September 2017

(SEHK stock code: 1137)

HONG KONG TELEVISION NETWORK LIMITED

香港電視網絡有限公司

Disclaimer This presentation and subsequent discussions may contain forward-looking statements and information that involve

risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives,

goals, strategies, future events or performance and underlying assumptions and other statements that are other than

statements of historical fact, including, but not limited to, those that are identified by the use of words such as

"anticipates,'' "believes,'' "estimates,'' "expects,'' "intends,'' "plans,'' "predicts,'' "projects'‘, “target” and similar expressions.

The information included is solely for the use in this presentation and certain information has not been independently

verified. No representations or warranties, expressed or implied, are made as to, and no reliance should be placed on,

the fairness, accuracy, completeness or correctness of the information or opinions presented or contained in this

presentation. The performance and the results of operations of the Group contained within this presentation are

historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking

statements and opinions contained within this presentation are based on current plans, estimates and projections, and

therefore involve risks and uncertainties. Actual results may differ materially from expectations discussed in such

forward-looking statements and opinions.

Certain information in this presentation is extracted from Google Analytics and rounded to the nearest thousand. The

computation method and basis of which have not been verified. The data could be overlapping (a) between TV

Programme Platform and Online Shopping Platform if the same user is watching our TV programmes and browsing the

online shopping mall at the same time; (b) between different type of devices among TV Programme Platform and among

Online Shopping Platform if the same user using more than one devices for watching TV programmes and/or browsing

our Online Shopping Platform at the same time; (c) or the same user using HKTVmall app to browse the HKTVmall web-

page. The information for the same period can be changed at different point of time when capturing the data as Google

Analytics performs the analysis on sampling basis. According to Google Analytics, the definition of “User” is “Users that

have had at least one session within the selected date range, which includes both new and returning users.” The above

data are unaudited and are not indicative of the Company’s business performance, financial condition or growth

prospect. Readers should not place reliance on these data.

For figures generated from internal systems and relevant platforms, which were rounded up to nearest integral

percentage or thousand, are unaudited and for reference only.

We are not required to correct or update any such statement or information to either reflect events or circumstances that

occur after the date the statement or information is made or to account for unanticipated events or otherwise.

About HKTV – 25 Years Proven Track Record to Turn Impossible to Reality

1992

• Co-founded by cousins Ricky & Paul with 10 Talents and start-up capital of less than US$300,000

• 1st company to shatter the international Direct Dial (IDD) monopoly in Hong Kong

• Listed in Hong Kong Stock Exchange Main Board (stock code: 1137)

2012

• Over 3,000 Talents located in Hong Kong and Guangzhou with annual revenue over HK$1.5billion

• Hong Kong’s largest alternative and fastest growing residential broadband service provider up to 1 Gbps

• Disposed the entire Telecommunications Business to CVC in April 2012, and focused on Multimedia Business

2015

• Formally launched our 24-hour Online Shopping Mall - HKTVmall - in February 2015, providing one-stop-shop services to consumers and merchants, including an online multimedia marketplace, delivery service, customer experience, entertainment, multimedia production and marketing, big data analysis and machine learning

• Stepping into the first phase – serving the people by tapping into the HK$440 billion retail market in Hong Kong (source: Report on Monthly Survey of Retail Sales published in July 2017 by the Census and Statistics Department of Hong Kong Special Administrative Region).

2017….

• Acquired Groupon HK operation in March 2017 to accelerate our expansion in the servicing segment and rebranded into HoKoBuy in June. Together with HKTVmall, we have a secure foothold in the e-commerce marketplace and make us becoming an unbeatable online shopping platform in Hong Kong

• On HKTVmall + HoKoBuy :

• Carrying more than 182,000 product items and on combined basis, partnering with more than 2,700 merchants and suppliers;

• Expanded efulfillment centre from 15,000 sq. ft. to about 210,000 sq. ft, including frozen and chilled facilities.

