VLOV, Inc.
(OTCBB: VLOV)
A Lifestyle
Apparel
Brand
“Victory
&
Love”
Disclosure
Safe Harbor Statement
This presentation contains forward-looking statements that are based on the beliefs of our management, and involve risks
and uncertainties, as well as assumptions, that, if they ever materialize or prove incorrect, could cause actual results to
differ materially from those expressed or implied by such forward-looking statements. The words “believe,” “expect,”
“anticipate,” “project,” “targets,” “optimistic,” “intend,” “aim,” “will” or similar expressions are intended to identify forward-
looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-
looking statements, including statements regarding new and existing products, technologies and opportunities; statements
regarding market and industry segment growth and demand and acceptance of new and existing products; any projections
of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of
management for future operations; any statements regarding future economic conditions or performance; uncertainties
related to conducting business in China; any statements of belief or intention; and any statements of assumptions
underlying any of the foregoing. All forward-looking statements included in this presentation are based on information
available to us on the date of this presentation. We assume no obligation and do not intend to update these forward-
looking statements, except as required by law.
Introduction
VLOV designs, sources and markets casual, fashion-forward apparel
for men in the People’s Republic of China
Solid brand equity among Chinese consumers
Strong profit margins through unique operating model
Based in Fujian Province, PRC
Ticker: OTCBB:VLOV
Attorney: Richardson & Patel LLP
Auditor: Crowe Horwath & Co
Select Financials
OTCBB Symbol
VLOV
Fiscal Year
December 31
Last-Traded Price (2/26/10)
$5.10
Shares Outstanding*
15.7M
Market Capitalization
$80.1M
Management Ownership
57.6%
Revenue 2008
$51.9M
Net Income 2008
$9.2M
Revenue - 9 Months Ended September 30, 2009
$45.8M 14.5%
Income - 9 Months Ended September 30, 2009
$8.8M 27.0%
EPS - 9 Months Ended September 30, 2009
$0.56 16.6%
*A $9.9 M raise was completed in Q4 2009. The Company issued preferred and common shares and
common stock purchase warrants, which on a converted and exercised basis would add 5,175,382
shares of common stock to the capital structure.
The VLOV Brand
VLOV represents Victory and Love, a reflection of a successful life
Lifestyle brand targeting middle-class, male Chinese consumers ages
15 to 34
Focused sales strategy includes 15 exclusive distributors who service
more than 730 Points of Sale
Emphasis on fashion-forward designs with multiple new product
launches each year
Strong brand recognition in PRC
Compelling Consumer Market
VLOV’s target demographic
accounts for the greatest wealth
creation in China today
15 to 34 year old fashion-
conscious men, which accounts
for nearly 400 million people in
China vs. a total US population of
300 million
Middle to upper income, who are
becoming more sophisticated and
scrutinizing about brands they buy
China’s wealthiest consumers are
25 to 44 years old
China Men’s Apparel Market
Euromonitor forecasts a 17.7% CAGR in China’s retail sales of men’s wear from 2006 to
2011, greatly surpassing women’s apparel (CAGR: 11.7%) in the period
Source: Euromonitor
Retail Sales of Apparel in China (2006-2011E)
China Men’s Apparel Market (cont’d)
Resale's of local brands jumped 35.6% year-over-year in 2008 and are forecast to post a
24% CAGR in the 2009-2011 period
56% of the market share of men’s wear is still “up for grabs” for branded lines of apparel.
Source: Frost & Sullivan
Retail Sales of Local Menswear Brands in China (2006-2011E)
Brand/Market Positioning
Fashion
Basic
Value
Luxury
CR-31
Armani
Gap
H&M
Hugo Boss
Gucci
Zara
Cabbeen
Calvin Klein
Agnes B
DKNY
Prada
VLOV
Jack Jones
Product Mix (% of 2008 Revenue)
Prices range from U.S. $26 to $220
Distribution Strategy Drives Strong Margins
and Cash Flow
VLOV has 15 Exclusive Distributors across northern, central and southern China
734 Points of Sale under the VLOV brand name
Free-standing stores, shop-in-shops, counters, concessions
VLOV maintains control over advertising and marketing activities from its
headquarters
120,000 square foot manufacturing and distribution facility located in Yinglin,
Fujian
R&D; production of specialty products
More than 80% of mainline production is outsourced, optimizing working capital
Strong Margins
734 POS in Tier II and Tier III regions throughout China
Free standing stores, shop-in-shops, concessions and counters
HAININ
HEILONGJIANG
JILIN
LIAONING
INNER MONGOLIA
SHANXI
SHAANXI
SHANDONG
JIANGSU
ZHEJIANG
FUJIAN
JIANGXI
HUBEI
HENAN
ANHUI
NINGXIA
GANSU
QINGHAI
XINJIANG
TIBET
SICHUAN
YUNNAN
GUIZHOU
HUNAN
GUANGXI
GUANGDONG
HEBEI
Tianjin
Shanghai
Beijing
Chongqing
Points of Sale
Points of Sale
Points of Sale
Points of Sale
Points of Sale
Points of Sale – New Generation
Points of Sale – New Generation
Points of Sale – New Generation
Product Distribution Agreements
15 Distributor Agreements covering 12 Provinces
Ability to leverage regional expertise and achieve economies of scale
Maintains solid brand recognition and drives strong margins
Management and operational guidelines ensure consistency of brand image
and store appearance
All Points of Sale exclusive to VLOV
Semi-annual Sales Meetings for all VLOV distributors
Showcase new designs to introduce products
Highlight advertising & marketing plans
Reinforce brand strength and positioning
Growing Distribution
VLOV’s Distributors and Points of Sale have grown steadily since the Company’s inception
with no required external financing
VLOV Points of Sale (2005-2010E)
Est. POS CAGR
2005 – 2010E: 31.6%
Marketing Strategies
Advertise in fashion publications, local newspapers, outdoor venues
and mall kiosks
To sponsor events, television programs and movies aimed at target
demographic
Host VLOV fashion shows and promotional events
Allocate approximately 5% of annual revenues to marketing &
advertising
Continue to build brand recognition through 35-person marketing &
advertising staff
Growth Initiatives
Continue to evolve VLOV’s lifestyle brand positioning
Fashion-forward
Elegant, stylish, casual chic
Refurbish selected points of sale
Extend price points to reach a broader consumer base
Expand depth of product offerings and increase SKUs
Broaden retail network through additional distribution agreements
Increase brand promotion, marketing and advertising
Open flagship stores in Tier I cities beginning in 2011
Higher income levels
More densely populated
Financial Performance
VLOV has produced consistently strong revenue growth and profitability
($000s)
Revenue
$39,727
$51,867
$57,677
Growth
109.2%
30.6%
16.5%
Gross Profit
$14,788
$18,551
$20,665
Gross Margin
37.2%
35.8%
35.8%
Operating Income
$11,558
$12,301
$14,985
Operating Margin
29.1%
23.7%
26.0%
Net Income
$7,749
$9,192
$11,065
Net Margin
19.5%
17.7%
19.2%
FYE
Dec-31-2007
FYE
Dec-31-2008
LTM
Sep-30-2009
LTM
Sep-30-2009
Balance Sheet Highlights
($000s)
Cash and cash equivalents
$2,758
$2,863
$9,328
Working Capital
$1,381
$6,230
$9,993
Total Assets
$13,660
$12,647
$18,726
Total Liabilities
$11,217
$5,078
$7,456
Shareholders’ Equity
$2,443
$7,569
$11,261
FYE
Dec-31-2007
FYE
Dec-31-2008
LTM
Sep-30-2009
9 Months
Sep-30-2009
The Company has the financial flexibility to pursue its growth plans
The Company completed a $9.9 M capital raise in the fourth quarter of 2009.
Experienced Management Team
Qingqing Wu – Chairman and CEO, graduated from Xiamen Jimei School of Light Industry in 1990 with a major in
apparel design and received a Masters in Business Administration degree from Tsing-Hua University in 2007. Mr. Wu
also serves as the Standing Director of the First Committee of the Association of Fabric & Apparel in Jinjiang City.
Yushan Zheng- CFO, graduated from Jiangxi University of Finance & Economics in 1987 with a major in industrial
economics. Mr. Zheng is a Chinese Certified Public Accountant and a Certified Tax Agent. Mr. Zheng has over 20 years
of financial and accounting experience in the public and private accounting field.
Dr. Jianwei Shen – Director, holds a Doctorate of Economics and Management from China Agricultural University, a
Doctorate of Philosophy from Hohenheim University in Germany, a Master’s Degree in Economics and Management
from Beijing Agricultural University and a Bachelor’s Degree in Agricultural Economics from Beijing Agricultural
University. Since 2006, Dr. Shen has been an independent director and a member of the Audit Committee of the China
Essence Group Ltd., a company listed on the Singapore Exchange. Dr. Shen is also a member of the Specialist
Advisors to the City of Jinjiang, Fujian.
Yuzhen Wu – Director, graduated from Huaqiao University in 1998 with a major in Business Management. Mr. Wu has
been working with the Group since 1998. He has been the director of the general production management since 2006.
Zhifan Wu – Director, has over 20 years of experience in the purchasing functions in the fashion trade and has served
as the manager of the Purchasing Department since 2006. Mr. Wu worked as the purchasing assistant at Huangbao
Apparel Co., Ltd. from 1996 to 2000. From March 2000 to 2005, Mr. Wu served as the manager of the Purchasing
Department in Huangbao Apparel Co., Ltd.
Investment Highlights
Compelling consumer market
Highly leverage able business model
Ability to expand distribution and brand reach without significant capital
expenditures or external financing
Operating strategy drives strong gross profit and EBIT margins
Strong, predictable free cash flow
Experienced and talented management team.
CEO more than 20 years of apparel experience
VLOV awarded China Fashion Week’s 2009 Menswear Design Award
Investor Relations Contact
Christine Greany
HC International, Inc.
858.523.1732
christine.greany@hcinternational.net
www.hcinternational.net
Howard Gostfrand
American Capital Ventures, Inc.
305.918.7000
info@amcapventures.com
www.amcapventures.com
