Proposed Business

Combination with

Pypo

Exhibit 99.1

2

Forward Looking Statements

Certain

statements

contained

herein

are

"forward-looking

statements"

within

the

meaning

of

Section

27A

of

the

Securities

Act

of

1933

and

Section

21E

of

the

Securities

Exchange

Act

of

1934.

Such

forward-looking

statements

may

be

identified

by

reference

to

a

future

period

or

periods,

or

by

the

use

of

forward-looking

terminology,

such

as

"may,"

"will,"

"believe,"

"expect,"

"estimate,

"

"anticipate,

"

"continue,"

or

similar

terms

or

variations

on

those

terms,

or

the

negative

of

those

terms.

Forward-looking

statements

are

subject

to

numerous

risks

and

uncertainties,

including,

but

not

limited

to,

those

related

to

the

economic

environment,

particularly

in

the

market

areas

in

which

the

Company

operates,

competitive

products

and

pricing,

fiscal,

monetary

and

environmental

policies

of

the

U.S.

or

Chinese

government,

changes

in

regulations

affecting

telecommunications

(including

the

recent

announcement

by

the

Chinese

government

concerning

the

restructuring

of

the

telecom

sector),

distribution

or

retail

companies,

acquisitions

and

the

integration

of

acquired

businesses,

and

the

availability

of

and

costs

associated

with

sources

of

liquidity. 

The

Company

wishes

to

caution

readers

not

to

place

undue

reliance

on

any

such

forward-looking

statements,

which

speak

only

as

of

the

date

made.

The

Company

wishes

to

advise

readers

that

the

factors

listed

above

could

affect

the

Company's

financial

performance

and

could

cause

the

Company's

actual

results

for

future

periods

to

differ

materially

from

any

opinions

or

statements

expressed

with

respect

to

future

periods

in

any

current

statements.

The

Company

does

not

undertake

and

specifically

declines

any

obligation

to

publicly

release

the

result

of

any

revisions,

which

may

be

made

to

any

forward-looking

statements

to

reflect

events

or

circumstances

after

the

date

of

such

statements

or

to

reflect

the

occurrence

of

anticipated

or

unanticipated

events.

This

presentation

has

been

filed

with

the

Securities

and

Exchange

Commission

as

part

of

a

Current

Report

on

Form

8-K

of

Middle

Kingdom

Alliance

Corp.

(“Middle

Kingdom”).

Middle

Kingdom

is

holding

presentations

for

certain

of

its

security

holders,

as

well

as

certain

other

persons,

regarding

the

proposed

business

combination

with

Pypo

Digital

Company

Limited

(“Pypo”).

I-Bankers

Securities,

Inc.,

Newbridge

Securities

Corp.

and

Westminster

Securities

Corporation, the managing underwriters of Middle Kingdom’s initial public offering (the “IPO) are assisting Middle

Kingdom in its efforts.

Disclaimer

3

Middle

Kingdom

and

its

directors

and

executive

officers

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies

for

the

special

meeting

of

Middle

Kingdom’s

stockholders

to

be

held

to

approve

the

proposed

acquisition.

Each

of

Middle

Kingdom’s

officers

and

directors

is

a

common

stockholder

of

Middle

Kingdom

and

therefore

has

no

rights

to

any

liquidation

distribution

Middle

Kingdom

makes

with

respect

to

the

Class

B

shares

sold

in

its

IPO.

Therefore,

their

common

stock

will

be

worthless

if

Middle

Kingdom

does

not

acquire

a

target

business

within

two

years

of

the

IPO

as

required

by

Middle

Kingdom's

Certificate

of

Incorporation,

unless

an

extension

to

such

time

is

approved

by

its

stockholders.

Stockholders

of

Middle

Kingdom

and

other

interested

persons

are

advised

to

read

Middle

Kingdom's

preliminary

proxy

statement

and

definitive

proxy

statement,

when

available,

in

connection

with

Middle

Kingdom’s

solicitation

of

proxies

for

the

special

meeting

because

these

proxy

statements

will

contain

important information.

