World Precision Machinery Ltd. · SGX:B49
World Precision Machinery — 9M2011 Earnings Presentation
40 slides from World Precision Machinery's earnings presentation, 2011
Slide 1: Company Presentation 3Q2011/9M2011
COMPANY PRESENTATION 3Q2011/9M2011
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward‐looking statements which can be identified by the context of the statement and generally arise when the Company is discussing its beliefs, estimates or expectations. Such statements may include comments on industry, business or market tre
Slide 3: Contents
CONTENTS 1 Corporate Profile 2 Industry Outlook 3 Growth Strategies 4 Financial Highlights 5 Investment Merits 3
Slide 4: Corporate Profile
CORPORATE PROFILE cae
Slide 5: Company Overview
COMPANY OVERVIEW ¾ Top 3 integrated manufacturer of precision metal stamping machines in the PRC ¾ Strategically located in Jiangsu Province, close to Yangtze River Delta manufacturing hubs ¾ Beneficiary of China’s growing auto parts and home appliance sectors ¾ Established track record as a listed
Slide 6: Business Model
BUSINESS MODEL Components Branded vendors Manufacturers /Assemblers Home Appliances Steel Suppliers 34%* Automobile 32%* Electronics 15%* Distributors Others 19%* * Based on FY2010 revenue 6
Slide 7: Diverse Customer Spread
DIVERSE CUSTOMER SPREAD Jilin Market Presence Shandong Jiangsu Anhui / Zhejiang Chongqing Guangdong Fujian 7
Slide 8: Wide Range of Products
WIDE RANGE OF PRODUCTS ¾ Over 200 different models of stamping machines ¾ Average lifespan of products: 20 years 8
Slide 9: Established Facilities
ESTABLISHED FACILITIES Capacity Utilisation Subsidiary Location Completion Products Type FY2008 FY2009 FY2010 Danyang Since 1953, World Precise City, Jiangsu Conventional and high upgraded in 63% 52% 77% Machinery Province performance 2006 Danyang Bright World City, Jiangsu High performance and Heav
Slide 10: Position in Industry
POSITION IN INDUSTY Total Market Value in 2010 = USD 5,080.4 million Domestic Market Value In 2010= USD 3,556.3 million Total Market Value For High Tonnage Segment in 2010= USD 2,540.5 million Source: Frost & Sullivan 10
Slide 11: High Barriers to Entry
HIGH BARRIERS TO ENTRY ¾ Estimated capex of RMB200 million at current prices to set up a typical equipment manufacturing plant of 20,000 sqm ¾ Capex of about RMB548 million already spent over 1953‐2010 to build the Group’s existing plants; Current replacement cost of the plants is about RMB1.5 billi
Slide 12: Brand Quality
BRAND QUALITY ¾ Products conform to various quality standards Jiangsu Province First 2010 Jiangsu Province Major Equipment in GB/T28001‐2001 ISO9001:2008 Renowned Product ISO14001:2004 Dec 2010 China Top 100 Enterprise Technology Leading Enterprise in Recognised as High‐ overseas invested Centre of
Slide 13: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Ms. Jiang Hong Di ¾Executive Director ¾China CPA Mr. Wang Wei Yao ¾In charge of overall Finance operations ¾ Non‐executive chairman, founder and majority ¾> 10 years in stamping machine industry shareholder ¾ Holds the concurrent posts as Chairman of Jiangsu World Electro
Slide 14: Industry Outlook
INDUSTRY OUTLOOK 14
Slide 15: Optimistic Industry Outlook
OPTIMISTIC INDUSTY OUTLOOK ¾ PRC government identifies high‐end equipment manufacturing as one of the pillar industries to develop for the next five years ¾ 17% VAT rebate on new equipment purchase for manufacturers since January 2010 ¾ China’s metal stamping machinery market expects to grow at a CA
Slide 16: China's Booming Auto Parts Industry
CHINA’S BOOMING AUTO PARTS INDUSTRY ¾ The after‐sales market for auto parts in the PRC expects to grow at a CAGR of 30% from 2011 to 2015 % R> 30.0 CAG Source: “Recent Trends in China Auto Parts Market “ issued by Deloitte, 2011 16
Slide 17: Resilient Home Appliance Sales
RESILIENT HOME APPLIANCE SALES ¾ Government Subsidy Program ¾ Rural Subsidy Program (till Jan 13): 13% rebate on purchase price ¾Demand driven by rapid urbanisation and growing disposable income of rural residents ¾ Retail sales of household appliances rose 19.5% yoy to RMB44.5 billion in September
Slide 18: Growth Strategies
GROWTH STRATEGIES 18
Slide 19: Growth Strategies
GROWTH STRATEGIES 19
Slide 20: Vertically Integrated Business Model
VERTICALLY INTEGRATED BUSINESS MODEL ¾ In‐house design and manufacturing ¾ Capabilities to design about 90% of equipment produced ¾ Over 200 R&D and technical staff in Danyang and Shanghai ¾ Margin improvement with in‐house design ¾ Bulk purchase of steel at competitive prices ¾ Place order at Group
Slide 21: Moving Up the Technology Ladder
MOVING UP THE TECHNOLOGY LADDER Conventional High Performance • Conventional • High performance • More High Products products performance • Higher Efficiency products Products • simple structure • 2 points / pistons • 4 pistons • Pressing Line • Manually • Computer Solutions Operated Numerical Contr
Slide 22: Technical Alliance with Aida
TECHNICAL ALLIANCE WITH AIDA • Technological alliance with Aida Engineering Ltd, a Japan based global manufacturer of metal stamping presses for automotive industry, since 2002 • Blue chip customers including Honda, Magna Cosma, Flextronics, Fisher Barton • Opens doors to Japanese manufacturers eg.
