Goodbaby International Hldg : (028) Accountants report from Ernst & Young of the Target Group

Ernst & Young

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Central, Hong Kong

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The Directors

Goodbaby International Holdings Limited

Dear Sirs,

We report on the historical financial information of Oasis Dragon Limited ("Oasis Dragon") and its subsidiaries (together, the "Oasis Dragon Group") set out on pages 4 to 72,which comprises the consolidated statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Oasis Dragon Group for each of the years ended 31 December 2014, 2015 and 2016, and the six months ended 30 June 2017 (the "Relevant Periods"), and the consolidated statements of financial position of the Oasis Dragon Group as at 31 December 2014 , 2015,and 2016 and 30 June 2017, and the statements of financial position of Oasis Dragon as at 31 December 2015 and 2016 and 30 June 2017 and a summary of significant accounting policies and other explanatory information (together, the "Historical Financial Information"). The Historical Financial Information set out on pages 4 to 72 forms an integral part of this report, which has been prepared for inclusion in the circular of Goodbaby International Holdings Limited (the "Company") dated 4 September 2017 (the "Circular") in connection with the Company's proposed acquisition (the "Proposed Acquisition") of the entire equity interests of Oasis Dragon.

Directors' responsibility for the Historical Financial Information

The directors of Goodbaby China Holdings Limited ("Goodbaby China") are responsible for the preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial Information, respectively, and for such internal control as the directors determine is necessary to enable the preparation of the Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting accountants' responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 Accountants' Reports on Historical Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants' judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity's preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial Information, respectively, in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

APPENDIX IIA ACCOUNTANTS' REPORT Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountants' report, a true and fair view of the financial position of the Oasis Dragon Group as at 31 December 2014, 2015 and 2016 and 30 June 2017 and Oasis Dragon as at 31 December 2015 and 2016 and 30 June 2017, and of the financial performance and cash flows of the Oasis Dragon Group for each of the Relevant Periods in accordance with the basis of presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial Information, respectively.

Review of interim comparative financial information

We have reviewed the interim comparative financial information of Oasis Dragon Group which comprises the consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for [the six months ended 30 June 2016] and other explanatory information (the "Interim Comparative Financial Information"). The directors of Goodbaby China are responsible for the preparation and presentation of the Interim Comparative Financial Information in accordance with the basis of presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial Information, respectively. Our responsibility is to express a conclusion on the Interim Comparative Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the Interim Comparative Financial Information, for the purposes of the accountants' report, is not prepared, in all material respects, in accordance with the basis of presentation and the basis of preparation set out in notes 2.1 and 2.2 to the Historical Financial Information, respectively.

Report on matters under the Rules Governing the Listing of Securities on the Main Board of the Stock Exchange and the Companies (Winding Up and Miscellaneous Provisions) Ordinance Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page 3 have been made.

Dividends

We refer to note 12 to the Historical Financial Information which states that no dividends have been paid by Oasis Dragon in respect of the Relevant Periods.

No historical financial statements for Oasis Dragon

As at the date of this report, no statutory financial statements have been prepared for Oasis Dragon since its date of incorporation.

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APPENDIX IIA ACCOUNTANTS' REPORT I HISTORICAL FINANCIAL INFORMATION Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants' report.

The financial statements of the Oasis Dragon Group for the Relevant Periods, on which the Historical Financial Information is based, were audited by Ernst & Young in accordance with Hong Kong Standards on Auditing issued by HKICPA (the "Underlying Financial Statements").

The Historical Financial Information is presented in Renminbi ("RMB") and all values are rounded to the nearest thousand (RMB'000) except when otherwise indicated.

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Year ended 31 December

Six months

ended 30 June

Notes 2014 2015 2016 2016 2017

(RMB'000) (RMB'000) (RMB'000) (RMB'000) (RMB'000)

(Unaudited)

REVENUE	6	1,678,738	1,854,631	1,937,395	920,669	1,205,911
Cost of sales	(966,981)	(1,064,686)	(1,121,391)	(527,565)	(687,590)
Gross profit	711,757	789,945	816,004	393,104	518,321
Other income and gains	6	10,624	9,599	7,432	2,125	3,247
Selling and distribution expenses	(540,821)	(579,167)	(593,030)	(293,888)	(343,622)
Administrative expenses	(52,305)	(69,040)	(75,917)	(45,536)	(31,851)
Other expenses	(5,229)	(3,883)	(4,585)	(1,604)	(1,408)
Finance costs	7	(14,931)	(11,614)	(13,646)	(9,213)	-
PROFIT BEFORE TAX	8	109,095	135,840	136,258	44,988	144,687
Income tax expense	11	(28,410)	(34,246)	(35,459)	(12,096)	(37,177)
PROFIT FOR THE YEAR/ PERIOD	80,685	101,594	100,799	32,892	107,510
Attributable to:
Owners of the parent	80,390	100,419	100,624	32,719	106,663
Non-controlling interests	295	1,175	175	173	847
80,685	101,594	100,799	32,892	107,510
EARNINGS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS OF
THE PARENT	13
Basic and diluted	N/A	N/A	N/A	N/A	N/A

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