The

definitive

proxy

statement

will

be

mailed

to

stockholders

as

of

a

record

date

to

be

established

for

voting

on

the

proposed

acquisition.

Stockholders

will

also

be

able

to

obtain

a

copy

of

the

definitive

proxy

statement,

without

charge, by directing a request to:

Middle Kingdom Alliance Corp.

information@midkingdom.com

The

preliminary

proxy

statement

and

definitive

proxy

statement,

once

available

can

also

be

obtained,

without

charge, at the U.S. Securities and Exchange Commission’s internet site at www.sec.gov.

333 Sandy Springs Circle

Suite 223

Atlanta, GA 30328

USA

Disclaimer

4

Table of Contents

1.

Transaction Overview

2.

Industry Overview

3.

Business Overview

4.

Appendix

5

Investment Thesis

China is experiencing mobile phone subscriber growth acceleration similar to 

that seen in Latin America in recent years, and in Europe and North America

in the late 1990’s.

The government-mandated restructuring of China’s wireless sector announced

in May 2008

1

presents a special opportunity for large Chinese mobile phone

distributors and retail operators.   Competition for mobile phone subscribers

is expected to increase thereby making distribution/retail channels more

profitable and valuable.

Pypo is in an excellent position to capitalize on this opportunity with its well-

established distribution network and rapidly growing mobile phone retail

network.

Source: 1. The Announcement on Deepening the Reform of the Structure of the Telecommunications Sector

jointly issued

by the Ministry of Industry and Information, the National Development and Reform Commission and the Ministry of Finance on May 24

2008:

http://www.miit.gov.cn/art/2008/05/24/art_4831_46173.html

6

Investment Highlights

Opportunity: Rapid growth of mobile phone subscribers in China regardless of

GDP growth 

•

Subscribers

in

China

are

projected

to

almost

double

to

1

billion

by

2012

from

531

million

today¹

•

Experiences in other mobile phone markets such as Latin America and Asia-Pacific demonstrate that growth can occur

regardless of the level of economic development²

•

The Chinese government has recently announced a wireless sector restructuring to balance the competitive landscape and

allow

increased

competition

among

China

Mobile,

China

Unicom

and

China

Telecom

•

Adoption of 3G networks may accelerate demand for new and replacement handsets

“Pure Play”

on the China mobile phone market

•

Pypo

has

an

extensive

mobile

phone

distribution

network

covering

approximately

350

cities,

3500

customer

accounts

and

9500 retail outlets

•

Pypo aims to become a major national mobile phone retail chain through a strategy of acquiring retailers in this highly

fragmented market

•

Pypo’s scale and leadership position it to become a vital partner to mobile phone carriers, helping them build subscribers

•

With deregulation introducing competition for Chinese mobile phone subscribers, Pypo will attempt to negotiate higher

margins and volumes given its growing mobile phone distribution channel

Capital structure set up for success

•

Low

SPAC

structure

dilution:

Purchase

price

of

US$378mm

is

12.6

times

the

size

of

Middle

Kingdom’s

IPO

•

Pypo shareholders convert 100% of their equity into new shares  with a two year limited lock-up for management  (one

year for non-management),  demonstrating their confidence in Pypo’s future

•

ARC

Capital

(ARCH.LN)

and

Golden

Meditec

(8180.HK)

two

of

Pypo’s

investors,

will

have

an

equity

interest

after

the

merger, including limited lock-up provisions

•

Listed shares used as currency can assist additional retail acquisitions as private sellers may trade for public stock

•

The

merged

company

will

be

named

Pypo

China

Holdings

Limited

and

it

intends

to

apply

to

move

trading

in

its

securities

from OTCBB to NASDAQ.  No assurances can be given that NASDAQ will approve the listing application or how long this

process may take

Source: 1. Citi

Investment Research: China Mobile  Buy: Bright Future, Rocky Road, August 11, 2008

