China Solar & Clean Energy Solutions, Inc. · OTC:CSOL
China Solar & Clean Energy Solutions — Investor Presentation (February 2008)
32 slides from China Solar & Clean Energy Solutions's investor presentation, Feb 26, 2008
Slide 1: China Solar & Clean Energy Solutions
EAab=} SHESGES CSCE PEG arm CHINA SOLAR & CLEAN ENERGY SOLUTIONS Integrated Clean Tech Energy Solutions OTCBB: CSOL JANUARY 2008
Slide 2: Forward-looking statements
This presentation contains statements that involves known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including changes from anticipated levels of sales, future na
Slide 3: Equity Snapshot
Equity Snapshot Symbol: OTCBB:CSOL Current share price: $2.89 (01-24-08) Treasury Method Shares Out: 11 million Fully Diluted Shares outstanding: 15.9 million* Management ownership: 22% Treasury Method Diluted Market ye oe $32 million capitalization: $25 million 157% $1.4 million + 35% Revenue (1st
Slide 4: Company Overview
~~. “Company Overview China Solar provides renewable energy solutions for residential, commercial, and industrial customers throughout China The Company provides residential and commercial customers an expanding portfolio of integrated systems, products, parts and after sale services. Current portfo
Slide 5: Company History
a March 1997 June 2004 April 2005 November 2005 June 2007 July 2007 January 2008 www = Company History Founded in 1997 Purchased Bazhou Deli Solar Energy Heating Co., Ltd. Went public through reverse merger Acquired Ailiyang Solar Energy Technology Co.(solar thermal for residential) Closed private p
Slide 6: Technology Development
Technology Development 51% Solar Industrial Products 100% Industrial/Commerical Projects Residential Projects
Slide 7: Environmental Drivers
~~. Environmental Drivers -_= + On February 28, 2005, the Chinese Government passed the Chinese Renewable Energy Law which went into effect on January 1, 2006 — Goal is to increase renewable energy production from < 1% currently to 10% by 2020 — All state power grids are required to purchase electri
Slide 8: Growth Drivers
Growth Drivers Rapid economic growth in China — Increasing disposable income in rural areas — Rapid urbanization and booming housing market — Strong commercial construction business * Rising energy prices and sustainability of fossil fuels * Growing environmental and health consciousness among indiv
Slide 9: Solar Thermal Market in China
_- eeem_SOlat Thermal Market in China a * China is the largest manufacturer and consumer of solar water heaters globally* — 70% of the world market — 19% average annual growth from 1999 to 2005: 15% CAGR 2004-2015 — 2005 sales estimate: US$2.7 billion + Annual/Cumulative installation: 15/75 million
Slide 10: Residential products
Residential 4 0 4 * Company currently brands and distributes these products 9
Slide 11: Evacuated-Tube and Flat Plate Solar Hot Water Heater
a Evacuated-Tube and Flat Plate Solar Hot Water Heater — 26-63 Gallons of hot water per household daily, available year/all climates Evacuated-Tube Solar Hot Water Heater Flat Plate Solar Hot Water Heater * Integrated Solar Heating Packages — For use in new home and multi-building construction — New
Slide 12: Solar Water Heater Cost Comparison
_- =edolar Water Heater Cost Comparison a * Solar initial equipment costs are Cost Comparison higher than gas and electric water systems, but ... * Solar possesses long-term cost advantages compared to gas and electric water heaters — Minimal ongoing maintenance as Types of Water Heaters — 2x longer
Slide 13: New Commercial Solar Products
wee New Commercial Solar Products + Shenzhen PengSangPu acquisition (announced January 2008) — Creates new growth opportunities in southem China market + Strong engineering capabilities and expertise in central solar hot water heater system for business users including schools, hospitals, hotels, an
Slide 14: Project: Zhongshan University Solar Hot Water Heater System
Project: Zhongshan University Solar Hot Water Heater System Initial company investment: $0.80 million* Annual water charge: $0.30 million (approx. 120,000 tons hot water) Total return: $4.8 million (16 yrs)
Slide 15: Environmental Impact
~~. Environmental Impact ¢ Installation of 2 million m? of solar thermal units over the past ten years is equivalent to: — Replacement of 1.8 million metric tons of coal, — 4.2 billion kWh of electric heating, or — 0.6 billion cubic meters of natural gas — Removing approximately 4 million tons worth
Slide 16: Waste heat recovery systems - Tianjin Huaneng Group
