Shengtai Pharmaceutical — Investor Presentation (May 2008)
29 slides from Shengtai Pharmaceutical's investor presentation, May 23, 2008
Slide 1: Shengtai Pharmaceutical
Seca INC _ —> hengtai
Slide 2: Safe Harbor Statement
‘] ed Safe Harbor Statement Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth in this presentation that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ mate
Slide 3: Equity Snap Shot
ee raf Equity Snap Shot = OTCBB: SGTI = Price (5/16/2008): $3.25 = Market Cap: $65.0 mil For the first three quarters of fiscal 2008: = Revenues: $65.0 mil = Net Income: $7.3 mil = Wtd. Avg. Diluted shares as of 3/31/2008: 20.0 mil «Earnings Per Share: bin $0.36 Note: Fiscal year ends June 30 f-shen
Slide 4: Market leader of pharmaceutical grade glucose in China
Market leader of pharmaceutical grade glucose in China The most important manufacturer and supplier of Dextrose Monohydrate transfusion solutions in China Background = Established and acquired state-owned enterprise in 1999 = Became an indirect wholly-owned subsidiary of West Coast Car Co. in 2007 =
Slide 5: Investment Highlights
rad Investment Highlights = Rapid revenue growth and strong OSES Mme) $05.0 profitability 7 21.7 = Positioning itself to be the leading pharmaceutical grade glucose $36.0 $36.5 supplier $249 $200 = Located near raw material supplies in | | Shandong, largest corn producing province in China; Convenie
Slide 6: Principal Products
Principal Products Pharmaceutical and medicinal materials = Dextrose Monohydrate Series = Starch, Dextrin, = Multivitamin glucose = Glucose base solution = Pharmaceutical grade starch = Avermectins (Ointment, refinement) Food, Beverage and Processing Industries Products Syrup Industrial glucose Star
Slide 7: Revenue Mix
Revenue Mix Revenue By Products, (9 Mos FYO8) 40.3% mGlucose ae mm Comstarch Others 26.0% s Total Revenue (9MosFY08) = $ 65.0million Average Gross Profit Margin, 9 Mos FY08 50% 1% 40% 30% 24% 20% 8% 10% om | | Glucose Cornstarch Others
Slide 8: Growth Strategy
Growth Strategy Higher living standards make glucose affordable in China, thus stimulates glucose consumption Upgrade existing glucose manufacturing plant capacity and launch the production of new high-quality glucose production complex to satisfy fast growing domestic and overseas markets Consolida
Slide 9: About New Cornstarch Plant
About New Cornstarch Plant New, modern equipment with state-of- the-art technology completed in October 2007 Maximum annual production capacity of 240,000 tons per year Capacity can be easily expanded to 300,000 tons per year when necessary Located close to corn production areas and existing glucose
Slide 10: Existing Glucose Production Facilities
Existing Glucose Production Facilities = Annual production capacity was 60,000 tons before October 2006 Whatever we produced was insufficient to meet the strong market demand Since October 2006 we have been upgrading their capacities; expected to reach 90,000 tons per year by 1H 2008 iW shengtaiphar
Slide 11: New Glucose Production Complex
te 2107 il = Dts iS New Glucose Production Complex New Glucose Production Complex Commenced construction in July 2007 with expected annual production capacity of 120,000 tons of pharmaceutical glucose and value-added glucose products Successfully launched trial production in May 2008 and now have st
Slide 12: Production Process
Production Process Convert 4 Glucoamylase Clean and Dry - w Eshengtaipharmaceutical.com |12 |
Slide 13: Production facilities fully certified for GMP, ISO9002 and HACCP
Production facilities fully certified for GMP, 1$09002 and HACCP international quality standards Most of the products also certified HALAL, KOSHER and IP GMO, which are recognized globally Three-Tier quality control system = Workshop team = Production team = Management accountability Pollution- and
Slide 14: Distribution Channels and Target Market
| ~geenal Be Dist = Four representative offices, with business in all provinces except Tibet Target Customers = Pharmaceutical companies = Medical supply companies = Medical supply exporters = Food and beverage companies © Representative Office © Chinese Operation Headquarter ribution Channels and T
Slide 15: Customer Base
