About Zongshen PEM

Zongshen PEM Power Systems Inc. ("ZPP") is a public company trading under the symbol ZPP on the Toronto Stock Exchange. ZPP is one of China's largest manufacturers and marketers of gas motorcycles and electric two-wheelers and its products are sold in China through 7,200 dealers and distributed in over 90 countries worldwide. The company is headquartered in Vancouver, Canada, and its ISO certified motorcycle, electric vehicle and parts manufacturing facilities that are capable of producing 2,000,000 motorcycles and 200,000 electric two-wheelers annually are located in Chongqing China.

Gas and electric two wheelers have become and will continue to be a key transportation unit in China and in other developing countries as they provide an affordable and efficient form of transportation. China is the largest and fastest growing motorcycle market where over 32 million units were sold in 2010. According to industry studies, the Chinese motorcycle market is undergoing an acceleration of growth where in 5 years, over 55 million units are expected to be sold domestically. Electric two-wheelers are expected to lead the growth because of government subsidies and the low operating costs while the gas motorcycle will continue to be favored, especially in the countryside because of rising rural incomes.

ZPP's largest shareholder is Zongshen Industrial Group, one of China's largest manufacturers of automotive engines, industrial motors and three-wheeled vehicles.

Growth Strategy

Gas Motorcycle

The demand for motorcycles is growing within China and in emerging markets. ZPP will continue to introduce and produce innovative and high quality motorcycles to its domestic and international markets as well as enter new export markets.

Electric Motorcycle

The worldwide demand for electric motorcycles is expected to grow rapidly in this decade. In the fall of 2010, ZPP introduced China's first electric motorcycle, Toronto, to met the demand for high performance electric two-wheelers. ZPP will use its strength and experience in distribution, production and technology to further develop and introduce additional electrical motorcycles for its domestic and international markets.

Acquisition Opportunities

ZPP is the beneficiary of a changing motorcycle industry. The government is encouraging consolidation in the fragmented motorcycle industry and there is tremendous market share growth opportunities brought on by changing emission standards where smaller competitors that lack the capital upgrade facilities to produce emissions compliant bikes are forced to exit the industry or be acquired.