Initial public offering

presentation
November 2015

WONHE MULTIMEDIA
COMMERCE LIMITED
ACN 607 288 755
ASX : WMC
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Wonhe Multimedia Commerce Limited

DISCLAIMER

This presentation has been prepared by Wonhe Multimedia

Commerce Limited for professional investors. The information
contained in this presentation is for information purposes only and
does not constitute an offer to issue, or arrange to issue, securities or
other financial products. The information contained in this presentation
is not investment or financial product advice and is not intended to be
used as the basis for making an investment decision. The
presentation has been prepared without taking into account the
investment objectives, financial situation or particular need of any
particular person.
No representation or warranty, express or implied, is made as to the
fairness, accuracy, completeness, or correctness of the information,
opinions and conclusions contained in the presentation. To the
maximum extent permitted by law, none of Wonhe Multimedia
Commerce Limited, its directors, employees or agents, nor any other
person accepts any liability, including, without limitation, any liability
arising 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 any
forecasts, prospects or returns contained in this presentation nor is
any 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 or

without the assistance of a financial adviser, whether an investment is
appropriate in light of your particular investment needs, objectives and
financial circumstances. Past performance is no guarantee of future
performance.

Wonhe Multimedia Commerce Ltd was incorporated on 27 July 2015.

The Company does not have any current operating or investment
activities. As the Company forms part of Kuayu and the Wonhe
Group, comprising the Chinese subsidiaries, financial information
contained in this Investor Presentation has been extracted from
Section 7 of the Prospectus.

Application for shares can only be made pursuant to the Prospectus

issued by the Company and available from the Companys website
(www.wonhe.net), the Lead Manager, Beer and Co Pty Ltd and from
the ASX website.

Wonhe Multimedia Commerce Limited

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 Listing

$30m

$31m

Group Net Assets 30 June 2015

$45.9m

$45.9m

Group Cash 30 June 2015 (pre IPO)

$53.1m

$53.1m

14.3 times
2.4 times

14.8 times
2.5 times

Offer Price PER (Price Earnings ratio)

- based on Full Year 2014 NPAT $2.1m
- based on annualised June 6 mths 2015 NPAT $6.3m

Proposed Annual Dividend

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

be paid approx Sept / Oct 2016

Wonhe Multimedia Commerce Limited

INVESTMENT HIGHLIGHTS
Leading edge producer of internet related
products

CEO, Jack Tong a leader of the IT

community in Shenzhen, the IT leader in
China

The Wonhe Commercial Router is

becoming a leading edge product

The Wonhe Router is sophisticated, used

with free WiFi in large retail areas to
aggregate data from consumers able to
be 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 bigger
contracts with SOEs

Strong future growth, profits, cash on

hand and dividends is compelling

Wonhe Multimedia Commerce Limited

BOARD OF DIRECTORS
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 computer
technology, innovation and a Leader in IT in
Shenzhen
Mr Jun Li, Non-Executive Director
Considerable experience in cross border
finance, international marketing and project
marketing

Mr Frank Cannavo,
Non-Executive Director
Experienced Company Director, strong
capital raising skills and experience and
strong investor networks
Mr Raymond Lim,
Non Executive Director
Holds qualifications in accounting, finance
and law. Raymond is a Chartered
Accountant and Solicitor. He is also a
Chartered Tax Advisor of the Taxation
Institute of Australia
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Wonhe Multimedia Commerce Limited

CORPORATE STRUCTURE
WONHE High-Tech International Ltd
(a Nevada company)
100%
World Win International Holding Ltd
(a British Virgin Islands company)
52.26%
Investors under Prospectus
Capital Raising

12.90%

WONHE Multimedia Commerce Ltd

(an Australian company)

34.84
%

Existing Minority
Shareholders

100%
Kuayu International Holdings Group Ltd
(a Hong Kong company)
PRC

100%
Shengshihe Management Consulting (Shenzhen) Co Ltd
(a wholly owned foreign enterprise in China)
100%
Shenzhen WONHE Technology Co Ltd
(a PRC limited liability company)

