Alltronics Holdings Limited — Call Transcript 2012

Mar 5, 2012

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ALLTRONICS HOLDINGS LIMITED 華訊股份有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 833)

MARKET BRIEFING

This announcement is made by Alltronics Holdings Limited (the “Company”) on a voluntary basis. The purpose of this announcement is to inform the shareholders and potential investors of the Company and its subsidiaries (the “Group”) that the Group has entered into the Suning Energy Management Contract Agreement with Suning Appliance Co., Ltd. (“Suning Appliance”), China Potevio Company Limited (“China Potevio”) and 北京巨龍東方國際信息 技術有限責任公司 (“Beijing Dragon”).

The Chairman of the Company discusses the strategy of the Energy Management Contract business and outlook of the Company during an interview with Corporate Focus (HK) Limited. A transcript of the interview is attached to this announcement.

By order of the Board Alltronics Holdings Limited Lam Yin Kee Chairman

Hong Kong, 5 March 2012

As at the date of this announcement, the Board of the Company comprises Mr Lam Yin Kee, Ms Yeung Po Wah and Mr So Kin Hung as executive directors; Mr Fan, William Chung Yue as nonexecutive director; and Ms Yeung Chi Ying, Mr Yau Ming Kim, Robert and Mr Leung Kam Wah as independent non-executive directors.

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ALLTRONICS HOLDINGS LIMITED 華訊股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 833)

Transcript of a recorded interview by Corporate Focus (HK) Limited ( ) with Chairman Lam Yin Kee of Alltronics Holdings Limited on the strategy of the Energy Management Contract business and outlook of the Company.

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The recently announced Energy Management Contract business represents a new line of business for Alltronics. Can you explain the technological evolution and development of this new management business?

• A This new business capitalizes on our core competencies. In fact Alltronics has extensive technical expertise in the research and development of electronic products, and its management has over 40 years of experience in electronic products. In view of the anticipated huge market potential for LED lighting equipment, the Group has been planning to enter this market since 2010 and as such we set up a dedicated team of engineers for the development of LED lighting equipment. After more than two years of development, the Group is now capable of designing and providing high efficiency LED lighting equipment which delivers above 40% savings in energy costs with a minimum economic life of 25,000 hours. This enables the Group to enter into the Energy Management Contract business. As background, LED has higher efficiency when compared to traditional lighting equipment, longer life and lower heat generation. With the strong support from the China Government in energy saving, especially in the green lighting industry, we expect there will be huge market potential for LED lighting equipment in the future.

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Do you see this as the beginning of a new business model for many companies who are looking to save energy costs as well as going green?

• A Absolutely. This Energy Management Contract business not only reduces energy costs for many companies, but it also helps to reduce overall carbon emission thereby contributing to environmental protection. Hence there are an increasing number of companies looking for Energy Management Contract business opportunities. We estimate the overall market to be worth billions.

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• Alltronics is going to provide LED energy solutions to at least 1,000 of Suning Appliance’s retail outlets and total energy savings of an estimated RMB 150 million during the 5 year contract. How much capital expenditure do you need to spend for the development of the platform and what is the share of revenue you will receive? Do you also need to expand your workforce?

• A During the contract period of 5 years, the aggregate energy saving revenue to be received from Suning Appliance is estimated to be approximately RMB150 million. However, this is only a rough estimation and the actual amount receivable will depend on the number and types of LED lighting equipment actually installed at each of Suning Appliance’s retail outlets. Based on an estimated revenue of RMB150 million, the total capital outlay will be approximately RMB80 million to RMB90 million. Out of all energy saving revenue receivable from Suning Appliance, Alltronics will be entitled to share 98% and China Potevio will share the remaining 2 %.

We will outsource the installation work to qualified contactor companies with a network all over China. In other words, Alltronics will not set up its own installation work force. This enables the Group to control the installation costs more effectively. However, we still need to hire additional qualified engineers to carry out supervision at the sites to ensure the installation work meets the relevant performance standard.

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• Once this platform is fully developed, do you think you can roll it out to other companies in the PRC? Will it also be applicable to factories and industries or just retail?

• A The Suning Energy Management Contract Agreement is the first of its kind and the Group is expecting to enter into more agreements in future. Indeed, the Group targets to enter into 2 to 3 Energy Management Contract agreements every year. In terms of industry, this business model is suitable for any sector and will be successful for those companies that have high lighting equipment energy consumption, such as supermarket chain stores and property management companies.

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What is the anticipated timeline for full installation? When do you think the first installation will take place?

• A Regarding the Suning Appliance contract, we expect to complete the installation work for 1,000 retail outlets within one year. In fact we have already completed the installation work for a total of 28 Suning Appliance’s retail outlets at Nanjing district.

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Do you own the sole technology rights?

• A Insofar as this type of technology, it is proprietary to Alltronics. But bear in mind that LED has a history of approximately 50 years. We see it as efficient and with continued growth as the key criteria for LED lighting equipment is its high efficiency and energy saving rate, less heat generation, long economic life with reliable and stable performance.

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Where are those 1,000 retail shops of Suning Appliance located? As the offices and factories of Alltonics are in Hong Kong and Shenzhen respectively, how does Alltronics arrange the logistics of LED equipment?

• A The 1,000 retail outlets are all over China. As mentioned before, the installation work will be done by qualified contactor companies under the close supervision of Alltronics’ engineers. The LED lighting equipment will be delivered by our suppliers to designated areas all over China at our request.

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Why did Suning Appliance choose to cooperate with Alltronics rather than other mainland electronic manufacturers? What kind of comparative advantage does Alltronics have over the mainland competitors?

• A As you know, Alltronics teamed up with China Potevio to set up a platform to carry out the Energy Management Contract business. With the strong state-owned enterprise background of China Potevio and the strong technical background of Alltronics, this platform provides a solid base to carry out future Energy Management Contract business.

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Can you comment on how this project has any impact to the Company’s profit? How much profit is expected to generate from this project?

• A We cannot comment directly as to the profit on each individual contract. We can say however that this contract business is expected to provide a constant source of income during the contract period, which is accretive to the Group’s profit. The Group hopes that, eventually, the profit contribution from Energy Management Contract business will exceed the profit generating from the existing electronic business.

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Will Alltronics continue developing energy saving projects with China Potevio, what are the considerations in deciding the projects?

• A The platform set up with China Potevio for Energy Management Contract business will be extended to other customers. The criteria in the selection of potential customers are mainly those companies with high lighting equipment energy consumption; strong financial position and preferably listed companies or state-owned enterprises.

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• How does Alltronics position itself after this new business line? What will then be the core operations?

• A At the moment, Alltronics will continue its electronics business as the Group expects that its electronic business will still have growth in the near future, although at a slower pace than the Energy Management Contract business. The Group expects that, eventually, the profit contribution from Energy Management Contract business will exceed the profit generating from its existing electronic business.

For further information, please contact Corporate Focus (HK) Limited on 852-2868 0282 or info@corporatefocus.org.