2. CRA International: ASCN Preliminary Conference for APEC 2007, Platforms for IT Productivity, December 11,2006

and  www.itu.int/osg/csd/ni/3G/casestudies/chile-venezuela/Chile-Venezuela.doc: Chile -

Venezuela 3G Case Study

7

Earn Out Targets Imply a Single Digit Forward PE

Note: 1. Adjusted Net Income  differs from GAAP Net Income.  Certain  expenses on an after-tax basis are added back to GAAP Net Income to  

determine Adjusted Net Income.  These include merger expenses under SFAS No. 141R , other expenses  of the transaction, amortization

of intangibles, impairment of goodwill, taxes payable as a result of this business combination, and third party costs of compliance with the

Sarbanes-Oxley Act .  This is more fully described in the Company’s S-4 filing and is critical to an understanding of the earn  out provisions.

Adjusted Net Income Target for Earn Out Shares

1

$54.0

$67.0

Middle Kingdom A & B Shares

4.49

4.49

Shares Issued to Pypo

Shareholders

45.00

55.00

Earn Out Shares to Pypo

Shareholders

10.00

13.00

Share Outstanding for GAAP Basic EPS

59.49

72.49

Warrants (Treasury Method)

3.40

3.40

Total Fully Diluted Shares Post-Merger

62.89

75.89

MKGBB Share Price at Trust Account per Share

$8.40

Fully Diluted Equity Value

$528.2

$637.4

Implied PE Multiple

9.8x

9.5x

in millions

of US$ and shares

Fiscal Year Ended

March 2011

Fiscal Year Ended

March 2010

8

Table of Contents

1.

Transaction Overview

2.

Industry Overview

3.

Business Overview

4.

Appendix

9

•

Volume is forecasted to grow at 16.1%

CAGR for the next four years, far

exceeding growth in North America and

Western Europe

1,2

•

More than 170 million phones were sold in

China in 2007

2

•

Volume is projected to more than double 

to 371 million units sold in 2012

2

Source:

1.  Gartner Dataquest, Forecast:  Mobile Devices,

worldwide,2003-2012

2.  Gartner Dataquest, Forecast:  Mobile Devices,

Asia/Pacific, 2003-2012

China Mobile Phone Market Represents a Compelling

Growth Opportunity

2007-2012 Mobile Phone Volume Growth

5.2%

1.5%

16.1%

2007-2012 Forecasted CAGR

North America

Western Europe

China

1

1

2

10

Underdeveloped Market

Source: Business Monitor International

•

The mobile phone penetration rate in China is significantly lower than

that of other Asian regions such as Hong Kong, Singapore and Taiwan.

147.1%

126.9%

106.2%

103.5%

90.4%

89.0%

84.5%

82.2%

40.9%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Hong Kong

Singapore

Taiwan

Australia

South Korea

Malaysia

United States

Japan

China

Mobile phone penetration rates (2007)

11

Defensive Investment:  Mobile Phone Subscriber Growth

Continues Even if the Chinese Economy Slows Down

“Historically the cellular industry has not been tremendously affected by

downturns because people don’t look at their cell phone as a luxury

anymore. ”

Paul Jacobs, CEO of Qualcomm July 24, 2008

ASCN Preliminary Conference for APEC 2007

China Mobile Phone Subscriber Growth Drivers:

•

New government-mandated restructuring to increase competition

•

Only 15 people out of 100 use mobile services in rural areas

1

and China

Mobile’s network already covers more than 97% of China’s population

2

Source: 1. Gidabyte

Asian Focus: China Mobile and China Unicom: How to Swim in a “Blue Ocean”

, September 24, 2007

2. China Mobile Communication Corporation: 2007 Annual Report

and network accessibility performance in mobile network has been

less

relevant. Some developing economies, for example Chile and Malaysia,

enjoy an equal if not higher penetration rate compared with their

developed counterparts.”

