Global Market Group (GMC) is scheduling a $132 million IPO with a market capitalization of $607 million at the price range mid-point of $12, for Friday, March 18.

Joint Managers are Deutsche and Piper. Co Managers are Cowen and Oppenheimer. Each ADS represents 10 shares

CONCLUSION

. GMC’s revenue is tied the China’s export market, but in February China imports were up 19.4% and exports up just 2.4%, the least since 2009 (see below).

. GMC has carved out a profitable niche and increased its manufacturing clients by 90% in 2010 to 1,636 as of December 2010 compared with 2009.

. According to the iResearch Report, GMC is the only e-commerce service provider in China’s B2B e-commerce industry that focuses on providing export marketing services to high-quality manufacturers in China.

GMC shows very good sequential quarterly progress, in both top line revenue and bottom line profits. For calendar 2010 GMC showed a very high gross margin at 89% and a very high net income profit margin of 27%, both very impressive. To justify 87 times 2010 earnings GMC must continue to perform.

Quarterly results	Sep-09	Dec 2009	March 2010	June 2010	Sept, 2010	Dec, 2010
Revenues ($mm)	$4.3	$5.3	$5.1	$6.1	$6.7	$8.8
Gross margin % of rev	87%	90%	88%	89%	89%	89%
Net income (loss)*	$0.2	$0.6	$1.0	$1.5	$2.1	$2.4
Net income % of rev	6%	12%	20%	25%	31%	27%
*from continuing operations

However, GMC’s P/E ratio is much higher than competitors listed in the S-1 filing.

Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	Gross
Year ended Dec 31, 2010	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	Margin
Global Market Grp GMC	$607	22.5	87	9.3	10.8	89%
Global Sources (GSOL)	$359	2.7	23	2.6	2.8	52%
Alibaba.com (HKX:	$73,080	17.0	47	13.0	n/a	86%

FEBRUARY TRADE DEFICIT IN CHINA

. China's February trade deficit of $7.3B is the largest in 7 years, and confounds predictions of a $5B surplus. Even with the Lunar New Year affecting the results, it could mean the oft-rumored slowdown in China has arrived.

. Economists combine Chinese data for the first two months of the year to eliminate distortions caused by the annual holiday. On that basis, the nation had a deficit of about $890 million, compared with a surplus of about $22 billion a year earlier.

. Central bank adviser Li Daokui said that the full-year trade surplus will shrink from the 2010 level.

. China’s trade figures are skewed around the time of the New Year holiday, which occurs at different times because it is tied to the lunar calendar. In March 2010, China posted a $7.24 billion deficit, its first in six years.

MARCH EXPECTED TO SHOW SURPLUS

This year, "the March trade numbers will go back into significant surplus again," said Donald Straszheim, Senior Managing Director for China Research at ISI Group in Los Angeles

BUT THE SURPLUS EXPECTED TO DECLINE

Speaking in Beijing, Li Daokui, the central bank adviser, said the annual surplus may slide to $150 billion this year, from $183 billion in 2010 and the record $295 billion in 2008.

BUSINESS

. GMC is a leading business-to-business, or B2B, e-commerce service provider dedicated to connecting high-quality manufacturers in China to international buyers.

. According to the iResearch Report, GMC is the only e-commerce service provider in China’s B2B e-commerce industry that focuses on providing export marketing services to high-quality manufacturers in China.

GROWTH DEPENDS ON GLOBAL ECONOMY & CHINA’S EXPORT MARKET

Because GMC derives substantially all of its revenues from providing B2B e-commerce services to export-oriented manufacturers in China and Hong Kong exporters of products made in China, GMC’s financial performance, to a large extent, depends upon the growth of the global economy and China’s export market.

EXPANSION METRICS

High rate of China manufacturer customer expansion

74% from 2008 to 2009; 90% from 2009 to 2010

(Manufacturer customers in the GlobalMarket marketplace increased rapidly from 494 as of December 31, 2008 to 860 as of December 31, 2009 and 1,636 as of December 31, 2010)

Low end user rate of expansion

13% from 2008 to 2009; 15% from 2009 to 2010

(Registered buyers in the GlobalMarket marketplace increased from 584 thousand as of December 31, 2008 to 661 thousand as of December 31, 2009 and to 761 thousand as of December 31, 2010 )

PRICING

. GMC typically enters into one- or two-year service contracts with customers. Since January 2010, GMC typically collects the full amount of the first year service fees at the time it enters into service contracts with new customers.

. For customers who had subscribed to services prior to January 2010, GMC typically allowed them to pay service fees in installments with at least 50% of the first year service fees paid at the time they entered into service contracts the remaining portion paid in one or two installments over the service period. We may allow these customers to adhere to these installment payment terms if and when they renew their service contracts.

GROWTH PLAN

Enhanced Geographic Coverage

. GMC currently provides services to GMC manufacturers primarily located in the coastal provinces or cities of Guangdong, Zhejiang, Jiangsu, Shanghai, Hong Kong, Fujian and Shandong. . GMC plans to replicate its sales and training model in other geographic areas and open up more offices, especially in northern China, to enlist more GMC manufacturers starting in 2011.

SEASONALITY

. GMC revenues tend to be lower in the first quarter of each year because fewer customers subscribe for services due to the Lunar Chinese New Year holiday. . Revenues tend to be higher in the third quarter of each year as many manufacturers in China take advantage of the China Import and Export Fair held in Guangzhou and subscribe for GMC services to promote their products to international buyers in the third quarter. . Since most customers finalize budget plans for their marketing expenses in the fourth quarter of each year, GMC is normally able to secure more contracts and generate more revenues in the fourth quarter. . The seasonality of results of operations may appear less prominent in the past eight quarters ended December 31, 2010 because of continued growth of revenues during such period, but may become more prominent in the future

COMPETITION

. B2B e-commerce competition includes Alibaba, Global Sources, Made-in-China as well as market players that focus on single industry verticals.

. With the rapid development of the B2B e-commerce market in China, GMC expects the operating environment to become increasingly competitive.

USE OF PROCEEDS

$59 million from sale of 5.5 million ADSs. Shareholders intend to also sell 5.5 million ADSs For general business expansion

Global Market Group	GMC, C+, 7					ADS equivalents: 51mm
B2B commerce
Guangdong, China	2007	2008	2009	2010		IPO Mkt
Revenues ($mm)	$4	$9	$16	$27		Cap (mm)
Gross margin % of rev	88%	87%	89%	89%		$607
Operating income % of rev	17%	-3%	-1%	27%		@$12
Net income (loss)*	$1	$0	$0	$7
Net income % of rev	21%	2%	0%	26%
*from continuing operations
Quarterly results	Sep-09	Dec 2009	March 2010	June 2010	Sept, 2010	Dec, 2010
Revenues ($mm)	$4.3	$5.3	$5.1	$6.1	$6.7	$8.8
Gross margin % of rev	87%	90%	88%	89%	89%	89%
Net income (loss)*	$0.2	$0.6	$1.0	$1.5	$2.1	$2.4
Net income % of rev	6%	12%	20%	25%	31%	27%
*from continuing operations
Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
Year ended Dec 31, 2010	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Global Market Grp GMC	$607	22.5	87	9.3	10.8	22%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	2	1	7
COMPARE
Valuation Ratios	IPO Mrkt	Price /	Price /	Price /	Price /	Gross
Year ended Dec 31, 2010	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	Margin
Global Market Grp GMC	$607	22.5	87	9.3	10.8	89\%
Global Sources (GSOL)	$359	2.7	23	2.6	2.8	52%
Alibaba.com (HKX:	$73,080	17.0	47	13.0	n/a	86%