• Average daily order number grew from ~ 1,300 in January 2016 to 6,200 in August 2017, about 370% increment in less than 2 years’ time, with average order value of about HK$500 per order. (source: Internal systems and relevant platforms)

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Background

Started from Management Trainee in 2003 and progressed to Managing Director for our shopping and eCommerce business in 2017

Responsible for the Group’s overall sales and merchant relations management

Holds Bachelor of Social Science degree from CUHK and MBA from HKUST

Co-founder

Responsible for the Group’s overall strategic planning, and day-to-day management

Leads the Group’s technical development in telecommunications, media and eCommerce industries

Holds a Diploma of Advanced Programming and System Concepts Design from Herzing Institute, Canada

Co-founder

Responsible for the Group’s overall strategic planning and management of the Group

Highly reputable in the telecommunications, media and eCommerce industries in particular on sales and marketing jurisdiction

Holds Bachelor of Science degree and EMBA from CUHK

Started with the Group since 2003 and progressed to CFO in 2012

Responsible for the Group’s overall financial, administration and talent management

Fellow members in HKICPA and ACCA

Holds Bachelor of Commerce degree from the University of Queensland and MBA from HKUST

Started from Management Trainee in 2004 and progressed to COO in 2017

Responsible for the Group’s logistics, e-fulfillment and business intelligence functions

Holds Bachelor of Actuarial Science degree from HKU

Senior Management Team

25-year history embraces reverse thinking with “Pioneer” DNA

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25-year Reputable History with High Brand Presence in Hong Kong

“David vs Goliath” - Crushed the IDD monopoly market in Hong Kong by introducing “call back” technology back in 1992, with an initial capital of US$300,000

“Invested” 7-year to build a fiber optical network before turning EBITDA positive Became the largest alternative player capable of providing up to 1Gbps Internet service in Hong Kong Became a global showcase for being the largest triple-play telecom network on Metro Ethernet technology

Sold to CVC Capital Partners for US$645mn in May 2012

• We are building the third Legend on !

• On 2 Feb 2015, we formally launched , an online shopping mall including a OTT platform offering real time and VOD drama and infotainment programs

• On 3 March 2017, we completed the acquisition of Groupon HK business and rebranded into on 28 June 2017

• Why “ ” business? – because there is no precedent in Hong Kong!

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Now – Ridding on High Brand Presence

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CONVENIENCE in one single

order

High CREDITABILITY

PRODUCT VARIETY >182,000

product items

COMPETITIVE PRICING at

LOWER RUNNING

COSTS

Our Positioning – A “Branded-Product” Online Shopping Mall in the Region

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• Product offering is limited by store space • Limited hours of operation (10-12 hours/day)

Relatively Low Running Costs

• No boundaries on product varieties • Opens 7 x 24 • Delivery cost efficiency improves

when number of orders increase in the neighborhood area

HK$ HK$

Estimated Daily revenue per shop1 20,000 Estimated daily revenue per Truck (45

orders each with order value @ HK$600)27,000

Estimated Major Daily Running Costs: -

1 Operating lease rental1 3,180 Truck operating costs (estimated at

HK$9,000 per month) 296

2 Staff costs for store operation (assume 3 staff

per store, each at HK$18,000 all-in-salary per

month)

1,776

Staff costs for delivery (assume 1 driver

and 1 courier, each at HK$20,000 all-in-

salary per month)

1,316

3 Depreciation on store renovation and

equipment (assume HK$770,000 CAPEX with

depreciation life of 3 - 5 years)

641 Truck depreciation (Estimated CAPEX at

HK$380,000 with 4 years depreciation life) 260

14,403 25,128

Remarks:

2. Estimates based on internal systems and relevant platforms

Brick and Mortar Store Online Store2

1. Estimates based on information extracted from 2017 annual report of CEC International Holdings Ltd (stock code: 759) and International Housewares

Retail Co Ltd (stock code: 1373)

Estimated profit before considering costs of

inventory/sales and other minor operating costs,

such as product damage, utilities, etc

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Remarks: 1. The sites in the top sites lists are ordered by their 1 month Alexa traffic rank. 2. The 1 month rank is calculated using a combination of average daily visitors and page views over the past month. The site with the highest combination of visitors and page views is ranked #1. The site’s metrics are estimated and based on traffic patterns across the web as a whole and using data normalization to correct for any biases.