+ Waste heat recovery systems - Tianjin Huaneng Group (51% majority ownership) Improves energy efficiency for commercial customers, e.g., steel and chemical customers Strong R&D group that leverages more than 100 senior technicians with 5 patents Heat transfer (“heat pipe”) technology can be incorpo
Slide 17: Project: Xinjiang Bayi Steel Air-to-Air
Project: Xinjiang Bayi Steel Air-to-Air Heat Recovery system for 75 ton furnace Cost: $1.3 million Time to implement: 100 days Air temperature (in): 1472 F° Air temperature (out): 356 F° Steam output: 20 ton/hour Steam price: $17.3 - $18.7 per ton Operation: 340 days per year Payback period: 150 day
Slide 18: Revenue Composition
__ “Revenue Composition -_, Revenue Composition by Product Solar Lighting, 4% Solar Water Boilers & Space Heater, 42% Heaters, 24% Waste Heat Recovery , 30% www om
Slide 19: Focus on rural market
* Focus on rural market — Large percentage of Chinese population lives in rural areas — Less restrictions on installation — 5% market penetration to date for solar thermal products + Targeted advertising — Advertise in government magazine to directly reach government and SOE decision makers for ener
Slide 20: Sales and Marketing Strategy
Sales and Marketing Strategy — Expand and strengthen distribution and service networks in China by partnering with regional distributors * Strategic Footprint — Organic growth complemented by disciplined approach on acquisition to mitigate capacity constraints and open up new markets + Integrate Sol
Slide 21: Strong Financial Performance
ee Strong Financial Performance a Historical Financial millions) S28 515 $10.0 $6.6 $55 7 =o $0.0 3Q2006 — 4Q2006 = -1Q2007--2Q2007 = 3Q2007S- 4Q2007E @ Revenue & Net Income NOTE: Q1 is typically the company’s weakest quarter due to seasonality and the Chinese New Year
Slide 22: Revenue projections
$100.0 $100.0 $80.0 $69.0 $60.0 aed $36.5 ‘i $15.6 $21.5 “au | soo | 2005 2006 2007E 2008E 2009E www
Slide 23: Income
a Income ar $8.0 $6.0 $4.8 $4.0 $2.3 $2.0 $1.3 $1.2 | | kt iz 2005 2006 2007E 2008E 2009E Make Good Targets Accompanying Recent Financing: 2007 Pre-Tax Income: $3.0 million 2008 Pre-Tax Income: $5.5 million www
Slide 24: Experienced Management
~~. Experienced Management _= www Mr. Deli Du, President & CEO - Mr. Du founded China Solar & Clean Energy Solutions, Inc. in 1997 and has been its controlling equity holder. chairman and chief executive officer during the past 5 years. Since June, 2004 he has also been a director and manager of Del
Slide 25: Experienced Board
~~ ™ Experienced Board ‘Mr. Zhenhang Jia, Director - Mr. Jia has been the director of Power Engineering Division of Beijing Mechanical Engineering Institute since 1995. He is also Vice Chairman and Deputy Secretary General of Beijmg New Energy and Renewable Energy Association and Secretary General o
Slide 26: Use of Proceeds
Use of Proceeds Working Capital — Tianjin Huaneng Group — Beijing sales channels — Expansion solar thermal production + Acquisitions S5 MM — Huaneng Group (remaining 49%) and PengSangPu — Additional biomass/PV opportunities Total $10 MM
Slide 27: Investment Conclusions
~~. Tfivestment Conclusions = Expand solar and other renewable energy product portfolio with proprietary additions that address large market opportunities * Grow revenues through strategic complementary acquisitions + Leverage increasing government regulation, rising energy prices and strong secular
Slide 28: Investor Relations Contact
Investor Relations Contact: Hayden Communications International, Inc. Matthew Hayden, President Phone: +1-760-994-0034 E-mail: matt@haydenir.com
Slide 29: Appendix
Appendix
Slide 30: Financial Highlights
| Financial Highlights Fiscal year ended December 31, 2006 Fiscal year ended December 31, 2005 Three months ended September 30, 2007 Three months ended September 30, 2006 Revenue ‘ost of Goods Sold Gross Profit Operating Expenses Operating Income Other Income Income before Taxes & Minority Interest
Slide 31: Balance Sheet Highlights
.. Balance Sheet Highlights December 31, 2006 September 30, 2007 Cash $3,212,065 $3,311,421 Accounts Receivable 870,446 6,408,141 Inventories 315,765 5,238,184 Total Current Assets 9,245,841 16,335,129 Total Property, Plant and Equipment 6,333,892 9,716,521 Total Assets Liabilities Accounts Payable
Slide 32: Key Operating Metrics
= Key Operating Metrics Nine Months Ended September 30, 2007 Revenue +56.7% Gross Profit Gross Margin Operating Income +3B.% Operating Margin Net Income EPS 453.8%
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