Antelope Enterprise Holdings Limited · NASDAQ:AEHL
Antelope Enterprise — China Ceramics — Investor Presentation (June 2013)
32 slides from Antelope Enterprise's investor presentation, Jun 25, 2013
Slide 1: Investor Presentation June 2013
Investor Presentation June 2013
Slide 2: Safe Harbor Statement
China Ceramics - Overview Safe Harbor Statement 2 This presentation contains forward - looking statements and management may make additional forward - looking statements in response to your questions . Such written and oral disclosures are made pursuant to the Safe Harbor provision of the Private Se
Slide 3: Company Overview
China Ceramics - Overview » Ceramic tile market growth correlates with the strong urbanization and construction trends in China » Potential plant production capacity currently 72 MSM of tiles / yr., a 90% increase from Dec. 2010 » Plant utilization in 1Q 2013 was 20 MSM / yr.; the ramp to 72 MSM is
Slide 4: Equity Snapshot
China Ceramics - Overview Equity Snapshot 4 NasdaqGM : CCCL FYE: Dec. 31 Revenue (TTM) $196.3 MM Fully Diluted EPS (TTM) $1.64 Net Income (TTM) $ 33.5 MM Debt (Mar. 31, 2013) $9.7 MM Cash (Mar. 31, 2013) $24.4 MM Market Capitalization $44.3 MM Primary Shares Outstanding 20.4 MM Price (6/6/13) $2.17
Slide 5: Corporate History
China Ceramics - Overview Corporate History Founded in 1993 as a manufacturer of outdoor ceramic tiles in Jinjiang, Fujian Province Received the certification of ISO9002, ISO9001 and ISO14001 in 1999; Gradually built up brand reputation Introduced state - of - the - art equipment from abroad; develo
Slide 6: Investment Highlights
China Ceramics - Overview Investment Highlights 6 1 Prominent manufacturer of exterior ceramic tiles Intent upon capitalizing upon China’s urbanization trend A 90% increase in annual potential plant utilization (72 MSM) since 2010 enables future capture of market share In 2H 2013, favorable new gove
Slide 7: China's Macroeconomic Environment
China’s Macroeconomic Environment 7 » The Chinese economy is expected to improve slightly in 2013 with forecasted median GDP growth of 8.0% versus est. GDP growth of 7.7% in 2012 » China has set a 7.5% GDP growth target for 2013 » China grew at an annualized rate of 7.7% in 1Q13, slower than the 8.0
Slide 8: China's Real Estate Market Environment
China’s Real Estate Market Environment 8 » The ratio of residential property under construction to sales is expected to rise in 2013 » Stronger sales of residential units could lead to a sustained improvement in real estate investment spending » Reports indicate that real estate developers have impr
Slide 9: CCCL Corporate News
CCCL Corporate News 9 » CCCL announced a semi - annual dividend of $0.10 per share; the first two dividends will be payable on 7/15/2013 and 1/13/2014 » CCCL announced a strategic contract with China State Decoration Group, a subsidiary of the largest real estate construction contractor in China » T
Slide 10: Urbanization Trend Provides Underpinning to Real Estate Construction
» China’s total urban population reached 691 million in 2011 vs. 450 million in 2001; according to projections, nearly 70% of the population will live in urban areas by 2035. » The scale and pace of China’s urbanization trend is unprecedented: 219 cities of more than 1 million and an aggregate urban
Slide 11: A Long-Term Trend of Strong Real Estate Growth in China
A Long - Term Trend of Strong Real Estate Growth in China 11 Forecast of Net Increase in Urban Residential Existing Residential Building Stock (2011 - 2020) Building Stock Chongqing 1,109 Poland 807 Chengdu 447 Greece 494 Zhengzhou 396 Portugal 424 Tianjin 389 Sweden 411 Beijing 350 Czech Rep. 369 X
Slide 12: Key Market Trends
China Ceramics - Overview Key Market Trends » China’s long - term urbanization trend – CCCL a prime beneficiary » Product trend – New outdoor ceramic tiles products are “Green”, lighter, heat insulating and noise - reducing » Potential of Tier II and III Cities • CCCL believes that much of the growt
Slide 13: Competitive Landscape
China Ceramics - Overview Competitive Landscape » China’s outdoor ceramics tile industry is highly fragmented with hundreds of manufacturers; CCCL estimates its current market share in China to be 5%. » The Company believes that more than 200 manufacturers are located in Jinjiang, with a combined an
Slide 14: Comprehensive Product Suite
Comprehensive Product Suite Ultra Thin 3% of Sales Porcelain 54% of Sales Glazed 7% of Sales Glazed Porcelain 4% of Sales Rustic 26% of Sales The company has over 2,000 size and color combinations 14 Wide array of standardized and made - to - order products Polished Glaze 6% of Sales
Slide 15: Research & Development
Research & Development 15 » R&D is an integral component of the Company’s culture and a key to its competitive advantage: R&D expenditures were over 2% of revenue in 2012, a noteworthy figure for a company in the building materials sector. » The 86 person team has developed over 2,000 types of diffe
Slide 16: Modern Production Lines Ensure High Quality
Firing Raw Material Inspecting Modern Production Lines Ensure High Quality Mixing & Grinding Spray Drying Glazing Molding 16 Plant’s ISO 9001:2000 accreditation signifies high quality control processes
