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Investor Presentation May 2010

Investor Presentation May 2010. Safe Harbor Statement.

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Investor Presentation May 2010

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  1. Investor PresentationMay 2010

  2. Safe Harbor Statement This presentation contains “forward-looking statements” within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the company to differ materially from the results expressed or implied by such statements, including changes of anticipated sales levels, future international, national or regional economic and competitive conditions, changes in relationships with customers, access to capital, difficulties in developing and marketing new products and services, marketing existing products and services, customer acceptance of existing and new products and services, and other factors, including those factors described on Exhibit 99.1 to SinoHub’s Current Report on Form 8-K filed on September 28, 2009. Any statements that are not historical facts and that express, or involve discussions, as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” and “projection”) are not historical facts, may be forward-looking statements and may involve estimates and uncertainties. Accordingly, although the company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The company undertakes no obligation to update the forward-looking information contained in this presentation.

  3. Company Profile • SinoHub provides a Web-based supply chain management (SCM) platform that is open to third parties and connects facets of the electronics industry: • Design • Component Purchasing • SinoHub’s SCM platform offers a free, open and robust network operating in China’s booming electronics industry • SinoHub generates sales of electronic components throughout China and of electronics products (currently mobile phones) throughout South East Asia from information and relationships derived from its SCM business • Manufacturing • Finished Product Distribution

  4. Select Financials Flexibility and leverage in business model allows for solid profitability Superior revenue growth despite global economic turmoil 2010 Revenue Guidance of 40% Growth to $180MM Founded: 2000 NYSE Amex Ticker: SIHI HQ: Shenzhen, China

  5. Strong Customer Relationships More than 120 companies utilize SinoHub’s SCM platform … SinoHub Customers

  6. Investment Highlights • Strong demand for mobile computing devices drives growth for SinoHub. • Business model is capital-efficient and asset-light, minimizing risk. • High barrier to entry: SinoHub’s SCM platform is a customer-designed solution created over 6 years. • SinoHub’s SCM platform solves mission critical, costly supply-chain problems for the electronics industry in China. • SinoHub has a proprietary database of 50,000 electronic components, enabling arbitrage and brokering opportunities. • Five consecutive years of high growth with profitability. • Strong management team and solid governance by five independent board members.

  7. Industry Problem: Closed Model XYZ Manufacturing Corp. • Lack of flexibility • High system costs • Supply chain only as strong as weakest link • Difficult to outsource any step due to lack of information flow • Inventory management issues • Drain on working capital Design Purchasing Supply Chain Mgmt. Manufacturing Sales

  8. SinoHub’s Solution: SCM Platform Product Distributors (Global) Electronics Design Houses (China) Finished Goods Manufacturers (China) Electronic Component Suppliers (Global)* • Open access to best providers • Transparent information source • Flexible, open model • Reduces cost & time to market * 85% of the components consumed in Chinese electronics manufacturing are imported into China; Source: China Customs

  9. Business Model Three inter-related business units leveraging SCM’s proprietary data assets: SCM: Provides supply chain application and services to electronics industry clients in China ECP: Sales of electronic components throughout China VCM: International sales of electronic finished products (1) BUSINESS UNITS 1) Virtual Contract Manufacturing (VCM) Electronic Component Purchasing (ECP) Supply Chain Management (SCM) Electronic Component Purchasing(ECP) 2) 3) (1) Represents recently-developed business segment in early stages focusing on mobile phone production and sales, which was not material to results of operations in 2009. VCM Subsidiary known as Topology Electronic Company (Shenzhen) Ltd.

