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Shining Building Business

Business OverviewPresented by

Denise Huangdenise@shininggroup.com.tw | +886-0926-384448

Nov. 2~4, 2009

mailto:denise@shininggroup.com.tw

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AgendaUpbeats on Taiwans Real Estate Market--10 Key features and benefits

1. Regulatory changes through a better cross-Strait relationship,2. Removal of Chinese funding restrictions & taxation reforms,3. Increase of financial channels,4. Drivers of macro stabilization: The broader macro recovery is underway,

property benefits as global GDP picks up in 20105. Low interest rates boost demand and the level of liquidity in the property

and stock markets.6. Strong NT$ Appreciation: Heavy funds inflows into Asia from western

countries7. Sell-Through rate picking up momentum in 20108. the Greater Taipei property market continues to grow with high-end

luxury products.9. Taiwan Excess Savings implies ample liquidity.10.ECFA Likely to boost Taiwan property

Shining Group-- Business Review & Strategies

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Taiwans house price gaining slow against the burst of the asset bubble

Source: Cathay RED, Centa City Leading Index and URA Residential Price Index

Historical data support our believes, with Taipei property prices having a much lower standard deviation (11.8%) than those for Singapore (19.2%) and Hong Kong(25.4%).

Taipei Property Prices are less volatile thanin Hong Kong and Singapore Over last 10 years

Asia Property over last 5 yearsAppreciation Comparison

61% 45%

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2006 2007 2008 2009E 2010EGlobal Economy 5.00% 5.00% 2.90% -1.60% 2.60%G10 2.80% 2.40% 0.70% -3.50% 1.10%Emerging Market 8.00% 8.50% 5.80% 0.60% 4.40%U.S 2.80% 2.00% 1.10% -3.30% 1.80%Europe 3.00% 2.60% 0.70% -3.30% 0.50%U.K 2.80% 3.00% 0.70% -2.50% 1.70%Germany 3.00% 2.50% 1.30% -4.50% 1.10%Netherlands 3.40% 3.50% 2.10% -2.10% 1.10%China 11.60% 13.00% 9.00% 7.00% 8.00%Japan 2.00% 2.40% -0.60% -5.80% 0.10%Taiwan 4.90% 5.70% 0.10% -6.00% 2.20%

Global GDP Should Recover in 2010E

Greater Taipei Sales Ratio Improves as 2010E GDP Recovers

E = Morgan Stanley Research estimates Source: TEJ, CEIC and Morgan Stanley

Property benefits as global GDP Picks Up in 2010.

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High savings rate and low interest rate urging the growth in TW asset value much faster

Taiwan Excess Savings Implies Ample Liquidity

The average savings rate in Taiwan from 1999-2008 was 26.8. According to data compiled by the Directorate-General of Budget, Accounting and Statistics, it is expected that the excess savings rate this year will reach a six-year high of 9.24 percent, at an all-time high of NT$1.1544 trillion (US$35 billion).

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Where is the Cross-Strait Express Train Headed? Benefits of Closer Cross-Strait Ties

Finance & EconomyThe signing of the memorandum of understanding (MOU) and a Comprehensive Economic Cooperation Agreement (CECA)

Capital injections: Mainland investors are able to buy into the island's stock market.Financial services: Taiwan banks representative offices on the mainland upgraded to full service branches.

Deregulations on Chinese investment in the Real EstateTaiwan registered Chinese company can buy commercial propertyExtend the visa stay limits from 30 days to one year Non-resident Chinese, like non resident foreigners, will be allowed to get mortgage up to 50%.Non-resident Chinese owning a property in Taiwan, could stay in total 4 months in a year (no entry requirement).Non resident Chinese can buy residential properties.Simplify purchase procedures within 1 month, no need to declare the source of funding

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Post-CEPA in HK Prices of Luxury House Doubled in 5 yearsHow if A Cross-Strait ECFA with Taiwan?

The average prices of Luxury House in HK=13,000-15,000 (HK$/sf) = 1.9 2.2 million (NT$/ping), which increases 2.5-3 times over Taiwan

Source: CEIC, Morgan Stanley

Greater Taipei Property Prices vs. Hong Kong Post 1997

Hong Kong Luxury Property Prices Surge Post 2004 CEPA

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The Flows of Cross-Strait Tourists, Trades, InvestmentsUrging up the commercial property demands

Dec. 16, 2008 Jan. 15, 2009

Expected 2,000 China enterprises further open up Taiwan branches.Cross-strait financial exchanges

Signed MOU on bilateral financial supervision in the Q4,2009, financial institutions and officials from both sides of the strait plan to set up branches in 1H2010. 4 state-own banks: Bank of China, Industrial and Commercial Bank of China, China Construction Bank, China Merchants Bank will set upTaiwan branches.