Wonhe Multimedia Commerce Limited

KEY MILESTONES OF WMC
Shenzhen Wonhe China registered in
November 2010

In 2012 launched the first home multi

media centre HMC 660

2013 High Speed Growth Award and

Innovation Award by the Shenzhen
computer industry

Advanced Home Media Centre

launched 2014

Domestic Router YLT-100S

launched 2015

Commercial Router YLT-300S

launched 2015

Following its ASX listing Wonhe will

be able to bid for major Chinese IT
contracts, backed by its leading
Commercial Router YLT-300S

Wonhe Multimedia Commerce Limited

THE IT INDUSTRY IN CHINA
In China, internet penetration moving to
deepening of user content
Broadband in China becoming the
macro development strategy
Broadband access in developed cities
now 100 Mbps
Demand for networking of mobile
phones, tablets, smart TVs and other
devices growing fast
Internet online video business
developing fast
All these factors underpin and enhance
the wireless Router market

Figures in 10,000 units

Wonhe Multimedia Commerce Limited

WONHE SALES NETWORK
NOW AND FORECAST
Wonhe sells its key products, the
Wireless set top box and the Commercial
router mainly in Guangdong Province
Wonhe sells most of its set top boxes to
12 Electronics companies in Shenzhen
60 Distributors sell Wonhes products
into the Guangdong market
Company is planning to increase its
sales reach to the entire east coast cities
of China

Wonhe Multimedia Commerce Limited

CHINA WiFi AND 3G / 4G

WiFi provides free network services
3G / 4G charged by data flow
WiFi much faster than 3G and faster
than 4G
Demand for cell phones in China is
massive

Very close link between cell phone

demand and market demand for WiFi
Wonhe Commercial router YLT-300S
offers free WiFi
Demand from Malls, Shopping centres
and Business centres for Routers
providing free WiFi is huge

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Wonhe Multimedia Commerce Limited

WONHES KEY PRODUCTS COMMERCIAL ROUTER YLT-300S
Intelligent hardware, researched and
developed by Wonhe
The router has an independent operating
system enabling the installation of various
applications by users
The router also has a powerful USB
sharing function

Users log on free to WiFi from the Router

provides users with a shopping platform

Uses cookies from users mobiles to build

user profiles

Enables Users to assess real time

product availability, special offers, and
discounts

Strong encryption, and is very flexible in

accessing and delivering value for money

Selling price around A$300

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Wonhe Multimedia Commerce Limited

WONHES KEY PRODUCTS HOME MEDIA CENTRE HMC720
A data storage, management and control
centre for household equipment
Uses remote wireless technology to
control household devices at home or
remotely
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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Wonhe Multimedia Commerce Limited

WONHES KEY PRODUCTS DOMESTIC ROUTER YLT-100S
Used for traditional router functions of
flow 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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Wonhe Multimedia Commerce Limited

WONHE FINANCIAL ANALYSIS
A. BALANCE SHEET A$M
30 June 2015

31 December 2014

Non Current Assets

53.1
3.6
56.7
3.0

42.2
4.0
46.2
3.2

Total Assets
Current Liabilities
Net Assets

59.7
13.8
45.9

49.4
12.8
36.6

Shareholders Funds
Paid up Capital
Retained Earnings
Other
Minority Interests

9.4
29.7
4.5
2.3

8.8
22.5
3.5
1.8

Shareholders Funds

45.9

36.6

Current Assets
Cash
Other

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Wonhe Multimedia Commerce Limited

WONHE FINANCIAL ANALYSIS
B. 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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Wonhe Multimedia Commerce Limited

WONHE STRATEGIES FOR FUTURE GROWTH
Current Wonhe sales only in Guangdong
Province 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 Guangdong
and adjoining provinces
Wonhe is planning to extend its agents
significantly in future years, initially
covering all east coast provinces over the
next 2 to 3 years