  10. Market Opportunities China Electronics Market: • China is world’s largest consumer of electronic components • China consumed over US $100B+ of electronic components in 2009, producing US $400B+ of finished goods Reed Electronics Research (RER), November 2007 SCM, ECP and VCM Markets: • SCM: serves design houses, manufacturers and suppliers in China • ECP: serves design houses and manufacturers in China • VCM: serves “white box“ mobile phone resellers in the developing countries

  11. Logistics SinoHub Vendors (TI, Motorola) Distributors (Avnet, Arrow) Express Forwarders (UPS, DHL, FedEx) Local Import/Export Companies (Shenzhen Eternal Asia) SCM Supply Chain Management – Powerful Differentiation SinoHub’s SCM platform is a proven resource for some of the largest electronic component distributors in the world SCM Software Platform Electronic Component Procurement Open to 3rd Parties *Chart based on SinoHub’s internal research.

  12. SCM Supply Chain Management US$ millions 7 % of Total Revenue

  13. Sales not Dedicated to Product Lines Minimum Sales Engineers Requirement Minimum Minimum Inventory Requirement Database from SCM Business Database from Sales Force not I nventory C ore SCM D edicated to Requirement Business Product Line SinoHub SinoHub Vendors Vendors (TI, Motorola) (TI, Motorola, etc.) Distributors Distributors (Avnet, Arrow) (Avnet, Arrow, etc.) Independent Stocking Distributors Independent stocking distributors Traders Traders ECP Electronic Component Purchasing Proprietary ECP platform & database to broker components: • by substituting suppliers • by aggregating orders to secure volume discounts • cost-effective and capital efficient to lower customer costs and create revenue source for SinoHub Original Buyer Cost SinoHub profit is a portion of the savings our lower cost delivers Buyer Savings New Buyer Cost SinoHub Profit SinoHub Cost

  14. US$ millions ECP Electronic Component Purchasing 93 % of Total Revenue

  15. Virtual Contract Manufacturing VCM SinoHub is uniquely positioned to become the most flexible, cost-effective contract manufacturer by: • Leveraging 3rd party design house and manufacturing capacity from SCM and ECP customers • Achieving low breakeven volume due to small investment in R&D and manufacturing Mobile Handset Unit Sales by Geography (millions) Database Assets: • 50,000+ unique electronic components • Detailed profiles on buyers’ projects, needs, shipping, payment record • Detailed information on suppliers’ capabilities, terms, and prices

  16. VCM Virtual Contract Manufacturing* SinoHub’s VCM business allows customers to place small orders for their markets, while generating a profit based on low fixed overhead Small Minimum Order Size R&D Open to 3rd Parties Manufacturing Open to 3rd Parties Web-based Platform Key SinoHub Does Not Apply OEMs (Nokia, Samsung) Tier 1 Contract Mfgs. Partially Applies (Foxconn, Flextronics) Local Contract Mfgs. (TCL, Skyworth, Konka) Applies Design Houses (Longcheer, Wintech) Chart based on SinoHub’s internal research. * Represents recently-developed business line in early stages of revenue, which is not yet material to results of operations.

  17. Synergistic Service Network System of warehouses, trucking and freight equipment add value to physical logistics Beijing Regional Office (300 sq. ft.) Shanghai (Wai Gao Qiao) Regional Service Center + Warehouse (5,300 sq. ft.) Beijing Hangzhou Regional Service Center (500 sq. ft.) Shanghai Shenzhen Headquarters + Regional Service Center + Warehouse (27,600 sq. ft.) Hangzhou China Hong Kong Procurement - Fulfillment Hub Bonded Warehouse Transportation Hub (79,500 sq. ft.) Shenzhen Hong Kong

  18. Founded June 2005 Dedicated to R&D of leading mobile handsets August 2008: license agreement with Qualcomm to introduce advanced 3G CDMA-2000 products throughout China Achieved ~100% CAGR in shipment volumes Annual revenue ~ $250MM (2009) 14000 12000 10000 8000 6000 4000 2000 Case Study: HuaQin HuaQin Annual Shipments (‘000 pieces) 12,000 7,600 4,800 1,800 “SinoHub SCM has enabled us to reduce our production cycle by 33%. We regard SinoHub SCM as an indispensable tool to enhancing our efficiencies and increasing our profitability.” Mr. Jiang QinlinDirector of Purchasing of HuaQin 0 2009 2007 2008 2006 HuaQin began utilizing SinoHub SCM in March 2009 for: • Inventory Management • Import / Export • Just-in-Time Delivery • Electronic Parts Movement • Between Projects Results

