Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — China Minzhong Food — FY2013 Earnings Presentation
28 slides from Singapore Exchange's earnings presentation, Aug 29, 2013
Slide 1: China Minzhong Earnings Presentation FY2013
China Minzhong Earnings Presentation FY2013 29 Aug 2013
Slide 2: Agenda
Agenda Financial Performance Review Outlook & Growth Strategies Appendix 1
Slide 3: Results Highlights for FY2013
Results Highlights for FY2013 Cash and cash Net equivalents operating rose from Gross profit cash flow up growth RMB66.2 164.4% to million to 13.2% RMB949.4 RMB826.4 Net profit million rose million. 11.1% Revenue jumped 26.4% 2
Slide 4: Income Statement Highlights
Income Statement Highlights Financial Summary (Profitability) Full year ended 30 June 3 months ended 30 June (RMB’million) FY13 FY12 % Change 4Q FY13 4Q FY12 % Change Revenue 3,247.8 2,568.8 +26.4% 811.3 803.5 +1.0% Processed business(1) 2,086.2 1,584.3 +31.7% 525.0 471.0 +11.5% (2) Cultivation busi
Slide 5: Notes on Income Statement (full year analysis)
Notes on Income Statement (full year analysis) Notes on gross margin On a full year basis, gross margin for the Cultivation business segment recorded a y-o-y decline of 7.4ppt to 45.1%. This is mainly due to higher labour costs and depreciation expenses and as a result of lower yield of newly pr
Slide 6: Revenue Growth continued
Revenue Growth continued … Processed Business Sales Cultivation Business Sales 3,500.0 3,248 3,000.0 2,569 2,500.0 Revenue (RMB’ million) 1,929 35.8% 2,000.0 64.2% 38.4% 1,423 1,500.0 31.0% 61.6% 1,058 32.3% 69.0% 1,000.0 31.6% 67.7% 68.4% 500.0 0.0 FY09 FY10 FY11 FY12 FY13 For the full year ended
Slide 7: Revenue breakdown across segments
Revenue breakdown across segments RMB’ million 2000.0 24% 1804.2 1451.8 1500.0 23% 1071.0 1000.0 870.2 21% 280% 6% 500.0 90.6 114.4 195.9 51.5 86.1 81.0 0.0 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 Fresh vegetables Mushroom spores Processed Beverages Other processed produce vegetables produ
Slide 8: Segmental Revenue by Proportion
Segmental Revenue by Proportion Mushroom Mushroom Revenue spores FY13 spores FY12 2.8% Fresh 4.5% Fresh vegetables vegetables produce produce, 33.0% 33.9% Processed vegetables Processed 55.6% vegetables Other Other 56.5% processed processed products products 2.6% 3.1% Beverages Beverages 6.0% 2.0% F
Slide 9: ASP and Sales Volume Breakdown
ASP and Sales Volume Breakdown FY13 ASP/ FY12 ASP/ % FY13 FY12 % RMB per kg RMB per kg Change Sales volume/ Sales volume/ Change ‘000 tonnes ‘000 tonnes Processed vegetables (1) 33.74 23.64 42.7% 53.5 61.4 (12.9%) Fresh vegetables produce 3.19 4.22 (24.4%) 335.8 206.4 62.7% (1) The ASP and sales vol
Slide 10: Revenue breakdown (key vegetable types)
Revenue breakdown (key vegetable types) Vegetable Type % Revenue % Revenue Remarks Contribution Contribution (FY13)* (FY12)* Champignon mushrooms 19.7% 25.3% Single largest product by revenue. The Group has recently started the industrialized farming of champignon mushrooms at its Tianjin facilities
Slide 11: Global Customer Base, Established Long-term Relationships
Across Global Customer Base, Underpinned by Established Long-term Relationships Global distribution network across 4 continents and FY2013 Sales Breakdown by Geography 26 countries 8.4% Americas 1.2% Russia 3.2% Europe Europe 42.8% Asia North Asia (ex PRC) and Middle East America other regions PRC 4
Slide 12: Financial Summary: Balance Sheet Highlights
Financial Summary Balance Sheet Highlights As at 30 June 2013 As at 30 June 2012 (RMB’million) (unaudited) (audited) % Change Total Assets 5,834.9 4,587.5 +27.2% Non-current assets 2,980.7 2,928.3 +1.8% Property, plant and equipment 2,068.5 1,832.0 +12.9% Land use rights 123.7 126.5 (2.2%) Land impr
Slide 13: Notes to Balance Sheet
Notes to Balance Sheet Assets Property, plant and equipment increased 12.9% due to addition of new facilities and machinery for Phase 2 of New Industrial Park as well as ongoing construction of new industrialized farming facilities in Jiangsu and Tianjin. Land improvement costs and operating pre
Slide 14: Receivables and Inventory Aging Profile
Receivables and Inventory Aging Profile Receivables (as at 30 Jun 2013 – RMB1,098.0 mln) RMB5.7 mln; RMB1.8 mln; 68.5% of receivables are attributed to sales recognized in 0.5% 0.2% 4QFY13. 99% of our overdue receivables belong to long-term RMB338.3 mln; standing customers who have yet to defaul
