Slide 1: Investor Presentation May 2010
- LIMITED (NASDAQ: PSOF) Investor Presentation May 2010
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation may contain forward-looking statements concerning Pansoft Company Limited. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipm
Slide 3: Equity Snapshot
Equity Snapshot NASDAQ Ticker: PSOF Price (05/07/10): $6.39 Market Cap (05/07/10): $34.8 mil Revenues (ttm): $11.0 mil Net Income (ttm): $3.4 mil Dil. shares outstanding (02/25/10): 5.4 mil Diluted EPS (ttm): $0.63 P/E Ratio (ttm): 10.1 times
Slide 4: Investment Highlights
Investment Highlights Leading software solutions and services provider in the oil and gas industries in China Solid customer demand and reputable core clients including Sinopec and PetroChina Superior on-demand, customized software systems to capture market potential Experienced management team with
Slide 5: Corporate Overview
Corporate Overview Founded in 2001 Headquartered in Jinan, Shandong NASDAQ IPO in 2008 Provides software solutions, integration and other services for the development and customization of software systems Total number of employees: approximately 200 R&D and technical professionals with 8+ years of e
Slide 6: Corporate History
Corporate History E-Business On Demand — New Solution Customized Mr. Wang and Mr. Lin founded Pansoft Obtained financing from Science and Technology Innovation Fund Phase | of the Centralized Financial, Accounting, Budget Control System implemented in PetroChina Participated in the 2007 CVCF Venture
Slide 7: Market Overview
Market Overview China software market is growing at a brisk pace, with an average annual growth rate of approximately 38% in recent years* Statistics from China Software Industry Association showed that 2008 China's software industry revenue was RMB 757 billion in 2008 and expects to reach RMB 900 b
Slide 8: Market Segmentation in China
Market Segmentation in China sient I _ eh Maturity | (PSOF Potential Market) Learning | | | i || 1. Supporting business strategies Introductory 2. Supporting new business ! 1. Improving resource efficiencyl] Todery i 2. Reducing cost 2. Improving men ent Technological | 1. Reducing handwork 3. Impro
Slide 9: Competitive Landscape & Market Opportunity
Competitive Landscape & Market Opportunity * Pansoft is at a market sweet spot with great potential = Limited market potential to offer customized products to small enterprises * Strategically avoid high competition from producing generic products Lower eeiBeg aiqesney eremyos Higher Customer Servic
Slide 10: Pansoft's Business Segments
Pansoft’s Business Segments + PetroChina Corporate Division Rica ermias approximately 90% + Sinopec Corporate Division + Main segments of current business model Divisi + Oil & Gas Subsidi * Coal Mining Division : Offers diversification to mitigate concentration + Solution Development Division risk +
Slide 11: Competitive Advantages
Competitive Advantages Pansoft’s Unique Advantages Advanced technological knowledge and operational experience Seasoned and loyal R&D and technical teams with strong research capabilities Strong client base in the oil and gas industries such as PetroChina and Sinopec Comparati Advantages vs. Peer Co
Slide 12: Core Technology Capabilities
Core Technology Capabilities Functional Systems | Industry Experts [| Customized Solutions. @ Fund & @Strong R&D clearance professional management Tu Proprietary | team = Components | system 1 = Centralized | platforms I @ Superior _ financial, @ Packages ——------— a industrial — | accounting, ® Reu
Slide 13: Proprietary Product Platforms
Proprietary Product Platforms Reusable Platform, Solutions and Components Accumulated solutions and Pan series of packages, components, and integration & quick-development tools PanBI: business data analysis and storage, model building, statements processing PanXI: converts business operational data
Slide 14: System Integration Sample
System Integration Sample + Centralized Financial and Accounting System for PetroChina 14
Slide 15: Marketing Strategy
Marketing Strategy Direct Marketing Organic system and services upgrade - Service Oriented - Complexity progression as needed Service package expansion and extension Divisional cross-selling Channel Marketing - Solution Oriented - Dynamics AX* using Microsoft’s superior brand recognition and broad s
