World Precision Machinery Ltd. · SGX:B49
World Precision Machinery — Bright World Precision Machinery — SPAC Merger (July 2008)
29 slides from World Precision Machinery's SPAC merger presentation, Jul 21, 2008
Slide 1: China Holdings Acquisition Corp. - Bright World Precision Machinery Investor Presentation
Exhibit 99.2 China Holdings Acquisition Corp. Bright World Precision Machinery Investor Presentation July 2008
Slide 2: Disclaimer: Additional Information About the Transaction
Disclaimer Additional Information About the Transaction and Where to Find It In connection with the proposed acquisition, China Holdings Acquisition Corp. (“CHAC”) intends to prepare a registration statement containing a proxy statement/prospectus to be filed with the U.S. Securities and Exchange Co
Slide 3: Disclaimer: Forward-looking Statements
Disclaimer Forward-looking Statements This presentationincludes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities LitigationReform Act of 1995. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “inte
Slide 4: Non-GAAP Financial Information
Non –GAAP Financial Information The directors of CHAC (including any who may have delegated detailed supervision of this presentation)have taken all reasonable care to ensure that the facts stated and all opinions expressed in this presentation are fair and accurate and that no materials facts have
Slide 5: Participants
Participants Paul K. Kelly CEO - China Holdings Acquisition Corp. Mark L. Wilson Chief Financial Officer (Designee) - China Holdings Acquisition Corp. 5
Slide 6: Transaction Overview
Transaction Overview Transaction CHAC is proposing a tender offer for all the shares of Bright World Precision Machinery Limited CHAC issues 19.9 million new shares to World Share in exchange for all Bright World shares Bright World, a Singapore Stock Exchange-listed company (symbol: B49), is approx
Slide 7: China Holdings Investment Criteria
China Holdings Investment Criteria CHAC Objective Bright World Investment Highlights Superior growth prospects that are directly correlated to the vibrant growth of China’s industrial output Successfully refocused sales mix from conventional stamping machines to higher priced and more profitable pre
Slide 8: China Holdings Investment Criteria (cont'd)
China Holdings Investment Criteria (cont’d) CHAC Objective Bright World Investment Highlights Experienced management team, led by serial entrepreneur with 25 years of business Experienced expertise and a CEO with more than 35 years of direct industry acumen Management Team – Wang Wei Yao, Non-Exec.
Slide 9: Successfully Refocused Product Mix
Successfully Refocused Product Mix Stamping machines, which can stamp, punch, stretch, bend and fold metals and other materials, are basic to the production of industrial and other consumer durable goods Since 2005, Bright World has successfully refocused its product portfolio towards high performan
Slide 10: Strong Consistent Growth
Strong Consistent Growth (1)(2) Net Sales EBITDA(2) (USD in millions) $100.0 $25.0 $24.1 $74.5 $20.0 $18.4 $75.0 $56.4 $15.0 $13.0 $50.0 $10.7 $39.2 $31.3 $10.0 $6.1 $25.0 $19.8 $13.5 $5.0 $3.9 $0.0 $0.0 2004 2005 2006 2007 Q1 07 Q1 08 2004 2005 2006 2007 Q1 07 Q1 08 Net Profit(2) $25.0 $20.0 $19.0
Slide 11: Significant Growth Potential
Significant Growth Potential Consolidation of Domestic Players Vertical Organic Growth Integration Horizontal Export Sales Integration ROFR on other Mr. Wang Companies 11
Slide 12: Implied Valuation
Implied Valuation Transaction Cost and Implied Multiple Base Case (1) Max Case Number of CHAC Shares Issued 19.9 35.7 CHAC Share Price (estimated redemption value) $9.79 $9.79 Unlevered balance sheet Total CHAC Stock Issued $195.1 $349.2 Cost of Bright World Minority Investors -- 49.8 provides signi
Slide 13: Transaction Structure
Transaction Structure Sources(4) Uses(4) Base Case Max Case Base Case Max Case Purchase of BW shares from majority S/H (1) $195.1 $349.2 Issuance of new CHAC shares (1) $195.1 $349.2 Purchase of BW shares from Public -- 49.8 Pro Forma Net Bright World debt assumed 5.0 5.0 Use of cash and trust fund
Slide 14: Industry Overview
Industry Overview
Slide 15: Attractive Long-Term Macro Growth Dynamics
