Major Shareholder:

• Jingxi Guigu ¡V 48.83% interest
• Wangshang Shijie E-business ¡V 15.74% interest

Wumart Group, a non-state-owned enterprise, is one of the leading retail chain store operators in Beijing, it is principally engaged in the operation and management of supermarkets and convenience stores in Beijing, Tianjin and Hebei, and a hybermarket in Beijing, with a view to providing a comprehensive range of merchandise to cater for the daily needs of the general public. While having an initial focus on Beijing, Wumart Group's aim is to expand its retail network first into the Northern Region, followed by the Eastern Region and ultimately across the other regions of the PRC

As of the Latest Practicable Date, either through Wumart Group's direct ownership or through entering into management agreement, including the Management Agreement, Wumart Group and its associated companies owned, operated and/or managed (as the case may be) a retail chain network comprising (1) 1 hybermarket in Beijing; (2) 23 supermarkets in Beijing and 2 supermarkets in Hebei; (3) 127 convenience stores in Beijing (including 14 owned convenience stores in subway stations) and 14 convenience stores in Tianjian; and (4) 7 drug stores in Beijing. In addition, as of the Latest Practicable Date, there were 52 franchise convenience stores in Beijing operated pursuant to various Franchise Agreements. All the hypermarket, supermarkets and convenience stores of Wumart Group are managed and operated under the logo of ¡§Wumart¡¨

The Directors believe that the Group has the following competitive advantages:

• A strong foothold with good recognition of ¡§Wumart¡¨ brandname by consumers in Beijing and peripheral areas;
• The adoption of a broad-based expansion model, with a primary focus on the collaboration with state-owned entitles or third parties enterprises.
• An effective control on cost and operation through the implementation of an integrated management and operation system for a scaleable network of retail outlets;
• An experience and stable management team;
• A cohesive and results-driven corporate culture supported by a comprehensive staff training system;

• Wumart Group relies on its controlling Shareholder, Wumei holdings, in respect of certain aspects of Wumart Group's business;
• Wumart Group's overall financial position and future growth potential depend significantly upon its ability to secure retail outlets situated in prime locations;
• Wumart Group encounter problem in replicating in other areas the expansion strategy which its has employed to date in Beijing;
• Wumart Group does not possess clear legal titles of leasehold titles or written agreement providing for usage rights in respect of some of its occupied properties
• Wumart Group relies on computer software and hardware systems which may be susceptible to failure.
• Wumart Group relies on its key management personnel;

To expand its retail outlet business, Wumart Group will continue to follow its strategic store expansion plan by growing organically or by entering into collaboration arrangements with state owned enterprises or third party enterprises. Wumart Group's strategy is to transform and re-engineer for the operations of loss making or inefficient shop outlets at strategic location into profitable Wumart Group stores within a short timeframe. Wumart Group also plans to expand its network through acquisitions of or mergers with existing shops/ stores owned by Wumei Holdings and/or other third part enterprises.

In order to strengthen the brandname further in the PRC retail industry , and to ensure that the brandname is regarded by its customer as a symbol of reliability, quality, value for money and innovation, Wumart Group intends to continue to (1)enhance its customer services; (2)improve both the variety and quality of its merchandise and services provided; (3) upgrade its stores,; and (4) develop the brandname through unified brand management and competitive pricing strategies.

Wumart Group's efficient cost structure is dependent upon its advanced operating system. These include a well established, centralized procurement and logistics system, information technology and inventory management systems. Wumart Group will continue to enhance and develop its operating systems and will install its advanced systems in newly established/acquired stores.

The Directors believe that, as a service oriented company, Wumart group's staff are its most important asset. As such, Wumart Group will continue to deploy resources to enhance the quality of its staff and to enhance its unique corporate culture, which places importance on its staff. Aiming to be a ¡§learning organization¡¨, Wumart Group will continue to place particular emphasis on regular staff training in order to keep its staff appraised to its cooperate objective as well as keeping them abreast of the latest techniques in the operation of retail chain outlets. Furthermore, Wumart Group's existing staff reward system will continue to be refined to attract and retain quality staff.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$336.0 million (based on the offer price HK$4.92 per shares). The Group at present intends to apply the net proceeds as follows: