China Kangda Food Co. Ltd. · HKEX:834
China Kangda Food — H1 2008 Earnings Presentation
28 slides from China Kangda Food's earnings presentation, Aug 12, 2008
Slide 1: China Kangda HY2008 results briefing
China Kangda HY2008 results briefing 12 August 2008
Slide 2: Presentation Overview
Presentation Overview • Financial Review • Operations Review • Industry Trends • Growth Strategies & Future Plans 2
Slide 3: Disclaimer
Disclaimer This presentation contains forward-looking statements which can be identified by the context of the statement and generally arise when China Kangda is discussing its beliefs, estimates or expectations. Such statements include projections, forecasts, and plans and objectives of management
Slide 4: Financial Review
Ko ND=ER7\ Financial Review
Slide 5: Results Highlights
Results Highlights • Sales for China Kangda propelled by robust demand for range of products – Revenue grew 47.4% to RMB456.1 million – Gross profit up 23.1% to RMB72.9 million – Net profit up 33.0% to RMB60.1 million • Expansion strategies into the EU & Russia paid off with strong surge in demand •
Slide 6: Income Statement
Income Statement RMB'000 2Q2008 2Q2007 % +/(-) HY2008 HY2007 % +/(-) • Continued broad based demand for the Group’s Revenue 243,794 173,865 40% 456,057 309,424 47% products • The decline in gross margin is mainly due to: (a) Gross Profit 36,819 33,851 9% 72,866 59,197 23% implementation of Japan Pos
Slide 7: Cash Flow
Cash Flow In RMB'000 2Q2008 2Q2007 HY2008 HY2007 Net cash generated from Operating Activities 11,365 55,055 52,483 37,594 (Increase)/decrease in amts due • Fund RMB61.8 million paid from related companies (14,291) 2,723 33,062 4,463 for acquisition of two subsidiaries Net Cash used in Investing Acti
Slide 8: Balance Sheet
Balance Sheet In RMB'000 30-Jun-08 31-Dec-07 Non-current assets 229,523 161,344 Property, plant and equipment 185,208 129,658 Current assets 480,238 527,729 Inventories 76,163 66,252 Trade receivables 75,222 56,505 • Higher inventory in line with Prepayments, other receivables higher activities and
Slide 9: Year-on-year Trend - Revenue
Year-on-year Trend - Revenue RMB’000 • 2Q2008 revenue 500,000 increased 40.2% as 450,000 compared to 2Q2007 400,000 • HY2008 revenue 350,000 increased 47.4% as 300,000 compared to HY2007 250,000 200,000 150,000 100,000 50,000 0 2Q2008 2Q2007 HY2008 HY2007 9
Slide 10: Year-on-year Trend - Gross Profit
Year-on-year Trend - Gross Profit RMB’000 80,000 • Gross profit in 70,000 2Q2008 increased 8.8% versus 60,000 2Q2007 50,000 • Gross profit in 40,000 HY2008 jumped 23.1% versus 30,000 HY2007 20,000 10,000 0 2Q2008 2Q2007 HY2008 HY2007 10
Slide 11: Operations Review
Ko ND=ER7\ Operations Review
Slide 12: HY Revenue by Product Segment
HY Revenue by Product Segment HY2008 4.6% HY2007 6.2% 18.3% 14.5% 33.5% 43.9% 45.8% 33.2% RMB'000 HY2008 HY2007 Change Rabbit 83.4 45.0 85.3% Processed Food 151.4 141.7 6.8% Chicken 200.3 103.5 93.5% Others 21.0 19.2 9.4% 456.1 309.4 47.4% 12
Slide 13: 2Q Revenue by Product Segment
2Q Revenue by Product Segment 2Q2008 2Q2007 5.5% 6.2% 13.9% 19.7% 37.8% 43.2% 42.1% 31.5% RMB'000 2Q2008 2Q2007 Change Rabbit 48.1 24.2 98.8% Processed Food 76.8 73.2 4.9% Chicken 105.4 65.7 60.4% Others 13.5 10.7 26.2% 243.8 173.8 40.2% 13
Slide 14: HY Gross Profit by Product Segment
