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September 2010 Facilitating the Mobile Device Revolution

SinoHub Investor PPT Sep-2010

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Page 1: SinoHub Investor PPT Sep-2010

September2010

Facilitating the Mobile Device Revolution

Page 2: SinoHub Investor PPT Sep-2010

www.sinohub.com 2

This presenta,on contains “forward‐looking statements” within the meaning of the “safe‐harbor”provisionsofthePrivateSecuri,esLi,ga,onReformActof1995. Suchstatementsinvolveknownandunknownrisks,uncertain,esandother factors that couldcause theactual resultsof thecompany todiffer materially from the results expressed or implied by such statements, including changes ofan,cipatedsaleslevels,futureinterna,onal,na,onalorregionaleconomicandcompe,,vecondi,ons,changesinrela,onshipswithcustomers,accesstocapital,difficul,esindevelopingandmarke,ngnewproductsandservices,marke,ngexis,ngproductsandservices, customeracceptanceofexis,ngandnew products and services, and other factors, including those factors described on Exhibit 99.1 toSinoHub’s Current Report on Form 8‐K filed on September 28, 2009. Any statements that are nothistorical facts and that express, or involve discussions, as to expecta,ons, beliefs, plans, objec,ves,assump,ons or future events or performance (oVen, but not always, through the use of words orphrases such as "will likely result,” “are expected to,” “will con,nue,” “is an,cipated,” “es,mated,”“intends,” “plans,” and “projec,on”) arenothistorical facts,maybe forward‐looking statements andmay involve es,mates and uncertain,es. Accordingly, although the company believes that theexpecta,ons reflected insuch forward‐lookingstatementsare reasonable, therecanbenoassurancethatsuchexpecta,onswillprovetobecorrect. Thecompanyundertakesnoobliga,ontoupdatetheforward‐lookinginforma,oncontainedinthispresenta,on.

Page 3: SinoHub Investor PPT Sep-2010

www.sinohub.com 3

ElectronicComponentPurchasing

(ECP)

Virtual Contract

Manufacturing

(VCM)

Manufactures and sells private-label

mobile phones

Electronic Component Purchasing

(ECP)

Purchases & sells electronic

components

Supply Chain

Management

(SCM)

Warehouses, imports & delivers

electronic components

SinoHub Business

Unit:

What Function?

Markets Served? China China

Southeast Asian Developing Countries

Page 4: SinoHub Investor PPT Sep-2010

www.sinohub.com 4

2009 2010 2011NorthAmerica 151 166 176Japan 36 38 40WesternEurope 147 151 155

DevelopedCountries 335 356 373China 190 205 226Korea 12 11 11India 151 193 233RestofAsiaPacific 92 92 105La,nAmerica 127 128 138E.Europe,MiddleEast,Africa

225 266 302

DevelopingCountries 797 895 1015

(millions)

Source: JP Morgan

1 Billion Mobile Phones to be sold

in Developing Countries in 2011

YOY 13%

YOY 5.4%

Page 5: SinoHub Investor PPT Sep-2010

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(mill

ions

)

Source: JP Morgan

797 million units

895

1Billion+

0

200

400

600

800

1,000

1,200

2009 2010 2011

Developed Countries Developing Countries

CAGR = 13%

Page 6: SinoHub Investor PPT Sep-2010

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MarketOpportunity

*White‐boxmobilephonemarketChinaconsumedUS$100Bofelectroniccomponentsin2009;

producingUS$400BoffinishedgoodsSource:ReedElectronicsResearch(London,UK)

Business

Unit

TotalAddressable

Market

SCM $1.5B

ECP $8B

VCM $8B*

Page 7: SinoHub Investor PPT Sep-2010

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STEP 1

•  Design Houses in China upload new designs (“roadmaps”) to SinoHub’s VCM platform, displaying phone models planned for launch in 6 – 12 months

STEP 2

•  Customer uploads mobile phone requirements to VCM platform, SinoHub connects customer requirements with design house roadmaps

STEP 3 1 days

•  Customer signs contract with SinoHub to produce handsets; provides either (1) 20% deposit (restricted cash), & balance due pre-shipment, or (2) Letter of Credit