Slide 16: Strong Customer Base
Strong Customer Base [New map — Add Dubai] PetroChina Company Limited ‘SH: 601857 HK: 0857 NYSE: PTR YP YA a Ae 0 A 2S a] CHINA PETROCHEMICAL CORPORATION China Petrochemical Corporation (0386.HK) CANA PETROLEUM & CHENICAL COMPORATION & SER ae TIER ATS China Petroleum and Chemical Corporation (NYSE:
Slide 17: Services and Solution
Services and Solution Development Cycle On-site R&D professionals to Observe technology monitor daily improvement and activities collect feedback / requests on Market to all applicable ; upgrades customers to E-Business on maximize reusability Demand Consolidate feedback from all customers to conduc
Slide 18: Customized Solution Case Study
Customized Solution Case Study Centralized Financial, Accounting, Budget Control System for PetroChina PetroChina is a huge company with thousands operations spread all over the country with several layers of accounting systems PetroChina was not able to run its business in a unified accounting syst
Slide 19: Growth Strategy
Growth Strategy = Current project extensions and new service Horio Repackaging > Horio Repackaging > and solution needs within the energy industry - Corporate project pipeline (solution for division verticals) - Untapped subsidiaries consisting of oil exploration, refinery, oil services up to 4,000-
Slide 20: Growth Through M&A
Growth Through M&A = Leverage M&A to expand in other solution categories of a different industry - Strong revenue and net income growth - Valuation of approximately 6x P/E - Industry expertise (Finance / Telecommunications / Logistics / Tobacco / Government) - Present market barriers to new entrants
Slide 21: Recent Acquisitions Update
Recent Acquisitions Update Shandong Hongao Power Technology - Pansoft acquired 85% equity (valued approximately $2.6 million) - Leading IT based energy-saving and pollution-reducing solution and service provider for power works with 40 large thermal power plant as customers - Revenue and net profits
Slide 22: Strong Management Team
Strong Management Team Hugh Wang - Chairman - Hugh has more than 30 years of experiences in the software industry. He was Senior Vice President and one of the chief engineers of Inspur Group. Hugh is an adjunct professor of enterprise internal process control models, data models and ERP systems at S
Slide 23: Experienced Board Members
Experienced Board Members Tony ¢. Luh - Mr. Luh has founded and served as a managing director of DragonVenture, Inc. In addition, since 2005, Mr. Luh has also served as a managing director of DFJ DragonFund China, a $100 millon China-focused early stage venture capital fund. From 1997 to 1999, Mr. L
Slide 24: Strong Financial Performance
Strong Financial Performance Revenue ($M) Net Income ($M) $90 = $30 500% 40.0% $60 $50 $28 300% 200% $23 $10 as $14 100% 7 - 00% Fiscal 2008 Fiscal 2009 Q32009 Q32010 Fiscal 2008 Fiscal2009 Q32009 932010 “ * # —=Netincome —e-NetMargn Gross Profit ($M) $5.0 70.0% 40 600% 50.0% $3.0 400% $20 30.0% 20.
Slide 25: Strong balance sheet
— Strong balance sheet Balance Sheet $in millions March 31, 2009 Cash & Cash Equivalents $13.5 Current Assets 20.6 Total Assets $21.3 Current Liability $1.9 Shareholders Equity 19.4 Total Lia & Equity $21.3
Slide 26: Investment Highlights
Investment Highlights Undervalued comparable to peers Fast growing economy and high growth industry Proven track record of annual growth of 30%+ for the past three to five years Strong financial position with ample of cash on balance sheet High market potential in high-end technological innovation
Slide 27: Contact Information
Contact Information Pansoft Company Limited CCG Investor Relations Allen Zhang, Chief Financial Officer Crocker Coulson, President Phone: +86 (0)531 8887-1159 Phone: +1 (646) 213-1915 Email: allen.zhang@pansoft.com Email: crocker.coulson@ccgir.com Legal Counsel Morgan, Lewis & Bockius Auditor AGCA C
Slide 28: Appendix - Terminology
Appendix - Terminology J2EE: platform for server programming in the Java programming language Websphere: designed to set up, operate and integrate electronic business applications across multiple computing platforms, using Java-based Web technologies Weblogic: owned by Oracle Corporation, consists o
Slide 29: Q&A Thank You
Q: PSOF) Investor Presentation Thank