HY Gross Profit by Product Segment HY2008 HY2007 2.6% 2.9% 16.2% 19.0% 28.0% 30.3% 61.9% 39.1% RMB'000 HY2008 HY2007 +/(-) Rabbit 22.1 11.2 97.3% Processed Food 28.5 36.6 -22.1% Chicken 20.4 9.6 112.5% Others 1.9 1.7 11.8% 72.9 59.1 26.1% 14
Slide 15: 2Q Gross Profit by Product Segment
2Q Gross Profit by Product Segment 2Q2008 2Q2007 3.2% 1.9% 27.6% 25.6% 28.5% 35.0% 44.0% 34.2% RMB'000 2Q2008 2Q2007 +/(-) Rabbit 12.9 6.2 108.1% Processed Food 12.6 20.5 -38.5% Chicken 10.2 6.1 67.2% Others 1.2 1.0 20.0% 36.9 33.8 26.1% 15
Slide 16: HY Revenue by Geographical Segment
HY Revenue by Geographical Segment HY 2008 HY 2007 36.4% 42.6% 57.4% 63.6% RMB'000 HY2008 HY2007 +/(-) Export 165.9 131.9 25.8% PRC 290.2 177.5 63.5% 456.1 309.4 47.4% 16
Slide 17: 2Q Revenue by Geographical Segment
2Q Revenue by Geographical Segment 2Q2008 2Q2007 34.5% 44.4% 55.6% 65.5% RMB'000 2Q2008 2Q2007 +/(-) Export 159.6 96.7 65.0% PRC 84.2 77.1 9.2% 243.8 173.8 40.2% 17
Slide 18: HY Revenue by OEM/Non-OEM Products
HY Revenue by OEM/Non-OEM Products HY2008 15.9% HY2007 22.9% 77.1% 84.1% RMB'000 HY2008 HY2007 +/(-) OEM Products 72.3 70.8 2.1% Non-OEM Products 383.8 238.6 60.9% 456.1 309.4 47.4% 18
Slide 19: 2Q Revenue by OEM/Non-OEM Products
2Q Revenue by OEM/Non-OEM Products 2Q2008 9.7% 2Q2007 24.1% 75.9% 90.3% RMB'000 2Q2008 2Q2007 +/(-) OEM Products 23.7 41.8 -43.3% Non-OEM Products 220.1 132.0 66.7% 243.8 173.8 40.2% 19
Slide 20: Industry Trends
Ko ND=ER7\ Industry Trends
Slide 21: Pork Prices in PRC
Pork Prices in PRC China Agricultural Products Pork Wholesale Spot Price (in RMB/Kg) • Pork prices went on an upward trend since Sep-Oct 2007 and still remain high Source: Bloomberg, China Ministry of Commerce 21
Slide 22: Pork Vs Chicken Prices
Pork Vs Chicken Prices RMB/Kg 25 • Pork prices shot up and are still quite high • Chicken prices are 20 still lagging behind • This poses 15 opportunity for chicken prices to follow pork prices as 10 the demand for chicken meat is on the rise 5 0 pork Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08
Slide 23: Growth Strategies & Future Plans
Growth Strategies & Future Plans
Slide 24: Growth Strategy
Growth Strategy Increase export Extensive sales of high accreditations & margin rabbit state-of-art products facilities Leading food processor with diversified revenue streams Ramp up of Vertically- production capacity integrated to support growth operations 24
Slide 25: Earnings Outlook
Earnings Outlook* 160 155.3 140 123.9 120 107.2 100 86.8 79.9 80 60 40 20 0 2005 2006 2007 2008(e) 2009(e) *Based on analysts’ consensus estimates 25
Slide 26: Company Developments
Company Developments • 31 May 2008 - received the approval of shareholders via a SGM for the completion of the acquisitions of two KD Animal Rearing Company and KD Rabbit Company, as well as the assets of KD Trading Company – Acquisitions are earnings accretive – Provide in-house capabilities for th
Slide 27: Outlook
Outlook • Application for a dual listing on the Main Board of the Stock Exchange of Hong Kong Limited (SEHK) on 30 June 2008 – Dual listing on the SEHK will enhance the growth prospects of China Kangda • Land transfer for the upcoming processing plant in Non An county, Jilin province completed – Ong
Slide 28: Thank You! Question & Answer Session
Thank You! Question & Answer Session
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