Fuxing China Group Ltd. · SGX:AWK
Fuxing China — Q3 2010 Earnings Presentation
44 slides from Fuxing China's earnings presentation, Nov 9, 2010
Slide 1: Company Presentation
Company Presentation 09 November 2010 Zipped-on For Global Markets FUXING CHINA GROUP LIMITED Koh Choon Kong, CFO choonkong@FuxingChinaGroup.com (+65-98588519)
Slide 2: Disclaimers
Disclaimers 2 This presentation has been prepared by Fuxing China Group Ltd. (“Fuxing” or “Company”) for informational purposes, and may contain projections and forward looking statements that reflect the Company’s current views with respect to future events and financial performance. These views ar
Slide 3: Contents
Contents (目录) 3 Business Overview (企业简介) Competitive Strengths (竞争优势) Financial Highlights (财务摘要) Outlook (前景) Q&A (问答环节)
Slide 4: Business Overview
Zipped-on For Global Markets FUXING CHINA GROUP LIMITED Business Overview 企业简介 4
Slide 5: Component of a Zipper
Component of a Zipper (拉链的构成部件) 5 Slider (Zinc) Tape (DTY) Finished Zipper Chain Teeth (PET chips, Plastic Resin, Copper) Stopper (Zinc)
Slide 6: Our Business
Our Business (我们的业务) 6 Principal Production of quality Zipper Sliders, Zipper activity Chains, Finished Zippers • > 1,600 customers in the PRC, mainly in Fujian, Jiangsu, Zhejiang, Sichuan provinces and Shanghai • Diversified Customer base: Customers - Local manufacturers – Apparel/Footwear, Camping
Slide 7: Our Locations
Our Locations (我们的位置) 7 Qingdao Shanghai Chengdu Wuhan Yiwu Quanzhou Jinjiang Xiamen Hong Kong Dongguan • 3 Production Facilities in Jinjiang [HQ], Shanghai, Qingdao • Extensive sales network - Xiamen, Quanzhou, Chengdu, Dongguan, Yiwu, Wuhan, Shanghai, HK
Slide 8: Types of Products
Types of Products (产品的种类) 8 Trademarks Invisible hook Pin lock trade mark Invisible with Nylon chain polyester tape Non lock double pull Non lock double plastic pull Auto lock ribbon pull Non lock long key Metal chain Plastic chain 3F = Quality First, Customer First, Service First
Slide 9: Wide Product Application
Wide Product Application (产品的广泛用途) 9 Widely used in consumer end-products such as: Apparels (incl Shoes Camping Laptop bag sportswear) equipment Travel luggage Bags & wallet Upholstery
Slide 10: Production Process
Production Process (生产过程) 10 Zipper Chains Zipper Sliders Sourcing of raw materials Die-casting Weaving Assembly of zipper sliders Colour dyeing Integration of plastic/metal teeth Sold as Electro-plating/ individual Spray painting components Quality Inspection Assembly of Sold as individual finished
Slide 11: Production Capacity & Utilisation Rate
Production Capacity & Utilisation Rate 11 (产能和利用率) Max Prodn Capacity 2006 2007 2008 2009 1Q 2Q 3Q 2010 2010 2010 (tons) Zipper chains 21,419 22,200 8582 25,623 6,406 6,406 6,406 Zipper sliders 10,897 10,897 10,897 10,897 2,724 2,724 2,724 Finished zippers * * * 3,971 3,971 993 993 993 Utilization r
Slide 12: Corporate Milestones
Corporate Milestones (企业里程碑) 12 1993 1994 1995 1996 - 1999 2005 • Started nylon • Expanded to... • Granted • Commenced • Established ‘invisible’ continuous production ‘3F’ brand authorization zipper nylon to use Oeko- of fabric • Started zippers, Tex mark, chains, tape related zipper finished mandat
Slide 13: Competitive Strengths
Zipped-on For Global Markets FUXING CHINA GROUP LIMITED Competitive Strengths 竞争优势 13
Slide 14: One of the Largest Zipper Manufacturers in the PRC