“Unlike the fixed-line sector, the relationship between economic development

12

Unique

Industry

Growth

Driver: 

Government-Mandated Mobile Telecom Restructuring

Before 1997

One monopoly operator:

Chunghwa Telecom with

970,000 subscribers

2008

3 Operators:

Chunghwa Telecom with 8.7mm

subscribers

Taiwan Mobile with 6.2mm

subscribers

FarEasTone

with 6.2mm

subscribers

Source:1.   The

Announcement

on

Deepening

the

Reform

of

the

Structure

of

the

Telecommunications

Sector

jointly

issued

by the Ministry of Industry and Information, the National Development and Reform Commission and the Ministry of Finance on

May 24, 2008:

http://www.miit.gov.cn/art/2008/05/24/art_4831_46173.html

2.  China Mobile Communication Corporation: 2007 Annual Report

3.  Macquarie Research: Taiwan Triple-Play Express, July 11, 2008

3

3

3

•

On May 24, 2008 the Chinese government mandated the restructuring of the mobile

telecom sector to ensure that China Mobile, China Unicom, and China Telecom will

have relatively comparable operating strengths and scale, as well as provide

comprehensive telecom services.¹

China Mobile is currently the dominant wireless

carrier with a 69.3% market share.²

Case Study:  Deregulation in Taiwan’s telecom sector in 1997

spurred penetration growth and competition

13

•

Case study: Restructuring in Taiwan’s telecom sector in 1997 coincided with

sharply increased mobile phone penetration

Restructuring Promotes Mobile Phone Penetration

Source: International Telecommunication Union, Year Book of Statistics 1993-2002

RESTRUCTURING

2.57%

2.76%

3.62%

4.51%

6.86%

21.56%

52.24%

80.24%

96.55%

106.15%

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Penetration Rate

CAGR 28%

CAGR 73%

14

Large Distributors and Retailers Benefited from Increased

Operator Competition in Taiwan

Mobile

Phone

Manufacturers

Chunghwa

Telecom

outlets

Consumers

Mobile Phone

Manufacturers

Senao

Synnex

Taiwan Diandian

Aurora

Arcoa

Jingye

Dongxun

Youbang

Operator

outlets

Retailer

Chains

Independent

Retailers

Independent

Retailers

Independent

Retailers

Consumers

Operator

outlets

Large

Retailer

Chains:

-Aurora

-Arcoa

Consumers

Retail

Shops with

Synnex

Alliance

Mobile Phone

Manufacturers

Senao

Synnex

Aurora

Arcoa

90% sold through largest

four

distributors

1

Before1996

Middle Stage

Current

Smaller

distributors

disappear

Independent

retailers

were big

losers in

retailing

market

Source:  1. http://wis.mic.com.tw/document/mic_digi/MIC/Reports/MobileHandheldDevices/2004/CDOC20040517004.pdf

15

Today a Highly Fragmented Chinese Retail Mobile Phone Market

2006 Estimates (US$mm)

•

The mobile phone retail sector in China is fragmented and plagued with redundant

deployment of inventory, commercial space and staffing, setting the stage for

consolidation over the next few years

•

The top

four

retailers

account

for

only

12.6%

mobile

phone

market

share

1,2

Source: 1. Anxin

Securities

2. Pypo management estimates (not independently verified)

Note: Assume US$1 = RMB6.8666

Retail Chain

Sales

Market Share

Gome

$1,136

4.9%

Suning

830

3.6%

Di Xin Tong

583

2.5%

Zhong Fu

379

1.6%

Subtotal top 4

2,928

12.6%

Total Market

23,316

•

Pypo’s management believes that within several years each major region will     

have only two or three dominant mobile phone retail chains with “mom & pop”

stores as the biggest loser

•

If the 6 planned acquisitions are completed, Pypo believes its market share

would be 2.5% as of March 2009 

1

1

1

2

16

Changing Operator Competitive Dynamics

Benefit Distribution and Retail

Before in China

Anticipated in China

Mobile

Phone

Manufacturer

Distributors

-Telling

-

Pypo

-China     

Fortune

-PTAC

-

Aisidi

Retailer

Retailer

Retailer

Retailer

China Mobile

Mobile

Phone

Manufacturer

Distributors

-Telling

-

Pypo

-

PTAC

-

Aisidi

Retailer

Retailer

Retailer

China Mobile

Customers

China Telecom

Pypo

acquires and

consolidates

China Unicom

Increased value

Retailers have little leverage due to

China Mobile’s dominant position

Mobile phone operators are likely

to offer bundling partnerships

with retailers such as phone

subsidies to attract and secure

consumers

Customers

17

Table of Contents

1.

