OWW Capital Partners

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OWW makes 9.5X return from Hand Enterprise
July 2013

OWW Capital Partners are pleased to announce that it had completed a distribution of the entire proceeds from the sale of its stake in Hand Enterprise Solutions Co. Ltd ("HAND"). The original investment was US$3M in 2007 and the distribution was US$28.7M or 9.5x return.

OWW originally invested in a wholly foreign-owned enterprise ("WFOE") Hand Enterprise Solutions (Pte) Ltd in 2007. In 2009, the shareholders of the WFOE restructured their shareholding into HAND, a sino-foreign JV company in China. HAND was subsequently converted into a joint stock company and listed on CHINEXT (stock code: 300170) in February 2011.

As OWW was a substantial shareholder holding more than 5% of HAND, it was subjected to a one year moratorium and restrictions relating to the divestment of its shares. Depending on the domicile of entity used by the foreign investor to hold the listed CHINEXT shares, different tax treatments can be interpreted by the provincial tax authorities whose tax clearance were required for approval from the State Administration of Foreign Exchange ("SAFE") to remit the divestment proceeds in US$ out of China. Divestment was carried out over a 6 months period but the bureaucratic processes required a further 9 months.

HAND's revenue and profits for FY 2012 was RMB702M and RMB106M respectively or an increase of 35% and 34% respectively over FY 2011. Its market capitalization at 30 June 2013 was RMB4.2Bil compared to RMB1.5Bil at IPO.

OWW has 2 other portfolio companies (one of which underwent the same restructuring) applying for CHINEXT listing.

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