XFY Holding Corporation: Business Summary

Business Summary

• Background XFY Holding Corporation (Code: 0968) is a hot pot restaurant management company that offer a healthy, delicious and enjoyable hot pot concept. LSXFY Ontario Inc. is the exclusive distributor for Little Sheep Mongolian Hot Pot in Canada. In 2005 Little Sheep Hot pot firstly was opened in Toronto, Canada. By right of special soup base and a new hot pot concept of without dipping the sauce, Little Sheep Hot Pot quickly was accepted by our customers. Then Little Sheep Hot Pot successfully built a new food concept in other market, such as Canada, United Sate,Japan. Nowadays more than 350 chain stores have spread all over the United States, Canada, Japan, South Korea, Indonesia and China.

Capitalizing
The lamb is from the ranches in Mongolia. Even the soup is also homemade. . Inner Mongolia Little Sheep Condiment Inc.(hereinafter refer to the “Little Sheep Condiment”) set up in January, 2007 in Baotou City, Inner Mongolia. It is the sole base producing the condiment of Inner Mongolia Little Sheep Catering Chain Co,. Ltd. (hereinafter refer to the “Little Sheep Group”). The most famous selling point is that customers do not need to use any source to enhance the taste because secret source is already in the soupIt attracts a lot of people who emphasize “health” of the young generation. It set up a central kitchen in shen zheng to enhance the competitiveness against its
low gross profit ratio (control of revenue and cost): high operating cost, esp COGS

➢ Income

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(2009 data)
|restaurant income |77.93% |
|Retail sales |19.99% |
|(lamb, hotpot relevant product, e.g source) | |
|Franchise fee |1.97% |
|Management fee |0.11% |

| |2008 |2009 |2010 |2011 |
| |$M |$M |$M (E) |$M (E) |
|restaurant income |1010.7 |1223.4 |1468.08 |1614.89 |
|Retail sales |239.9 |313.8 |376.56 |414.22 |
|Franchise fee |18.9 |30.9 |37.8 |40.788 |
|Management fee |2.1 |1.7 |1.8 |1.9 |
|total |1271.5 |1569.8 |1883.52 |2071.79 |

➢ Cost