IPO CORNER

2 of 3 China IPO files
Pre-IPO analysis, grading & scoring
. Business Model Rating Criteria
A = high growth market, potential leader; B = more competitive market; C= 'public venture capital'
. Calculations
. IPO Price to annualized Sales Ratio -- (Price / Sales)
Numerator		Denominator
IPO market capitalization…		Annualized Sales (based on recent results)
(post-IPO # of shares times mid-point of IPO price range)
. IPO Price to annualized Earnings (loss) -- (Price / Earnings)
Numerator		Denominator
IPO market cap		Annualized Earnings (loss) from the last quarter
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SEARCH BY COMPANY		In your browser use 'Edit/Find' to search for companies
or ticker for analysis		below
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China Digital TV (STV)
digital television access systems in China: C+, 8
Oct 4, 2007 @ $!6

WuXi PharmaTech (WX)
biopharma R&D outsourcing: B-, 9
Aug 8, 2007 @ $$14

E-House (China) (EJ)
China real estate services: B-, 9
Aug 7, 2007 @ $13.80

Perfect World (PWRD)
China online 3D video games: B-, 8
July 25, 2007 @ $16

Spreadtrum Com (SPRD)
Chinese designer of wireless handset Ics: C+, 7
June 26, 2007 @ $14

Yingli Green Energy (YGE)
Vertically integrated photovoltaic prod: B-, 8
June 7, 2007 @ $11

LDK Solar (LDK)
multicrystalline wafers for solar cells: B-, 8
May 31, 2007 @ $27.00

China Sunergy (CSUN)
solar cell products, China: C+, 7
May 16, 2007 @ $11
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Noah Education Holdings	NED, B-, 8
interactive education content in China			June 30 fiscal year			Post-IPO shrs: 37mm
Shenzhen, China		2005	2006	2007		IPO Mkt
Rev ($mm)				$73		Cap (mm)
Gross profit %		44%	55%	52%		$396
Operating profit %		8%	6%	12%		@$10.8
Profit (loss) $mm				$9
Profit (loss) %		19%	7%	12%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings*	BookValue	TangibleBV	in IPO
Noah Education (NED)	$396	5.4	46	3.4	3.5	27%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	3	2	1	8
Business
. A leading provider of interactive education content in China.
. Develops and markets interactive, multimedia learning materials mainly to complement prescribed
textbooks used in China's primary and secondary school curriculum, covering subjects such as English,
Chinese, mathematics, physics, chemistry, biology, geography, political science and history.
. Delivers content primarily through DLDs, into which content is embedded or subsequently downloaded at
over 8,500 points of sale, approximately 2,000 download centers, or through NED's website,
www.noahedu.com.
. In addition, derives a significant, but decreasing, portion of revenue from the sale of E-dictionaries.
DLDs - fast adoption rate
(DLD is a library package of C functions that performs dynamic link editing. Programs that use dld can add
or remove compiled object code from a process anytime during its execution. Loading modules, searching
libraries, resolving external references, and allocating storage for global and static data structures are all
performed at run time.)
. First introduced in 2003, DLDs have become the main platform for interactive learning in the Chinese
market.
. DLD sales in China grew at a CAGR of 41.7% from 2004 to 2006, according to CCID Consulting, which
projects DLD sales in China to grow at a CAGR of 20.8% from 2007 to 2009.
. NED believes the fast adoption of, and growing demand for, DLDs is due to the manner in which DLDs
present traditional content in an engaging multimedia format and at a pace and order selected by each
individual student, thereby creating a more tailored and more enjoyable teaching and learning experience.
Market position
According to CCID Consulting, in 2006 and the first half of 2007, NED was ranked
. No. 1 by revenue and by the combined number of DLDs and E-dictionaries sold, and
. No. 2 in 2006 and No. 1 in the first half of 2007 by revenue and by the number of DLDs sold, among
interactive education content providers that distribute content through DLDs and E-dictionaries in China.
Fiscal 2007 revenue compared with 2006 (June 30 fiscal)
Net revenue increased 41.3% in fiscal 2007 from fiscal 2006.