Transaction Overview

2.

Industry Overview

3.

Business Overview

4.

Appendix

18

•

Established in October 2003.  Headquartered in Beijing

•

One of four national distributors for Samsung mobile phones in China; Samsung is number

two in

China

in

terms

of

market

share

by

sales

volume

1

•

A distribution network covering approximately 350 cities, 3500 customer accounts and 9500

retail outlets

in

the

PRC.

The

retail

coverage

is

expected

to

grow

to

over

10,000

outlets by

the end of March 2009

•

Pypo has recently acquired three retail chains, entered into binding agreements to acquire

three more chains with projected closings before December 2008 and is in discussions to

acquire three more retail chains

•

Samsung mobile phones

•

Samsung Ultra Mobile PC

•

SanDisk USB Memory, SD Card,

Multi-media Card

•

All brands of mobile phones

•

230 affiliated stores expected by

December 31, 2008

Company

Overview

Distribution

Product

Portfolio

Expansion

into Retail

Beginning

2008

A Leading National Mobile Phone Distributor

Rapidly Growing Retailing Division

Source: 1. GFK Asia Pte

Ltd

19

Extensive Coverage and a Nationwide Distribution Network

23

Regional Subsidiaries

67 Regional and Municipal

Offices

Coverage in More Than 350

Cities and Towns

3500+ Active Key Customer

Accounts

Access to Over 9500 Retail

Outlets

Head Office

Subsidiaries

Sales Offices

20

Target B

Local ranking: 2

50 stores: 8 cities

Sales area: 26,440 sqm

Market share: 5.12%

Closing date: April 30, 2008

Target A

Local ranking: 1

40 stores; 5 cities

Sales area: 15,240 sqm

Market share: 3.44%

Closing date:  August 22, 2008

Target E

Local ranking: 1 in

Shanxi, Shandong,

Jiangsu

56 stores: 30 cities

Sales area: 21,841 sqm

Market share: 7% in

Shanxi, Shandong,

Jiangsu

Expected closing date:

December 15, 2008

Target D

Local ranking: 1

14 stores;1 cities

Sales area: 3,760 sqm

Market share: 3.69%

Closing date: August 28, 2008

Target C

Local ranking: 1

19 stores: 1 city

Sales area: 10.430 sqm

Market share: 2.3%

Expected closing date:  September 15, 2008

Jiangsu

Hebei

Henan

Shandong

Shanghai

Hunan

Inner Mongolia

Yunnan

Shanxi

Source: Pypo management estimates

Note: 1. Cannot be

estimated

due

to

highly

fragmented

local

retail

market

Target F

Local ranking: N/A

1

11 stores: 2 cities

Sales area: 4,743 sqm

Market share: 4.6%

Expected closing date: December 15, 2008

Pypo Retail Acquisition Targets as of June 2008

As of June 2008

•

Number of stores: 190

•

Provinces covered: 9   

•

Cities covered: 47

•

Sales area: 82,454

sqm

21

•

Pypo’s public stock is likely to be used as acquisition currency in an

attempt to accelerate the execution of M&A strategy

•

Pypo has relationships with more than 3000 downstream mobile phone

retailers

•

The targeted retail chains are long-term customers / partners of Pypo’s

distribution business

-

Long history of successful cooperation with the targets

-

Familiarity with the management teams and their business philosophies

-

Good understanding of the operating performance of the targets

Retail M&A Strategy

22

•

The mobile phone retail consolidation strategy is expected to broaden the

revenue base, increase gross margins and enhance overall

competitiveness

•

Key operating initiatives include:

