China XD Plastics Company Limited
China XD Plastics — Investor Presentation (September 2011)
25 slides from China XD Plastics's investor presentation, Sep 27, 2011
Slide 1: September
September
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which statements reflect the beliefs and expectations of China XD Plastics Company Limited (“China XD”) about the futur
Slide 3: Company Overview
Company Overview 2
Slide 4: Key Investment Highlights
Key Investment Highlights 1. Leading position in a large and fast-growing market 2. High value to cost ratio suitable for individual customer needs 3. Strong customer-oriented R&D capabilities 4. Unique business model and strong competitive advantages 5. Seasoned management team with local market kn
Slide 5: Capital Market Summary
Capital Market Summary Exchange / Ticker Nasdaq / CXDC Share Price (Sep 23, 2011) $ 4.51 Market Capitalization $ 215 million Fully Diluted Shares Outstanding 47.8 million TTM Revenue $ 302 million TTM Net Income $ 45.0 million TTM EPS $ 0.94 TTM Revenue, Net Income and EPS as of June 30, 2011 TTM Ne
Slide 6: Company Overview
Company Overview • Headquartered in Harbin, China. China XD Plastics • Approximately 27 years of operating history. Company Limited, through its • Currently have 596 employees. operating • Operate two production facilities equipped with 38 top class production lines subsidiaries, and have annual pro
Slide 7: The Company's History
The Company’s History July 1985 September 2004 August 2007 November 2009 The production base with Harbin Xinda Nylon Factory, the infrastructure to host the Company’s predecessor, production capacity of was founded and became 100,000 metric tons was the first enterprise engaging completed and the Co
Slide 8: A Leading Market Position
A Leading Market Position Leading Market Position and Broad Growth Space Auto Modified Plastics Market Share Domestic manufacturers: 35% (mainly includes China XD, peer company 1 and peer company 2) Foreign manufacturers: 65% Steadily Increasing Customer Base and Geographic Distribution Growing Dist
Slide 9: Our Efficient Business Model
Our Efficient Business Model The Company’s supply chain and manufacturing processes are integrated, well-tested, and operate in a seamless fashion. This enables and results in significant efficiencies and speed to market. 8
Slide 10: Our Industry Leading Products
Our Industry Leading Products What Are Modified Plastics? Modified plastics are new materials made by physical and chemical processes to plastic resin through the use of specialized equipment and technologies. The end products constitute novel new materials which provide a host of benefits over trad
Slide 11: Advanced R&D and Production Capabilities
Advanced R&D and Production Capabilities Leading R&D Platform • Leading professional R&D center in Chinese modified plastics industry and core for company’s sustainable development. • Over 100 sets of internationally advanced R&D and inspection devices for modified plastics, allowing for the develop
Slide 12: A Leader in Product Certifications & Patents
A Leader in Product Certifications & Patents R&D Achievements Automotive products required to obtain certification from auto OEMs according to international automobile industry practice. • We currently have 193 product certifications, the largest among the industry through R&D accumulation and techn
Slide 13: Growth of Automobile Production Volume Modified Plastic per Vehicle Trend
Growth of Automobile Production Volume Modified Plastic per Vehicle Trend kg Global China 8 12
Slide 14: High Barriers to Industry Entry
High Barriers to Industry Entry According to international automotive industry practices, companies have to pass strict qualification affirmation by the automotive OEMs before becoming a certified supplier. High Barriers to Entry Strict Qualification Authentication Rigorous Product Certification Pro
Slide 15: Our Competitive Advantages
Our Competitive Advantages With 27 years’ dedication to R&D and technological reserve, the company has significant advantages over its domestic and foreign competitors in terms of formulation cost, operation model, product certification quantity, customization degree and brand recognition. Internati
Slide 16: Clear Growth Strategy
Clear Growth Strategy A Diversified Long-term Growth Strategy Reinvest to grow production capacity Increase Production Capacity at a targeted annual rate of 30% Expand Customer Base and Geographic Distribution Expand market share and customer base in existing sales markets and explore export opportu
Slide 17: Experienced Management Team
Experienced Management Team The management team has over 50 years combined industry experience in the field of modified plastics and is committed to achieving the company’s operational and strategic targets • Founded China XD and former affiliate, Harbin Xinda Nylon Factory; over 27 years of experie
Slide 18: Strong Independent Directors
Strong Independent Directors • Mr. Leighton has had an extensive 40 year international investment banking career. His Lawrence W. Leighton previous positions includes Co-Head of the Corporate Finance Department at Clark, Independent Director Dodge & Co. , Limited Partner of Bear Stearns, Managing Di
Slide 19: Overview of Financials
Overview of Financials 18
Slide 20: Successful Revenue and Profit Growth
Successful Revenue and Profit Growth Revenue Growth Quarterly Revenue Growth (FY08-2Q11) Robust Revenue Growth (FY07-11E) o FY07-FY10 CAGR - 94% US$ Million FY07-FY10 o 2Q11 YoY Growth - 42% CAGR=94% Strong Profit Capabilities o Consistent gross and net margins o Non GAAP recurring net income (1) FY
Slide 21: Sustainable Margins
-& Sustainable Margins Gross Profit and Margin USS Million =uGross Profit -——Gross Margin a 2 ei We have been pe ee: ; able to maintain 21% 49%, 23% 23% 25% 18.6 18.9 a consistent ——_—_—_ as gross margin - despite variable 30.6 i aati raw material 17.3 I 7 28 63 Vill cost FYO6 FYO7 FYO8 FYO9 FY10 LJ
Slide 22: Key Balance Sheet Items
Key Balance Sheet Items (S in thousands) As of December 31, 2010 As of June 30 2011 Cash & Equivalents 22,721 46,860 Accounts Receivable 28,616 30,724 Inventories 25,757 19,134 Advance to suppliers 31,937 35,376 Fixed Assets 49,038 48,172 Total Assets 159,399 199,763 Accounts Payable 737 270 Short T
Slide 23: Key Investment Highlights
Key Investment Highlights 1. Leading position in a large and fast-growing market 2. High value to cost ratio suitable for individual customer needs 3. Strong customer-oriented R&D capabilities 4. Unique business model and strong competitive advantages 5. Seasoned management team with local market kn
Slide 24: Contact Information
Contact Information China XD Plastics Company Ltd. Investor Relations Firm: Mr. Taylor Zhang, CFO FTI Consulting Phone: +1-212-747-1118 (New York) Cara O’Brien (Hong Kong) Phone: +852-3768-4537 Mr. Tienan Han, IR Director Email: cara.obrien@fticonsulting.com Phone: +86-451-84346600 (China) Email: cx
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