Attractive Long-Term Macro Growth Dynamics ChinaGDPGrowth(1) Output(1) ChinaIndustrial 300,000 350,000 316,589 246,619 250,000 300,000 210,871 251,620 250,000 200,000 183,868 201,722 159,878 200,000 150,000 135,823 120,333 142,271 109,655 150,000 99,215 110,776 100,000 89,677 95,449 84,402 100,000 8
Slide 16: Chinese Metal Stamping Industry
Chinese Metal Stamping Industry The PRC has become the world's factory and production base for all forms of manufacturing, primarily due to its low operating cost advantage Stamping machines constitute a basic step in the production of industrial and consumer durable products, such as automotive bod
Slide 17: Compelling Industry Dynamics
Compelling Industry Dynamics Metal Forming Machinery Industry The conventional stamping machines business in China is highly Highly Fragmented fragmented with an estimated hundreds of producers in this category. The high performance stamping machines business consists of fewer manufacturers, due to
Slide 18: Impact of Raw Materials Costs
Impact of Raw Materials Costs During the last several years, the world price of iron and steel products has increased significantly, due to a combination of increased demand and resultant sharp hikes in iron ore prices by leading world iron ore producing companies Prior to 2008, Chinese steel produc
Slide 19: Company and Financial Overview
Company and Financial Overview
Slide 20: Competitive Strengths
Competitive Strengths Consistent track record of strong year-over-year growth and profitability Enhanced focus on the successful ongoing transition toward the high performance sector Well recognized AOTU brands and World trademarks Introduction of new, high-tonnage stamping machines capability makes
Slide 21: Market Presence
Market Presence Bright World’s proximity to numerous manufacturing facilities should increase its ability to expand its customer base > 300 distributors Established a strong Developing throughout Markets market presence in the PRC the Pearl River Delta Bohai Bay Area and Yangtze River including Shan
Slide 22: Vertically Integrated Manufacturing
Vertically Integrated Manufacturing Vertically Integrated Manufacturing Delivery of 1. Smelting Resin-casted Components 2. Casting 5. Processing of 6. Quality 4. Hot Stamping Inspection of Treatment Machine Components Components 3. Welding 7. Electronics Wiring 8. Assembly, Quality Inspection and De
Slide 23: Customers by Sectors
Customers by Sectors Balanced Mix of Customers Automobiles 30% Other (e.g. Electrical Home Electrical Fittings) & Hardware Appliances 30% 20% Computer & Telecomms 20% Source: Bright World 1Q07 results briefing. 23
Slide 24: Balance Sheet Highlights
Balance Sheet Highlights Bright CHAC World Pro Forma (1) (USD in millions) Q1 2008 Combined (2) Net cash position and Cash & cash equivalents $8 $77 Inventories 27 27 unlevered balance sheet Receivables 43 43 Current assets 78 147 provides adequate capital Property, plant & equipment 48 48 for acqui
Slide 25: Experienced Management Team
Experienced Management Team (Post-transaction) Wang Wei Yao, Non-Executive Chairman – Mr. Wang has received a number of awards for his entrepreneurial activities in China. He has served as Chairman of a number of companies which he has founded or acquired and restructured. As Chairman and a major sh
Slide 26: Appendix
Appendix
Slide 27: BW Corporate Structure and Taxation Considerations
BW Corporate Structure Taxation – Considerations The corporate structure of the Bright World Group is indicated below. Bright World Precision Machinery Ltd. (Singapore) 100% 100% World Precise Machinery (China) Bright World Heavy Co., Ltd. Machine Tools (China) (China) Co., Ltd. (China) 60% Shanghai
Slide 28: Implied Share Price Multiples
Implied Share Price Multiples Assumed Share Price (USD$ in millions, except per share data) $10.00 $11.00 $12.00 $13.00 $14.00 $14.25 Shares o/s: (1) Public 12,800,000 12,800,000 12,800,000 12,800,000 12,800,000 12,800,000 Founders 3,200,000 3,200,000 3,200,000 3,200,000 3,200,000 3,200,000 Bright W
Slide 29: Bright World 1st Quarter Comparison
BrightWorld1st QuarterComparison ($ USD in 000's) Q1 2008 (1) Q1 2007 (1) % Change Revenue $19,759 $13,454 46.9% Gross Profit 6,883 4,849 41.9% Gross Profit Margin 34.8% 36.0% (1.2%) Distribution, Selling & Admin. 1,719 1,625 5.8% DSA % Sales 8.7% 12.1% (3.4%) Profit from Operations 5,278 3,267 61.6
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