1. BEIJING CAPITAL P R I VAT E EQUITY
北 京 首 创 股 权 投 资
SUITE 305, HENGAO CENTER, BUILDING C
No. 26 JIN SHI FANG STREET, XICHENG
DISTRIC, BEIJING, CHINA 100033
(O) +8610.6896.4807 (F) +8610.6896.4810
B E I J I N G C A P I TA L G R O W T H F U N D
U P D AT E – S P R I N G 2 0 1 2
HIGHLIGHTS
 QFLP Status – To date, SAFE not onboard with municipalities for currency conversions, approval timing uncertain
 1st Closing With Parallel Fund Structure – Opportunity cost of waiting for QFLP deemed too high
 Downward PE Ratio Trend - Lower valuations create unexpected 2012 investing opportunities
 IPO Market Outlook – Dearth of publicly listed SMEs in China expected to keep future demand high
 Latest Fund Results – Gross returns remain consistent at 60% IRR
QFLP: CAUTIOUS APPROACH TAKEN TO PROTECT OUR FOREIGN LPs
Last year, a handful of municipalities were designated by China’s Central Government to release QFLP programs, whereby private equity
managers and funds established as PRC Foreign Invested Partnership (FIPs) entities, will be permitted to, for the first time ever in
China, convert foreign currency into RMB in their own fund accounts. Notwithstanding QFLP approvals issued in 2011 by municipal
governments in Shanghai, Chongqing and Tianjin, the authority responsible for currency conversion at China’s Central Government-
level, the State Administration of Foreign Exchange (SAFE), has delayed implementation of the currency conversion aspect of these
programs effectively muting the ability to conduct investment operations under them. It is our understanding that to date, none of the
approved fund managers have been permitted to convert currency under the program.
Since late 2011 and early 2012, senior executives of the Beijing Capital Group (“BCG”, our conglomerate) and the managing partners of
Beijing Capital Fund Management (“Beijing Capital”, BCG’s private equity arm and the manager of the Beijing Capital Growth Fund),
have been working vigorously to lobby governmental authorities in Beijing, and more recently in Chongqing (a city of 30 million people
where BCG has a considerable footprint) to remove obstacles to implementation of the QFLP program.
We have been joined by the Financial Bureaux of each of the municipalities that were expected to launch QFLP programs to appeal to
SAFE and other authorities in the Central Government to remove currency conversion delays. Although we expect this to be authorized
by SAFE at some point in 2012, the timing of implementation is never exact, and this issue has been a source of frustration for Beijing
Capital as well as for other private equity funds in China. We have observed that certain other managers who closed on their
funds based on the FIP structure with the expectation of QFLP implementation, have called foreign capital that sits
idly in bank accounts awaiting conversion that has yet to be permitted.
SOLUTION: 1st CLOSING WITH PARALLEL FUND STRUCTURE
Beijing Capital has concluded that waiting further for the implementation of the QFLP program will put our deal pipeline at risk and has
decided to launch the fund under the traditional structure of a parallel fund. Unlike other funds that structured as FIPs and already
closed with the expectation that QFLP would be implemented, we have the flexibility to establish our parallel structure and pursue
investments without being beholden to implementation of the new regulations, since the parallel fund structure is based on the offshore
method by which foreign investors have traditionally invested into China.
Under the parallel fund structure, foreign investors will invest into the same Cayman Islands feeder fund established in connection with
our FIP structure under the QFLP program and for which some of our investors signed subscription documents. However, instead of the
Cayman feeder fund feeding into a PRC FIP, it will feed into a new Cayman Islands fund we are establishing which will invest directly
into our investee companies in China. Meanwhile, we are establishing a pure RMB fund in China for our PRC investors which will invest
directly into our investee companies. Thus, under the parallel structure, both the onshore pure RMB fund in China, and the new offshore
Cayman fund will invest RMB and US$, in parallel, on a pari-pasu basis in each investee company.
We have been advised that utilizing our existing PRC Foreign Invested General Partner (GP) entity with the parallel fund structure may
jeopardize our foreign investors’ privileged tax status in the PRC. Therefore, we are establishing new separate offshore and onshore
General Partnership management entities that will work in parallel in order to preserve a 10% withholding tax rate for our
foreign investors, instead of an onshore tax rate of up to 30% as applied to PRC investors. This new fund structure requires approval
at the executive level of Beijing Capital Group because it involves a State-Owned Enterprise management of foreign capital and
establishment of foreign partnership structures. Investors should note that although State-Owned Enterprises, such as Beijing Capital
Group, have a number of advantages over private institutions in China, speedy approval at the executive level of the conglomerate is not
one of them.
Investors will be provided with an addendum to the Private Placement Memorandum explaining the new structure, the new subscription
documents and limited partnership agreement when the structure is approved and established. The changes to the agreements will be
minimal as the commercial terms and major items remain the same, with only modifications to account for the parallel structure for the
Fund.
