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Company Overview: Zhongxun Consulting (or “the company”) is an integrated professional real estate service company by providing real estate information services, secondary real estate brokerage services and primary real estate agency services through its unique online-offline model. Started 5 years ago in Beijing, XXX was a successful traditional agency and brokerage company with more than 1000 real estate sales professionals and annual sales (commission revenue) of RMB100Million (2009). Since 2006, the company has been investing heavily in the R&D of proprietary real estate database system, and later in June 2008 launched the website www.chinaidan.com backed by its database system which allows traditional brokers to manage and publish their listings and interact with potential property buyers more efficiently.

Since its inception, xxx has built up premium brand name and solid foundations in Beijing. The company is expanding nationwide by marketing its website chinaidan.com, and assisted by setting up local offices and third-party service centers in 25 major cities. The offline presence will well supplement its online portion and provide high quality, secure transaction services. The company is also setting up national call center to serve those who have difficulties in accessing Internet. As xxx markets its website, it has developed 5,000 enterprise members with over 100,000 outlets and over 500,000 sales professionals by end of August 2009. Such a network is covering 10 million potential property buyers.

Currently xxx.com has Alexa ranking of 2,000 globally with PV of 15. The website also possesses a forum with more than 1,000,000 registered users.

Market Opportunities: Along with recent economic boom, the real estate market in China has been growing extremely rapidly, especially the secondary real estate brokerage sector. Statistics shows that approximately 90 percent of secondary property transactions were done through brokers or sales agents. According to relevant research report, in 2009, 150,000 units of secondary properties were traded in Beijing. The total value of secondary real estate brokerage market in the 25 cities where xxx currently has presence was RMB800Billion in 2009. Under the conventional brokerage rate (2.5% of total transaction value), brokerage commission in these 25 cities were RMB20Billion in total.

Target Customers/Users: xxx’s major customers include traditional brokers who will use the database system to exhibit their listings, and real estate developers who will be adverting at xxx.com and use the company’s primary real estate agency services. Other customers are service companies in real estate industry like decoration companies and designers as xxx.com is a targeted media to reaching their potential clients.

Besides traditional secondary real estate brokerage companies, the company also allows individuals who has their primary property resources, or “individual brokers” and personal property owners to trade directly at xxx.com. Individual broker is one of the most important types of customer that xxx is developing. The entire transaction will be consummated via xxx’s offline third party service center.

Revenue Model: The company is generating revenues primarily from both online and offline businesses. Online revenues consist of i) traditional online advertising charges due to the traffic of website; ii) sponsor listing for institutional and individual brokers, and iii) membership fees for listing brokers and other service providers in connection with real estate industry.  However, the database system is free of charge for all types of brokers in order to attract them to list at xxx.com.

Offline revenues are mainly from i) commission sharing with individual brokers (xxx taking out 30%), and third party service fees for those who trade through individual brokers and personal owners; ii) primary real estate agency commissions. As increasing institutional brokers choose to list at xxx.com, they also become important channel and partner for xxx to market primary properties, and iii) telecom VAS revenues from call center for inquiries and trading of properties.

In addition, the company may have other revenue streams, such as e-magazine for real estate information, etc.

Competition Positioning: xxx does not have direct rivals at present against its online-offline model. For real estate information services, the company may face competitions from a number of players such as Soufun.com (Alexa ranking of 200 and PV of 10), and Focus.cn (Alexa ranking of 400 and PV of 7). However, neither of them provides agency or brokerage services so far as their revenues are mainly generated from advertisement. For secondary real estate brokerage services, the company may face competitions from traditional brokerage companies, such as Lianjia, 5i5j, Century 21, ZDHouse, etc. In long term, however, traditional brokerage companies will be more like partners than competitors as to xxx.

In the future, xxx will take advantage of its online-offline model and technology to compete with others. For example, xxx’s website and call center will be covering more audience, and will provide more comprehensive information and high quality, one-stop services to property buyers. Furthermore, management team has proven track records in bringing the company to a dominant leadership in primary real estate agency and secondary real estate brokerage market in Beijing. The extensive experience in real estate industry also benefits the management team to develop online business and others.

Historical and Forecasted Financials (RMB 000s):

Historical and Forecasted Financials

The company has experienced extremely fast growth since its inception in 2006. From 2006 to 2009, revenue and net income grew at a CAGR of 129% and 113%, respectively. In 2008, the company generated revenue of RMB30Million and net income of RMB15Million. After 2008, the company began to invest in the R&D and shift its business to online part. The company expects to generate revenue of RMB200Million and net income of RMB80Million, or US$12Million in Year2011.

Fundraising Plan & Use of Proceeds: The company targets to raise US$20million growth capital from reputable investors. Proceeds will be mainly used for offline roll-out in other cities, and R&D investments in database system as well as marketing expenses. The objective of Series A financing is to solidify the online-offline model and build up “xxx” as a national brand name.

Management Team:

Tom WANG, founder & CEO. Former Senior Vice President of xxx Technologies, a leading real estate information portal in China, in charge of corporate strategy and marketing. Prior to xxx, Tom worked for Lehman Brothers. Tom is MBA of Harvard Business School.

Contact:

Zhongxun Consulting, Email: cheney@chinaidan.com; Tel: 0755 33162550  400-728-7258

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