World Precision Machinery Ltd. · SGX:B49
World Precision Machinery — H1 2011 Earnings Presentation
36 slides from World Precision Machinery's earnings presentation, August 2011
Slide 1: World Precision Machinery 2Q2011/1H2011 Company Presentation
World Precision Machinery 2Q2011/1H2011 Company Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward‐looking statements which can be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. Such statements may include comments on industry, business or market tre
Slide 3: Contents
Contents 1 Corporate Profile 2 Competitive Advantage 3 Financial Performance 4 Business Outlook 5 Q&A
Slide 4: Corporate Profile
Corporate Profile
Slide 5: Company Overview
Company Overview • Leading manufacturer of precision metal stamping machines in China • Located in Jiangsu Province close to Yangtze River Delta manufacturing hubs • Beneficiary of China’s automotive and railway sector growth • Order book of RMB 254 million as at 5 August 11
Slide 6: Value Chain
Value Chain Distributors Stamped products OEMs & other Brand owners manufacturers End Products (as % of FY2010 revenue) 34% 32% 15% 19% Home Appliances Automobile Electronics Others components components (including railway)
Slide 7: Wide Range of Products
Wide Range of Products • Manufactures more than 200 different models • Average stamping machine useful life: 20 years
Slide 8: Manufacturing Facilities
Manufacturing Facilities Production capacity utilisation Subsidiary Completion Products FY2008 FY2009 FY2010 1H2011 World Precise Machinery Since 1953, Conventional and (Danyang City, Jiangsu upgraded in 63% 52% 77% 82% high performance Province) 2006 Bright World Heavy High Machine Tools (Danyang Y
Slide 9: New Plant in Shenyang - Geographic Expansion
New Plant in Shenyang - Geographic Expansion •Major factors in customers’ purchasing decision – rising fuel, inflation & transportation costs •New plant at Shenyang – to increase sales across Northern China especially at Bohai Rim* (京津唐) •A land of 364,923 sqm was acquired at RMB123.3 million in May
Slide 10: Experienced Management Team
Experienced Management Team Mr.Wang Mr. WangWei WeiYao Yao •• Non-executivechairman, Non-executive chairman,founder founderand andmajority majorityshareholder shareholder •• Holdsthe Holds theconcurrent concurrentposts postsas asChairman ChairmanofofJiangsu JiangsuWorld WorldElectronics ElectronicsG
Slide 11: Experienced Management Team
Experienced Management Team Mr.Zheng Mr. ZhengYu YuLin Lin •• ChiefTechnology Chief TechnologyOfficer Officerinincharged chargedofofproduct productdevelopment development •• >>20 20years yearsininstamping stampingmachine machineindustry industry •• DiplomaininMachinery Diploma MachineryEngineering E
Slide 12: Competitive Advantage
Competitive Advantage
Slide 13: Competitive Advantage
Competitive Advantage + Stable Cost Structure Le fi *) Strong R&D Capabilities \ y, ( > Diverse Customer Spread \ y, 4 >) High Barriers to Entry y,
Slide 14: Stable Cost Structure
Stable Cost Structure Raw materials costs (~83% of total costs) • Locked in upon contract signing & short delivery time • Bulk purchase of steel at competitive prices at Group level 7% 3% 7% FY2010 Cost of Goods Breakdown 83% Raw materials Overhead Labour Utilities
Slide 15: Strong R&D Capabilities
Strong R&D Capabilities | Proven In-house R&D Teams ¢ Over 200 R&D and technical staff in Danyang and Shanghai ¢ Design and development of stamping machines with high performance and high tonnage | Strategic alliances with foreign companies | ¢ Technological alliance with Aida Engineering, a global
Slide 16: Moving up the technology ladder
Moving up the technology ladder Conventional High Performance • Conventional • High performance • More High Products products performance Products • Higher Efficiency products • simple structure • 2 points / pistons • 4 pistons • Pressing Line • Manually • Computer Solutions Operated Numerical Contr
Slide 17: Diverse Customer Spread
Diverse Customer Spread Jilin Market Presence Shandong Jiangsu Anhui / Zhejiang Chongqing Guangdong Fujian