STEP 4 30 days

•  SinoHub (1) purchases design, (2) customizes design, (3) begins production

STEP 5 3 days

•  SinoHub collects payment, and ships to customer (point of Revenue Recognition)

45 DAYS: Purchase Order Production Payment Shipment

Page 8: SinoHub Investor PPT Sep-2010

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Two Revenue Streams

Spot Sales   Find arbitrage opportunities   Perform spot purchases   Deliver value to customers, generating return for SinoHub

B.O.M. Procurement   Customer uploads Bill of Materials   ECP team seeks better pricing   If OK, customer approves supplier swap; cost savings shared   SinoHub works with original parts & packaging, thus maintaining quality

In 2009, 80% of ECP revenue generated from spot sales, with 20% from BOM procurement

Page 9: SinoHub Investor PPT Sep-2010

www.sinohub.com 9

SupplyChainManagement(SCM)

Hong Kong

China

At current run-rate, SinoHub processes $1BN of electronic component imports into China

Page 10: SinoHub Investor PPT Sep-2010

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85%ofthecomponentsconsumedinChineseelectronicsmanufacturingareimportedintoChina(Source:ChinaCustoms)

Design Houses

Product Distributors

Finished Goods Manufacturers

Electronic Component Suppliers

Component Manufacturers

Increased Flexibility

Reduced Time

to Market

Lower Cost

Free to Customers

Open Access

Transparent

Customers are in charge of their business with SinoHub SCM

Page 11: SinoHub Investor PPT Sep-2010

www.sinohub.com 11

ComponentSuppliers&

ManufacturersProduct

ManufacturersDesignHouses

ProductDistributors

Our customers in China work with China Mobile, Huawei, Samsung . . .

Page 12: SinoHub Investor PPT Sep-2010

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●  Founded2005,mobilephoneR&Dfirm●  5newphonedesignspermonth

●  30‐40designsinproduc,onatany,me●  AnnualRevenue$250MM

HuaQin started using SinoHub SCM in March 2009: •  Inventory management •  Import / Export •  Just-in-Time delivery •  Movement of electronic parts Between Projects

“SinoHub SCM helped cut our production cycle time by 33% . . . we regard SinoHub as a vital tool for efficiency and profitability.”

Mr. Jiang Qinlin Director of Purchasing

Results

Page 13: SinoHub Investor PPT Sep-2010

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Hong Kong

China Beijing Regional Office & Support Center

Shanghai Regional Service Center

Warehouse (5,300 sq. ft.)

Shenzhen 1)  Headquarters (Nanshan) 2) VCM Factory (Baoan) 3) Customs Office (Futian) 4) VCM Sales Office (Futian) Hong Kong Warehouse

(80k sq. ft.) Capacity: $200MM monthly throughput

Shenzhen

Shanghai

Beijing

Page 14: SinoHub Investor PPT Sep-2010

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Grow Customer Base

  StrongpushformobilephonesalesinIndonesia,India,Vietnam,&Malaysia

  VCMSalesteamlaunchedin2010

  VCMFactory500+employees

  FactorynowproducingPCBAmotherboardsin‐house

  EnhanceSCMserviceoffering

  DeployECPandVCMInternet‐basedplaiorms(plannedfor2010)

  ConvertmoreSCMcustomersintoECP/VCMcustomers

  IncreasenumberofproductsperVCMcustomerUp-Sell & Cross-Sell

VCM: Deepen Southeast Asian

Market Penetration

Page 15: SinoHub Investor PPT Sep-2010

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$19.1 $29.0

$79.5

$128.4

$0

$20

$40

$60

$80

$100

$120

$140

2006 2007 2008 2009

Mill

ions

Revenue

$1.2

$3.5

$8.5

$12.4

$0

$2

$4

$6

$8

$10

$12

$14

2006 2007 2008 2009

Mill

ions

Net Income

Founded: NYSE Amex: Headquarters: 2000 SIHI Shenzhen, China

2010 Guidance of 40% Growth to $180MM

Page 16: SinoHub Investor PPT Sep-2010

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(Audited, USD millions, except EPS) 2007 2008 2009

