Wuhan General Group (china), Inc. · OTC:WUHN
Wuhan General Group (china) — Investor Presentation (November 2009)
30 slides from Wuhan General Group (china)'s investor presentation, Nov 17, 2009
Slide 1: Wuhan General Group Investor Presentation
WUHAN GENERAL November 2009 WUHAN GENERAL GROUP (CHINA), INC: (NASDAQ: WUHN) Investor Presentation
Slide 2: Safe Harbor Statement
Safe Harbor Statement The words “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “projects,” “should,” and similar expressions, or the negatives of such terms, identify forward-looking statements. The matters discussed herein that are forward-looking statements are based on current man
Slide 3: Equity Snap Shot
Equity Snap Shot Ticker Symbol Fiscal Year End Share Price (11/13/2009) Shares Outstanding Market Capitalization^ Revenue (ttm) Net income (ttm)* Diluted EPS (ttm)* P/E (ttm) * EV/EBITDA (ttm) P/B (mrq) NASDAQ: WUHN December 31 $2.38 39.1 million $93.1 million $88.0 million $11.9 million $0.30 8.0x
Slide 4: Investment Highlights
Investment Highlights Growth opportunities from government mandate for environmental protection and demand for electricity Only non-government player among top five blower and turbine producers Strong capabilities in R&D and design with experienced management team Potential to take market share from
Slide 5: Company Overview
Company Overview One of China’s leading providers for industrial blowers, steam turbines and water turbines Headquartered in Wuhan, Hubei Province Three subsidiaries: Wuhan Blower, Wuhan Generating Equipment and Wuhan Xingelin Equipment, all based in Wuhan Approximately 830 employees; advanced propr
Slide 6: Corporate Milestones and Recent Achievements
Corporate Milestones and Recent Achievements Wuhan Blower was founder as a Chinese State-Owned Enterprise Wuhan Blower was privatized by Mr. Jie Xu Began production at new blower manufacturing facility and opened new administrative headquarters and new R&D facility with acoustics lab Initiated blowe
Slide 7: Growing Pains of China's Industrialization
Growing Pains of China’s Industrialization Over the past several years, China’s growth rate has consistently surpassed most developing economies Until recently, absolute GDP growth has been pursued at the expense efficiency and sustainability Water and air pollution are now chronic problems througho
Slide 8: China's Demand for Electricity Outstrips Supply
China’s Demand for Electricity Outstrips Supply Steam Power Capacity Hydro Power Capacity Per capita power consumption in China is significantly lower than developed nations, about 1/3 of EU and Japan, and 1/5 of US Power shortages nationwide have routinely caused rolling black outs over the past se
Slide 9: Strong Selection of Steam and Water Turbines
Strong Selection of Steam and Water Turbines Steam turbines, up to 100MW, are used in large industrial facilities to generate electricity from excess steam (energy recovery) and also in thermal power plants Turbine product margin of roughly 22% - 25% Water turbines, up to 50MW, are used in hydro pow
Slide 10: Turbine Growth Driven by Energy Recovery and Power Generation
Turbine Growth Driven by Energy Recovery and Power Generation 2009 9mon Turbine Revenue by Segment Hydro Power Plant Small to medium scale hydro electric power plants Steam - Energy Recovery Co-generators using waste heat emitted by manufacturing processes 2009 4Q Expected Turbine Revenue by Segment
Slide 11: China's Pollution Reduction Plans
China’s Pollution Reduction Plans China is now the global leader in greenhouse emissions, having over taken the US* emission in China # emissions by 57.8% from 2005 levels Due in large part to this, the Chinese market for industrial blowers is forecast to be approximately $1.9 billion in 2010^ *The
Slide 12: Blower Demand Driven by Pollution Control and Infrastructure Build Out
Blower Demand Driven by Pollution Control and Infrastructure Build Out 2009 Q3 Blower Revenue by Segment Air Pollution Control key component of sulfur dioxide reduction equipment for steel companies and thermal power plants Auxiliary Furnace Equipment feed industrial furnaces with both air and coal
Slide 13: A Glance at Blowers and Pollution Reduction
A Glance at Blowers and Pollution Reduction Wuhan General provides blowers to complement every niche in the power generation process - Air supply and coal dust blowers for furnaces - Pollution blowers for sulfur dioxide dissipation - Exhaust blowers to expel fumes
Slide 14: Diversified Array of Industrial Blowers
Diversified Array of Industrial Blowers 15-20% of blower revenue comes from services and replacement parts Gross margin of 25% for blower products Each blower is customized according to different applications Designed to withstand the most arduous conditions with proprietary technology Main product
Slide 15: Strong Customer Base and Established Market Channels
Strong Customer Base and Established Market Channels Wuhan General has a leading sales force It has over 300 customers for its blower division and over 30 for its turbine segment Sales offices covering major cities including: Xi’an, Guangzhou, Shanghai, Beijing, Chongqing and Nanjing Sales wins base
Slide 16: Up to 15 Percent Cost Advantage Vs. State-Owned Competitors
Labor 2% Steel 25% Other Raw Materials 28% Conversion 14% Other 1% SOE Blower Cost as % of Revenue* 10-15% labor saving 3% material savings Wuhan General Blower Cost as % Revenue 85% 70% With our cost advantage, our growth strategy is focused on taking market share from state-owned competition Up to
Slide 17: Sole Private Top Five Player in Blower and Turbine Segments
Sole Private Top Five Player in Blower and Turbine Segments Market Size Top Five Shenyang Group Shanghai Blower Works Wuhan General Shanxi Blower Howden Engineering $435MM 27.7% 7.3% 6.8% 6.3% 3.7% 3.7% (1) (1) (1) Nanjing Steam Qingdao Steam Wuhan Steam Hangzhou Steam Wuhan General $500MM 62.8% 25.