For more information, contact Geneva Capital S.A.: info@genevacapitalsa.com Tel. +41 22 550 0050 x802

2. BEIJING CAPITAL P R I VAT E EQUITY
北 京 首 创 股 权 投 资
SUITE 305, HENGAO CENTER, BUILDING C
No. 26 JIN SHI FANG STREET, XICHENG
DISTRIC, BEIJING, CHINA 100033
(O) +8610.6896.4807 (F) +8610.6896.4810
B E I J I N G C A P I TA L G R O W T H F U N D
U P D AT E – S P R I N G 2 0 1 2
SUBSEQUENT ADOPTION OF QFLP
Once we receive formal QFLP approval from the Beijing Municipal government and the program is implemented, we believe we will be
able to merge our parallel fund structure into one FIP structure onshore under the QFLP program. This, from a corporate restructuring
perspective, is not complex and involves the pure RMB fund and the offshore Cayman fund acting as feeders into the new onshore FIP
fund. However, no assurance can be given that QFLP will be implemented in China, or within the near term, and even if implemented,
that we will be given approval under the program or that the authorities will allow us to merge a pre-existing parallel fund into a new FIP
to utilize the QFLP program. However, we understand that at least one of the other SOE-backed foreign invested funds in Beijing that
has also been delayed in their QFLP approvals is also proceeding with setting up a parallel fund in anticipation of merging the onshore
and offshore funds into one FIP in the future when QFLP is available.*
DEAL PIPELINE UPDATE
Understandably, some of the time-sensitive target companies in our pipeline were clearly unable to remain onboard late last year while
we waited for QFLP approval. We are actively working on replacing these. Fortunately, one of our strongest competitive advantages is
superior deal flow available to us through our nationwide footprint, brand name and infrastructure. In addition to our parallel fund
structure we are re-establishing an exceptional deal list with additional sourcing support from Beijing Capital Group’s senior
management and the conglomerate’s nationwide infrastructure, which will be available before 1st closing of the Fund.
MARKET UPDATE: 2012 VS. 2011 PROVIDES AN UNEXPECTED BONUS
One very interesting recent development is that valuations in our target sector: high growth pre-IPO small to
medium sized enterprises (SMEs) in China, have decreased to more sustainable levels and we believe that 2012 is
developing into an attractive buying opportunity in this area.
In 2011, price-to-earnings multiples for the deals we negotiated in our pipeline ranged from 9 to 17 (Note that many of our competitors
are paying as much as 20 to 25 PE ratio for deals) while we are now seeing a reduction in PE ratios of deals in our pipeline in the single
digits to low teens, ranging now from 7 to 13, particularly with respect to pre-IPO, high growth SMEs. Therefore, replacing some of
our previous cases with new ones has evolved into an unexpected benefit.
This reduction in PE multiples in private SMEs is being driven by the reduction in PE multiples of publicly listed SMEs. In April 2011 we
listed our investee company Sunwoda at a 59 PE, and several months later listed North Glass in August 2011 at a 45 PE. Another of our
investee companies, Zhongji Pile, had a follow-on investment in late 2011 by a third party private equity fund at a 22 PE ratio and is
currently in the queue, expected to IPO in the range of 32 to 40 PE. This is reflective of a decrease in valuations for SME’s in China, as
well as the general decline in the average trading prices of stocks on the Shenzhen SME and Shenzhen ChiNext, the two stock markets
on which we typically list our companies. Since the summer of 2011 the price indexes on both exchanges have dropped by as much as
30% - to the point where the Shenzhen SME traded in February 2012 at an average of 31 price to earnings multiple and Shenzhen
ChiNext traded at an average of 39 price to earnings multiple, off from 43 and 55 respectively in April 2011.
In addition to declines in public market valuations, austere monetary policy by the Central Government has contributed to restrictions
on debt financing for SMEs which has put further downward pressure on valuations. Accordingly, as noted above, we expect that late
2012 will emerge as a buyer’s market in the high growth, pre-IPO SME space and 2012 and 2013 will be good vintages in which to deploy
capital in the high growth pre-IPO SME space; indeed significantly better than 2010 or 2011.
IPO OUTLOOK IN CHINA
Notwithstanding the current downturn in IPO valuations described above, we expect IPOs of SMEs to eventually return to their buoyant
activity over the coming years. There still remains a significant dearth of publicly listed SMEs in China and the Central Government, in
their 5 Year Plan starting 2011, targeted private equity and IPOs of high growth technology-based SMEs one of the pillars of economic
growth policy for the country. The head of JPMorgan China announced this month that they expect an upturn in China’s IPO activity
and rising prices in the near future which will be a significant source of revenue for the investment bank going forward. This is
important from our perspective not only with respect to our exits in IPO markets, but also because JPMorgan is forming a joint venture
with Beijing Capital Group’s investment bank, First Capital Securities, specifically in order to enter the domestic IPO market in
Shenzhen and Shanghai. First Capital Securities is one of our primary sources of deal flow and we expect to benefit from this increased
deal activity through the joint venture. Investors should note that this joint venture is separate and independent from the $200 million
partnership Beijing Capital has with One Equity Partners, JPMorgan’s private equity arm, which is for the purposes of sourcing and
investing into large combination-based private equity transactions in China.
