Tongxin International Ltd · OTC:TXIC
Tongxin International — Investor Presentation (April 2011)
31 slides from Tongxin International's investor presentation, Apr 29, 2011
Slide 1: Tongxin International, Ltd. Investor Presentation
ED Tongxin International, Ltd. Pink Sheets: TXIC Tongxin International competes in the $142B global market for automotive Engineered Vehicle Body Structures Investor Presentation April 29, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement ED) This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, about Tongxin International Ltd. (‘TXIC’) and Hunan Tongxin Enterprise Co., Ltd. (“Hunan TX” or “HNTX”). Forward looking statements are state
Slide 3: Investment Highlights
Investment Highlights @™ In business for more than 20 years Largest vertically integrated independent supplier of commercial vehicle Engineered Vehicle Body Structures (“EVBS” or “cabs”) in China = Vertically-integrated product/die design, fabrication and manufacturing process = 95% domestic commerc
Slide 4: Select Financials
Select Financials Fiscal Year December 31% Last-Traded Price (12/31/10) $1.22 Basic Shares (12/31/09) Total Shares diluted 11.8M 11.8M Market Capitalization (based on Total Shares Diluted) $106M FY 2008 Revenues Net Income EPS $98.4M 49.4% $20.0M $1.44 FY 2009 Revenues Net Income EPS $121M 423% ($16
Slide 5: Industry and Company Overview
Industry and Company Overview QD EVBS is the largest single product classification in automotive vehicles based upon content value = Up to $3,700 for trucks versus $1,200 for cars = Total global EVBS market in 2010 was approximately $142B = China became the largest EVBS market accounting for approxi
Slide 6: Global EVBS Market
Global EVBS Market ) The global demand for EVBS production approximately $142B in 2010 90% Original Equipment Market ($128B) = Cars ($70B) = Commercial Trucks ($72B) 10% Collision Parts Aftermarket ($14B) = 3.5%-4.0% annual growth Global EVBS Original Equipment Market Global EVBS Collision Parts Aft
Slide 7: China's EVBS Market
China’s EVBS Market QD In 2010, China became the largest automotive market in the world (approx. 18M vehicles sold) and is the largest exporter of commercial vehicles worldwide. The demand for EVBS in China amounted to approximately $38.8B in 2010. Contributors include: Infrastructure spending: Nati
Slide 8: TXIC is an Integrated EVBS Supplier
TXIC is an Integrated EVBS Supplier Bo _ sth ile assembh Integrated EVBS Solution for OEMs Include: 1.Product Design: 85% of products designed by HNTX; 15% by OEMs 2.Die design & Fabrication: 100% of dies designed and fabricated by HNTX 3.Stamping, welding, assembly: 1 site co-located with customers
Slide 9: TXIC's Footprint in China
TXIC’s Footprint in China + HNTX cover 21 Sales and Marketing regions throughout China + Ability to call on all 140+ commercial vehicles and 80+ light vehicles OEMs * Main facility in Changsha; 3 regional assembly sites at Ziyang, Dali and Zhucheng + 2. co-located assembly ‘sites at OEM customer HNT
Slide 10: 2010 – 2012 Product Introductions
2010 — 2012 Product Introductions @™D In 2009 TXIC designed the Tianrui cab model for introduction during 2010 to the Chinese medium duty commercial truck market segment. . The “Tianrui” will become the basis for a new cab model for the heavy duty commercial vehicle segment in 2011-2012. . In 2010,
Slide 11: TXIC Market Share
TXIC Market Share ) Commercial market segment = HNTX estimated 6% market share in 2010 = More cabs built by OEMs in-house due to large volume increases —model specific = Estimated loss in share by most other independent suppliers Passenger Market segment = HNTX entered this segment in 2009 with mode
Slide 12: Four growth opportunities for the years ahead
<9) TXIC has identified four (4) growth opportunities for the years ahead. They are: Growth Opportunities Overview Organic: 1. Exports to emerging automotive commercial truck markets 2. North American and European severe service truck OE markets 3. North American and European light vehicle OES colli
Slide 13: Growth Opportunity #1: Exports to Emerging Markets
Growth Opportunity #1 ™ EXPORTS TO EMERGING MARKETS China Commercial Truck/Cab Export Market Share by Country in 2010 au Russia 10% Middle East: (5 countries) 54% “Algeria - Syria jouth America (2 countries): = Iran 18% -lraq Chile - Egypt - Brazil Source: J.D.Power Emerging markets with lower barri
Slide 14: Export Markets: Southeast Asia Example - Vietnam
Export Markets (cont.) E29) SOUTH EAST ASIA EXAMPLE - VIETNAM Since 2006 TXIC has exported commercial cabs to the Vietnam automotive market = Largest emerging market for Chinese manufactured commercial vehicles and components (14% share of total commercial vehicle exports) » Vietnam requires commerc
Slide 15: Growth Opportunity #2: North America and Europe Severe Vehicle Markets
Growth Opportunity #2 E29) NORTH AMERICA AND EUROPE SEVERE VEHICLE MARKETS Medium and heavy-duty specialty trucks that serve the basic needs of municipalities and off road (vocational) requirements = Approximately 150,000 vehicles with an estimated total market size of $550M = End users in construct
Slide 16: Growth Opportunity #3: Automotive Collision Parts Aftermarket