-

Upgrading of IT system with the goal of providing more accurate and

timely information

-

Improving logistics with the goal of lowering cost per unit delivered

-

Cooperate with operators to provide value-added services and

bundling, as mobile phone operator competition increases

Key Operating Initiatives to Consolidate Retail Chains

23

Experienced and Stable Management Team

Management

Title

Experience

Mr. Kuo Zhang

Chairman

•

Founder of Pypo. Responsible for Pypo’s strategic planning

•

Successful owner of BMW retail stores, successful BMW importer

•

Graduated from Hunan University and completed the executive MBA program at the School

of

Economics

and

Management

of

Tsinghua

University

Mr. Dongping Fei

CEO

•

Founder of Pypo, CEO of Pypo since Pypo’s establishment in 2003 and previously CEO of

Hua

Song Electron, the predecessor of Pypo

•

Pypo forged a strategic partner relationship with Samsung and became one of Samsung’s

mainstream national distributors under his leadership

•

Graduated

from

Hunan

University.

Obtained

a

MBA

degree

from

Guanghua

Management

School, Beijing University

Mr. Jackie Leong

CFO

•

Joined Pypo as CFO in 2008

•

Has fourteen years of experience in the finance and accounting field, specializing in initial

public offerings and financial and cost accounting

•

Graduated from Tunku

Abdul Rahman

College in Malaysia and is a member of the

Association of Chartered Certified Accountants (ACCA) and The Malaysian Association of

Certified Public Accountants (MACPA)

Mr. Francis Kwok

Cheong Wan

Vice President

•

Vice

President

of

Pypo

Group

and

previously

COO

of

Hua

Song

Electron,

the

predecessor

of

Pypo, since Sept. 2002

•

Responsible for Pypo’s e-commerce business (www.dongdianwang.com)

•

Experienced marketing specialist, maintains good relationships with several international

digital electronics producers

•

Graduated from Hong Kong Polytechnic University

Mr. Hengyang

Zhou

Executive Vice

President

•

Experienced specialist in communication distribution industry, became director of Pypo in

December 2005, currently executive vice president of Pypo

•

GM of Beijing Guoxin

Jiuding

Communication Equipment Co., Ltd in 2002-2005

•

Graduated from Hunan University

24

Table of Contents

1.

Transaction Overview

2.

Industry Overview

3.

Business Overview

4.

Appendix

25

Pypo’s Private Equity Investors

•

ARC Capital Holdings Limited

-

Founded in 2006, affiliate of Pacific Alliance Group

-

Leading private

equity

firm

focused

on

China

retail

and

consumer

sector

-

AIM listed (ticker: ARCH LN), market capitalization of approximately US$500mm

-

Investment portfolio includes:

•

GoodBaby, the largest baby carriages and young children’s products producer in China

•

Hunan Department Stores, the leading department store chain in Hunan province

•

Jiadeli

Supermarkets, a leading supermarket chain in Shanghai

•

Invested US$90mm in Pypo on October 20, 2007

•

Golden Meditech

-

A leading

healthcare

company

in

the

PRC,

listed

on

the

HKSE

(ticker:

8180.hk)

since

2001,

with market a capitalization of approximately US$469.2mm

-

Focused on medical devices, healthcare services and natural herbal medicines business

-

In-depth knowledge in the PRC market, with all its operations a market leader in their own

sectors.