Customer Base Key Factors to reinforce customer loyalty: = High quality, pharmaceutical grade products Certified product reliability On-time deliveries New and improved medicinal products and packaging Excellent service and support Strong referrals @ & ROQUETTE | e | REDOX yee BBCA GROUP -~ w fsheng
Slide 16: China pharmaceutical market demand
Thousand 304 120 1310 1300 120 180 170 Number of Health Institutions 2003 Population in China 1300 1285 6 2006 1315 same 200 1 2002 2006 Source: National Bureau of Statistics of China = About 300,000 medical service providers = Increasing population drives over 15% annual growth of Chinese pharmaceu
Slide 17: Raw Material: Corn
Raw Material: Corn Corn is the principal raw material for cornstarch Two Events: = Recently Chinese regulators reiterated publicly they intended to control development of industrial use of corn, such as conversion of corn into ethanol = Since December 11, 2007, Chinese regulators have been selling c
Slide 18: Raw Material: Corn
Raw Material: Corn Management believes that: Stable corn prices will help maintain availability of our raw materials, and therefore, stabilize our gross profit margin These government policies have had and will continue to have positive effects on our operations We are still able to pass the adverse
Slide 19: Experienced Management Team
y Experienced Management Team Qingtai Liu — President, CEO Formerly head of Science and Technology of Changle Power Factory, Bachelor of Electrical Engineering Degree from Shandong Technical University Melody Shi - CFO Served as audit manager for Kabani & Co., Inc., Controller at Aroa Marketing, Cha
Slide 20: Financial Highlights
Shengtai Pharmaceutical, Inc.~; Financial Highlights
Slide 21: Strong Revenue Growth
Strong Revenue Growth Millions $ 2004 2005 2006 2007 9 Mos 07 9 Mos 08 Note: 9 Mos 2008 unaudited financial statements
Slide 22: Gross profit and gross margin
Millions $ 1 16 - i + 30% 24.8% i 14 4 23.5% 8% / 21.3% Bo, ' p 25% 12 + 47, a I + 20% 10 4 | $88 ° 84 : + 15% 64 i} 1 + 10% ad i 1 L 59 24 I a 1 0 0% 2004 2005 2006 2007 9 Mos 079 Mos 08 imam Gross profit -*— Gross margin Note: 9 Mos 2008 unaudited financial statements W.shengtaipharmaceutical.com
Slide 23: Strong Net Income Growth
* Strong Net Income Growth 13.8% $4.9 OA NWR OY DN & 2004 2005 2006 2007 ga Net Income —s— Net Profit Margin Note: 9 Mos 2008 unaudited financial statements 9 Mos 07 9 Mos 08 16% 14% 12% 10% 8% 6% 4% 2% 0%
Slide 24: Earnings Per Share (Diluted)
s Earnings Per Share (Diluted) $0.64 $0.48 $0.42 $0.36 $0.16 $0.05 2004 2005 2006 2007 9Mos07 9Mos 08 Note: 9 Mos 2008 unaudited financial statements. iW shengtaipharmaceutical.com [24]
Slide 25: Balance Sheet Highlights
s Balance Sheet Highlights For year ended June 30 2007 2006 ($ in Thousands) Cash $5,719 $6,420 $502 Current Assets 22,263 31,266 12,150 Total Assets 88,337 73,760 31,271 Current Liabilities 42,839 38,468 23,612 Total Liabilities 45,805 42,130 24,614 Total Stockholder's 5 42,532 31,631 6,657 Equity
Slide 26: Attractive Valuation
Attractive Valuation Ticker Stock Market Cap EPS$ PIE PIS PIB Symbol Price(s) (SM)—{ttm) (ttm) (ttm) (mrq) Shengtai Pharmaceutical, Inc. SGTI 3.25 65.0 0.50 6.5 0.8 1.5 Xiwang Sugar Holdings 2088.HK 0.38 320.5 0.06 6.9 2 1.8 Global Bio-Chem 0809.HK 0.45 1038.5 0.05 9.0 le 1.3 Corn Products Internati
Slide 27: Investment Summary
Investment Summary = Market leader and preferred supplier of pharmaceutical grade glucose in China = Vertically integrated cornstarch plant enables stable, high-quality and low cost material supply = Upgrading existing glucose capacity expansion = The initiation of new glucose complex significantly
Slide 28: Optimistic: make-good provision
= Optimistic: = Believe we can achieve “make-good” provision of after-tax net income of at least $9 million or fully diluted EPS of at least $0.43 by end of June 30, 2008 ww fivshengtaipharmaceutical.com [28 | —
Slide 29: Shengtai Pharmaceutical, Inc. CCG Elite Investor Relations Inc.
Shengtai Pharmaceutical, Inc. CCG Elite Investor Relations Inc. Melody Shi, CFO Crocker Coulson, President Changda Road East, 1325 Avenue of the Americas, Changle County, Suite 2800 Shandong, China New York, NY 10019 Tel: 86 (536) 629-5728 Tel: 1 (646) 213-1915 Crocker.coulson@ccgir.com shengtaicfo@
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