Daily direct charter flights across the Taiwan Strait.There are 6 Chinese air carriers, including Air China, China Southern Airlines, China Eastern Air, Shanghai Airlines, Xiamen Airlines and Hainan Airlines, have established offices in Taiwan

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Sell-Through Rate of Recent High Priced ProjectsAgora Garden, with a minimum bid of NT$14.9bn (close to US$450m), recent auctions have brought future ASPs of residential property in Taipei to close to NT$2m/ping.Shining (5531.TWO; NC) has placed a record high selling price in Taipei for its G21 Headquarters with NT$3mn/ping for luxury commercial office space.

G21 HeadquartersLocation: Zhongshan DistrictLand area: 1,138.22 ping (3,762.72 m2)Built up area: 6943 ping(22,912m2)

Agora HotelLocation: Xinyi DistrictLand area: 2,468.4 ping(8,160m2)Built up area: 12,458 ping(41,181m2)

Corporate Snapshot

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Members of Shining Group

Real Estate Development

Shining Building Business (5531)

Taiyu Construction

Shining Plumbing & Electricity

Hotel Development AMAYI International Corporation

The Lalu Hotel, Sun Moon Lake

Shining Culture & Education Foundation

Non-profit Organization

http://www.anaheimhomesguide.com/img/architecture-closeup-of-the-anaheim-convention-center.jpghttp://www.xixiwetland.com.cn/upload/upload_20061130_140211_education officer.jpg

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Company Overview

Shining Building Business, established in 1980 and listed on the Taiex in 2005 (OTC in 2001), is a leading propertydevelopers in Taichung and Taipei, targeting mid-range and high-end residential markets.

Shining, armed with the strong reputation of its luxury hotel, The Lalu on Sun Moon Lake, replicates resort-living at home in its construction designs and projects.

Shining is transforming to a diversified property developer, focusing on real estate developments, high-end brands shopping mall/ retail business and hotel investments.

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Shining Building Business

Established: May 1980Headquarter: Taichung, TaiwanIPO in Taiwan OTC: June 2001Market Cap: US$481million ($40,as of Oct.15) Capital Size: 3.7 billionEmployees:

Taiwan: 273 (as of Dec.-08)China: 10

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a series of best practices

Our Core Value

PropertyDevelopment

Planning&

Design

Construction Management

Civil Engineering

Marketing&

Sales

Customer Complaints

Service

Planning meeting

SOP

Secured quality

Sales by our commitmentDesign in Lalu style

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Current position as: - Chairman of Shining GroupThe 11th chairman of Council for Industrial and Commercial Development ROC- Committee of Executive Yuan Tourism Development committee - Marketing Director of Executive Yuan Plan for the Doubling of Tourist Arrivals Sun Moon Lake Route- The Director-General of The Federation Of Taiwan Architecture and Development Association - Chairman of Tichung Chamber of Commerce - Director of Brotherhood Cultural & Educational Foundation - Director of World Trade Center Taichung - Managing Director of International Real Estate Federation Taiwan ROC Chapter- Managing Director of Federation of the Real Estate Development Association of the Republic of China- Director of Taichung Lifeline Association

About Cheng-I, Lai

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The Best Networking for Political, Economic, and Social Developments in Cross-Strait businesses.

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Master PieceThe Lalu Hotel

The First Luxury, Design and Stylish Resort in TaiwanThe Lalu Hotel was rebuilt from the Chiang Kai-shek presidential villa, used to be lodging place for Japanese emperor Hirohito , with the investment capital of NT$1.8 billion.

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2003 The top-notch Hotel selected by Conde Nast Traveler Magazine2004 FIABCI Gold medal2005 World Travel Awards - Taiwans Leading Spa Resort2006 World Travel Awards - Taiwans Leading Spa Resort2006 2006 World's Sexiest Hotels

Worldwide Awards

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The Fourth Chiang-Chen Talks

The upcoming meeting, the fourth in a series since June 2008, will take place in December in the central city of Taichung.