Slide 23: Geographic Expansion
GEOGRAPHIC EXPANSION ¾ Rationale ¾ To tap the huge market in Northern China, especially Bohai Rim* (京津唐) ¾ Better accommodate customers’ buying needs ‐ 292 existing customers from Bohai Rim contributed RMB 127 mil to revenue in FY2010 ¾ Proximity to raw materials and customers will lower the raw mat
Slide 24: Tap on Bohai Rim
TAP ON BOHAI RIM ¾ Bohai Rim has the highest growth rate of 123% YoY for FY2010 sales FY2008 FY2009 FY2010 Sales Sales Sales No. of (RMB’ No. of (RMB’ No. of (RMB’ Location Customer mil) (%) Customer mil) (%) Customer mil) (%) Bohai Rim* 78 44 7% 166 57 10% 292 127 12% Jiangsu 612 93 14% 742 109 19%
Slide 25: Financial Highlights
FINANCIAL HIGHLIGHTS 25
Slide 26: Financial Highlights
9M2011 FINANCIAL HIGHLIGHTS Revenue +30.3% RMB947.9 million High Performance/ +41.4% RMB623.0 million Tonnage machine sales Gross profit margin +2.8% 28.3% Net profit +46.3% RMB143.7 million 26
Slide 27: Revenue Trend
REVENUE TREND 1,200,000 1,000,000 800,000 600,000 400,000 200,000 566,360 Revenue (RMB ‘000) 2007 727,304 947,928 1,038,647 642,619 [ 560,779 2008 2009 2010 9M2010 9M2011 27
Slide 28: Conventional Stamping Machines
CONVENTIONAL STAMPING MACHINES 28
Slide 29: High Tonnage/Performance Machines
HIGH TONNAGE/ PERFORMANCE MACHINES 29
Slide 30: Quarterly Revenue Trend
400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1Q QUARTERLY REVENUE TREND Quarterly Revenue (RMB ‘000) 293,595 365,695 288,638 269,0 271,28 2Q ™ 2009 2010 2011 3Q xe 311,343 4Q
Slide 31: Gross Profit and Margin
GROSS PROFIT AND MARGIN . 9 % 4 +4 31
Slide 32: Net Profit and Margin
NET PROFIT AND MARGIN . 3% + 46 32
Slide 33: Healthy Financial Position
HEALTHY FINANCIAL POSITION (RMB’000) As at 30 Sep 2011 As at 31 Dec 2010 Total assets 1,627,426 1,262,737 ‐ Cash & bank balances 77,176 62,102 ‐ Inventories 330,966 256,368 ‐Trade receivables 450,154 370,988 ‐ Property, plant and 478,487 431,996 equipment Total liabilities 704,879 436,603 ‐ Trade pa
Slide 34: Turnover Days
TURNOVERDAYS @ 25 2007 2008 2009 2010 9M2011 —Inventory Turnover — Accounts Receivables — Accounts Payables §—Cash Conversion Cycle 34
Slide 35: Order Book Trend
ORDER BOOK TREND Order Book (RMB ‘Million) 280 270 1/15/2011 2/16/2011 428 4/25/2011 254 8/5/2011 @ =e 287 11/7/2011 35
Slide 36: Continued Dividend Payout
CONTINUED DIVIDEND PAYOUT RMB’000 Cash and Bank Balance Dividend Amount FY2010 62,102 47,500 FY2009 56,995 60,000 FY2008 43,048 ‐ FY2007 32,210 ‐ 36
Slide 37: Investment Merits
INVESTMENT MERITS ¾ China’s top 3 largest integrated manufacturer of precision metal stamping machines ¾ Proxy to PRC’s booming auto parts and home appliance markets ¾ The four‐pronged strategies to further boost the Group’s profitability ¾ Stable return with high dividend payout 37
Slide 38: Thank You
THANK YOU Contact Details: Samuel Ng CFO, World Precision Machinery Limited Tel: (65) 8180 2482 Email: saisamuelng@hotmail.com Yibing Tang / Kamal Samuel / Kathy Zhang IR Consultant, Financial PR Pte Ltd Tel: (65) 6438 2990 Email: staff@financialpr.com.sg 38
Slide 39: Appendix
APPENDIX 39
Slide 40: Trade Show & Exhibition Participated in 2010
TRADE SHOW & EXHIBITION PARTICIPATED IN 2010 ¾ The 10th China International Machine Tool Exhibition (中国国际机床工具展览会)at Beijing, June 2010 ¾ The 9th China International Equipment Manufacturing Expo (中国国际装备制造业博览会 ) at Shenyang, September 2010 ¾ 2010 China International Industry Fair (2010中国国 际工业博览会) at S
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