【正文】 xpansion, first from Beijing to Wuhan, (2) introduce entry products to cover all price points while continuing to introduce high end products to create margins, (3) improve channel coverage by increasing the distributor work and the sales force resources, (4) increase significantly advertising spending while optimizing media mix, (5) reduce aggressively cost by leveraging economies of scale. 3 010326SH_120703_085v5i 1 , 9 0 02 , 3 0 03 , 4 0 04 , 4 0 0THE MWO MARKET IN CHINA HAS GROWN TO MILLION SETS 1997 2023 China MWO retail sales volume Thousand sets 1997 1998 1999 2023 CAGR = 32% source: Light Industry Information Center, ponent manufacturers, Galanz, LG, team analysis, SIC Team estimation based on ponent purchases minus inventory and export volume for Galanz MWO management estimation based on sales volume of Galanz’ 20 largest distributors 3,800 4 010326SH_120703_085v5i PENETRATION IS DRIVEN BY INCOME INCREASE 2023 peration rate by region RMB, percent Peration rate Percent Annual disposable ine RMB 1991 1999 SH peration rate RMB, percent Peration rate Percent Annual disposable ine RMB 010203040506070800 2 , 0 0 0 4 , 0 0 0 6 , 0 0 0 8 , 0 0 0 1 0 , 0 0 0 1 2 , 0 0 001020304050607080904000 6000 8000 10000 12023 14000Shanghai Beijing Guangdong Chongqing Source: China Statistic Yearbook 5 010326SH_120703_085v5i 4 , 4 0 05 , 4 0 06 , 4 0 07 , 5 0 08 , 6 0 09 , 8 0 0BASED ON THE EXPECTED INCOME GROWTH, 18% ANNUAL GROWTH RATE IS EXPECTED FOR TOTAL CHINA MICROWAVE OVEN MARKET IN THE NEXT 5 YEARS Key assumptions ? Increase of peration rate in urban areas from 14% in 2023 to 30% in 2023 ? Increase of urban household numbers from 99 million in 2023 to 114 million in 2023 Total China microwave oven market forecast Thousand units Source: Team analysis 2023 2023E 2023E 2023E 2023E 2023E CAGR = 18% Low estimate = 3,800 Low estimate = 8,464 6 010326SH_120703_085v5i HUA BEI (NORTHERN CHINA) REGION HAS BEEN THE LARGEST MARKET FOR MWO IN CHINA * Estimated by LG sales branches Source: SIC Total China sales volume – YYSC Thousand sets, percent ? Hua Bei and Hua Dong still account for more than 60% of the whole market ? However, sales in XiNan, Dong Bei, and Hua Chung has grown even more rapidly 100% = 652 847 760 1,032 Beijing Shanghai Guangzhou Shenyang 1997 1998 1999 2023 2023 total China sales revenue – YYSC RMB thousands, percent 8 . 3 1 1 . 11 4 . 3 1 4 . 44 0 . 03 4 . 4 3 1 . 22 4 . 53 0 . 9 3 0 . 7 3 2 . 16 . 39 . 81 2 . 51 0 . 91 1 . 74 . 66 . 97 . 35 . 43 9 . 1 %762,591 779,450 667,818 753,679 1997 1998 1999 2023 Chengdu Wuhan % Beijing Shanghai Shenyang Wuhan Chengdu Guangzhou 100% = 1,584 2023 plus selected hypermarkets* 7 010326SH_120703_085v5i 11 11 1010 102017 171932 322230 24 23655BASED ON THE INCOME DEVELOPMENT, DEMAND FORECAST ANALYSIS SHOWED THAT CENTRAL AND SOUTHERN REGION WILL HAVE THE HIGHEST GROWTH ? China total urban household number increase by 30% per annum from 2023 2023 ? Disposable ine per capita in total China urban areas increase by 6% per annum from 2023 2023 Market size forecast by region Thousand sets。 percent 100% = 1997 2023E 2023 CAGR Percent Key assumptions Source: Team analysis, China Statistic Yearbook Beijing Shanghai Guangzhou Shenyang Wuhan Chengdu 1,930 9,800 4,400 18 17 12 23 19 34 20 HIGH ESTIMATE 8 010326SH_120703_085v5i Market size of each region Thousand sets BEIJING, SHANGHAI AND WUHAN WILL BE THE LARGEST MARKETS IN 2023 465 1,028 2023 2023 Chengdu region 453 1,983 2023 2023 Wuhan region 236 561 2023 2023 Shenyang region 1,055 2,233 2023 2023 Beijing region 754 1,853 2023 2023 Guangzhou region 1,399 2,177 2023 2023 Shanghai region HIGH ESTIMATE 9 010326SH_120703_085v5i ALTHOUGH REGIONS OTHER THAN BEIJING ONLY ACCOUNT FOR SMALL SHARE CURRENTLY, TREMENDOUS GROWTH AND HEALTHIER MARGIN ARE EXPECTED THERE 5101520253035404520 25 30 35 40 452023 2023 growth potential CAGR Profitability LG 2023 gross margin percent Market size today Shanghai Beijing Guangzhou Chengdu Shenyang Wuhan HIGH ESTIMATE Source: LG, team analysis 10 010326SH_120703_085v5i SALES FROM SINGLE FUNCTION PRODUCTS HAS SHIFTED TOWARDS MECHANICAL GRILL PRODUCTS * Estimated by LG sales branches Source: SIC Total China sales – YYSC Thousand sets, percent 796443 4091231 3423 22 2312410% 3100% = 633 847 775 1,032 Sensor Computer grill Mechanical grill Single 1997 1998 1999 2023 Sales revenue – YYSC RMB thousands, percent 70553826912283732 283121610% 6100% = 629,680 728,891 592,880 707,582 Sensor Computer grill Mechanical grill Single function 1997 1998 1999 2023 1,584 2023 plus selected hypermarkets* 11 010326SH_120703_085v5i RECENT BUYERS TEND TO BUY MORE MECHANICAL GRILL PRODUCTS THAN BEFORE Type of MWO bought Percent Single function Mechanical grill Computer grill Temperature** control Don39。t know 41292184284617010All owners Recent buyers* * Those who purchased in past 12 months ** Part is subset of puter grill Source: AMI customer survey 12 010326SH_120703_085v5i PRODUCT TYPE MIGRATION RELATES MORE TO THE PRICE DROP 1997 2023 product evolution RMB Percent Sales of mechanical grill products has increased a lot due to the price drop. Computer grill products are expecte