. The increase was primarily attributable to a substantial increase in sales of DLDs, offset by a decrease in
E-dictionary sales.
. Sold 557,093 DLDs in fiscal 2007, an increase of 63.7% from 340,343 DLDs sold in fiscal 2006.
. Average selling price of DLDs increased 12.0% as NED introduced a number of models with more
innovative features and offered better content offering.
. The increase in average selling price was moderated by an increase in sales discounts given to distributors
to stimulate sales, from 8.7% of net revenue in fiscal 2006 to 13.0% in fiscal 2007.
. Sold 775,659 E-dictionaries in fiscal 2007 compared to 904,747 E-dictionaries in fiscal 2006. As a result
of a decrease in market demand, lowered selling prices of E-dictionaries and the average selling price of E
dictionaries decreased by 6.7%.
Competition
. The interactive education content market in China is rapidly evolving and very competitive.
. Some competitors who were present when we entered the market in 2004 no longer operate in this field
and others have lost their dominant positions.
. According to CCID Consulting, as of the end of 2006, the top five companies accounted for
approximately 80% of the DLD market.
. Main competitors in the DLD market include Shanghai Ozing Digital Technology Limited and
Guangdong Bubugao Electronic Industry Limited. Our main competitors in the E-dictionaries market
include Guangdong Bubugao Electronic Industry Limited and Global View Co., Ltd.
. Also competes indirectly with online education content providers, such as Beijing No. 4 Middle School
Net and Hu Bei Province Huang Gang Middle School Net, and providers of interactive education content
through CD-ROMs such as HUMAN Education & Technology Co., Ltd. and Guangdong Dongtian Culture
Enterprise Co., Ltd.
Use of $84mm in IPO proceeds from sale of 8.7mm ADSs
(shareholders intent to sell 1.12mm ADSs)
o US$40 million to fund our expansion into complementary businesses such as tutoring and test preparation
services, including possible acquisitions;
o US$20 million to fund efforts to enhance our branding and sales channels;
o US$10 million to fund the development of educational content and diversification of delivery platforms;
o US$10 million to fund research and development efforts; and
o the balance to fund working capital requirements.
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China Digital TV Holding	STV, C+, 8
digital television access systems in China						Post-IPO shrs: 55.5mm
Beijing, China	2004	2005	2006	June, 06*	June, 07*	IPO Mkt
Rev ($mm)	$4	$13	$30	$10	$22	Cap (mm)
Gross Profit	50%	70%	76%	80%	81%	$666
Profit (loss) $mm	-$3.3	$4.5	$13.0	$3.4	$12.2	@$12
Profit (loss) %	-92%	34%	43%	33%	56%
				* six months ended June 30
Last four quarters		Sept, 06	Dec, 06	March, 07	June, 07
Rev ($mm)		$10	$10	$10	$11
Gross Profit		79%	75%	84%	80%
Profit (loss) $mm		$5.7	$3.8	$6.2	$6.0
Profit (loss) %		55%	40%	60%	54%
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
China Digital TV (STV)	$666	15.0	28	4.4	4.3	22%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	2	8
ADS offering
Note: last four quarters had essentially flat revenue
No corporate taxes
. For tax purposes STV is based in the Cayman Islands
. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income,
gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty or withholding
tax applicable to us or to any holder of ADSs or ordinary shares.
Business
. The leading provider of conditional access, or CA, systems to the Peoples Republic of China's (PRC)
rapidly growing digital television market.
. STV'sCA systems, which consist of smart cards, head-end software for television network operators and
terminal-end software for set-top box manufacturers, enable digital television network operators in the PRC
to control the distribution of content and value-added services to their subscribers and block unauthorized
access to their networks. In addition, STV licenses its set-top box design to set-top box manufacturers and
sell advanced digital television application software, such as electronic program guides and subscriber
management systems, to digital television network operators.
The industry
. The PRC has the largest television viewing market in the world, with televisions in 362 million
households, of which 139 million households subscribed to cable television, as of December 31, 2006,
according to Analysys International. The commercial potential of the PRC cable television industry,
however, has yet to be fully developed.
