Beer and co summary and IPO presentation, page-4

The reason why 2014 revenue was low was because they focused on their new product which was released in the last qtr of 2014. The first 3 quarters of 2014 they had no product hence no revenue. The reason why they redesigned their old model to their new model was to make it compliant to other provinces since they knew they would be expanding to other provinces rapidly..

As a result of our announcement that a second generation product was coming, demand for our first generation product fell significantly. Toward the end of 2013 we terminated production of the HMC660, and during the first three quarters of 2014, we recorded no sales, as we awaited our new product.

They had over $25m revenue in 2012 and 2013 with $8m net profit on one product only, the old home media centre which they stopped manufacturing at the end of 2013. The company made $6.2m revenue and $1.9 net profit in the last quarter of 2014 when the new home media centre was introduced...

On October 15, 2014, our second generation home media center, the HMC720, passed its stability test, which was the final pre-requisite before we could introduce it to the market. In the fourth quarter of 2014 we commenced sales of the HMC720. Total revenue for the year ended December 31, 2014, all of which was recorded in the 4th quarter, was $6,195,313.

In the second quarter of 2015, sales of the HMC720 rebounded to $6,365,846, resulting in sales of the HMC720 totaling $12,429,491 for the first half of 2015. We believe sales will increase in coming quarters.

Their domestic wifi router was introduced in March 2015 and commercial wifi router in June 2015. So with 3 products to market compared to 1 previously, I would expect revenue for the full 2016 to be much more than the $25m they made in 2012 and 2013... This isn't taking into account the expansion that is planned in other provinces which will increase revenue exponentially...

WONHE SALES NETWORK NOW AND FORECAST
Wonhe sells its key products, the Wireless set top box and the Commercial router mainly in Guangdong Province
Wonhe sells most of its set top boxes to 12 Electronics companies in Shenzhen
60 Distributors sell Wonhe’s products into the Guangdong market
Company is planning to increase its sales reach to the entire east coast cities of China
Wonhe is planning to extend its agents significantly in future years, initially covering all east coast provinces over the next 2 to 3 years