Financial Highlights

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Sustainable Earnings over last 8 years

Unit:NTD$M

1,396

807561

2,2122,709

5,414

3169

742

182 107 112

695 895

1773.6

2331.6

233

6,056

1077

4.58

1.95

0.19

6.066.38

0.44 0.23 0.24

3.41

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2002 2003 2004 2005 2006 2007 2008 1H2009

Sales Margin EPS Net Profit

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Sustainable Net Profit Margin

(USD$Mn) 2004 2005 2006 2007 2008 1H2009Revenue 68.06 83.35 166.58 189.51 97.51 22.22Margin 21.38 27.54 59.32 69.75 33.32 7.17Net 13.91 19.74 36.68 52.28 19.85 2.12Margin% 31% 33% 36% 37% 34% 32%Net profit margin% 20.44% 22.42% 22.01% 28.03% 20.35% 9.53%Bank Loan 43.97 109.57 228.15 145.08 194.12 195.69Stockholder's Equity 43.54 62.09 98.46 150.37 152.58 154.68Capital 25.11 40.77 57.42 86.12 103.35 113.69EPS(after tax) 5.55 4.58 6.38 6.06 1.92 0.19DIV-cash 2DIV-stock 6.25 4.08 5 2 1

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EPS& DPS

In dealing with economic cycles over three decades, Shinings financial strategy is based on the maintenance of sound financials that allow long term, stable growth, with an emphasis on capital efficiency.

Through dividend payouts close to 1~5 / per share over past 5 years, Shining strives to return profits to its shareholders and create shareholder values during economy downturn.

6.25

4.085

45.58

1.96

6.086.3

4.6

1

01

2345

67

2004 2005 2006 2007 2008 FEPS DPS

Business Review & Strategies

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Business StrategyDiversified Property Developer

To leverage the residential market cycle, we aim at sustainablecash inflow from hotel investment, commercial lease & retail business in next 3~5 years.

2010 F Persentage2,000 50%

1,000 25%

1,000 25%

4,000 100%

Commercialmarket, 25%

Residentialmarket, 50%

Hotelnvestment,

25%

Current Status Taipei : Taichung = 7: 3Planning to aim at China property developments in the near future.

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Taipei city map

1. Yuan Chung

2. Top of the City

3. Yangming Garden

4. Shamhbala

5. G21 Headquarters

6. Pure Wind

7. HsinJhuang Suburban

8. Tianmu A,B+C

9. Wan Hua Urban Renewal

10. Grand mountain Urban Renewal

11 . TwinTowns Urban Renewal

12. TaiPower Urban Renewal

13. NanHai Rd. Urban Renewal

Taipei Project Locations

1

23 5

67

8

4

9

1011

12

13

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Shinings Projects with ASP in Different Taipei Districts

1

23 5

67

8

4

9

1011

1

2

3

5

6

7

8

4

9

10

11

13

12

12

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No. of new project lunched with current ASP in different Taipei districtsResource: Morgan Stanley

30K, 200561K, 200760K, 200870K, 2008300K, 200942~45K, 200946~48K, 201072~75K, 201038~40K, 201053~55K, 201150~52K, 201180~82K, 201175~78K, 2011

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Landmark Project in Taipei City G21 Headquarters

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"Super HOPSCA" Plan

Landmark Project in Taipei City -- HsinJhuang Suburban Center

HHotel+High-density Transportation SystemsOOffice+OdiumPParking+ParkSShopping+ Skywalk+Super DomeCConference+ ConventionAApartment+ Administration Center

With a total investment of more than NT$50 billion, the plan is expected to create an output value of NT$119.2 billion when completed in 2013.

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7

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Taichung Projects Location

7th rezoned district 5th rezoned district 8th rezoned district 12th rezoned district

BOT Project9

7. Emperor Palace

8. New Lunar

9. SBB Headquarter

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Landmark Buildings in Taichung

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Leading the trend in luxury lifeInfinity pool at Lalu Resort reflected in citys Sky Lounge

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Business Performance Residential Market

2009~2010 Project PipelinesUint price(USD$K/sf)

Landcost(M) Land size(sf)

SaleableFloor

Area(sf)Storey Units Unit Size(sf)

Sales F(USD$Mn)