Slide 17: Established and Loyal Customer Base
China Ceramics - Overview Established and Loyal Customer Base » 88% of products sold to 40 exclusive domestic distributors and 6 international distributors » 12% of products sold directly to larger real estate developers via own sales force » The top ten customers have purchased from CCCL for over 1
Slide 18: Sales Process
Sales Process Meet / Introduction to customers Discuss design and product specifications Sign contracts Delivery After - sales service » Excellent communication between our sales force and distributors avoids overlapping of sales » Distributors required to make monthly reports on customer requiremen
Slide 19: Selected Hengda Projects
China Ceramics - Overview Selected Hengda Projects 210,000 sq. meters Chengdu Kanjun Garden China Resources Land Limited Lanxi Town The 11th National Games Village 100,000 sq. meters 95,000 sq. meters Hangzhou Redbud Garden 53,000 sq. meters Xiamen Blue Gulf Peninsula Shenyang Institute of Aeronauti
Slide 20: Stable Supplier Base
Stable Supplier Base Raw Material % of COGS # of Suppliers Clay 28 11 Coal 22 8 Coloring 21 8 Glazing 6 4 » Clay and coal are the two major raw materials for tile production, accounting for 50% of COGS » Over 10 years’ cooperation with key suppliers ensures on - time supply and reasonably stable pri
Slide 21: Sustainable Gross Margins
Sustainable Gross Margins » Continued steady demand – backlog and channel checks indicate a steady pace of new construction projects. » Customized product – nearly all production is built to order for specific projects. » High quality manufacturing – ISO certified; international manufacturing equipm
Slide 22: Plant Expansion and Fully Funded Capital Expenditures
Plant Expansion and Fully Funded Capital Expenditures (All Capacity figures in Square Meters) Hengda Hengdali Total Capacity as of Dec. 2010 28.0 M 10.0 M 38.0 M 2010 and 2011 Capacity Expansion 14.0 M 4.0 M 18.0 M Total 2011 Capacity 42.0 M 14.0 M 56.0 M 2012 Capacity Expansion 16.0 M 16.0 M Total
Slide 23: Growth Strategy
Growth Strategy Key focus is to ramp market share domestically and to exploit market opportunities abroad 23 » Continue to capitalize upon strong brand awareness » Utilize the near doubling of production capacity » Reach new markets – new Hengdali facility extends reach while reducing costs » Contin
Slide 24: Robust Revenue Growth
FYE: Dec 31 (USD In millions) Robust Revenue Growth 24 For statements of financial position data, translation of RMB into U.S. dollars has been made using historic spot exchange ra tes published by www.federalreserve.gov . For statements of comprehensive income data, translation of RMB into U.S. dol
Slide 25: Strong Financial Margins
Strong Financial Margins Availability of unused capacity should improve margins over time 25 21% 20% 17% 28% 27% 23% 32% 31% 26% 0% 5% 10% 15% 20% 25% 30% 35% FY 2010 FY 2011 FY 2012 Net Income Profit before Taxes Gross Profit
Slide 26: Strong Balance Sheet
Shareholders’ Equity 231.6 231.6 Debt 9.6 9.7 Cash 14.4 14.4 (USD, in millions) As of Dec 31, 2012 (Unaudited) Strong Balance Sheet Total Working Capital 106.4 106.4 Inventory Turnover 110 103 26 ROE 14% 17% Trade Receivables Turnover 118 117 As of Mar. 31, 2013 ( Audited)
Slide 27: Capital Markets: Key Differentiators
Capital Markets: Key Differentiators Management • CEO founded the company and is a well - known industry expert • CFO an English - speaking CPA formerly at Deloitte Touche • Strong fundamentals, 20% revenue CAGR, 17% ROE, net margins of 20% Oversight • Independent Board directors with prominent busi
Slide 28: Management Team
Edmund Hen CFO Peizhi Su Sales Deputy GM & Director Jiadong Huang CEO » Lawyer at Fujian Minrong Law Firm from 2005 to 2007 » Graduated from the School of Law of Xiamen University » Also a Director of the Company » Former CFO of a Sichuan switchgear manufacturer and accountant for Dickson Concepts L
Slide 29: Board of Directors
Cheng Yan Davis Ding Wei Dong Paul K. Kelly Non - Executive Chairman » Was a Partner at Pricewaterhouse Coopers and has over 36 years of experience in public accounting with clients in a wide variety of industries » On Board of Directors of Fox Chase Cancer Center in Philadelphia and the Visiting Nu
Slide 30: Summary Investment Thesis
China Ceramics - Overview Summary Investment Thesis □ China Ceramics is a key competitor in a highly fragmented space □ Plant expansion and a near - doubling of production will enable more competitive market positioning □ Sustainable advantages due to capacity expansion, R&D, exclusive distributor r
Slide 31: Appendix: Corporate Structure
China Ceramics Co. Ltd. (CCCL:NASDAQ) (BVI) Nov 2009 Success Winner Limited (BVI) May 2009 Stand Best Creation Limited (HK) Jan 2008 100% On - shore: PRC Off - shore WOFE Nov 2009 Jinjiang Hengda Ceramics Co., Ltd. Sep 1993 100% 100% Jun 2009 Appendix: Corporate Structure Former SPAC: China Holdings
Slide 32: Contact Information
China Ceramics - Overview China Ceramics Co. Ltd. CCG Investor Relations Edmund Hen, CFO Email: info@cceramics.com David Rudnick Tel: (1) 646 626 4172 Email: david.rudnick@ccgir.com SEC Attorney Auditors Loeb & Loeb Giovanni Caruso, Partner Tel: (1) 212 407 4866 Email: gcaruso@loeb.com Grant Thornto