Wonhe will expand its Commercial Router

into more large commercial districts with
intelligent WiFi router installation at no
cost or only at cost price
A listing on ASX combined with the
Companys technological strength plus a
strong Balance Sheet will enable Wonhe
to bid for significant contracts in the future
Using different applications of Wonhe
technology together with the Cloud, being
Wonhes Router, Storage, Videos, Media,
and Networking to gain a strategic
advantage in its IT space
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Wonhe Multimedia Commerce Limited

GOVERNMENT POLICIES AND BARRIERS TO ENTRY
China has specific policies which support
the development of domestic routers
Routers are a combination of hardware
and software; the key hardware is the
chip and the key software is the protocol;
both require expensive and complicated
development platforms and equipment
China has issued a series of policies to
promote the development of network
intelligent equipment

Like Australia, China is focused on

increasing its Broadband strategy and
implementation
The increased network speed creates
significant opportunities for more
intelligent set top boxes
With the increasing internet penetration in
China, the official development mantra is
changing towards the deepening of user
content, adding to the complexity of
internet related products

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Wonhe Multimedia Commerce Limited

WONHE RESEARCH AND DEVELOPMENT
R&D is critical forWonhe to enable it to
stay at the forefront of new IT
developments
Wonhe employs young IT graduates to
develop the protocols for high class
products.
Wonhe uses the international advanced
CMMI-3 level management standard to
manage projects and establish a sound
standardized development system and
training system

Internal R&D is structured in business

teams
The Company holds many Product design
patents for both hardware and software
designs but more recently has focused
more just on the design of new products
with less risk of copying by others

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Wonhe Multimedia Commerce Limited

WONHES COMPETITIVE STRENGTHS
Jack Tong key to the continuing
development of innovative products

Strong focus on R&D to stay at the

forefront of development

Jack Tong sits on the Shenzhen

Computing Association Board and is a
key contributor

Balance Sheet with $53.1m cash on hand

at 30 June 2015

The Commercial router was released into

the market in the June Quarter of 2015
with strong demand

The smart router competes very well

against the similar products on the market
The Company intends to pay dividends
from profits earned

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Wonhe Multimedia Commerce Limited

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:

Use of Funds
Total raised under Offer
Equipment required for product development and testing
(over a two (2) year period)

Maximum
Subscription

Percentage of
Funds (%)

$4,000,000

Minimum
Subscription

Percentage of
Funds (%)

$3,000,000

$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%

$4,000,000

100%

$3,000,000

100%

Total Funds Applied

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 Multimedia Commerce Limited

WONHE TIMETABLE (INDICATIVE)
Opening date of offer (expected)

Tuesday 17th November 2015

Expected closing date

Friday 4th December 2015

Securities issued and allotted

Friday 11th December 2015

Shares expected to commence trading

Wednesday 16th December 2015

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Wonhe Multimedia Commerce Limited

WONHE WHY LIST ON ASX?
An Australian main board listing enables
Wonhe to pursue much larger sales
contracts with large State Owned
Enterprises
An Australian listing gives much greater
credibility to this growing company in a
growth industry
Enables greater opportunity for access to
capital in future years as growth
continues

The Australian market favors Technology

listings with strong growth potential, and
when that is coupled with a strong
Balance Sheet and an intention to reward
shareholders with dividends, the Wonhe
investment opportunity is compelling
It is generally much quicker to achieve a
Listing than all the other Stock markets in
Asia

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Wonhe Multimedia Commerce Limited

HOW TO APPLY FOR WONHE SHARES
1. Complete the Application form at the back of the Prospectus and in accordance with the
accompanying instructions
2. Applications must be a minimum of 10,000 shares ($2,000) and then in increments of
1,000 shares ($200)
3. Pay Application Monies in accordance with instructions set out on the Application form

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Wonhe Multimedia Commerce Limited

WONHE AUSTRALIAN ADVISORY TEAM
Lead Manager

Beer and Co. Pty Ltd and its wholly owned

subsidiary, 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 Multimedia Commerce Limited

WONHE CONTACT LIST
Beer and Co. Pty Ltd
Michael Beer
T:

+61 3 9600 3599

M:

+61 412 945 818

E:

mbeer@beerandco.com.au

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