AUTOMOTIVE COLLISION PARTS AFTERMARKET The global collision parts aftermarket is an approximate $14B market and growing at 3.5% - 4.0% annually. The market consists of two channels; = Original Equipment Service (“OES”) = Independent Aftermarket (“IAM”) Growth Opportunity #3 ) Preliminary contacts ma
Slide 17: Growth Opportunity #4: Add-on Acquisitions
Growth Opportunity #4 ADD ON ACQUISITIONS ‘e9) TXIC has been analyzing acquisition opportunities throughout the global EVBS market focusing on the following segments: Chinese based EVBS competitors = Independent/in-house suppliers with niche OEM EVBS product offerings = Annual revenue range: $25M-$7
Slide 18: Management Team
Management Team QO Zhang Duanxiang- Chairman & Chief Executive Officer of Hunan Tongxin : 30+ years automotive experience; founded HunanTongxin in 1984 : Recognized twice as one of the top 10 economic outstanding business executives and once as an excellent private entrepreneur in Hunan province. Wi
Slide 19: 2009 Income Statement
12 Months 2009 Income Statement E9) Revenue $121,071 $98,358 423.09% Cost Of Goods Sold (105,421) (83,517) Gross Profit 15,650 14,841 45.45% Selling, General & Administrative (10,192) (7,041) ee ee gainitoss) (20,806) 13,535 Other 1,188 4,696 Interest Expense (1,753) (2,702) Income before Income Tax
Slide 20: Balance Sheet
Balance Sheet ASSETS Current Assets Cash Restricted Cash — Bank Deposits Accounts Receivable-trade, net of allowance for doubtful accounts Other Receivable, Net of allowance for doubtful accounts Due (to) from Related Parties Notes receivable Inventories Advance to suppliers Prepaid Expenses Deferre
Slide 21: Summary Cash Flow
Summary Cash Flow Net Income Depreciation Expense Amortization expense Loss/(Gain) on warrant (Increase)/decrease in inventories (Increase)/decrease in trade accounts and notes receivable Reversal of bad debt allowance Increase/(decrease) in accounts payable Deferred income tax (Increase)/decrease i
Slide 22: Revenue and Income — 2009 vs. 2008
Revenue and Income — 2009 vs. 2008 ico Revenue Miers $83.2M sosam — $121M 2005 2006 2007 2008 Growth of 23 % due to: = Expansion of customer base # Introduction of new products, including high-content cab interiors Net Income Millions $25 $15 $6.2M $5 | 88M $oiM $5 2005 2006 2007 2008 2009 Negative
Slide 23: Margin Analysis
Margin Analysis QO Gross Margin 2004 - 2009 25% 227% 22.3% 20% 15% 10% 5% 0% 200 2005 2008-«=2007 «20082008, Analysis of twelve months ended December 31, 2009 versus 2008: = Effect of lower steel costs, improved steel purchasing strategies, reduced fixed costs, and new product mix. = Gross margins c
Slide 24: Margin Analysis (excluding gain/loss on warrants)
Margin Analysis (exctude gainitoss on warrants) ico EBITA Margin 16% 14% 12% 10% 8% 6% 4% 2% 0% 2004 2005 ©2006 «= 2007 15.6% 2008 2009 Net Income Margin 12% 10% 8% 6% 4% 2% 0% 2005 11.2% 9.3% 2006 = 2007S 2008 = 2009 Analysis of twelve months ended December 31, 2009 versus 2008: EBITA Margin (exclu
Slide 25: Investment Summary
Investment Summary Do The largest independent supplier in China’s commercial EVBS market = Opportunity to increase market share from OEM outsourcing = 95% Chinese-owned commercial manufacturing base creates high barriers to entry for international companies Targeted organic growth opportunities incl
Slide 26: Contact Information
Contact Information @™D Company Contacts Bill Zielke, CEO Tom Chang, VP of Finance of NA Tongxin International 199 Pierce Street, Suite 202 Birmingham, MI 48009 US +1 (248) 593-8330 zielke@txicint.com tom.chang@txicint.com Investor Relations Contact Stanley Wunderlich, CEO Consulting for Strategic G
Slide 27: Appendix
APPENDIX e)
Slide 28: China EVBS Value Added Chain - Commercial Vehicles
China EVBS Value Added Chain-Commercial Vehicles Supply Chain Structure Analysis Vehicle Market: Supply Chain Structure (China), 2008 OEMs Retail End-user 140+ Outlets 400,000 + 600 + * a 7 ] Tier - one | suppliers Complete EVBS -HNTX OEMs Score 7 . in-house Subsidiaries ‘Stamping/Assembly-Competito
Slide 29: China EVBS Value Added Chain - Passenger Vehicles
China EVBS Value Added Chain-Passenger Vehicles Supply Chain Stru e Analysis Passenger Vehicle Market: Supply Chain Structure (China) , 2008 OEMs Retail End-user 80+ > | Outlets 1,200 + a Tier - one OEM: suppliers CKD Kit EVBS -HNTX yo Is ssi so cee cbana sco eenaierecaeaaniecuatveatacastear asics e
Slide 30: 2010 Manufacturing Operations Projects
2010 Manufacturing Operations Projects = TXIC utilized University of Michigan resources to assist in continuous improvements to the Company’s manufacturing operations in Changsha including: v Resources from the Graduate School of Engineering to focus on improvements to the stamping operations to red
Slide 31: China & Emerging Markets Truck Segments
China & Emerging Markets Truck Segments oO = Due to the design and customer requirements the Chinese and Emerging Market segmentation classification of commercial trucks is essentially the same ¥ Differs somewhat from classifications in NA and Europe = Segments include, Mini, Light, Medium and Heavy
Tongxin International — Investor Presentation (April 2011) on 6ix