Slide 18: Customers Breakdown by Location
Customers Breakdown by Location FY2008 (Actual) FY2009 (Actual) FY2010 (Actual) Customer Sales Value Customer Sales Value Customer Sales Value Location (No.) (RMB’ mil) (No.) (RMB’ mil) (No.) (RMB’ mil) Bohai Rim 78 44 166 57 292 127 Jiangsu 612 93 742 109 1,127 236 Shanghai 300 70 224 47 299 95 Zhe
Slide 19: High Barriers to Entry
High Barriers to Entry • Estimated cost of RMB 200 million at current prices to set up a typical equipment manufacturing plant of 20,000 sq m • Current Capex as of 31st Dec 2010 approximately RMB 548 million. To set up current plants will need approximately RMB 1.5 billion • 2 years qualification pr
Slide 20: Financial Performance
Financial Performance
Slide 21: 2Q2011 Financial Highlights
2Q2011 Financial Highlights Revenue +35.9% RMB365.7 million High Performance/ +46.2% RMB236.8 million Tonnage machine sales Gross profit margin +4.3% 27.8% Net profit RMB54.9 million +65.0%
Slide 22: Revenue Trend
Revenue Trend RMB’ 000 . 6% 4 +4
Slide 23: Conventional stamping machines
Conventional stamping machines Units RMB
Slide 24: High tonnage/ performance machines
High tonnage/ performance machines Units RMB
Slide 25: Quarterly Revenue Trend
Quarterly Revenue Trend RMB’ 000
Slide 26: Gross profit and margin
Gross profit and margin Gross Margin RMB’ 000 % .3 63 +
Slide 27: Net profit and margin
Net profit and margin Net Margin RMB’000 . 0% 6 +6
Slide 28: Healthy Balance Sheet
Healthy Balance Sheet (RMB’000) As at 30 June 2011 As at 31 Dec 2010 Total assets 1,743,859 1,262,737 ‐ Cash & bank balances 292,850 62,102 ‐ Inventories 303,406 256,368 ‐Trade receivables 493,562 370,988 ‐ Property, plant and 442,372 431,996 equipment Total liabilities 863,749 436,603 ‐ Trade payab
Slide 29: Turnover Days
Turnover Days 125 127 113 115 2007 2008 2009 2010 1H2011 —Inventory Turnover —Accounts Receivables — Accounts Payables ©—Cash Conversion Cycle
Slide 30: Business Outlook
Business Outlook
Slide 31: Revenue Forecasts: Chinese Metal Stamping Machinery Market
Revenue Forecasts - USD 13.8 billion by 2015 The Chinese metal stamping machinery market was estimated to Chinese Metal Stamping Machinery Market: Sales Revenue and Forecast be USD5,080.4 million in (China) , 2008-2015 2010, and is forecasted to grow at a CAGR of 22.0% from 2010 to 2015, due to sust
Slide 32: Market Share Analysis – Overall
Market Share Analysis – Overall The Chinese metal stamping machinery market is a highly fragmented one with the top 3 competitors occupying approximately 20% of the total market share. JIER Machine Tool group emerged as a market leader with 7.9% share, Jiangsu YangLi emerged second largest and held
Slide 33: Market Share Analysis – Domestic Market
Market Share Analysis – Domestic Market The domestic market share of the Chinese stamping machine market witnessed the same key competitors holding the major market share. Jier Group led the market with 11.3%, YangLi Group was estimated at 10.4% and WPM was estimated at 4.2% Chinese Domestic Metal S
Slide 34: Market Share Analysis – High Capacity Segment
Market Share Analysis – High Capacity Segment The Chinese high capacity segment was found to be dominated by Jier Group, Jiangsu YangLi and WPM. Jier Group was estimated to be the market leader with 13.3% followed by Jiangsu YangLi at 3.9%. WPM was estimated at number 3 with a share of 3.4% for 2010
Slide 35: Key Chinese Players in the Stamping Machinery Market in China
Key Chinese Players in the Stamping Machinery Market in China Company Est. Sales Revenues Est. Sales Revenues Est. Market Share ‐ (USD million, 2010) (RMB,2010) 2010 JIER MACHINE‐TOOL GROUP CO.,LTD 403.3 2,730.0 7.9% JIANGSU YANGLI GROUP CO.,LTD 369.3 2,500.0 7.3% WORLD PRECISION MACHINERY LTD 147.7
Slide 36: Q&A Thank you
Q&A Thank you Contact Details: Samuel Ng CFO, World Precision Machinery Limited Tel: (65) 8180 2482 Email: saisamuelng@hotmail.com Kathy Zhang IR Consultant, Financial PR Pte Ltd Tel: (65) 6438 2990 Email: staff@financialpr.com.sg
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