For more information, contact Geneva Capital S.A.: info@genevacapitalsa.com Tel. +41 22 550 0050 x802

3. BEIJING CAPITAL P R I VAT E EQUITY
SUITE 305, HENGAO CENTER, BUILDING C 北 京 首 创 成 长 基 金
No. 26 JIN SHI FANG STREET, XICHENG
DISTRIC, BEIJING, CHINA 100033
(O) +8610.6896.4807 (F) +8610.6896.4810
B E I J I N G C A P I TA L G R O W T H F U N D
U P D AT E – S P R I N G 2 0 1 2
2011 IRR – CONSISTENT RETURNS
Based on marks for 2011, our year-end gross IRR to date remains consistent at 60%, demonstrating Beijing Capital’s consistency in
generating superior returns for its LPs. The following returns are calculated on actual exits, and mark-to-market (listed shares or those
with subsequent third party investments) that remain in our predecessor funds:
BEIJING CAPITAL – IRR
EXIT
COMPANY NAME TICKER INV DATE IRR
DATE
Beijing Storage Battery 2001 2004 62.1%
CNLight SZ:002076 2004 2008 734.4%
Hangmin Limited SH:600987 2003 2005 82.5%
NHU SZ:002001 2003 2005 123.8%
Sunvim Group SZ:002083 2005 2008 681%
New Jialian Electronics SZ:002088 2006 2008 37.%
Dali Tech SZ:002214 2005 2009 48.2%
Fulida Fibre 2008 2009 17.7%
Jinqiao RE 2007 2009 7.3%
Kingold NASDAQ:KGJI 2007 2011 17.4%
SUBTOTAL (Exits Only) 58.4%
HOLDING Mark-to-Market
North Glass SZ:002613 2008 172.0%
Sunwoda Electronics SZ:300207 2008 1003.0%
Zhongji Pile 2008 522.2%
TOTALS 60.0%
The above companies represent investee companies that we have either (i) exited, (ii) IPO’d but we have yet to exit, or (iii) there has been
a subsequent third party investment and we have yet to exit. We have three additional investee companies, which are not marked and
are valued at cost, namely, Best Precision, Sino Selen Hi-Tech, and Lu-Hai Environmental, which we invested into in 2007, 2009 and
2010 respectively. These 16 investee companies are investments we made through our predecessor funds, and not through Beijing
Capital Growth Fund.
AN INVESTMENT IN BEIJING CAPITAL GROWTH FUND (THE “FUND”) INVOLVES A SIGNIFICANT RISK OF LOSS. SEE “RISK FACTORS” IN THE PRIVATE
PLACEMENT MEMORANDUM. THE PAST PERFORMANCE OF BEIJING CAPITAL IS NO GUARANTEE OF FUTURE RETURNS.
* THERE IS NO GUARANTEE THAT THE BEIJING MUNICIPAL GOVERNMENT WILL RELEASE AND IMPLEMENT A QFLP PROGRAM, AND EVEN IF RELEASED,
THERE CAN BE NO ASSURANCE THAT BEIJING CAPITAL WILL UTIMATELY BE ISSUED A QFLP APPROVAL UNDER SUCH PROGRAM.
THIS DOCUMENT IS NOT MEANT TO BE AN OFFERING, WHICH CAN ONLY BE MADE THROUGH THE PRESENTATION OF SUBSCRIPTION DOCUMENTS
PRESENTED AT THE REQUEST OF THE QUALIFIED INVESTOR.
THE INFORMATION CONTAINED HEREIN IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED OR USED AS AN OFFER TO SELL, OR A SOLICITATION OF
ANY OFFER TO BUY, ANY SECURITY. NO OFFER OR SOLICITATION OF ANY SECURITY MAY BE MADE PRIOR TO THE DELIVERY OF A DEFINITIVE OFFERING
MEMORANDUM TOGETHER WITH SUBSCRIPTION DOCUMENTS. BEFORE AN INVESTMENT IN ANY SECURITY, PROSPECTIVE INVESTORS ARE ADVISED TO
THOROUGHLY AND CAREFULLY REVIEW THE APPLICABLE DEFINITIVE OFFERING MEMORANDUM WITH THEIR FINANCIAL, LEGAL & TAX ADVISORS TO
DETERMINE WHETHER AN INVESTMENT IS SUITABLE FOR THEM. THE INFORMATION CONTAINED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND
CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION. BEIJING CAPITAL AND ITS AFFILIATES ARE NOT RESPONSIBLE FOR ANY ERRORS OR
OMISSIONS ASSOCIATED WITH THIS DOCUMENT OR THE PRIVATE PLACEMENT MEMORANDUM.
For more information, contact Geneva Capital S.A.: info@genevacapitalsa.com Tel. +41 22 550 0050 x802