Transfar.Network: Serving the Real Economy

1. Transfar Network: Serving the Real Economy ——Cloudification Practices of Transfar Group

2. Transfar’sBusiness Transfar Holdings Transfar Chemical Transfar Agriculture Xiaoshan Innovation Polis Transfar Logistics • Leading the world in specialty chemicals, transforming from "manufacturing" to "manufacturing + services + platforms" • Building a nationwide, fully connected Transfar Network that runs through the whole supply chain • Achieving city-industry integration by creating a new science and technology city in the south of Hangzhou that is livable and suitable for doing business and traveling • Building a first-class comprehensive investment management platform in China • Demonstrating the next-generation agricultural science and technology of China

3. Considerations in Cloud Migration Digital Business Strategy Digital Business Transformation Digital Business Optimization Net New Revenue from Products and Services Better Customer Experience Improved Productivity & Existing Revenue Streams New Business Models 1. Using one or multiple cloud services 2. Embracing cloud ecosystems 3. Becoming an industry cloud (ecosystem)

4. Three Methods of Cloud Migration Embrace cloud ecosystems for rapid business results. Enterprise cloud migration Purchase clouds to improve services and reduce costs. Become an industry cloud. • Provide prompt support for business transformation by embracing other cloud ecosystems to achieve business results quickly. • Purchase one or multiple basic cloud services to enhance the flexibility of enterprise IT architectures, reduce costs, and improve operational efficiency. Focus on the core value of services and core technological investment, to reduce the total OPEX. • Support new business models by becoming an industry cloud (ecosystem for one or more industries).

5. 1. Digital Enhancement: Cloud Migration (Purchasing Cloud Services, e.g., IaaS, PaaS, SaaS) • Hybrid IaaS cloud architecture • Flexible resource supply • Massive amount of data storage • Real-time equipment data collection • Digital technology application • IT resource efficiency and delivery capacity Supply Chain Applications Financial Payment Applications Smart Campus Applications Other Applications • Cost reduction of 35%+ • Delivery efficiency improvement of 60%+ Elastic Computing Elastic Storage Elastic Network Security & Management TransfarIaaSHybrid Cloud China Telecom “e Cloud” Leveraging the "e Cloud" services of China Telecom to enhance digital IT capabilities so that enterprises can focus on developing their core services

6. 2. Business Model: Transfar Network (Logistics Center  B-End Supply Chain Service Platform) • Running through the entire supply chain, providing one-stop financial solutions for the logistics industry, and serving the B-end with all licenses in the logistics domain • A nationwide urban logistics network with three north-south lines and four east-west lines, serving seven economic belts Credit reporting Big data analysis Industry Financial Infrastructure Payment capacity User system Accountsystem • 150projects deployed nationwide • 27 provinces, cities, and autonomous regions covered • The settlement amount reached CNY178.6 billion in 2017 and is predicted to be CNY500 billion in 2018. • 51distribution centers • 65projects in operation

7. Transfar Network Ecosystem: One-Stop Logistics and Supply Chain Solutions • TransfarNetwork Ecosystem • E Huodi (EHD): A top brand in city distribution and NTOCC • Lujing: A top brand in trunk transport NTOCC capacity + Highway Kangaroo (drop & pull) • Highway ports • -Distribution centers • -Property leasing • -3PL services • Transfar Finance • -Supply chain finance • -Factoring • -Insurance broking • -Financial leasing • Follow-up services (Huilian, Yunlian, Youfu) Transfar Finance Transfar Network Ecosystem Social Cross-industrial Industrial Lujing E Huodi Enterprise Customer Highway ports Follow-up services

8. Internet finance Cloudifying Enterprise Services to Develop Business Channels • Campus services platform • Material supply and marketing services platform Financial services platform • Smart manufacturing services platform • Building a service cloud platform, launching cloud services, and innovating business models to boost new growth (SaaS) • Outsourcing services based on cloud platforms (centralized procurement, supply chain, etc.) • Vehicle and goods information services platform • Smart manufacturing services platform Logistics and supply chain services platform Vehicle and goods Information services platform • Transfar Network Efficient flow of materials used in production and living Smart manufacturing services platform Cloudifying traditional services, developing digital services, and building the Transfar Network based on the China Telecom Cloud Material supply and marketing services platform Campus services platform

9. 3. Embracing Cloud Ecosystems for Rapid Business Results Government, public security, fire protection, tourism, judicial, and education services are deployed on WeChat. Target: Developing new channels to engage customers rapidly based on the Alibaba ecosystem. Government services Social Alibaba Group Cross-industrial Alipay Industrial Tmall Enterprise Enterprises The public Target Customer • Connecting to the public/enterprises • Serving the public/enterprises • Handling government affairs 9

10. Transfar Plus China Telecom/Huawei Ecosystems 5G channels + IoT: Vehicle-mounted T-BOX launched by China Telecom and Transfar Digital/intelligent highway ports Vehicle drivers: Customized telecom services Digital precision marketing Transfar digital transformation: Data center resources Disaster recovery centers IaaS PaaS Huawei's ABC capabilities Link resources: Private line resources High-end CN2 resources Through this service convergence, the China Telecom ecosystem will fuel the rapid development of Transfar, and Transfar Group and China Telecom will ultimately serve the real economy together.

11. Driving digital transformation of enterprises by purchasing clouds, embracing clouds, and becoming a player in the cloud ecosystem Many thanks to China Telecom and Huawei