One of the Largest Zipper Manufacturers in the PRC (中国最大的拉链生产商之一) 14 • No. 2 in China in terms of production capacity • Economies of Scale in terms of raw material procurement, production management and brand marketing • Ability to Provide Value-added service by customising zipper products to cater
Slide 15: One of Few Vertically Integrated Players in PRC Zipper Industry
One of Few Vertically Integrated Players in PRC Zipper Industry(中国拉链行业为数不多的一条龙生产商) 15 • Able to carry out Upstream Activities, including production of monofilament line, fabric tape and centre core thread • Ability to assemble Finished Zippers • Allows Economies of Scale • Achieve Consistency in Qua
Slide 16: Established Track Record & Reputation
Established Track Record & Reputation (良好的业绩和声誉) 16 • End products used by renowned brands such as: Sportswear: CBA Leisu Fashion:
Slide 17: Established Track Record & Reputation (Luggage/Bags, Camping)
Established Track Record & Reputation (良好的业绩和声誉) 17 Luggage/Bags: Camping Equipments:
Slide 18: Emphasis on Quality and R&D
Emphasis on Quality and R&D (注重质量和研发) 18 • Our R&D facility was certified as “Fujian Provincial Level Enterprise Technology Center” • Intertek Eco-Certification => products can be sold in the international markets • 21 full time R&D staff - members include professors, software engineers, tooling eng
Slide 19: Experienced Management Team
Experienced Management Team (经验丰富的管理团队) 19 • Key management team – Mr Hong Qing Liang (Chief Executive Officer) over 20 years experience – Mr Hong Peng You (Director of Administration) – Mr Hong Qing Ke (Director of Sales) – Mr Hong Shui Ku (General Manager) – Mr Koh Choon Kong (CFO) Hong Qing Liang
Slide 20: Financial Highlights
Zipped-on For Global Markets FUXING CHINA GROUP LIMITED Financial Highlights 财务摘要 20
Slide 21: Revenue By Year
Revenue By Year (营业收入一览) 21 RMB ‘ Mln 40% y + - o - Y 475.9 462.4 329.2 Zipper segment up 64%
Slide 22: Revenue by Quarter
Revenue by Quarter (季度营业收入) 22 RMB ‘ Mln 275.5 17% y + 216.9 - o- 214.1 Y 204.3 190.0 146.7 127.8 120.9 108.1 80.4 • Others includes Knitting wool, Trading. Knitting wool business discontinued in 2Q2010 • Zipper Segment sales Q-o-Q up 12%
Slide 23: Gross Profit By Year
Gross Profit By Year (毛利一览) 23 RMB ‘ Mln 93% y + - o - Y • Emphasis on higher margin business- Finished Zipper segment
Slide 24: Gross Profit By Quarter
Gross Profit By Quarter (季度毛利) 24 RMB ‘ Mln 81.9 75.2 70.9 41.7 36.6 23.4 21.7 17.6 18.4 16.7 Q-o-Q Gross Profit up 14%
Slide 25: Net Profit By Year
Net Profit By Year (净利一览) 25 RMB ‘ Mln 8 % 3 +1 o-y Y-
Slide 26: Net Profit by Quarter
Net Profit by Quarter(季度净利润) 26 RMB ‘ Mln 2 9% 1 - y + Y-o 9.9 Q-o-Q Net Profit up 52%
Slide 27: Quarterly results
Quarterly results (季度财务摘要 ) 27 RMB ‘ Mln % Zipper Segment 217.0 208.4 190.1 150.0 214.1 204.3 80.4 120.9 127.8 146.7 108.1
Slide 28: Shanghai Plant Performance
Shanghai Plant Performance (上海工厂业绩) 28 1Q & 2Q10 incl. discontinued knitting wool ops. RMB ‘ Mln Targeting to turnaround end FY2010, Positive contribution FY2011
Slide 29: Qingdao Plant Performance
Qingdao Plant Performance (青岛工厂业绩) 29 RMB ‘ Mln Improving sales, 3Q profit. Expecting positive contribution FY2011
Slide 30: Profit Margins
Profit Margins (利润率) 30 Zipper % Segment Implementation of new strategy- expansion of finished zipper production which generates higher margin
Slide 31: COGS & Raw Materials
COGS & Raw Materials (生产成本及原材料组成) 31 9M10 Raw Material COGS Composition Composition
Slide 32: Sales Contribution Breakdown
Sales Contribution Breakdown (地区销售情况) 32 RMB’ million FY2008 FY2009 9M2010 3Q2010 Local sales 83% 70% 59% 58% Export sales 17% 30% 41% 42%