Slide 18: Commitment to Quality and R&D, Tailored Solutions
Commitment to Quality and R&D, Tailored Solutions 50 senior professionals, of which 10 enjoy special government subsidies Licensed technology from Mitsubishi One of the few Chinese companies capable of making variable angled blades Established one of the three major national testing centers for indu
Slide 19: Extensive Manufacturing Facilities and Capabilities
Extensive Manufacturing Facilities and Capabilities Blower manufacturing facilities occupy over 430,000 square feet set on 30 acres Annual production of approximately 620 units – currently operating at capacity, some manufacturing work is outsourced Features more than 100 pieces of cutting-edge, mod
Slide 20: Multifaceted Growth Strategy
Multifaceted Growth Strategy Continue to grow market share in existing businesses, taking market share from state-owned enterprises Leverage strong brand equity and precision technology Continue to cooperate with leading academic agencies and institutions in R&D Expand customer base and deliver tail
Slide 21: Strong and Experienced Management Team
Strong and Experienced Management Team Mr. Jie Xu Chairman and CEO Served as Chairman and CEO of Wuhan Blower since 2004 Over 20 years of industry experience, including 10 years at Wuhan Blower’s sales department prior to privatization Mr. Haiming Liu, CFO 13 years at PricewaterhouseCoopers with ext
Slide 22: Revenue and Net Income Growth
Revenue and Net Income Growth 21 Revenue in Millions of USD Net Income in Millions of USD (1) (1) Excluding stock penalty for late listing on NASDAQ and one-time and non-cash charges
Slide 23: Summary Income Statement
Summary Income Statement ($MM) Revenue Gross Profit EBITDA Net Income* Revenue Growth Net Income Growth Gross Margin EBITDA Margin Net Margin* 2006 16.7 7.8 4.9 3.2 2006 46.8% 29.1% 19.2% 2007 82.5 25.1 17.3 14.9 394.0% 364.3% 2007 30.4% 21.0% 18.0% 2008 118.6 34.2 25.0 21.5 43.8% 44.6% 2008 28.8% 2
Slide 24: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary ($MM) Cash Total Current Assets Total Assets Total Liabilities Shareholder’s Equity 12/31/2006 0.2 31.0 50.4 31.5 18.9 12/31/2007 1.0 67.8 100.4 45.0 55.4 12/31/2008 2.8 88.8 155.1 61.5 93.6 Cash from Operating Activities Net Change in Cash 2006 (YE) (1.8) (0.4) 2
Slide 25: Capital Structure
Capital Structure Bank Loans and Notes 31,244 Equity – Nine months Ended on September 30, 2009 (In thousands) Debt (In thousands) Common Stock Outstanding 25,352 Conversion of Preferred Stock 12,596 Exercise of Warrants* 12,266 80 *Warrants have exercise prices ranging from $2.57 to $2.83 and expira
Slide 26: Attractive Valuation
Attractive Valuation 3.4 1.03 20.7 Average (excluding WUHN) 1.21 0.33 24.8 $0.15 $42.5 M $3.76 CECE Cece Environmental Corp. 0.57 0.15 3.22 $2.02 $44.3M $6.51 MFRI MFRI Inc. 3.2 3.5 NA ($0.13) $246.9M $10.20 FTEK Fuel Tech Inc. 1.38 0.58 NA ($0.32) $126.7M $4.86 FLDR Flanders Corp 12.86 1.34 42 HK$1
Slide 27: Summary
Summary Growth opportunities from government mandate for environmental protection and demand for electricity Only non-government player among top five blower and turbine producers Strong capabilities in R&D and design with experienced management team Potential to take market share from SOEs due to l
Slide 28: Thank You
Thank You Company Contact: Mr. Haiming Liu, CFO Wuhan General Group (China), Inc. 27-5970-0069 Auditor: Samuel H. Wong & Co. LLP 400 Oyster Point Blvd. ste. 122 South San Francisco CA 94080 Investor Relations: Mr. Crocker Coulson, President CCG Investor Relations Inc. Phone: +1 646-213-1915 (New Yor
Slide 29: Appendix: EBITDA Reconciliation
Appendix: EBITDA Reconciliation $19,978,854 1,628,214 80,256 $18,270,384 9mon 2008 $4,854,359 $17,304,083 $24,969,555 $10,284,170 EBITDA 1,052,442 814,050 2,157,143 1,661,067 Depreciation 76,174 90,260 190,192 244,535 Amortization $3,725,743 $16,399,773 $22,622,220 $8,378,568 Operating Income 2006 2
Slide 30: Appendix: Adjusted Net Income Reconciliation
Appendix: Adjusted Net Income Reconciliation $0.12 38,324,011 $4,750,315 $543,363 $5,293,678 $1,153,439 $4,140,239 9 Months Ended 9/30/2009 $0.25 Adjusted diluted EPS 45,365,361 Diluted shares $11,131,688 Adjusted Income available to common shareholders $3,760,831 Preferred dividends declared $14,89
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