Antelope Enterprise Holdings Limited · NASDAQ:AEHL
Antelope Enterprise — China Ceramics — Investor Presentation (July 2011)
30 slides from Antelope Enterprise's investor presentation, Jul 15, 2011
Slide 1: Investor Presentation July 2011
Investor Presentation July 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements and management may make additional forward-looking statements in response to your questions. Such written and oral disclosures are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of
Slide 3: Company Overview
Company Overview Founded as Jinjiang Hengda Ceramics in 1993 Manufactures six different types of ceramics tiles used for exterior siding Ceramic tile market growth correlates with the strong construction and urbanization trends in China Plant capacity to increase by 90% to 72 MM square meters by 201
Slide 4: Equity Snapshot
Equity Snapshot NasdaqGM: CCCL FYE: Dec. 31 Revenue (TTM Mar 31 ) $172.5 MM Fully Diluted EPS ( TTM Mar 31) $2.33 Net Income (TTM Mar 31) $ 35.2 MM Debt (Mar 31) $14.8 MM Cash (Mar 31) $13.0 MM Market Capitalization $90.5 MM Primary Shares Outstanding* 18.25 MM Price (7/13/11) $4.96 P/E Ratio 2.13x
Slide 5: Corporate History
Corporate History Founded in 1993 as a manufacturer of outdoor ceramics tiles in Jinjiang, Fujian Province Received the certification of ISO9002, ISO9001 and ISO14001 in 1999; Gradually built up brand Reputation Introduced state-of-the-art equipment from abroad; recently expanded Hengda capacity to
Slide 6: Investment Highlights
Investment Highlights Prominent manufacturer of exterior ceramic tiles Intent upon capitalizing upon China’s construction and urbanization trend Plant capacity expansion enables capture of market share Motivated distributors and direct sales drive revenue Product customization enables premium pricin
Slide 7: Urbanization Trend Provides Underpinning to Real Estate Construction
Urbanization Trend Provides Underpinning to Real Estate Construction China China’s total urban population reached 666 million in 2010 vs. 450 million in 2001 The scale and pace of China’s urbanization trend is unprecedented: 219 cities of more than 1 million and an aggregate urban population nearing
Slide 8: A Long-Term Trend of Strong Real Estate Growth in China
A Long-Term Trend of Strong Real Estate Growth in ChinaThe scale of construction in China is immense: the expected future increase in cities is equal to the residential floor space of a number of European cities today Strong underlying demand for housing is expected throughout the next decade; any c
Slide 9: Key Market Trends
Key Market Trends Beneficiary of China’s long-term urbanization trend Product trend – New outdoor ceramic tiles products are “Green”, lighter, heat insulating and noise-reducing Potential of Tier II and III Cities Much of the growth in China’s GDP is being driven by economic activity in Tier II and
Slide 10: Competitive Landscape
Competitive Landscape China’s outdoor ceramics tile industry is highly fragmented with hundreds of manufacturers More than 200 manufacturers are located in Jinjiang, with a combined annual production volume of 70% of China’s total production volume Others are mainly located in Foshan, Zibo, Linyi, a
Slide 11: Comprehensive Product Suite
Comprehensive Product Suite The company has over 2,000 size and color combinations Porcelain 74% of Sales Glazed 10% of Sales Glazed Porcelain 5% of Sales Rustic 7% of Sales Ultra Thin 4% of Sales Polished Glaze New product launched in Q2 2011 Wide array of standardized and made-to-order products
Slide 12: Research & Development
Research & Development R&D is an integral component of the Company’s culture and a key to its competitive advantage The 85 person team has developed over 2,000 types of different product combinations Awarded Asia's 500 Most Valuable Brands of 2010 Devised an energy recycling system that reuses exces
Slide 13: Modern Production Lines Ensure High Quality
Modern Production Lines Ensure High Quality Raw Material Inspecting Mixing & Grinding Spray Drying Firing Glazing Molding Plant’s ISO 9001:2000 accreditation signifies high quality control processes
Slide 14: Established and Loyal Customer Base
Established and Loyal Customer Base China Ceramics Domestic distributors 82% of sales International distributors 7% of sales Real estate developers 11% of sales 89% of products sold to 40 exclusive domestic distributors and 6 international distributors 11% of products sold directly to larger real es
Slide 15: Sales Process
Sales Process Meet / Introduction to customers Discuss design and product specifications Sign contracts Delivery After-sales service Excellent communication between our sales force and distributors avoids overlapping of sales Distributors required to make monthly reports on customer requirements Pro
Slide 16: Selected Hengda Projects
Selected Hengda Projects Chengdu Kanjun Garden China Resources Land Limited Lanxi Town The 11th National Games Village 100,000 sq. meters 95,000 sq. meters Hangzhou Redbud Garden 53,000 sq. meters Xiamen Blue Gulf Peninsula Shenyang Institute of Aeronautical Engineering 133,000 sq. meters 97,000 sq.
