OVERVIEW

We are a leading domestic watch brand-owner of economical quartz analogue watches and a
leading OEM manufacturer of quartz analogue watches in the PRC. According to industry research, for the
year ended 31 December 2013, Time2U was the leading domestic watch brand in the PRC in the
segment of economical quartz analogue watches in terms of retail value and we were also one of the
top five quartz analogue watch manufacturers in terms of sales value in the PRC. Established in 1994
initially as a manufacturer of watches and related products, leveraging over a decade of experience in
watch manufacturing, we began designing, manufacturing and selling watches under our own brands
Time2U and Jonquet in 2010 and subsequently launched our major sub-brand Color in mid-2012. With
fashionable and trendy designs, affordable prices targeting the mainstream mass market, we position
our watches as “fast-fashion” products to capture the recent consumption trend.

we have two principal lines of business operations, namely, the manufacture and sale of watches on an OEM basis and the manufacture and sale of watches under our proprietary brands and major sub-brand, namely Time2U, Jonquet and Color.

Watches that we produce on an OEM basis are bearing the corporate logo or brands specified by
our OEM customers, who are companies directly purchasing for themselves or trading and sourcing
companies purchasing on behalf of end-customers. For OEM watches, we manufacture watches
primarily based on our customers' design and specifications, and in addition, we participate from time
to time in the design and development of watches in accordance with our OEM customers' concepts,
requirements and standards and suggest designs developed by our in-house design team. We believe
that our watch design and development capabilities differentiate us from our OEM competitors.

Taking advantage of our design and production capabilities, we successfully launched our
branded watches business in 2010. We manage all aspects of the design, development and production
of our branded watches. Under the overarching theme of "fast-fashion", we have developed and
marketed a few distinctive brands and sub-brands with differentiating product characteristics,
domestic pricing and target markets. Time2U is our flagship brand, which has already become the
leading domestic brand in the PRC economical quartz analogue watches segment in terms of retail
value. Jonquet is our premium brand which targets more mature and sophisticated consumers, and
Color is our major sub-brand under Time2U which targets youthful and trendy consumers. Please see
"- Our brands and products - Our branded watches" for further details.

     For our OEM watches, we sell directly to our OEM customers, which are located domestically in the PRC and
nationally in places such as Europe, Americas and Asia (excluding the PRC). On the other hand, domestic sales of our branded
watches are made on a wholesale basis to our distributors, who then resell our branded watches to (i)
consumers at various points of sale and on-line stores which they operate or (ii) to their wholesale
consumers who then resell our branded watches to consumers through their respective retail channels.
As of 31 August 2014, we had 28 distributors across 24 provinces, autonomous regions and
centrally-administered municipalities in the PRC. Since 2013, we also exported our branded watches
on a wholesale basis to overseas customers.

            As a brand owner, we focus on improving our brand awareness through various marketing
campaigns. Since 2010, we have been increasing our marketing expenditure in order to promote the
awareness and image of our proprietary brands. We execute a multi-prong marketing strategy, which
includes attendance of exhibitions, placement of advertisements in television and printed media, and
on-line marketing campaigns.