Top Sites in Hong Kong - as at 19 September 2017

Ranking in Hong Kong Sites

1 www.google.com.hk

2 www.youtube.com

3 www.google.com

4 www.facebook.com

5 www.yahoo.com

9 www.taobao.com

16 www.price.com.hk

18 www.tmall.com

25 www.amazon.com

90 www.JD.com

110 www.hktvmall.com.hk 356 Zalora.com.hk

360 www.hokobuy.com814 www.fortress.com.hk

930 www.broadway.com.hk

884 www.ztore.com

944 www.parknshop.com

1196 www.sasa.com

1330 www.fingershopping.com

1398 www.watsons.com.hk

1622 www.wellcome.com.hk

Source: https://www.alexa.com/topsites/countries;2/HK

Why Merchant Partners joining HKTVmall and HoKoBuy?

• Wide range of grocery products brings frequency of orderings and increases the landing rate to merchant partners’ store pages – for 90 days ended 31 August 2017, HKTVmall has about 51.8% customers have repeated purchases >/= 2 orders during the period (source: Internal systems and

relevant platforms)

• Multiple stores purchases – in August 2017, average 2.0 stores/order at HKTVmall (source: Internal systems and platforms)

• Average daily traffic to HKTVmall and HoKoBuy in August 2017 was 132,000 and 60,000 respectively (source: Google Analytics)

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Growing Traffic, increasing stickiness!

We serve every aspect in life of our customers !

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• www.hktvmall.com • http://www.hokobuy.com • HKTV mall App • HoKoBuy App

Access to Our Platforms

Supermarket Beauty &

Health Fashion Household

Mother & Baby Outdoor & Sports Hot Deals Pets

Digital & Electronics

Music, Video & Books

On Combined basis: > 182,000 product items From own FMCG inventory to Merchant offered varieties

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Toys, Games & Stationery

No of Product Items

22,000 35,000 27,000 13,000 29,000

4,000 6,000 7,000 21,000 7,000 11,000

As at 15 September 2017

Source: Internal systems and relevant platforms

HKTVmall and HoKoBuy - A One-Stop Shopping Experience with Wide Spectrum of Products

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Our Partners… HKTVmall and HoKoBuy have more than 2,700 stores on combined basis

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• Over 22,000 product items to fulfill day-to-day food and grocery needs • An effective way to maintain recurring orders and to bring consistent

upward traffic to merchant partners

Supermarket Products for Frequency of Orderings

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Supermarket

38%

Others

26%

Digital and Electronics

14%

Hot Deals

24%

As a % of August 2017 Total Gross Merchandise Value (“GMV”) which represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used and returns of merchandise sold.

Beauty & Health

Household

Digital and Electronics

Source: Internal systems and relevant platforms

From Grocery Shopping to High Value Multiple Purchases…..

We deliver a delightful shopping experience, and that’s how we

keep recurring business and business referrals!

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• Delivered almost half A MILLION loyal, high spending & digital new

generation customers to merchants

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224,000 266,000 High synergy

and collaboration

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The above figures represent number of unique customers for 12-month ended 31 August 2017 Source: Internal systems and relevant platforms

HKTVmall Groupon HK/ HoKoBuy

An Unbeatable Platform, as at 15 September 2017 (unless specified)

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4,150,000 registered email subscriptions (source: 1)

3,374,000 app download (source: 1)

880,000 Facebook likes (source: 1)

Source: 1. Internal systems and relevant platforms 2. Google Analytics

2,834,000 combined unique Users in August 2017 (source: 2)

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• On 3 March 2017, HKTV completed the acquisition of acquired Groupon HK business and rebranded into HoKoBuy on 28 June 2017

• From 4 March 2017, Average Daily Order Number and Average Order Value are the combined results from HKTVmall and HoKoBuy; while before 4 March 2017, it represented HKTVmall performance

• Transactions on HoKoBuy are on “deal” basis while HKTVmall are on “shopping cart” basis Source: Internal systems and relevant platforms

What we achieved since January 2016……..