Slide 15: Financial Summary: Cash Flow Highlights
Financial Summary Cash Flow Highlights For full year ended 30 Jun (RMB’million) FY13 FY12 % Change Net cash from operating activities 949.4 359.1 +164.4% Net cash generated used in investing activities (590.0) (733.1) (19.5%) Net cash generated from financing activities 390.5 255.4 +52.9% Net increa
Slide 16: Key Financial Indicators
Key Financial Indicators Key Financial Indicators For 12 months ended 30 Jun 2013 30 Jun 2012 (unaudited) (audited) Working Capital Days Trade Receivable Turnover Days (1a) 116 85 (1b) Trade Payable Turnover Days (44) (35) (1c) Inventory Turnover Days 21 26 Cash Conversion Days 93 76 Liquidity Ratio
Slide 17: Agenda
Agenda Financial Performance Review Outlook & Growth Strategies Appendix 16
Slide 18: Favorable Industry Outlook
Favorable Industry Outlook Industry Outlook and Features PRC Vegetables Export Market Poised for Continued Strong Growth Growth industry outlook remains positive Market Size of Vegetables Exports (PRC), 2012E–2016E US$ in Millions Strong business adaptability of vegetable farmers, steady 25,231
Slide 19: Favorable Regulatory Environment Supporting Large-scale Farming
Favorable Regulatory Environment Supporting Large-scale Farming PRC’s 12th Five Year Plan continues to support large-scale farming 1 Food security / ensuring food supply 2 Food safety Optimizing variety structure, improving yield Enhance animal & plant disease prevention and and standardizing th
Slide 20: Strategic investment by Indofood
Strategic investment by Indofood February 27, 2013: Private placement to Indofood of c.S$90 million of new shares in Minzhong February 28, 2013: Additional Indofood stake increase via acquisition of shares at S$1.12 per share from Tetrad Ventures Pte Ltd (c.S$106 million) Indofood a c.29.3% ow
Slide 21: Capitalizing on the positive industry fundamentals
Capitalizing on the positive industry fundamentals… Cultivation Cultivate higher value crops including king oyster mushrooms, black fungus and organic vegetables. Expansion into high yield, climate controlled industrialized farming in key major cities in China. Experiment the use of industrial
Slide 22: Expanding Industrialized Farming Footprint Across PRC
Expanding Industrialized Farming Footprint Across PRC King Oyster Mushroom Cultivation Capacity Upcoming Developments Expected Location Targeted Capacity Completion Cultivation Capacity Tianjin City 35 tons/day 2QFY14 30 (champignon mushrooms) (Tons/Day) 20 Jiangsu 25 tons/day 4QFY14 (champignon mus
Slide 23: Cultivation of champignon mushrooms using industrialized farming
Cultivation of champignon mushrooms using industrialized farming Front view of Tianjin Minzhong’s second phase of industrialized farming facilities Strategy During peak season – industrialized farming of champignon mushrooms in-house for processing needs. This reduces the Group’s working capital n
Slide 24: Farmland Maturity Profile
Farmland Maturity Profile Despite accounting for approx. 0.5% of land area, industrialized farming Own Cultivation Area 56,405 mu contributed 14% of fresh vegetables 1 mu = 666.67 sq m 0.5% sales in FY13. Approx. 55% of farmland still in maturing phase 44.2% 55.3% Matured farmland Maturing farmland
Slide 25: Increasing Cultivation Yield
Increasing Cultivation Yield Increasing yield per mu (RMB per mu) from FY07 - FY12 due to: 20.0 Overall yield per mu Group’s continued shift towards higher value products. 17.6 17.3 (RMB’000 per mu) 18.0 Maturing farmland profile. Yield per mu 16.0 14.1 Food inflation 12.9 14.0 Increased foc
Slide 26: Agenda
Agenda Financial Performance Review Outlook & Growth Strategies Appendix 25
Slide 27: Advantages of Industrialized farming
Advantages of Industrialized farming What is industrialized farming? Advantages of industrialized farming Cultivation of vegetables under closed-room, air- Ability to grow vegetables even during off-peak conditioned environment seasons when local climatic conditions are not conducive Centralized
Slide 28: Investor Relations Contact
Investor Relations Contact China Minzhong Food Corporation Limited Dave Tan, Investor Relations Manager Tel: +65 6346 7506 Email: dave@chinaminzhong.com Website: www.chinaminzhong.com.sg