Slide 33: Operating Expenses
Operating Expenses (营运支出) 33 RMB’ million 3Q10 3Q09 Variation Selling and distribution 1.8 1.1 +64% exp Gen and admin exp 5.4 1.4 +293% Fin exp 1.1 0.8 +39% Fin income 1.2 0.6 +95% Notes: - Selling/Distr exp up due to higher promotion cost - Gen/admin exp up on increase in salaries partially offset
Slide 34: Cashflow Highlights
Cashflow Highlights (现金流摘要) 34 RMB’ mil 3Q2010 3Q2009 Cashflows from Operating activities 34.6 120.0 Cashflows (used in) Investing (22.5) (49.3) activities Cashflows (used in)/generated from (3.5) 47.0 Financing activities RMB’ mil 3Q2010 FY2009 Bank + Deposits – OD 708.5 689.9 Net Cash (Bank/Deposi
Slide 35: CapEx
CapEx (资本支出) 35 Project CapEx (RMB million) Construction worker’s dormitory 25 Super Durable 100 sets machinery 25 Extension of 2 production flrs 15,000 20 sqm
Slide 36: Financial Highlights
Financial Highlights (财务摘要) 36 RMB ’ m As at As at 30/09/2010 31/12/2009 Total Assets 1,319.2 1,284.8 Total Liabilities (213.3) (190.1) Total Equity 1,106.0 1,094.7 Earnings per share* 0.06 0.04 (RMB) NAV per share ** 1.34 1.32 (RMB) ~S$0.26 @5.0824 Net Cash per share as at 30/09/2010: RMB 77.1 cent
Slide 37: Financial Ratios
Financial Ratios (主要的财务比率) 37 9M2010 FY2009 Ave Trade receivable days 101 171 Ave Trade payable days 14 18 Inventory turnover days 37 38 Return on equity (%) 4.4 2.8 Return on assets (%) 3.7 2.4 Current Ratio (times) 6.7 8.6 Debt to equity* (%) 19.3 17.4 * Debt includes bills payable to banks and sh
Slide 38: Outlook
Zipped-on For Global Markets FUXING CHINA GROUP LIMITED Outlook 前景 38
Slide 39: PRC's Macro Economy Environment
PRC’s Macro Economy Environment (中国的宏观经济环境) 39 Growing Consumer Price Index (CPI) % 2003 2004 2005 2006 2007 2008 2009 9M10 CPI (YOY growth) 1.2 3.9 1.8 1.5 4.8 5.9 - 0.7 2.9 PRC’s Mfg output still positive, Consumption expected to Increase accordingly % PMI > 50 for 20 consecutive mths Source: Nati
Slide 40: Related Industries Reports
Related Industries Reports (行业相关报告) 40 Textile & Garment • During the 9 months of this year, Chinese textile and garment exports rose 46% to USD181.4billion • Garment export to Europe and US increased as the global economy shows a recovery - Statistic by PRC Customs Footwear • For 9M 2010, the PRC f
Slide 41: Our Growth Strategies
Our Growth Strategies (成长策略) 41 • Acquisition plan- works in progress • 3 companies involved in electroplating , zipper dyeing, dyed yarn business • Shanghai, Qingdao plants– positive contribution • Push out patented Super Durable Zipper • High-end user, higher margin expected • Improve operating ef
Slide 42: Dividend Payout
Dividend Payout (股息支付) 42 FY2008 FY2009 FY2010 1Q2010 Name of Dividend Interim Final Final Final Interim Dividend Type Cash Cash Cash Cash Amount Per Share (In RMB) 0.01 0.02 0.02 0.02 Tax Rate N.A. N.A. N.A. N.A Total Per Share (In RMB) 0.03 0.02 Dividend Policy: Payout ratio not less than 40% of n
Slide 43: CEO's Message
CEO’s Message (主席致词) 43 We shall continue to enhance our Brand name and develop sales strategies to remain competitive and grow its market share. We will also continue to pursue opportunities for growth through new product, M&A in CEO Hong Qing Liang zipper-related businesses. 洪清凉 FY2010 is a growth
Slide 44: Q&A
Q&A Zipped-on For Global Markets FUXING CHINA GROUP LIMITED Investor/Analyst/Biz Partnership Media Contact: Koh Choon Kong, CFA M: (65) 98588519 Email: choonkong@FuxingChinaGroup.com Add: 79 Anson Road #15-06 Singapore (079906) 44