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Date Submitted: 11/18/2012 02:17 AM

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1. Executive summary

Qingdao Ocean Spring Resort is a masterpiece project presented by China Travel Service (Holdings) Hong Kong Limited. With an initial investment of 5 billion Yuan, the resort will be opened before the 2012 Spring Festival and will receive more than 220,000 tourists a year.

In order to make the tourists come to the resort more conveniently and enhance the resort influence in Shandong province, especially in Qingdao City, it is suggested to develop a shuttle bus project to make the resort more competitive and attractive.

The project is named as Ocean Spring Bus which provides convenient transportation services in order to attract more tourists. It is expected to create value not only for the passengers and tourists, but also for the Ocean Spring Resort.

This capital expenditure mainly focuses on the evaluation of the seven-year shuttle bus project (Year 2012-2018). The initial investment is 9,671,040 RMB with nearly 5 years payback period. With continuous profits from the operation, the net present value (NPV) is more than xxx RMB (KA =xx%) and IRR is xxx%. It means that the Ocean Spring Bus project is profitable and valuable to invest.

2. Project description

2.1 Description of China Travel Service (Holdings) Hong Kong Limited

Founded in April 1928 by Chinese banker Chen Guangpu, China Travel Service (Holdings) Hong Kong Limited (abbreviated as HKCTS) is China’s largest travel group,state-owned enterprise under the direction of the State-Owned Assets Supervision and Administration Commission. With efforts by generation after generation, it now engages in tourism, industrial investment (iron and steel), real estate development and logistics trade, providing a comprehensive qualified service marking its predominance within the industry. In the financial year of 2009/ 2010, the group has a total value of assets of ¥55.3 billion, revenue of ¥50 billion and approximate 45,000 employees worldwide.

Tourism business is the core business of...