Slide 17: Stable Supplier Base
Stable Supplier Base Clay and coal are the two major raw materials for tile production, accounting for 47% of COGS Over 10 years’ cooperation with key suppliers ensures on-time supply and reasonably stable pricing All raw materials are inspected on delivery for quality control Raw Material % of COGS
Slide 18: Sustainable Gross Margins
Sustainable Gross Margins Continued steady demand – backlog and channel checks indicate a steady pace of new construction projects. Customized product – nearly all production is built to order for specific projects. High quality manufacturing – ISO certified; international manufacturing equipment. Q
Slide 19: Plant Expansion and Fully Funded Capital Expenditures
Plant Expansion and Fully Funded Capital Expenditures Hengda Hengdali Total (All Capacity figures in Square Meters) Capacity as of Dec. 2010 28.0M 10.0M 38.0M Current Capacity 32.2M 10.0M 42.2M 2011 Expansion (in aggregate) 42.0M 30.0M 72.0M Anticipated Completion Date Q3 2011 Q3 2011 Targeted Utili
Slide 20: Growth Strategy
Growth Strategy Continue to capitalize upon strong brand awareness Utilize the near doubling of production capacity Reach new markets – new Gaoan facility extends reach while reducing costs Continue to broaden product suite – through innovative R&D Penetrate new markets – via a broadened distributio
Slide 21: Robust Revenue Growth
FYE: Dec 31 (USD In millions) Robust Revenue Growth 21 For statements of financial position data, translation of RMB into U.S. dollars has been made using historic spot exchange rates published by www.federalreserve.gov. For statements of comprehensive income data, translation of RMB into U.S. dolla
Slide 22: Strong Financial Margins
Strong Financial Margins Planned reduction in OEM outsourcing and increased capacity should continue to improve margins 22 20% 22% 18% 26% 30% 24% 30% 33% 31% 0% 5% 10% 15% 20% 25% 30% 35% 40% Q1 2010 Q4 2010 Q1 2011 Net Profit Profit Before Tax Gross Margin
Slide 23: Strong Balance Sheet
Strong Balance Sheet As of Mar 31 As of Dec 31 2011 2010 2010 (USD In millions) Cash 13.0 19.3 39.9 Debt 14.8 13.1 14.7 Total Working Capital 50.5 41.8 62.7 Shareholders’ Equity 144.1 80.5 133.7 Days Sales Outstanding 91 109 95 23 ROE (TTM) 24% 30% 25% Inventory Turnover 83 73 73
Slide 24: Capital Markets: Key Differentiators
Capital Markets: Key Differentiators Management CEO founded the company and is well-known industry expert CFO an English-speaking CPA formerly at Deloitte Touche Strong fundamentals, 25% revenue CAGR, 24% ROE, net margins of 20%+ Oversight Independent Board directors with prominent business
Slide 25: Purchase Agreement Pay-Out
Purchase Agreement Pay-Out Net Income Target (US$ in million) Implied Growth Shares Released to Seller 2009 22.3 1,214,127 on 5/26/10 2010 31.4 ~ 40% 1,794,800 on 4/7/11 2011 43.5 ~ 40% (a) (a) 2,176,836 shares are being held in escrow and remain to be released based on earnings targets; 3,008,927 s
Slide 26: Management Team
Management Team Jiadong Huang CEO Founder of Jinjiang Hengda Ceramics Co., Ltd. In 1993 20 years of experience in the China ceramic tile industry Vice Chairman of Fujian Province Ceramic Industry Association and Executive Director of Jinjiang City Chamber of Import and Export Trade Edmund Hen CF
Slide 27: Board of Directors
Board of Directors Paul K. Kelly Non-Executive Chairman Was a Partner at Pricewaterhouse Coopers and has over 36 years of experience in public accounting with clients in a wide variety of industries On Board of Directors of Fox Chase Cancer Center in Philadelphia and the Visiting Nurse Associati
Slide 28: Summary
Summary China Ceramics is a key competitor in a highly fragmented space Plant expansion and doubled capacity production will enable more dominant market positioning Sustainable competitive advantage due to capacity expansion, R&D, exclusive distributor relationships and world-class brands Co
Slide 29: Appendix: Corporate Structure
China Ceramics Co. Ltd. (CCCL:NASDAQ) (BVI) Nov 2009 Success Winner Limited (BVI) May 2009 Stand Best Creation Limited (HK) Jan 2008 100% On-shore: PRC Off-shore WOFE Nov 2009 Jinjiang Hengda Ceramics Co., Ltd. Sep 1993 100% 100% Jun 2009 Appendix: Corporate Structure Former SPAC: China Holdings Acq
Slide 30: Contact Information
China Ceramics Co. Ltd. CCG Investor Relations Edmund Hen, CFO Email: info@cceramics.com David Rudnick Phone: (1) 646 626 4172 Email: david.rudnick@ccgir.com SEC Attorney Auditors Loeb & Loeb Mitchell Nussbaum, Partner Tel: (1) 212 407 4159 Email: mnussbaum@loeb.com Giovanni Caruso, Partner Tel: (1)