiesof China

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WiFi provides free network services

3G / 4G charged by data flow

WiFi much faster than 3G and fasterthan 4G

Demand for cell phones in China ismassive

Very close link between cell phone

demand and market demand for WiFi

Wonhe Commercial router YLT-300Soffers free WiFi

Demand from Malls, Shopping centresand Business centres for Routersproviding free WiFi is huge

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CHINA WiFi AND 3G / 4G


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Intelligent hardware, researched anddeveloped by Wonhe

The router has an independent operatingsystem enabling the installation of variousapplications by users

The router also has a powerful USBsharing function

Uses cookies from users mobiles to builduser profiles

Strong encryption, and is very flexible inaccessing and delivering value for money

Users log on free to WiFi from the Router provides users with a shopping platform

Enables Users to assess real timeproduct availability, special offers, anddiscounts

Selling price around A$300

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WONHES KEY PRODUCTS COMMERCIAL ROUTER YLT-300S


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A data storage, management and controlcentre for household equipment

Uses remote wireless technology tocontrol household devices at home orremotely

Can access TV and video on demand

Game consol

Storage facility for data

Enables viewing of satellite programs

Read video files

Support WiFi

Sells for approx. A$715

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WONHES KEY PRODUCTS HOME MEDIA CENTRE HMC720


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Used for traditional router functions offlow forwarding and multi device access

Also has a variety of intelligent functions

Independent operating system

Store of information

Built in firewall and strong encryption and

security

Great value for money

Sells for approx. A$80

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WONHES KEY PRODUCTS DOMESTIC ROUTER YLT-100S


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WONHE FINANCIAL ANALYSISA. BALANCE SHEET A$M

30 June 2015 31 December 2014

Current Assets

Cash 53.1 42.2 Other 3.6 4.0

56.7 46.2

Non Current Assets 3.0 3.2

Total Assets 59.7 49.4

Current Liabilities 13.8 12.8

Net Assets 45.9 36.6

Shareholders Funds

Paid up Capital 9.4 8.8

Retained Earnings 29.7 22.5

Other 4.5 3.5

Minority Interests 2.3 1.8

Shareholders Funds 45.9 36.614


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WONHE FINANCIAL ANALYSISB. NET PROFIT BEFORE AND AFTER TAX A$M

6 months to June 2015 Full Year 2014

Sales 17.2 6.9 Cost of Sales (9.1) (3.6)

Gross Profit 8.1 3.3

Total Expenses (0.6) (0.8)

Net Profit before tax 7.5 2.5

Taxation (0.9) (0.3) Profit after tax 6.6 2.2

Non controlling interests (0.3) (0.1)

Net Profit After tax (NPAT) 6.3 2.1

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Current Wonhe sales only in GuangdongProvince through a sales network of 60

agents The YLT-300S will become a dominant

product which is sold by Yun Lu Tong(YLT) to over 400 agents in Guangdongand adjoining provinces

Wonhe is planning to extend its agentssignificantly in future years, initiallycovering all east coast provinces over thenext 2 to 3 years

Wonhe will expand its Commercial Routerinto more large commercial districts with

intelligent WiFi router installation at nocost or only at cost price

A listing on ASX combined with theCompanys technological strength plus astrong Balance Sheet will enable Wonhe

to bid for significant contracts in the future Using different applications of Wonhe

technology together with the Cloud, beingWonhes Router, Storage, Videos, Media,and Networking to gain a strategicadvantage in its IT space

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WONHE STRATEGIES FOR FUTURE GROWTH


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China has specific policies which supportthe development of domestic routers

Routers are a combination of hardwareand software; the key hardware is thechip and the key software is the protocol;both require expensive and complicateddevelopment platforms and equipment

China has issued a series of policies topromote the development of networkintelligent equipment

Like Australia, China is focused onincreasing its Broadband strategy and

implementation The increased network speed creates

significant opportunities for moreintelligent set top boxes

With the increasing internet penetration in

China, the official development mantra ischanging towards the deepening of usercontent, adding to the complexity ofinternet related products

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GOVERNMENT POLICIES AND BARRIERS TO ENTRY


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R&D is critical forWonhe to enable it tostay at the forefront of new IT

developments Wonhe employs young IT graduates to

develop the protocols for high classproducts.

Wonhe uses the international advanced

CMMI-3 level management standard tomanage projects and establish a soundstandardized development system andtraining system

Internal R&D is structured in businessteams

The Company holds many Product designpatents for both hardware and softwaredesigns but more recently has focusedmore just on the design of new productswith less risk of copying by others

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WONHE RESEARCH AND DEVELOPMENT


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Jack Tong key to the continuingdevelopment of innovative products

Jack Tong sits on the ShenzhenComputing Association Board and is akey contributor

The Commercial router was released intothe market in the June Quarter of 2015

with strong demand

Strong focus on R&D to stay at theforefront of development

Balance Sheet with $53.1m cash on handat 30 June 2015

The smart router competes very wellagainst the similar products on the market

The Company intends to pay dividendsfrom profits earned

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WONHES COMPETITIVE STRENGTHS


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Use of FundsMaximum

SubscriptionPercentage of

Funds (%)Minimum

SubscriptionPercentage of

Funds (%)

Total raised under Offer $4,000,000 $3,000,000

Equipment required for product development and testing(over a two (2) year period) $717,866 18% $493,222 16%

Development of hardware products $1,696,774 42% $1,165,796 39%

Development of software products $522,084 13% $358,706 12%

Expenses of Offer $713,276 18% $632,276 21%

Administration and overheads (over a two (2) year period) $350,000 9% $350,000 12%

Total Funds Applied $4,000,000 100% $3,000,000 100%

Under the Offer, the Company plans to raise up to $4,000,000. The Company intends to apply the funds raised from the Offer as follows:

Notes: *If the Company raises less than the Maximum Subscription amount offered under this Prospectus then the budgets set out above may be reduced proportionately.


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WONHE TIMETABLE (INDICATIVE)

Opening date of offer (expected) Tuesday 17th November 2015

Expected closing date Friday 4th December 2015

Securit ies issued and allotted Friday 11th December 2015

Shares expected to commence trading Wednesday 16th December 2015

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An Australian main board listing enablesWonhe to pursue much larger sales

contracts with large State OwnedEnterprises

An Australian listing gives much greatercredibility to this growing company in agrowth industry

Enables greater opportunity for access tocapital in future years as growthcontinues

The Australian market favors Technologylistings with strong growth potential, and

when that is coupled with a strongBalance Sheet and an intention to rewardshareholders with dividends, the Wonheinvestment opportunity is compelling

It is generally much quicker to achieve aListing than all the other Stock markets in

Asia

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WONHE WHY LIST ON ASX?


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HOW TO APPLY FOR WONHE SHARES

1. Complete the Application form at the back of the Prospectus and in accordance with theaccompanying instructions

2. Applications must be a minimum of 10,000 shares ($2,000) and then in increments of1,000 shares ($200)

3. Pay Application Monies in accordance with instructions set out on the Application form

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WONHE AUSTRALIAN ADVISORY TEAM

Lead Manager Beer and Co. Pty Ltd and its wholly ownedsubsidiary, Melbourne Venture Securities Pty Ltd

holding Australian Financial Services Licence No.224313

Legal Advisor Pointon Partners Pty Ltd

Independent Accountant HLB Mann Judd Corporate Finance Pty Ltd

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WONHE CONTACT LIST

Beer and Co. Pty LtdMichael Beer

T: +61 3 9600 3599

M: +61 412 945 818

E: [email protected]


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Wonhe Presentation 161115.pdf

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