• ~ 300 Professional warehouse and logistic talents

• ~ 120 + Car Fleet including 3-tempature Cool Trucks in operation

• The first “touch” point to our customers

- Better control the last mile delivery

- Stringent requirement on outlook & appearance

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Our Logistic Team – we deliver Service, not only Product

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More than 300 professionals

• Fleet of 120 + trucks in operation;

• Expansion plan to increase to 150 – 200 in 2018

E-Commerce Fulfillment Center

Tseung Kwan O new headquarters with about 55,000

sq. ft. eFulfillment Center Tsing Yi eFullfillment

Center 144,000 Sq Ft

Food Factory at Kwai Chung (frozen/chilled)

12,500 Sq Ft

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eCommerce Platform

Multimedia Production

e.g. Photo and video production for product

promotion

Order processing system

Independent Payment Gateway

eFulfillment Centre

e.g. warehousing, pick/pack functions

3-Tempature Controlled Trucks

operated by self-run Logistics Team

Customer Services

- CRM

- Machine Learning

- Big Data Analysis

One-Stop Integrated Platform

Major Plans in 2017 and forward…

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• The Familiar Online to Offline Model

Drives offline sales through online promotions, advertisings &

notifications, thus transforming online users into offline customers

Online Advertising

Offline Sales

Traditional O2O Model

Awareness & Engagement

Showroom Sales Service Point

Customer Education

Handle Order

enquiries

Order Pick-up Point

Build Trust & Relationship

Arouse Public Attention

Display and show product diversity

Sales Centre

Our O2O Model – a new way of retailing

Example: South Horizons Store

3 months from opening of South Horizons store:

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• This offline-online interactivity is a new way of retailing, adding value to our customers via a 400-500 sq. ft. store compared to a 20,000 sq. ft. retail store

• Focuses on converting Visitors to

Shoppers - “We sell whatever you can imagine”

• An effective marketing channel for

offline-to-online sales conversion!

• Order pick up point to cater for different customers’ delivery preference

Source: Internal systems and relevant platforms

Our O2O Model

• Number of orders and customers from surrounding residential areas soared by 5 times!

• Revenue from products sales increased by 4 times

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20 Oct 2016: Wharf Road, North Point 25 Jan 2017: South Horizons, Ap Lei Chau 20 Aug 2017: Robinson Road , Central 29 Aug 2017: Riviera Garden, Tsuen Wan 5 Sept 2017: Sham Tseng 10 Sept 2017: Mei Foo Sun Chuen 14 Sept 2017: Eldo Court, Tuen Mun

Robinson Road, Central

HoKoBuy Concept Store

North Point

South Horizons

Our O2O Model

Together with HoKoBuy Concept Store at Causeway Bay,

a total of 8 stores!

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Our O2O Model More are under the pipeline ……… • Chi Lok Fa Yuen, Tuen Mun • Plaza Ascot, Fo Tan • Fortune City One Plus, Shatin • Laguna Plaza, Kwun Tong • Tsz Wan Shan Shopping Centre • Paradise Mall, Chai Wan • Island Resort, Chai Wan

~Expansion to 20-30 Stores by 2017

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• Hong Kong’s largest robotic warehousing system, introduced from Germany

• Fully automated system for storage, on-site transportation, pick and pack to enhance logistics efficiency

• To turn the current loss-making “highly manual fulfilment process” into a profitable “highly automated process” for a stable operating environment and substantially less reliance on human resources

• CAPEX plan to install at Tsing Yi and Tseung Kwan O eFulfillment Centre, first phase to be launched in last quarter of 2017