  19. Growth Strategy Grow customer base • Further enhance SCM services • Deploy ECP and VCM platforms • Convert more SCM customers into ECP customers • Increase number of products per VCM customer Expand Existing Relationships • Grow presence in networking equipment and expand into other verticals through acquisition • VCM for mobile phones in Vietnam, Malaysia, Indonesia, and India Enter New Products & Adjacent Markets • VCM for mobile phones in US – Mobile Virtual Network Operators (e.g. Virgin Mobile) • Acquire overseas distribution channels (ECP / VCM) Pursue International Expansion

  20. Financial Highlights (Audited, $ in US millions, except EPS data) 2007 2008 2009 Revenue $28.8 $79.5 $128.4 Gross profit $6.7 $16.2 $22.4 Net income $3.5 $8.5 $12.4 Earnings per share – diluted Number of shares (millions) – diluted $0.22 15.9 $0.40 21.5 $0.48 25.7

  21. Balance Sheet ($ millions) December 31, 2009 Assets: Cash & Cash Equivalents Working Capital Total Assets Liabilities & Shareholders’ Equity Total Debt, including current portion Total Liabilities Total Shareholders’ Equity Total Liabilities & Shareholders’ Equity $8.3* $39.4 $59.3 $11.8 $15.2 $41.7 $59.3 * Does not include recent equity raise completed in March

  22. Experienced Management Team • Henry T. Cochran – CEO and Chairman of the Board • 30+ years founding and managing companies • Former CEO and president – Content Integrity and Advanced Visual Systems • Former VP – Sybase • Strong MIS background • Lei Xia – President • 15 years in electronic industry in China • Significant senior management experience in the Chinese electronics industry • First sales manager of Arrow Electronics’ Shanghai office • Founded RGL Beijing (high-end distributor and solution provider) and NEFAB China (manufacturer and packaging solution provider) • Willa Li – CFO • Years of experience working with Chinese banks • Significant knowledge of electronic components industry • Prior CFO of Shenzhen Excellence Investment Development Company where he raised RMB 120 million • Prior CFO of Hong Kong B&D Engine Company

  23. Building World-Class Corporate Governance BOARD OF DIRECTORS Audit Committee EXECUTIVE Harry Cochran – Chairman of the Board and CEO Lei Xia – President Will Wang Graylin – CEO, ROAM Data - Extensive operational and entrepreneurial skills in mobile phone industry INDEPENDENT Charles Kimball –Consultant- Significant Wall Street and financial management experience as 30-year veteran of JP Morgan  Dr. Richard King – Former All American Electronics Analyst and Investment Banker; Science Advisory Board, NYU - Extensive experience in financial markets as an electronics analyst and investment banker, advanced economic studies Robert Torino – COO, iPayment - CPA, former CFO, significant public company experience  Afshin Yazdian – EVP & General Counsel, iPayment - SEC reporting knowledge, strong M&A experience 

  24. Why Invest in SinoHub? • Capitalizes on substantial and growing market opportunities • Differentiated business model that delivers high profitable growth • Exciting potential in VCM custom-phone supply for under-served markets • Excellent corporate governance with experienced board, Top-10 Accounting Firm (Baker Tilly) and top US law firm (Seyfarth Shaw) • Multiple expansion opportunities in the Company’s public valuation, given growth rate and profitability

  25. Contact Us COMPANY: Falicia Cheng Douglas Menelly SinoHub, Inc. SinoHub, Inc. Phone: +86 755 2661 1080 Phone: +86 139 2524-5053 Email: falicia@sinohub.com Email: dmenelly@sinohub.com INVESTOR RELATIONS: Ted Haberfield HC International, Inc. Phone: +1 (760) 755-2716 Email: thaberfield@hcinternational.net www.hcinternational.net

  26. Thank You

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