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Company Presentation Company Presentation May 2015 China: Financial Services Being Transformed by the Internet Portal Online E-Commerce Social Media Financial Services Games 2 Huge Market Opportunity: Multi-trillion Dollar Addressable Market $ Tn $18Bn $25Bn 2 $20Tn China’s Online China’s Online China’s Online China’s Non-standard Game Market Ad Market Shopping Market Financial Assets Source: iResearch, Oliver Wyman Research 3 Most Prominent and Recognized China Internet Finance Platform Lufax Has Won Multiple Awards Lufax Has Won National Recognition “The Most Popular Internet Finance Platform”, Caijing China Annual Conference 2015.1 "Innovative Internet Investing and Financing Platform of the Year“, Shanghai Municipal 2014.11 Government “Most Influential Brand" and “Most Innovative P2P Product“, Shanghai Internet Finance 2014.6 Exposition “We encourage Mr. Gibb to bring further innovative ideas and "Best Risk Management“, Shanghai contributions to Internet finance in Securities Journal China” 2014.6 ——Xi JinPing, PRC President "The Most Important P2P Company in China", “Global Top 3 P2P Online Trading 2014.5 Services”, Lend Academy 4 Huge P2P Market Opportunity China U.S. $40Bn 2014 $5.5Bn 2014 $565Bn 2018E $60Bn 2018E Source: Wangdaizhijia, iResearch Source: Liberum Research Notes 1. Data represents annual transaction volume 5 Distinctive Driving Forces for China P2P China U.S. Consumer Auto Micro Finance Loan Incumbents Banks Banks Finance Finance Companies Associates Providers Providers Typical Borrowing Home Remodelling Wedding Travel Purposes $ Debt Consolidation SME Financing Continuing Education Durable Goods SME Financing Consumer Loan Penetration (1) 23% 83% Direct Financing Penetration (2) 17% 70% • Lack of a nationwide consumer credit database and credit scores • Well-established nationwide credit information system Credit System • Generally supportive of a sector in the early stage • Established and clear framework Regulatory • P2P platforms seen as a real economy tool, addressing unmet • P2P platforms viewed as people helping other peers Environment consumer / SME financing needs across China Investors • Principally retail investors • Retail and institutional investors Notes 1. Consumer loans as % of GDP 2. Direct financing as % of total financing 6 P2P Market Leadership Borrowers as individuals Borrowers as individuals and enterprises Ranking by Loan Balance Ranking by Number of Borrowers In RMB Bn Unsecured P2P Secured P2P B2C In 000s 14 100 6 80 6 73 5 73 5 69 5 65 4 49 4 45 4 29 Source: Wangdaizhijia, as of May 2015 7 Lufax – The New Online Financial Services Powerhouse Bank P2P Trust Real Gold Estate / Public Government / Fund Large Private Insurance Enterprises Equity I need Securities What choice money! do I have? What will it Borrowers / Can I assess cost me? Investors risk easily? Asset Providers When could I Can I sell if I get it? #1 China P2P Platform have to? #1 China Securitization Platform 8 Formula for Success in Mainland China Lufax: Diversified Asset Sources Lufax: Massive Base & Engagement • Access to assets from the full • ~10M Registered Users financial services spectrum • Growing average investment • Optimized sourcing costs / speed • Strong relationships across China • Increasing conversion rate Asset User Sourcing Traffic Risk Management Lufax: Data-Driven Risk Management • Big data analytics • Unique data sources, e.g. credit bureau, insurance data • Full disclosure 9 Leading Open Market for Non-Standard Assets in China and Globally Equity Positioning Leading Open Market for Non-Standard Assets in China and Globally Bond Customer Product Service Online wealth Provides the most Provides the lowest Five Core management and extensive products, cost, the highest Markets in Interbank Market trading platform for including cash transparency and high-end individuals management, fixed the best liquidity China and institutions income, variable through account income, equity- integration linked products and commodities Gold / Foreign Exchange Supporting Mechanism Non-Standard Assets Risk control Standards Systems 10 Future Development Strategy of Lufax: Open Platform of 9158 9 Funnels 1 Platform 5 Markets B end 1: B2B 1 Bank 5 Securities Risk Control Primary Market Lfex B End 2 Trust 6 Insurance 2: B2B Products Secondary Real Market 3 Public Fund 7 Estate/Government /Large Enterprises B System Private 4 8 Gold 3: P2P Equity Marketing 9 P2P Lufax Shared C End 4: B2C Micro-lending Companies Resources Small & Medium Individuals Companies 5: C2C P2P Companies 8 Keys Model Product Risk Control Account Customer System Marketing Operations Experience 11 Recent Development: Creation of Inclusive Finance Business Group • One of China’s