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IGERATOR MARKET WILL BE OF VERY LIMITED SIZE, DESPITE ITS HIGH GROWTH RATE RMB millions, percent 2 1 7 . 01 6 6 . 01 2 6 . 09 6 . 07 4 . 02852023 2023 2023 2023 2023 2023 CAGR (0005) Percent Key drivers Rationale or assumptions ? Living space ? Only households with kitchens over 30m2* are assumed to possibly consider sideby side refrigerators ? Household ine ? Only households with average annual ine over RMB500,000 are assumed to possibly consider sidebyside refrigerators ? Lifestyle ? Most wealthy people have maids who do grocery shopping everyday and they are not in high demand for super large refrigerators ? Price ? Drops at 2% . * Construction area Source: Zhongxi Trading Co., aaaaaa, Lufthansa Department Store, Scitech Department Store, YYSC, team analysis 3,500 4,680 6,260 8,380 11,210 15,000 Units sold Sidebyside refrigerator market size and growth Average selling price ? Key customer groups – Chinese educated overseas – Expatriates – Wealthy local people ? Key markets – Beijing – Shanghai – Guangzhou – Shenzhen – Shenyang 12 aaaaaa010807BJrefrigerator PRICE IS THE DOMINANT FACTOR FOR CONSUMER’S NONSIDEBYSIDE REFRIGERATOR CHOICE WHILE BRAND AWARENESS IS MORE IMPORTANT FOR SIDEBYSIDE REFRIGERATOR Factors to consider when making nonsidebyside refrigerator purchasing decisions Percent of respondents Source: IMI, SCSS2023, interview 47 28 26 23 19 17 14 14 10 7 4 Brand image Price Capacity Energysaving Exterior design Low noise No frost Aftersales service NonCFCs Freezer capacity Other KBFs for side by side refrigerator Soft mercials, such as putting a sidebyside refrigerator in the club of highend residential area is very effective in increasing the awareness Many potential customers are not fully aware of the existence of sidebyside refrigerators in China market When making purchase decisions, the key factors that customers consider are brand, design and feature Yong Guy Manager ZXHY Trading Co. 13 aaaaaa010807BJrefrigerator DIRECT COOLING IS STILL THE PREFERRED CHOICE ACROSS THE MARKET Percent Source: SINOMR。s growth in the market is rather slow Millions units, percent Refrigerator market share of major players in major cities CAGR (9800) Percent aaaaaa Haier/Kelon/Meiling Siemens/Electrolux 21 aaaaaa010807BJrefrigerator EAST, SOUTH AND SOUTHWEST CHINA SEEM TO BE THE WINNING TERRITORY FOR MNC PLAYERS * Kelon and Rongsheng bined Source: SINOMR, GfK, LIIC 100%= North China Others aaaaaa Electrolux Meiling Kelon* Haier Siemens ? Electrolux and Siemens are doing particularly well in Southwest ? Apart from Southwest, MNC players are doing better in east China and South China, relatively more affluent areas ? aaaaaa is relatively strong in East China and South China North East East China Central South South West North West Market share in major cities by geography, 2023 Million units, percent aaaaaa Haier/Kelon/Meiling Siemens/Electrolux 22 aaaaaa010807BJrefrigerator LOCAL LEADING PLAYERS ARE DOMINATING IN ALMOST ALL PRICE SEGMENTS, MNC PLAYERS TEND TO BE STRONG IN MIDTOHIGH END MARKETS * Another Kelon39。S PROFIT SUFFERED OVER THE PAST FEW YEARS AND ARE EXPECTED TO REMAIN LOW Source: Man Stanley Dean Witter report, annual reports Meiling 1997 2023E 2023E 1999 1998 1918