. Digital television offers a range of advantages over analog television, including enhanced picture quality,
more efficient use of bandwidth, improved content protection and the opportunity to offer value-added
services to viewers. The transition from analog to digital television services in the PRC introduces
significant opportunities in the PRC cable television industry. This transition is being driven by the
following key factors:
. In 2003, the PRC State Administration of Radio, Film and Television, or the SARFT, announced a target
of 2010 for all television broadcasts to be made in digital format (in addition to any parallel transmissions
in analog format)
. And a target of 2015 for cable television networks to switch off all analog transmissions. In February
2007, the SARFT ordered cable television network operators nationwide to continue to provide at least six
analog television channels for the indefinite future for the benefit of those unable or unwilling to subscribe
to digital television services.
Market share
. According to Analysys International, STV was the leader in the PRC CA systems market in 2006 and
each of the first and second quarters of 2007.
. According to Analysys International, in the second quarter of 2007 STV had an approximately 44%
market share based on the number of smart cards shipped, followed by DVN Holdings Ltd. With
approximately 19% market share, Irdeto Access BV with approximately 12% market share, NDS Group
with approximately 9% market share, Kudelski SA with approximately 9% market share, Sumavision
Technologies Co., Ltd. with approximately 5% market share, and others accounting for the remaining 2%.
Smart cards
. Derives a substantial majority of our revenues from sales of smart cards, which accounted for 85.6% and
87.9% of total revenues in 2006 and in the six months ended June 30, 2007, respectively.
. Expects that the sales of smart cards will continue to constitute the majority of revenues in the near future.
. Sold 0.2 million, 1.5 million and 3.9 million smart cards in 2004, 2005 and 2006, respectively, and sold
2.8 million smart cards in the six months ended June 30, 2007, compared to 1.3 million in the same period
of 2006.
. The number of smart cards sold by STV in each of the first and second quarters of 2007 represented
approximately 44% of the smart cards that were shipped in the PRC in such period, according to Analysys
International
Customers
. STV sells CA systems and digital television application software to PRC television network operators,
including cable, satellite and terrestrial television network operators and enterprises that maintain private
cable television networks within their facilities.
. Currently derives, and we expect to continue to derive, a significant portion of revenues during any given
period from a limited number of customers, primarily cable television network operators who are launching
new digital transmission systems, although the particular customers may vary from period to period.
PRC television network operators
. Aare in the early stages of switching from analog to digital transmissions, and the PRC government has
set a target of 2015 for operators nationwide to complete the digital transition.
. Benefiting from this transition and the expanding market for STV products, the business has experienced
significant growth since 2004.
. As of June 30, 2007, STV had installed CA systems at 130 digital television network operators in 26 of
the 32 provinces, autonomous regions and centrally administered municipalities in the PRC.
Research and Development
. STV'ssuccess to date has in large part resulted from strong research and development capabilities. As of
June 30, 2007, STV's research and development team consisted of 178 employees, up from 145 as of
December 31, 2006, and STV plans to further expand the team during the second half of 2007.
. Many of STV's current research and development staff are graduates of the PRC's top science and
engineering universities, including Tsinghua University, and have extensive experience in digital television
and encryption technologies.
. STV's research team played a leading role in drafting the PRC industry standards for CA systems,
electronic program guides and other key industry standards. STV is active in the China DRM Forum, which
aims to develop a PRC standard for digital rights management, and the Audio and Video Coding Standard
Workgroup of China, which has developed the PRC's own video and audio compression technology.
. In 2006, the Radio and Television Standards Institute of the SARFT awarded STVs their annual
technology innovator award, and honored Mr. Jian Han, STV's chief technology officer, with their
innovative person award.
Intellectual property
. STV develops all of its software internally
. As of June 30, 2007, held a total of three patents issued in the PRC and seven pending patent applications
in the PRC.
. Issued patents and pending patent applications relate primarily to digital transmission technologies,
encryption and decryption technologies, technologies relating to the production of set-top boxes and smart
cards and technologies relating to value-added services.
. Also completed copyright registration of 34 software programs for digital television in the PRC.
