Xiwang Property Holdings Co., Ltd. · HKEX:2088
Xiwang Property — Xiwang Sugar Holdings Company — H1 2007 Earnings Presentation
35 slides from Xiwang Property's earnings presentation, September 2007
Slide 1: 2007 Interim Results Presentation
Xiwang Sugar Holdings Company Limited Stock Code: 2088.HK 2007 Interim Results Presentation September 2007
Slide 2: Content
Content 1. 1.Introduction Introduction 2. 2.Interim InterimResults Results--Business Businessand andAnalysis Analysis 3. 3.Future FutureProspects Prospects 4. 4.QQ&&As As Appendices Appendices 2
Slide 3: Introduction to Xiwang Sugar
Introduction to Xiwang Sugar
Slide 4: Brief Introduction
Brief Introduction The largest and leading crystallized glucose producer in the PRC, with 800,000 tonnes annual production capacity installed Unique fully vertically integrated production approach, together with strong research and product development capabilities Environmental friendly produc
Slide 5: Corporate Development Milestones
Corporate Development Milestones Commenced corn starch Established import and Reached annual Established Xiwang processing plant, animal export operation; Sugar with a registered crystallized glucose feed processing plant and reached crystallized production capacity of capital of RMB70 second crysta
Slide 6: Rapid Growth in Sales
Rapid Growth in Sales RMB’000 1,600,000 1,384,945 1,400,000 61 % 1% 7. .8 1,200,000 : 11 27 AGR 1,037,711 1,000,000 C 879,028 800,000 687,748 602,736 600,000 400,000 302,933 200,000 61,758 0 2002 2003 2004 2005 2006 1H06 1H07 6
Slide 7: Diversified Product Applications
Diversified Product Applications Current Contribution Model Food and Beverages Fermentation Chemical Pharmaceuticals The Group enjoys diversified product applications which ensures stable income. It also enhances the Group’s revenue potentials. 7
Slide 8: Shareholding Structure
Shareholding Structure Management Atlantis Investment Public Float Shareholders Management Ltd 62.68% 8.03% 29.29% The Company (Bermuda) Master Team (BVI) 100% 100% 100% Shandong Xiwang Shandong Xiwang Bio-chem Technology Xiwang Sugar Sugar Industry Co. (Hong Kong) Ltd. (HK) Co. Ltd. (PRC) Ltd. (PRC
Slide 9: Competitive Strengths
Competitive Strengths Largest operator with vertically integrated and efficient production facilities Strong R&D capabilities and new product pipelines Reputable products with stringent quality control Extensive sales network in China as well as overseas Experienced and dedicated managemen
Slide 10: Interim Results - Business and Analysis
Interim Results - Business and Analysis
Slide 11: Corn, Sugar, Glucose Prices
Corn, Sugar, Glucose Prices RMB 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 0.00 2004 2005 2006 2007 Purchases Corn Price Glucose Price (inclusive of VAT) Sugar Cane (Qingdao) 11
Slide 12: 1H2007 Business Overview
1H2007 Business Overview Market demand for glucose remained strong, turnover reached RMB879 million, a 27.8% increase over 1H2006 Export grew rapidly, reached 15% of overall turnover Achieved economy of scale through newly installed production capacity, resulted in significant cost savings O
Slide 13: 1H2007 Business Overview (Cont'd)
1H2007 Business Overview (Cont’d) Implemented a cohesive strategy to enhance revenue potentials and to mitigate rising corn cost impact Focusing on exploring more large and core customers Developing new customers in new application segments Further expanding overseas markets and strengthenin
Slide 14: Financial Highlights
Financial Highlights For 6 months ended 30 June (RMB ’000) 2006 2007 Change (%) Turnover 687,748 879,028 +27.8% Gross profit 191,902 186,316 -2.9% Gross margin (%) 27.9% 21.2% -6.7% Operating profit 170,014 174,375 +2.6% Profit attributable to equity 158,852 151,868 -4.4% holders Net Margin (%) 23.1
Slide 15: Turnover by Product
Turnover by Product For the 6 months ended 30 June 2006 2007 10.4% 15.0% 8.7% 8.4% 36.8% 9.3% 5.9% 11.0% 55.2% 7.5% 1.0% 26.4% 4.3% Crystallized glucose Glutamic Acids Crystallized glucose Glutamic Acids Lysine Gluten Meal Lysine Gluten Meal Corn germ Animal Feed Corn germ Animal Feed Others Others
Slide 16: Sales Volume and Selling Price
Sales Volume and Selling Price Crystallized glucose unit sales was doubled as compared to that of 1H2006 Sales volume (Tonnes) Average selling price (RMB/Tonne) For the six months ended 30 June For the six months ended June 2006 2007 Change (%) 2006 2007 Change (%) Crystallized glucose 103,889 207,7
Slide 17: Cost of Sales Breakdown
Cost of Sales Breakdown Cost of corn played a much more important role in cost of sales For the 6 months ended 30 June 2006 2007 1.9% 6.5% 1.7% 18.7% 3.9% 9.4% 3.3% 62.7% 13.7% 78.3% Corn Utilities Depreciation Corn Utilities Depreciation Labour costs Others Labour costs Others 17
Slide 18: Gross Profit Contribution
