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About CPP

To our shareholders,

 

On behalf of the Board of Directors (the “Directors”) (the “Board”) of China Public Procurement Limited (the “Company” or “CPP”), we hereby present the annual report of the Company and its subsidiaries (collectively the “Group”) for the year ended 31 December 2015.

 

PUBLIC PROCUREMENT BUSINESS

The Company continued to pursue the ongoing setting up of its 22 electronic public procurement platforms, which were all successfully connected to our China Public Procurement Platform (http://www.china-cpp.com) with data sharing functionalities. Our user platform “公採通” on the China Public Procurement Platform, which provided vendors with vital information on procurement and marketing, third party payment services and logistics information, achieved positive results.

 

The Company has entered into agreements with numerous universities in relation to the development of electronic platforms, and is making active progress in terms of the provision of diversified procurement services for colleges and universities across the country in a bid for digitalisation and standardisation. In addition, the Company expects that agreement will be entered into with other government authorities to develop electronic procurement platforms for them. Out of over 600 colleges and universities in the PRC, we have entered into agreements with 39 of them, of which 15 are currently conducting transactions on our platform.

 

TRADING BUSINESS

 

Our trading business slowed down for the year while still achieving growth as compared to 2014. We will continue to strive for expanding our business network and strengthen the advantage of our unique brand and market position.

 

PROSPECTS

 

The electronic commerce industry is currently facing the challenges of consolidation and reform.

 

On 31 July 2015, the “Proposal Relating to the Integration and Establishing of a Unified and Standardised Public Resources Trading Platform” was approved by the Standing Committee of the State Council of the PRC, suggesting that a unified public resources trading platform shall be established by integrating the bidding process of construction projects, transfer of land use rights and mining rights, transactions of state-owned interests and government procurement, into a core platform. The Group is conducting research in an accelerated mode on the implications of the integration and establishment of a unified and standardised Public Resources Trading Platform. At the same time, the Group will continue to pursue market share, by adopting innovative marketing strategies, reinforcing our brand and taking advantage of our unique market position, and offering of improved value-added services.

 

In late December 2015, the Company entered an acquisition agreement and acquire a 40% effective interest in a company that is principally engaged in the promotion of ChinaPay’s cross-border online settlement solutions. The acquisition is currently pending regulatory and Company’s shareholders (the “Shareholders”) approval. Should the acquisition succeed, the Group’s capacity for electronic commercial platform services will be enhanced, and more comprehensive value-added services will be provided for the users of the Group’s procurement platform. It will be very favourable to the Group’s future developments with respect to integration and construction of our trading platforms.

 

Looking forward to 2016, amidst the slowdown of growth of the PRC economy, intense market competition and challenging economic prospect are expected. The Group will continue to identify business opportunities and focus on building a complete procurement chain to serve our customers.

 

On behalf of the Board, I would like to thank all the investors, clients, business partners and Shareholders for their support and trust. Our gratitude also extends to all the members of the Board and our employees for their faithful performance of duties and loyal services which helped the Group meet and overcome all our challenges.

 

Yours faithfully,

For and on behalf of the Board

 

Cheng Yuanzhong

Chairman

Hong Kong, 31 March 2016

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