China Carbon Graphite Group, Inc. · OTC:CHGI
China Carbon Graphite — Investor Presentation (November 2008)
23 slides from China Carbon Graphite's investor presentation, Nov 20, 2008
Slide 1: Corporate Presentation
Corporate Presentation November, 2008 www.ChinaCarbonGroup.com CHINA CARBON GRAPHITE GROUP (OTCBB.CHGI)
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our comments may contain 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 Securities Litigation Reform Act of 1
Slide 3: Equity Snapshot
Equity Snapshot * Includes 1.2MM preferred shares, 3.0MM warrants exercisable at $1.20, and 3.0MM warrants exercisable at $2.00 $4.98 million Net Income before one-time Deemed preferred dividend (TTM 9/30/2008): $1.35 (as of 09-30-08) Current Share Price: $26.2 million Fully Diluted Market capitaliz
Slide 4: Company Overview
Company Overview #1 wholesale supplier of fine grain and high purity graphite in China One of the top 7 overall producers of carbon and graphite products in China One of China’s largest privately-owned companies in its industry Experienced staff of 550 full time employees (466 in manufacturing, 36 i
Slide 5: Investment Highlights
Investment Highlights Rapid revenue and profitability growth Awarded “High technology and science company” by the Ministry of Science and Technology in 2007 Strong industry fundamental Large domestic and international growth opportunities Doubling production capacity
Slide 6: China Carbon Products
China Carbon Products High-temperature electric conductors used in electric arc furnaces to melt scrap steel Widely used for non- ferrous metals smelting as well as for the manufacture of molds Used in aviation, electronics, nuclear energy, the chemical industry, the food industry Fine Grain Graphit
Slide 7: Graphite's Unique Properties
Graphite’s Unique Properties Graphite, a form of elemental carbon, has unique properties of both metals and non-metals and is used in numerous low and high tech applications Properties include: Stability and strength at very high temperatures Good electrical conductivity Low absorption of X-rays and
Slide 8: Broad Applications for Graphite
Broad Applications for Graphite Iron and Steel Automotive High-temp Technology Racing Sports Sports Equipment Chemical Industry Process Equipment Environmental Protection Mechanical Engineering Pharmaceutical Technology Sealing Technology Fertilizer Tool Manufacturing Satellite Technology Nuclear Te
Slide 9: Production Process and Capacity
Production Process and Capacity Raw Materials Molding Add asphalt Baking Dipping High temperature High temperature High pressure Dip into asphalt Graphitization Finished Goods Crushed and mixed with auxiliary materials in different proportions Repeat 2-3 times to improve purity and density Phase I:
Slide 10: Large Market Opportunities
Large Market Opportunities Worldwide total graphite electrode demand exceeds 1 million metric tons annually* Electrodes are consumed at a rate of one electrode every 8-10 hours Current market shortage of 50,000 tons of high power electrode** Current market shortage of 50,000 tons of ultra high power
Slide 11: Sales & Marketing
Sales & Marketing Sell primarily through distributors Over 50 customers in 22 provinces in China Top 10 customers represent 64% of sales (none are over 10%) 60% - 70% of products ultimately sold internationally due to cost competitiveness against international competitors
Slide 12: Strong R&D
Strong R&D technical employees engaged in research and development Extensive technical expertise in each phase of the production process One Chinese patent, Patent No IL: 2004 1 0044348.7, for high-density, high strength and wear-resistant graphite material Technology cooperation agreement with Huna
Slide 13: Environmental Management
Environmental Management The company meets ISO9001 quality management standards The company meets ISO14000* environmental management standards * ISO14001 is an internationally accepted specification for an environmental management system (EMS). It specifies requirements for establishing an environme
Slide 14: Moving to Higher Margin Products
Moving to Higher Margin Products 50% 60% 38% ($ Million) Revenue Mix
Slide 15: Financial Highlights
Financial Highlights
Slide 16: Strong Revenue Growth
Strong Revenue Growth $ million
Slide 17: Strong Income Growth
Strong Income Growth *Income before one time exclusion of deemed preferred stock dividend of $854,300. * $ million
Slide 18: Summary Income Statement
Summary Income Statement 3,068 4,529 Operating Income Nine Months Ended September 30, 2007 Nine Months Ended September 30, 2008 ($ in thousands) $0.28 $0.18 Earnings Per Share (diluted) 16.3% 21.4% Operating Margin 2,943 4,330 Net Income before Deemed Preferred Dividend 2,943 3,476 Net Income availa
Slide 19: Balance Sheet (9/30/08)
Balance Sheet (9/30/08) $50.8 million Total Asset $26.3 million Property, Plant & Equipment, net $35.9 million Stockholder’s Equity: $14.9 million Current liabilities: $24.5 million Current assets: $17.2 million Inventories: $5.9 million Accounts Receivable: $ 52 thousand Cash:
Slide 20: Management Team
Management Team Dengyong Jin, CEO Mr. Jin, 53, has been the Chief Executive Officer of Xingyong Carbon since 2001 and worked for the company prior to its privatization since 1986. Mr. Jin has more than 20 years of experience in the carbon graphite industry. Donghai Yu, CFO Mr. Yu, 42, has been the C
Slide 21: Growth Strategy
Growth Strategy Near Term Strategy Double capacity from 15,000 tons to 30,000 tons Expand sales of fine grain and high purity graphite to fill capacity Acquire other carbon graphite companies in China to increase capacity of high power electrode graphite as well as fine grain and ultra fine grain gr
Slide 22: Highlights
Highlights #1 wholesale supplier of fine grain and high purity graphite in China One of the top 7 overall producers of carbon and graphite products in China Doubling production capacity to 30,000 tons annually Strong track record of revenue and profitability growth Superior technology in high purity
Slide 23: Investor Relations Contact
Investor Relations Contact: Ting Chen: ting@ChinaCarbonGroup.com Tel : 0086-474-7209723 Fax: 0086-474-7209799 Website: www.ChinaCarbonGroup.com Address: 787 Xicheng Wai, Chengguan Town, Xinghe County, Inner Mongolia China 013650 China Carbon Graphite Group
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