-

Invested RMB460mm

(

approximately

US$57.4mm

)

in

Pypo

on

January

27, 2006

Source: Bloomberg

Note:     1. As of September 4, 2008; exchange rate: US$1 = HK$7.8000

2. Historical exchange rate: US$1= RMB 8.0170

2

1

26

Transaction Summary

•

Pypo has reached a definitive agreement for a business combination with Middle Kingdom

valued at approximately US$378mm

based on the conversion price of $8.40 per Class B share

(Middle Kingdom’s estimated per share liquidation value in the trust account as of December 13,

2008)

•

Consideration to Pypo’s shareholders

-

Middle Kingdom

issues

45mm

common

shares

at

closing

plus

3.4mm

warrants

1

and earn

out shares as follows:

•

10mm shares

will

be

earned

if

Pypo

achieves

US$54mm

Adjusted

Net

Income

2

in its 

fiscal year ending March 31, 2010

•

13mm shares

will

be

earned

if

Pypo

achieves

US$67mm

Adjusted

Net

Income

2

in its 

fiscal year ending March 31, 2011

•

Earn out provisions are “all or none”

but with a one-year grace period if Pypo misses

either target

•

Post-closing and before accounting for earn-out shares, warrants or underwriters purchase

options, Pypo shareholders will hold 90.9% of merged entity

Note: 1. Warrants are

similar

to

Middle

Kingdom’s

Class

B

warrants,

US$5

exercise

price

and

redemption

features.

2. Adjusted Net Income differs from GAAP Net Income .  Certain  expenses on an after-tax basis are added back to GAAP

Net Income to determine Adjusted Net Income.  These include merger expenses under SFAS No. 141R , other expenses

of the transaction, amortization of intangibles, impairment of goodwill, taxes payable as a result of this business

combination,

and

third

party

costs

of

compliance

with

the

Sarbanes-Oxley

Act

.

This

is

more

fully

described

in the

Company’s S-4 filing and is critical to an understanding of the earn out provisions.

27

Historical

Financial

Summary

–

Income

Statement

Highlights

in millions of US$

Fiscal Year

Ended

March 2007

% of Net

Revenues

Fiscal Year

Ended

March 2008

% of Net

Revenues

Net Revenues

294.2

378.3

Gross Profit

46.8

15.9%

61.5

16.3%

Income from Operations

19.8

6.7%

37.2

9.8%

Net Income

14.4

4.9%

30.2

8.0%

Source:  Pypo audited financial statements

28

Historical Financial

Summary

–

Balance

Sheet Highlights

Source:  Pypo audited financial statements

Note:

1.

FY2008

includes

85.1mm

mezzanine

equity,

subsequently

reclassified

as

shareholders’

equity

after ARC Capital waived its redemption rights in June 2008

in

millions

of US$

Fiscal Year Ended

March 2007

Fiscal Year Ended

March 2008

Cash

8.4

62.6

Current Assets other than Cash

109.8

187.6

Non-current Assets

7.4

8.2

Total Assets

125.6

258.4

Short-term Borrowings

36.2

40.6

Current Liabilities

other

than

Short-term

Borrowings

59.5

64.1

Non-current Liabilities

1.0

0.4

Total Liabilities

96.7

105.1

Minority Interest

0.6

0.6

Total Shareholders' Equity

1

28.3

152.7

Total Liabilities and Shareholders' Equity

125.6

258.4

29

Middle

Kingdom

Pypo

Pro Forma

$22

-

$22

3.80

-

3.80

Adj.

$48

51

($3)

-

45.00

45.00

($7)

-

($7)

-

-

-

$63

51

$12

3.80

45.00

48.80

1

2

3

Middle

Kingdom

Pypo

Pro Forma

Cash

Debt

Net Cash

Outstanding

Shares

Middle Kingdom (mm)

Pypo (mm)

Basic

(mm)

$27

-

$27

4.49

-

4.49

Adj.

$48

51

($3)

-

45.00

45.00

($7)

-

($7)

-

-

-

$68

51

$17

4.49

45.00

49.49

1

2

3

Pro Forma Capitalization (in millions of US$ and shares)

Note: Assumes US$1 = RMB6.8388

1. Assumes closing in December 2008

2. Management accounts of July 31, 2008

3. Estimated transaction expenses

Assuming no Class B shareholders

convert their

shares Into pro-rata

share of the trust account

Assuming the maximum number of Class B

shares

(684,060)

are converted into

a    

pro-rata

share of the trust

account