Competition
International
. Main international competitors in the CA systems business are Conax AS, Irdeto Access BV, Kudelski
SA, and NDS Group. These companies have longer operating histories and substantially greater financial,
technical and other resources than STV, which may enable them to respond more quickly than STV to
technological or commercial changes in our industry.
. Several of these companies entered the PRC market before STV but have been less successful in capturing
market share. Historically, these companies have generally focused on sales to the television network
operators in the PRC's largest cities.
. To the extent that international competitors may begin targeting small and mid-size television network
operators, STV believes that it can continue to compete successfully because of local knowledge and
relationships and more extensive customer support and service network.
Domestic
. Main domestic competitors are Compunicate Technologies Inc., DVN Holdings Ltd., and Sumavision
Technologies Co., Ltd., all of which are non-state-owned companies operating mainly in the PRC.
. They may offer their CA systems at a lower price than STV. However, STV believes that it has more
advanced technology and that STV's strong technology and leading market position will enable STV to
continue to compete successfully against these companies.
Dividend policy
. As a result of the substantial growth of revenues in 2005 and 2006, STV generated cash in excess of
ordinary business needs. Because STV had not identified any immediate investment or acquisition
opportunities, it declared dividends to shareholders in August 2006 and November 2006 and paid out such
dividends in August 2006 and February 2007, respectively.
. Currently intends to retain all available funds and any future earnings for use in the operation and
expansion of the business, and does not anticipate paying any cash dividends on ordinary shares, or
indirectly on ADSs, for the foreseeable future
Use of $131mm in IPO proceeds
. The principal reasons for this offering are to create a public market for our ordinary shares for the benefit
of all shareholders, to retain talented employees by providing them with equity incentives in a public
company, to promote our corporate brand and image and to raise capital.
. Intends to use net proceeds from this offering for research and development, sales and marketing,
acquisitions and general corporate purposes.
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E-House (China) Hldigs	EJ, B-, 9
China real estate services						Post-IPO shrs:75mm
Shanghai, China	2004	2005	2006	March, 06*	March, 07*	IPO Mkt
Rev ($mm)	$31	$39	$56	$4	$16	Cap (mm)
Gross Profit	69%	72%	82%	68%	85%	$933
Operating profit (%)	22%	38%	43%	-43%	37%	@$12.5
Profit (loss) $mm	$5.6	$11.1	$18.0	-$1.3	$4.4
Profit (loss) %	18%	29%	32%	-33%	28%
				* three months ended March 31
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
E-House (China) (EJ)	$933	10.1	37	4.9	5.0	20%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		3	3	2	1	9
Each ADS represents one ordinary share
Recent developments
. EJ estimates that it generated revenues ranging from approximately $22.5 million to $24.0 million for
the quarter ended June 30, 2007.
. Also estimates that it had income from operations ranging from approximately $9.2 million to $10.0 million and
. Net income ranging from approximately $6.0 million to $6.5 million for the quarter ended June 30, 2007.
Business
. A leading real estate services company in China based on scope of services, brand recognition and
geographic presence.
. Provides primary real estate agency services, secondary real estate brokerage services as well as real
estate consulting and information services
. China Real Estate Information Circle system, or CRIC system: EJ believes their CRIC system is the only
information system that provides up-to-date, comprehensive and in-depth information covering residential
and commercial real estate properties in all major regions in China.
. EJ ranked as the largest real estate agency and consulting services company in China for three consecutive
years from 2004 to 2006 by the China Real Estate Top 10 Committee, as measured by the number of
transactions facilitated, transaction value and GFA of properties sold and geographic coverage.