Revenue $28.8 $79.5 $128.4

Grossprofit $6.7 $16.2 $22.4

Netincome $3.5 $8.5 $12.4

Earningspershare–dilutedNumberofshares(millions)–diluted

$0.2215.9

$0.4021.5

$0.4825.7

YOYGrowth

Revenue 51% 176% 61%

Grossprofit 65% 143% 38%

Netincome 192% 142% 46%

Page 17: SinoHub Investor PPT Sep-2010

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(Audited, USD millions, except EPS) Q2

2010*Q22009

YOY

Revenue $43.9 $31.4 40%

Grossprofit $7.6 $5.7 33%

Netincome $2.9 $3.2 9.4%

Earningspershare(fullydiluted)Numberofshares(millions)(diluted)

$0.1028.78

$0.1325.16

* 2010 figures unaudited

Page 18: SinoHub Investor PPT Sep-2010

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$9.4

$48.5

$78.2

$18.1

$25.2

$53

$78.2

Assets: Cash & Cash Equivalents Working Capital

Total Assets

Liabilities & Shareholders’ Equity Total Debt, including current portion

Total Liabilities

Total Shareholders’ Equity

Total Liabilities & Shareholders’ Equity

(USD, millions) June 30, 2010*

* Unaudited

Page 19: SinoHub Investor PPT Sep-2010

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HenryT.Cochran–CEOandChairmanoftheBoard  30+yearsfoundingandmanagingcompanies  FormerCEOandpresident–ContentIntegrity&AdvancedVisualSystems  FormerVP–Sybase  StrongMISbackground

LeiXia–President  15yearsinelectronicindustryinChina  SignificantseniormanagementexperienceintheChineseelectronicsindustry  FirstsalesmanagerofArrowElectronics’Shanghaioffice  FoundedRGLBeijing(high‐enddistributorandsolu,onprovider)andNEFABChina

(manufacturerandpackagingsolu,onprovider)

WillaLi–CFO  YearsofexperienceworkingwithChinesebanks  Significantknowledgeofelectroniccomponentsindustry  PriorCFOofShenzhenExcellenceInvestmentDevelopmentCo.whereheraisedRMB120million  PriorCFOofHongKongB&DEngineCompany

Page 20: SinoHub Investor PPT Sep-2010

www.sinohub.com 20

AfshinYazdian–EVP&GeneralCounsel,iPayment

‐SECreporBngknowledge,strongM&Aexperience

BOARDOFDIRECTORSAudit

Committee

HarryCochran–ChairmanoftheBoardandCEO

LeiXia–President

WillWangGraylin–CEO,ROAMData

‐ExtensiveoperaBonalandentrepreneurialskillsinmobilephoneindustry

CharlesKimball–Consultant‐SignificantWallStreetandfinancialmanagementexperienceas30‐yearveteranofJPMorgan Dr.RichardKing–FormerAllAmericanElectronicsAnalystandInvestmentBanker;ScienceAdvisoryBoard,NYU

‐Extensiveexperienceinfinancialmarketsasanelectronicsanalystandinvestmentbanker,advancedeconomicstudies

DanielLui–CEO,PorcheersConsultants‐CFOofU.S.listedChinesecompany,significantexperiencewithinternalcontrols,MBA *

EXEC

UTI

VE

IND

EPEN

DEN

T

* Chairman, Audit Committee

Page 21: SinoHub Investor PPT Sep-2010

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 ExcellentManagement

 World‐ClassCorporateGovernance

 5consecu,veyearsofhighgrowth&profits

 Strongdemandformobiledevices

 HighBarriertoEntry:ProprietaryPlaiorms

 Top‐10Accoun,ngFirm:BakerTilly(London)

 USlawfirm:SeyfarthShaw(800atorneysinUS)

Page 22: SinoHub Investor PPT Sep-2010

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COMPANY:

SusanLiu DouglasMenelly

SinoHub,Inc. SinoHub,Inc.

Phone:+861501377‐2683 Phone:+861392524‐5053Email:[email protected] Email:[email protected]

INVESTORRELATIONS:

TedHaberfield

HCInterna,onal,Inc.

Phone:+1(760)755‐2716

Email:thaberfield@hcinterna,onal.netwww.hcinterna,onal.net

Facilitating the Mobile Device Revolution