CAPEX Plan on Efficiency – Robotic Picking and Conveying System

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Data – We are building the “Future of Retail” – in the past 31 months, we collected a total of 2.5 million users’ behavior in HKTVmall and HoKoBuy (source: Internal systems and relevant platforms), all these represent our digital capabilities Tools – With the gradual deployment of different predictive and analytical tools, we are bringing them into reality:

• Increasing precision in predicting Consumer Need so as to build trust and stickiness, create demand and be able to capture the time of need

• Assist suppliers, brand owners, distributors and retailers for more accurate product recommendations and target marketing, and to increase cost effectiveness in placing digital advertisements

Future Count on Machine Learning, Predictive Intelligence and Data Analytics

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Capabilities – We are ready to assist our partners to groom their businesses!

• According to the table extracted below from a recent whitepaper – “Smarter Digital

City” jointly published by Google and Nielsen, to benefit from the digital transformation, retail corporates need digital solution partners

• We have most of the capabilities in providing these solutions by ridding on • Growing database on customer behavior • Investment in future “Machine Learning”

technologies • Solid experience in multimedia creative

and production; and • Established eCommerce online platforms

Future Count on Machine Learning, Predictive Intelligence and Data Analytics

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1. “Hong Kong is too convenient to shop” is a fallacy or an misunderstanding!

• Real “convenience” kick-in by a mobile 24-hour shopping mall – consumers can research and make purchases anytime, anywhere

• Benefit from lower online running cost, door-to-door delivery service at your selected date and timeslot….

• Wide spectrum of product varieties - > 182,000 product items at your choice! This is not only a supermarket, but a SHOPPING MALL like Times Square, Festival Walk at your door…..

• Online shopping is complementary, not replacing Brick and Mortar stores; same as Digital media vs Traditional media – we are here to offer choices and varieties to suit different people’s needs at different time

To Conclude…..

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2. Expanding “Digital” crowds • Though Hong Kong has 81% of its population connected to

Internet, it is still behind its peers in the region – Singapore, South Korea, Japan in terms of digital transformation (source: The Economist: http://connectedfuture.economist.com/article/connecting-capabilities/)

• This essentially represents a growing opportunity for

eCommerce business development, in particular, the Young lifestyle generation is growing up while the Middle age and Seniors are keen to catch up the world trend on digital city. It is just a matter if you can capture the “time of need”.

To Conclude…..

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3. To catch up the world trend to becoming a digital city, Hong Kong

consumers, retailers, distributors and brand owners need a Hong Kong based “driver” which is creditable and scalable, embrace new technology, have the guts to adopt, and are committed to invest and develop the “forward looking technologies” – There are HKTVmall and HoKoBuy!

4. Hong Kong is a HK$440 billion retail market, before considering the potential in nearby region. By having an increasingly digitalized addressable market embracing innovation, online shopping is an inevitable business model to capture this digital transformation.

To Conclude…..

www.hktvmall.com http://www.hokobuy.com

Appendices

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• VIP Programme enjoy at HK$250 for free delivery service and benefit from VIP price

• Advertising panels along the MTR stations

• On-street promoters “Jetsoer” in specific areas to push for HKTV mall App download and initiate the first purchase

• Weekly regular promotions such as $10/$20/$30 flashsale Tuesday

Continuous Customer Acquisition & Repeated Purchases

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• A boost up campaign for brand building and brand awareness purpose, covering more than 3,000 advertising panels along the 119 tracks of 50 MTR

• Our aim is to strengthen the association between Shopping and HKTVmall in people’s mind

Unprecedented Advertising Campaign along MTR Stations (Aug – Sep 2015)

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• The third large scale brand awareness campaign on selected advertising panels along the MTR stations … We woke people up at 6am and 1pm everyday during the campaign period to “fight” for the $99 super value for money set!

• Our aim is to maximize the exposure of the newly launched frozen products for the new target customer acquisition, as well as a new year reward to our existing customers!

$99 Crazy Meat Sets Campaign to welcome 2016 (Jan 2016)

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Event Marketing