IsZo Capital Issues Letter to Nam Tai Shareholders Regarding its Slate’s Strategic Vision - Seite 3

ISZO’S SLATE OF DIRECTOR CANDIDATES HAS THE RIGHT STRATEGY FOR UNLOCKING THE SIGNIFICANT UPSIDE VALUE TRAPPED WITHIN NAM TAI’S SHARES

IsZo appreciates the fact that shareholders have been receptive to our calls for change. The market’s enthusiasm is evidenced by the fact that Nam Tai’s shares have appreciated approximately 2.5x since our first public communication in May of this year. As we now await the Special Meeting, IsZo believes it is important for shareholders to know that its slate of director candidates has spent considerable time working together to assess Nam Tai’s assets, corporate governance, investor communication and disclosure practices, and approach to allocating capital and managing its project portfolio. Given that our slate includes individuals with significant experience working within China’s real estate sector, we have also been able to closely analyze the markets in which Nam Tai is currently developing properties.

Our slate’s disciplined strategy focuses on realizing the intrinsic value of Nam Tai’s current portfolio – which the Company has failed to properly emphasize – prior to committing any additional capital to new investments and continuing to spread the Company’s resources thin. By installing IsZo’s six director candidates and positioning a refreshed Board to implement a structured plan, we believe the intrinsic value of Nam Tai’s existing projects can finally be unlocked. Nam Tai’s most recent valuation reports imply that its project portfolio is worth up to $40 per share, which is approximately 4x the Company’s current share price.

Prior to releasing a comprehensive and more detailed presentation ahead of the Special Meeting, we want to share an overview of the key points anchoring our slate’s strategy:

• Improving corporate governance and enhancing the Board’s alignment with shareholders. Upon being appointed to the Board, our slate plans to nominate an aligned, experienced and integrity-rich individual to serve as Chairman. Our slate also intends to establish a three-member strategic oversight committee, inclusive of Bo Hu, Louis Leung and Jeffrey Tuder, to lead a 60-day assessment of the business and help direct major corporate decision-making during the period in which newly-appointed local management team members are transitioning into their roles. Each director serving on the Board’s strategic oversight committee would bring unique and valuable expertise, ranging from Chinese real estate experience to capital allocation acumen to property management knowhow. It is also critical to highlight that all six members of IsZo’s slate pledge to align themselves with shareholders by taking at least 75% of their Board compensation in the form of shares rather than cash.

• Installing a proven, high-caliber management team based in China. Thanks to our director candidates’ diverse experience operating in China and working at global private equity firms that frequently recruit portfolio company management teams, they have already initiated discussions with exceptional individuals capable of holding senior executive roles at Nam Tai. IsZo is confident that its slate will have firm, confidential commitments in the near-term from a prospective chief executive officer, general counsel and other senior executives. We have also selected a top-tier executive recruitment firm to help identify the best available real estate talent in mainland China if any roles cannot be filled through our slate’s network. Our slate feels that it is essential for Nam Tai’s management team members to live and operate in China, so they can be actively involved in overseeing project development matters.

• Retaining local advisors to support project-level continuity in Shenzhen and Dongguan. Based on our director candidates’ proactive evaluation of the Shenzhen and Dongguan projects, they have a strong understanding of the operational, legal and regulatory considerations associated with a change in control of the Board. Our slate plans to preserve project-level continuity across Nam Tai’s portfolio by empowering and further incentivizing development teams and retaining experienced advisors in each jurisdiction to engage with local governments and ensure compliance with all laws and jurisdictional rules. IsZo has already worked with its slate to identify top local regulatory affairs and legal consultants in Shenzhen and Dongguan.

• Establishing a disciplined capital allocation approach. Shareholders deserve to understand Nam Tai’s capital allocation philosophy and no longer be surprised by large, poorly-disclosed investments. Our slate plans to establish and communicate a conservative capital allocation framework that prioritizes the retention of cash in the near-term. As Nam Tai begins to realize the value of its projects, the reconstituted Board would likely seek to return capital to long-suffering shareholders in the form of buy-backs or dividends. It is critical for Nam Tai to rebuild its cash position and regain the trust of its shareholder base prior to investing in another project – beyond the four it currently has – over the long-term.

• Commencing a credible strategic review of the current project portfolio. Once a reconstituted Board and fresh management team have been installed at Nam Tai, it will be necessary to test legacy assumptions held by Kaisa insiders. Our slate believes it has an obligation to conduct a strategic review of Nam Tai’s portfolio and assess potential strategic alternatives for all four properties under development. There may be previously unexplored avenues, such as joint ventures or partial or full asset sales, that can accelerate the realization of value and lower risk to shareholders. Our slate of directors has already commenced confidential discussions with local brokers and financial advisors to aid the Board in this prospective process. We believe a credible strategic review at Nam Tai requires a refreshed Board that is no longer hindered by Kaisa’s influence.

Although this is just a high-level summary of our slate’s strategy, we believe it should be clear that a well-structured and targeted plan is in shareholders’ best interests. There is no reason to allow the Kaisa-controlled Board to continue wasting shareholders’ capital when the Company has failed to deliver any meaningful value to date. In our view, Kaisa-affiliated insiders have proven themselves either incapable or unwilling to represent the best interests of all shareholders. We are pleased that our fellow shareholders recognize that they deserve better as demonstrated by the overwhelming support to call the Special Meeting.