Segments
For the quarter ended March 31, 2007 the segment distribution of revenue was
. Real estate agency services, 79.4%
. Secondary real estate brokerage services, 11.5%
. Real estate consulting and information services, 9.1%
Highlights
o Enhanced brand recognition and leading position in the real estate services market, as evidenced by the
award received on March 28, 2007 as the largest real estate agency and consulting service company for the
third consecutive year;
o CRIC system was further expanded from covering real estate data in nine cities as of March 31, 2007 to 24 cities
as of June 30, 2007
o Secondary brokerage store network was further expanded from 114 stores as of March 31, 2007 to 141
stores as of June 30, 2007;
o Experienced a minimum of 40.6% increase in revenues from $16.0 million for the first quarter of 2007 to
the estimated revenues ranging from approximately $22.5 million to approximately $24.0 million for the
second quarter of 2007; and
o Experienced a minimum of 36.4% increase in net income from $4.4 million for the first quarter of 2007 to
the estimated net income ranging from approximately $6.0 million to approximately $6.5 million for the
second quarter of 2007.
Tax issues
. Under the new Enterprise Income Tax Law, enterprises that are established under the laws of foreign
countries or regions and whose "de facto management bodies" are located within the PRC territory are
considered PRC resident enterprises, and will be subject to the PRC enterprise income tax at the rate of
25% on their worldwide income.
. However, the new law does not define the term "de facto management bodies." Substantially all of our
management are currently located in China, and if they remain located in China after January 1, 2008, the
effective date of the new law, EJ's offshore holding companies may be considered PRC resident enterprises
and therefore be subject to the PRC enterprise income tax at the rate of 25% on their worldwide income
. This may increase EJ's tax expenses and adversely affect results of operations.
Customer concentration & developer relationships
. Generated 95.2%, 89.2% and 81.6% of total revenues from primary real estate agency services in 2004,
2005 and 2006, respectively.
. Although EJ is expanding service offerings, EJ expects to continue to rely on primary real estate agency
services to generate a significant portion of revenues for the foreseeable future.
. Revenues from primary real estate agency services are typically generated on a project-by-project basis
and are non-recurring in nature. This may contribute to the fluctuations in our period-to-period operation
results.
. EJ typically enters into agency agreements with developers shortly before they are expected to obtain
permits to sell their newly developed properties. However, the timing of obtaining these sales permits
varies from project to project and is subject to uncertain and potentially lengthy delays as developers need
to obtain a series of other permits and approvals related to the development before obtaining the sales
permit.
Seasonal
. Operating income and earnings have historically been substantially lower during the first quarter than
other quarters.
. This results from the relatively low level of real estate activity during the winter and the Chinese New
Year holiday period, which normally falls within the first quarter each year.
Competition
> EJ's competitive position in Shanghai, Wuhan and Fuzhou is stronger than its position in other local
markets.
. In Shanghai, EJ remained as the leading comprehensive real estate services company for three consecutive
years starting in 2004 and
. EJ's leading position was recognized by the prestigious "Golden Bridge" Award EJ received annually for
the same period from the Shanghai Real Estate Services Company Association.
> In the primary real estate agency services market, main competitors include World Union Real Estate
Consultancy (China) Ltd., Hopefluent Group Holdings Limited, Shanghai T&D Real Estate Co. Ltd. And
B.A. Consulting Company, all of which operate in multiple cities in China
> In the secondary real estate brokerage services market, EJ competes with established international and
domestic real estate brokerage firms, including Century 21 China Real Estate, Centaline Group, Coldwell
Banker, Shanghai House Exchange Co., Ltd., SUNCO Real Estate Co., Ltd., and 5i5j Real Estate Co. Ltd.,
in terms of number of brokerage storefronts, sales force and geographic coverage.
> In the real estate consulting and information service market, competes with other leading international
and domestic real estate services companies which provide real estate consulting services, including DTZ
International, Jones Lang LaSalle, CB Richard Ellis and First Pacific Savills
Use of $130mmin IPO proceeds from sale of 11.45mm ADSs
(shareholders intend to sell 3.15 ADSs)
o $20.0 million to fund capital expenditure, including approximately $10.0 million to fund opening of new
secondary storefronts and approximately $10.0 million to invest in information and operational systems;
o $5.0 million to expand our sales and marketing efforts; and
o balance for general corporate purposes, including funding possible acquisitions of complementary
businesses, although EJ is not currently negotiating any such transactions.
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WuXi PharmaTech	WX, B-, 9
biopharma R&D outsourcing						Post-IPO shrs:60mm
Shanghai, China	2004	2005	2006	March, 06*	Ma