Gross Profit Contribution Crystallized glucose contributed two thirds of the gross profit, further solidifying its importance within the Group’s businesses For the 6 months ended 30 June 2006 2007 9.3% 4.9% 30.1% 7.5% 49.6% 10.8% 11.6% 66.7% 4.5% 5.0% Crystallized glucose Gluten meal Crystallized gl
Slide 19: Gross Profit Margin Analysis
Gross Profit Margin Analysis Efficiency gain from enlarged operation scale partially offset the loss incurred by corn cost increase Gross Profit Margin For the six months ended 30 June 2006 2007 Change (%) Crystallized glucose 36.8% 26.1% -10.7% Gluten meal 18.4% 22.9% +4.5% Corn germ 20.6% 17.3% -3
Slide 20: Crystallized Glucose Production & Sales Growth
Crystallized Glucose Production & Sales Growth Unit sales grew faster than unit production increases tonnes 60,000 53,260 49,267 50,000 40,000 30,000 21,621 20,590 20,000 10,000 0 Jan-07 Jun-07 Monthly Production Monthly Sales Average Monthly Production Average Monthly Sales 20
Slide 21: Profit Margin Analysis for 1H2007
Profit Margin Analysis for 1H2007 50.00% 45.00% 40.00% . 9% % 35.00% 5 8.2 30.00% 28.3% 28.0% 24.5% 25.00% 21.7% 22.1% 20.00% 16.2% 15.00% 10.00% 5.00% 0.00% Jan07 Mar-07 Jun-07 Crystallized Glucose Overall Crystallized Glucose Monthly Average Overall monthly average 21
Slide 22: Financial Strengths and Return on Equity
Financial Strengths and Return on Equity As at 31 December 2006 As at 30 June 2007 Total assets (in RMB’000s) 2,195,490 2,287,852 Net assets (in RMB’000s) 1,171,401 1,214,597 Cash and cash equivalents 662,609 238,605 (in RMB’000s) Current ratio 2.5 1.1 Net gearing ratio* 0.2 0.5 Rate of return on eq
Slide 23: Future Prospect
Future Prospect
Slide 24: Future Prospects
Future Prospects Continued market demand expansion fueled by Continuous rapid economic growth Improved living standards Broadened health consciousness Corn price expected to be stable for 2H2007 Harvest season coming in September Chinese government imposed stringent regulation over app
Slide 25: Development Plan and Strategies
Development Plan and Strategies For existing glucose and corn refined product businesses Continually expanding production to gain further economy of scale Strengthen marketing and sales efforts, in particular, focusing on further developing large and core customer business Strengthen oversea
Slide 26: Development Plan and Strategies (Cont'd)
Development Plan and Strategies (Cont’d) New product development and introduction Complete mid-scale trial production of crystallized fructose in 2007 Commission investment project ad commence production in 2008 Expect significant contribution in 2009 Potential further growth through M&As
Slide 27: Question & Answer Session
Question & Answer Session
Slide 28: Thank You
Thank You
Slide 29: Appendices
Appendices
Slide 30: Appendix 1 – Fully vertically-integrated production line
Appendix 1 – Fully vertically-integrated production line Starch processing plant Corn gluten Corn steep Corn germ Corn fibre Corn slurry Starch paste meal liquor Animal feed Glucose processing plant production plant Key: Production process Glucose Animal feed Crystallised products syrup glucose Semi
Slide 31: Appendix 2 – Installed production capacity
Appendix 2 – Installed production capacity Starch processing plant 1,000,000 tonnes starch paste 800,000 tonnes of crystallized glucose Glucose production plants 200,000 tonnes of non-concentrated glucose syrup Animal feed processing Plant 240,000 tonnes Glutamic acid production plant 80,000 tonnes
Slide 32: Appendix 3 – Production Yield
Appendix 3 – Production Yield Starch Paste: 700,000 tonnes Corn Germ: 70,000 tonnes Corn Gluten Meal: 60,000 tonnes Corn: Corn Fiber: 100,000 tonnes 1 million tonnes Animal Feed Products: 100,000 tonnes Crystallized Glucose: 600,000 tonnes Glucose Syrup: 120,000 tonnes Glutemic Acids: 70,000 tonnes
Slide 33: Appendix 4 – Historical Financial Highlights
Appendix 4 – Historical Financial Highlights For the 12 months ended 31 December RMB’000 2002 2003 2004 2005 2006 Turnover 61,758 302,933 602,736 1,037,711 1,384,945 Gross profit 4,959 61,623 118,491 261,237 365,046 Gross margin (%) 8.0% 20.3% 19.7% 25.2% 26.4% Operating profit 2,173 56,627 110,554
Slide 34: Appendix 5 – Historical Financial Highlights
Appendix 5 – Historical Financial Highlights As at 31 December RMB’000 2002 2003 2004 2005 2006 Non–Current Assets 74,991 267,040 351,036 696,297 1,285,459 Current Assets 123,278 184,946 318,105 691,248 910,031 Current Liabilities 98,242 302,197 212,520 311,903 359,775 Non–Current 0 10,000 184,680 2
Slide 35: Disclaimer
Disclaimer Disclaimer The information provided to you in this presentation does not constitute, or form part of any offer for subscription of, or solicitation of any offer to subscribe for or to sell any securities of Xiwang Sugar Holdings Company Limited (“Xiwang Sugar” or the “Group”) nor shall it
Xiwang Sugar Holdings Company — H1 2007 Earnings Presentation on 6ix