CurrentSales Ratio

Top of the City 1,020 16.7 18,715 117,165 18F/B3 52 855-1,995 53 100.00%

Shihlin Yangming 1,030 32.1 37,395 217,109 15F/B3 78 1,675-2,740 106 83%

Shamhbala 19,462 77,031 15F/B4 21 1,425-2,635 41 100.00%

G21 Headquarters 1.24 50.1 40,490 235,753 8F/B4 28 8185-8,895 457

TaichungEmperorPalace 0.35 43.6 124,530 1,764,590 28F/B4 441 2,490-5,340 363 42%

Taichung Headquarter 0.83 9.3 11,243 153,421 24F/B5 21 5,340-5,515 32

TaichungNewLunar 0.25 17.6 71,338 684,773 15F/B3 346 1,350-,2065 69 21%

TaichungSitun District 0.47 17.2 36,738 19

Hsinchuang Suburban Cente 981 40.0 46,361 416,286 15F/B4 197 1,600-2,670 112HsinChung PureWind 614 21.5 39,209 219,707 15F/B3 86 1,425-2,670 68

Tianmu A 0.62 44,333 99,909 5F/B2 36 1,710-3,025 43

Tianmu B+C 25,475 59,170 5F/B1 41 1,000-1,710 23Wan Hua Urban Renewal 75,572 455,175 15F/B4 96

Grand mountain Urban Renewal 26,934 157,299 12F/B3 35Twintowns Urban Renewal 20921.04 223,585 18F/B4 53Taipower Urban Renewal 19,363 96,529 12F/B3

Naihai Urban Renewal 22,914 144,562 14F/B5

Sum (USD$ Million) 276 680,992 5,122,061 1,569

27.5

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Business StrategyHotel Investments in China

QingdaoJiaozhou Bay

Forbidden Citys Beijing

Suzhou, Humble Administrator's Garden

Guilin , Li Jian

Shanghai

The Lalu Hotel, Sun Moon Lake

YangZhou

WuHan

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Plan to open 30 hotels in the next decade

LOCATION LAND SIZE PLANGuilin , Lijiang River 227,000m2/340 acres 200 rooms resort

Wuhan, The Yellow Crane Pavilion

56,000 m2/85 acres 200 rooms resort

Yangzhou, Slender West Lake 103,000 m2/155 acres 150 rooms resort

Qingdao, Jiaozhou Bay 145,000 m2/220 acres 120 rooms resort

Suzhou, Humble Administrator's Garden

32,000 m2/ 45acres 200 rooms resort

Beijing, Forbidden Citys 204,000 m2/305 acres 140 Villa

Shanghai, Daning Lingshi Park 634,000 m2/ 950 acres 200 rooms resort

We have a series of developments to establish 30 seven-star class hotels in Taiwan, China and all worldwide over next 10 years, and each operation will contribute to Shining NT$100~150Mn/ year.

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Why Shining group? SWOP Analysis

Leading brand in Luxury-resort housing market

Mid & High-end luxury houses equipped with hotel facility

Success of Lalu ResortGlobal top-notch professionalsInternational management teamThe nation's leading developer of

shopping mall & convention center.

Lalu resort brandingSOP system for Hotel

management, Commercial & retail markets

Cross-Strait property developer in China, and Vietnam, Cambodia strategies.

Experienced management TeamArchitects and Building Design ConstructionQuality ControlSecurity & Safety examinesMarketing & SalesCustomer Claim ServiceCommunity management

S

O

Weapon

Power

AgendaTaiwans house price gaining slow against the burst of the asset bubbleHigh savings rate and low interest rate urging the growth in TW asset value much fasterWhere is the Cross-Strait Express Train Headed? Benefits of Closer Cross-Strait TiesPost-CEPA in HK Prices of Luxury House Doubled in 5 yearsHow if A Cross-Strait ECFA with Taiwan?The Flows of Cross-Strait Tourists, Trades, InvestmentsUrging up the commercial property demandsSell-Through Rate of Recent High Priced ProjectsCorporate SnapshotMembers of Shining GroupCompany OverviewShining Building BusinessOur Core ValueAbout Cheng-I, Lai The Fourth Chiang-Chen TalksFinancial HighlightsSustainable Earnings over last 8 yearsSustainable Net Profit MarginEPS& DPSBusiness Review & StrategiesTaipei Project LocationsShinings Projects with ASP in Different Taipei DistrictsLandmark Project in Taipei City -- HsinJhuang Suburban CenterTaichung Projects LocationLeading the trend in luxury lifeInfinity pool at Lalu Resort reflected in citys Sky LoungeBusiness Performance Residential MarketPlan to open 30 hotels in the next decadeWhy Shining group? SWOP Analysis