"Powerlong City Plaza" – a distinctive commercial property business model

Powerlong focuses on developing large-scale commercial complexes in cities with rapid growth. Our "Powerlong City Plaza" projects are integrated commercial-residential complexes that typically include large-scale commercial premises that contain supermarkets, department stores, retail shops, cinemas, food courts and other recreational facilities, as well as quality residential properties. Depending on the locations of our projects and market demand, our future commercial complex projects may also include high-quality hotels managed by internationally recognized hotel management companies, and large-scale indoor amusement parks. Our “Powerlong City Plaza” projects typically have a total gross floor area (GFA) ranging from 200,000 to 500,000 square meters and are among the largest integrated commercial projects in the cities where they are located, meeting the commercial and entertainment needs of local residents and enhancing the living environment of the communities in which our properties are located.

We aim to bring “Powerlong City Plaza” to emerging cities where we work closely with the local governments to meet their future city development plans. “Powerlong City Plaza” adds new features to the cities where they are located and improve the functional organization of the cities. We primarily focus on fast-growing emerging cities in China, which enables us to acquire land at relatively low cost and avoid the high levels of competition prevalent in first-tier cities.

One of the highlights of our business model is that we generally develop our properties in multiple phases. In early phases, we sell the residential properties and part of the commercial properties to generate healthy cash flow to satisfy the capital needs of the remaining phases of the project. We also strategically retain long-term ownership of our quality commercial properties for recurring rental income and potential capital appreciation. We believe our “Powerlong” business model allows us to expand rapidly with relatively low capital outlays, achieve attractive returns and stable cash flow. We also believe it provides us with diversified revenue sources and lowers the risk of over-reliance on any particular property sector to ensure our continued success.

We will continue to optimize our tenant mix and introduce domestic and international brands as long-term anchor tenants of “Powerlong City Plaza”. Our anchor tenants include Fujian Xinhuadu Department Stores, Carrefour, Gome Electronics, and Jinyi Cinemas, to name a few. We believe that such strategic partnerships with well-known brands will　allow us to maintain the quality and value of our properties. At the same time, we will be able　to introduce them to similar projects in other target markets and further enhance our　‘‘Powerlong’’ brand by having strong relationships with our long-term anchor tenants.

Powerlong intends to continue to adopt our "Powerlong" business model in fast-growing cities in China to meet increased demand for quality commercial properties driven by heightened regional business activities in these cities. We intend to develop large-scale, multi-functional complexes in cities with good growth potential.

Sizable land reserves

Since we began to engage in property development operations in 2003, we have completed three projects in Fujian Province and one project in Henan Province, with a total GFA of over 660,000 square meters. As at 30 June 2009, we had seven projects under development in Jiangsu, Shandong, Henan and Anhui provinces, with a total GFA of over 3,300,000 square meters. We also have six projects held for future development in Jiangsu, Shandong and Henan provinces with a total GFA of over 3,900,000 square meters.

We will continue to increase our land reserves and strategically select new locations for future project development in order to grow our business. We intend to continue to work closely with local governments to meet their future city development plans to meet their future city development plans in order to acquire additional land in our target regions at attractive prices.