Investment Outline of Business Inviting Projects of Hunan Publishing Investment Holding Group Co., Ltd.

Company name
Hunan Xinhua Bookstore Group Co., Ltd..
Industry
Publishing
Registration address
No. 76, 2nd section, Furong Zhong Lu Road, Changsha City
Registered capital
173.55 million Yuan
Business scope
wholesale, retail, importing and exporting of Chinese and foreign books, textbooks, electronic publications, audio & video products, cultural goods, and periodicals, and publications with foreign cooperation, hotel and tourism, real estate management, education and training and other business.
Legal person
Qin Yulian
Corporation structure
Hunan Xinhua Bookstore Group Co., Ltd. (hereinafter abbreviated as Hunan Xinhua) is a wholly-owned subsidiary of Hunan Publishing Investment Holding Group Co., Ltd., administers 14 city-level subsidiaries and 86 county-level subsidiaries.
History
Hunan Xinhua Bookstore was established on August 27, 1949, and reformed as Hunan Xinhua Bookstore Group Co., Ltd. on December 28, 2002. In 2001, Hunan Xinhua entered into top 500 of wholesale enterprises of China; in 2003, Hunan Xinhua exercised chain operation strategy; Hunan Xinhua has first-level state certificate of wholesale enterprise for books, audio & video products, and general issuance certificate for books, audio & video products.
Business of Hunan Xinhua
Main business of Hunan Xinhua is including: wholesale and retail of books, electronic audio & video products, and cultural goods. Additional to main business, Hunan Xinhua has been engaging in real estate development, import and export business, tourism, hotel and etc. Hunan Xinhua¡¯s incomes from main business are in the following table:

(Unit: 10,000 Yuan)

Outline of the industry
Market scale and general situation: Hunan Xinhua has exclusive right to issue all textbooks in Hunan Province with a proportion 100%. As to the complete competitive market of common books and audio & video products, Hunan Xinhua occupies 40% share by active competition, and the publication of textbooks and other products increases over 10% annually.
Competition of the industry: Hunan Xinhua possesses 570 sales points with total assets 2.449 billion Yuan and annual sales incomes 4.396 billion Yuan, which has an absolutely leading position in the industry of Hunan Province. Hunan Xinhua¡¯s advantages are including: sales terminals all over Hunan Province; customer resources accumulated for many years; brand advantage caused by sincere services; scale advantage caused by chain operation, and talent and professional technology. In recent years, by deepening reform, Hunan Xinhua has collected its preponderant resources to form its core competence and further consolidate its leading position. Now in whole area of Hunan Province, Hunan Xinhua has not any main rival with threat, only in partial district and some subdivided markets, which is in competition with the bookstores established by Hunan Hengdao Book Co., Ltd., Wanjuan Book Co., Ltd. and the enterprise of post system.
Core group and staff
Core group

Staff:
Hunan Xinhua now has 6689 employees, including 482 administrative employees, 379 financial employees, 140 technicians, and 5688 production employees.
Business development
Hunan Xinhua exercises a development strategy of ¡°one main body, two wings¡±, which means that based on the successive increment of its main business of books publication, Hunan Xinhua will march into high-tech industries and the tertiary industry.
Main future economic objectives:
Based on main economic indexes in 2005, to make efforts to increase its annual sales incomes 30% to 2010 and achieve 5.5 billion Yuan; increase its annual profit 100% and achieve 150 million Yuan; increase its total assets 50% and achieve 3 billion Yuan. The development objective of sales incomes is in the following table:
Unit: 100 million Yuan

Development objectives of each business:
The first is publication issuance, to form a fluent issuance net for textbook and teaching aids, successively consolidate its publication function, and make efforts to achieve 3.2 billion Yuan sales incomes; to form a chain operation system covering cities and villages in different districts for common books, electronic audio & video products; to construct an oversize book-shopping center in Changsha City with over 20,000 square meters operation area, 20 large-type book-shopping centers nationwide, 50 professional bookstores, 200 standardized chain bookshops and 200 high-quality book sales points in village, to improve market share, consolidate and develop its position of main channel, and achieve 1.4 billion Yuan sales incomes of common books and electronic audio & video products in 2010. The second is the operation of cultural goods, based on exercising chain operation of publication, to actively develop chain operation of cultural goods and achieve 200 million Yuan sales incomes in 2010. The third is development of hotel and tourism, to develop an economic chain hotel brand with high-quality assets to explore tourism potential and achieve 200 million Yuan sales incomes in 2010. The fourth is real estate development, to form a real estate block with huge potential and a real estate management block with a good reputation and achieve 300 million Yuan sales incomes in 2010. The fifth is to enlarge superstore, to take the commercial chance, enlarge sales hall, form Xinhua brand of superstore, and achieve 200 million Yuan sales incomes in 2010. The detailed situation of each business is in the following chart:

Financial situation

Hunan Xinhua¡¯s advantages
1. Hunan Xinhua possesses the well-known brand of ¡°Xinhua Bookstore¡± and a sales net covering the whole area of Hunan Province; 2. Its structure of assets is rather good, which mainly is sales hall located at high-quality commercial district, and its cash flow is rather good; 3. Its management group has several years operational management experiences on wholesale and retail of book.
Contact information
Contact person: Tang Zhenyu, Zhang Wenfei
Tel:0731-4302627 4302523
Mobile:13873119586
Fax:0731-4302627
E-mail:tangzhenyu@hnpg.com.cn
zhangwenfei@hnpg.com.cn