largest • One of the largest offline consumer loan consumer loan provider telemarketing teams in China • 500+ stores in 100+ cities • 2000+ sales representatives • 1.7M borrowers Xinbao Telesales • Contributed ~10% of loan • US$5Bn Xinbao and ~50% of outstanding Lufax P2P borrowers Better Resource Dedicated Combination of Online Economies of Scale Enhanced Valuation Coordination Management and Offline Strengths China’s Leading Provider of Consumer Financial Services 12 Exponential User Base Growth Cumulative Registered Users Cumulative Retail Investors MM ‘000 +30x +140x Growth Growth 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 13 Retail Investors Keep Adding to Their Accounts Monthly Cumulative Investment per Investor US$000 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Feb 2015 14 Lufax vs. LendingClub – P2P Platform Comparison Key Data Online Market Position • #1 in China • #1 in US 2014 vs. 2013 P2P Growth • 5x • 1x Market Environment • Fast-growing middle-class • Leveraged consumers seeking refinancing Key Growth Drivers • Large, aspirational financing needs • Traditional banks underprice consumer credit • Traditional banks reticent to consumer credit Marketplace Participants Borrowers • Mostly individuals • Mostly individuals • Retail (~55%) Investors • Retail (~100%) • Institutionals (~45%) Product Characteristics • Unsecured Product Types • Unsecured only • Secured • New loans only % 2ary Trading • ~20% • Some trading via 3rd-party platforms • Some with guarantee, increasing number of loans Risk Exposure • Not guaranteed without guarantee 15 Strong Business Volume Growth Business Volume Including Institution & Individual Quarterly Retail Volume Transaction RMB Bn RMB Bn C2C P2P +350x +150x F2F/ Growth B2B Growth B2C C2C P2P B2C 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 B2C P2P C2C B2B/F2F 16 Risk Control through Multiple Approaches Asset-end Fund-end Comprehensive Risk Prudent Account Opening Retail / SME Rating System Authentication System Retail Funding Investors Needs Asset Security Guarantee Plan Scientific Model for Financial Investor Admittance Institutions Whole Process Risk Control System for Asset Financial Admittance Institutions Customer Risk Type and Corporates Product Matching Model Leading Risk Model Clear Contract Comprehensive Ping An Relationship Information Disclosure Corporates Big Data Analytics Significant Input in Integrated System of Model System Security Three Defense Lines 17 Various Products Based on Different Customer Risk Preference Customer Acquisition Customer Identification Product Matching Product Product Product Product Product Risk Risk Risk Risk Risk Level 1 Level 2 Level 3 Level 4 Level 5 Conservative Robust Customer Risk Balanced Preference Growth Aggressive 18 Full Information Disclosure and Well-Established Risk Rating Full Information Disclosure Well-Established Risk Rating Product Information Disclosure Risk Profile • Product: Rainbow– Henghanxi No.03C • Expected Ann. Yield: 7.70% • Project name: Rainbow-Henghanxi No. 03C • External rating: N/A • External Rating Agency: N/A • Term: 146 days • Internal Rating: A-1 • Threshold: RMB300,000.00 Rating Level Disclosure • Remaining Investable Amount: Rating Definition Disclosure RMB1,449,200.00 Short-Term Debt Rating (Within 1 Year) • Status: 92% Project Introduction • Interest Period: 17/04/2015~10/09/2015 • Receipt: 15/09/2015 • Term: 146 days • Payment: One-off Payment; Zero Coupon • Transferor: Shenzhen Ping An Huifu Asset Management Borrower Information Disclosure Medium- to Long-Term Debt Rating (Over 1 Year) Transferor Information Disclosure Transaction Document 19 Sponsored by Ping An – China’s #1 Non-SOE Financial Institution Largest Non-SOE Financial Institution Insurance Banking 80M+ Customers US$646Bn Total Assets Internet Investment Finance US$110Bn Market Cap 20 Unique Access to Ping An and Financial Resources Access to 21 Licenses Asset Sourcing Life Insurance • Access to assets from the full financial services spectrum: bank, insurance, trust, Motor Insurance fund, securities, etc. • Optimized sourcing costs and easiness Trust Packaging & Distribution Fund Sales Largest License Set in China Finance by • Certain licenses (e.g. trust) can be used to Securities package assets into investable products Both Number and • Flexibility to adapt packaging format to Bank Breadth each product Asset Management Product Innovation … • Develop products combining the various licenses across sectors Exchange • E.g. secured P2P loans backed by insurance policies 21 Clear Growth Strategy More Investors More Products • Provide more products with • Build strong brand awareness via innovative structure social media marketing • Vary investment
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