About ZERO FINTECH Company

The Group is mainly engaged in property investment and development, oil field engineering and consultancy services. Property investment and development As of September 30, 2015, the business environment for the Group's property investment and development business remains difficult. The overall performance of the property market in Mainland China (“China”) Guangdong Province remains sluggish. The Group's property projects were mainly developed in Guangdong Province, and business was not active during the period. The Group's completed property for sale in Zhongshan City, Guangdong Province, Yongsheng Plaza, has more than 440 residential units, located in a three-story shopping mall and parking lot. The property is located in a prime location with convenient transportation and elegant riverside views. The Zhongshan property market is fiercely competitive. There is an adequate supply of modernly designed properties. Continued vacancies in shopping malls and the occupancy rate of residential units were lower than the same period last year. The management is committed to marketing activities for these properties and endeavors to improve the operation of the mall. The Group's rental income at Yongsheng Plaza during the period decreased by about 6% compared to the same period last year. During the review period, the Group sold 1 residential unit. As of September 30, 2015, the Group still had 213 residential units unsold, of which 131 were leased. Oilfield engineering and consultancy services On April 1, 2015 and September 30, 2015, the Group held 30.47% interest in the associated company Baiqin through Tianli Natural Resources Co., Ltd., a wholly-owned subsidiary of the Group. During the period under review, the Group has used equity accounting for the results of Baiqin Group (as an associated company) for the six months ended June 30, 2015. According to the interim report published by Baiqin, in the first half of 2015, the Baiqin Group recorded revenue of HK$416,000,000, an increase of approximately 18% over HK$353,000,000 for the six months ended June 30, 2014 (the “first half of 2014”). The increase in revenue was mainly due to the growth of Baiqin Group's overseas performance. Due to the increase in net financial costs, the net profit attributable to the owners of Baiqin Group fell from about HK$13,500,000 in the first half of 2014 to about HK$8,200,000, a decrease of about 39%. On September 24, 2015, the Group signed a subscription agreement with Baiqin to subscribe for 28,480,000 new shares at a cost of approximately HK$22,499,000 in cash. The completion of the subscription is subject to certain conditions being met on or before the final deadline (i.e. November 30, 2015), including approval of the subscription agreement at the Baiqin Extraordinary General Meeting of Shareholders (the “Extraordinary General Meeting of Shareholders”). On November 16, 2015, the subscription agreement was not approved by independent shareholders at the Extraordinary General Meeting of Shareholders. Baiqinzheng is discussing with the Group the conclusion of a supplementary agreement to (among others) extend the final deadline. The first half of 2015 was the most challenging period for the Baiqin Group in the past ten years. The slowdown in China's economic growth and weak international oil prices have led most of Baiqin Group's Chinese customers to implement strict cost reduction plans, leading to a reduction in overall exploration and mining activities in the Chinese market. Although Baiqin Group made significant progress in business development from overseas markets (mainly in the Middle East) and recorded revenue growth in the first half of 2015, weak international crude oil prices are still the main uncertain factor considered by most international oil companies (“international oil companies”). Baiqin Group management anticipates that most international oil companies will continue to implement cost saving measures to cope with weak oil prices. To overcome difficult times during the downturn in the oilfield services industry, Baiqin Group implemented a number of risk mitigation measures in the first half of 2015, including streamlining the cost structure of all major service lines and reducing overall manpower. Prospects As a high-end integrated oilfield service provider, Baiqin Group attaches great importance to technology and is proud to launch innovative products and services in various oilfield service fields. In the first half of 2015, Baiqin Group continued to seek to improve technology and introduce new products to the market. The global economy is gradually recovering from the global financial crisis that broke out in 2008. The US and China are facing various challenges after the global financial crisis. Various factors, including the European debt crisis, the US government's cessation of purchasing treasury bonds, and the US interest rate hike process, all have had an unpredictable impact on global economic recovery. In China, the central government has introduced a number of tight monetary policies to cool down its overheated real estate market. We believe China will continue to play a key role in future global economic recovery. The Group is confident that it can seize such good opportunities, seize all kinds of opportunities to establish its own unique advantages, and develop new business in China. Property investment and development has been the Group's main business in recent years, and the Group has invested significant resources to find investment opportunities in the Chinese property market, particularly in Guangdong Province. However, due to the fierce competition in the property market in Guangdong Province, the Group did not acquire any land or property during the review period, but the Group will continue to seek investment opportunities in the Chinese property market. Looking ahead to the second half of 2015, Baiqin Group management believes that the overall business environment for the oilfield service industry will remain challenging. International oil prices fell further after rebounding at the beginning of the year, causing the market's overall expectations for oil prices to drop. Obviously, the market still looks down on oil prices, and believes that oil companies will continue to invest their capital prudently. Due to various uncertain factors in the current business environment for oil field services, such as weak oil prices and a slowdown in China's economic growth, Baiqin's management will continue to act prudently in the second half of 2015 to seek business development. We remain cautiously optimistic about the future performance of the Baiqin Group. The Group will continue to operate its property investment and development business and engage in oilfield engineering and consultancy services through its interests in Baiqin Group. The Group will carefully explore various investment opportunities to maintain steady growth in the Group's long-term performance. On the other hand, the Group cannot ignore a number of potential risk factors that currently exist, such as oil and commodity price fluctuations, interest rate trends, the global economic recovery process, and natural disasters. The Group is cautiously optimistic about next year's business and is convinced that it can enhance its competitiveness and create value for its shareholders.