China Carbon Graphite Group, Inc. · OTC:CHGI
China Carbon Graphite — Investor Presentation (February 2011)
30 slides from China Carbon Graphite's investor presentation, Feb 17, 2011
Slide 1: China Carbon Graphite, Inc Investor Presentation
China Carbon Graphite, Inc OTC BB: CHGI Investor Presentation February 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our comments may contain 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 1
Slide 3: Company Profile
Company Profile History: Founded in 1986 as a state-owned carbon graphite manufacturer Converted to a private enterprise in 2001 December 2007 Listed on US exchang Business: Manufactures carbon and graphite based products in China, The largest wholesale supplier of fine grain and high purity graphit
Slide 4: Investment Highlights
Investment Highlights Leading Market Position Increasing Market _ Demand f Sound Reputation Chinese leader fe grain graphte products "Copnenented ecnnologies bt ean gener curing which requires the most ‘can genarats SoM grace proft margin. on products J2e) 400 mme damater righ purly graphite product
Slide 5: Investment Highlights Cont.
Investment Highlights Cont. >) cumemecmmemcmecaen | Sees | fehierecirespareiGicres, + Received patent protection on 1,700-T ACM gear Chaee om wera eoen + Owns patentfor high-density high strength | same period of2008, a a a ae Noms 200s 1 00445487 cheperinecenremeeecimre a CAT SPCR CCE RG Se MMMM bc
Slide 6: Graphite's Unique Properties
Graphite’s Unique Properties Graphite is a soft steel-gray to black, hexagonally crystallized allotrope of carbon with a metallic luster and a greasy feel. Graphite’s varied characteristics make it a highly desirable material for industrial components and processes. Properties include High thermal r
Slide 7: Product Portfolio
Product Portfolio — Major Products: Graphite Electrodes Fine Grain Graphite High Purity Graphite Revenue Breakdown Electrodes =FineGrain ® High Purity
Slide 8: Graphitized Electrodes
Graphitized Electrodes Opportunities: > Worldwide total graphite electrode demand exceeds 1.15 million metric tons annually > General electrodes are consumed at a rate of one electrode every 8-10 hours; Graphitized electrodes are consumed at longer rate of 12-14 hours > Low end products consumable w
Slide 9: Fine Grain Graphite
Fine Grain Graphite - Opportuniti > Heavily used in defense and aerospace industry > Heavily used for non-ferrous metals smelting as well as for the manufacture of molds Demand of fine grain graphite is growing - Applications: ‘Aerospace and Defense industry: mold for airplane wing; rocket nose cone
Slide 10: High Purity Graphite
High Purity Graphite Opportunities > Heavily used in aviation, electronics, nuclear energy, the chemical industry, the automotive industry > There are annual 20,000 tons market needs for high purity graphite in China auto industry > ‘The price of imported high purity graphite for auto spark is up to
Slide 11: Company Advantages
Company Advantages Company's Advantages ) ‘@Capable of manufacturing large size of electrodes. ‘@Focus on producing large size ultra-high electrodes which has as high as 30% gross profit margin, ‘ls the first producer capable of producing 750+ mm diameters ultra-high electrodes upon completion of th
Slide 12: Advanced Machinery
Advanced Machinery 1,700-T double-sided molding machine : China Carbon is only ‘one with patent in china. 4,200 tons extrusion machine: the largest in Chi 16,600 KAV graphiti ‘one in china who has suc! 35 capacity of graph In order to extend its product category to isostatic graphite, the company, i
Slide 13: Production Process
Production Process Phase Motaing Phase | ‘Sipping Baking Graphitization _Seuuuutel>| Finished Goods The production process for all grades of graphite involves three basic steps which can require as long as six months for completion. »The more refined or pure the graphite is, the longer is the produc
Slide 14: Environmental Protection
Environmental Protection Pharmaceutical Technology| tT Pump Filled with Graphite it Graphite Tube to Absorb Neutrons Graphite Artificial Heat Valve Example applications s Equipment Appliances: “== Mechanical Engineering | | Glass & Ceramics Sealing Technology Plastics ‘Too! Manufacturing Constructio
Slide 15: Example applications
Example applications ‘Automotive Racing Sports ‘Sports Equipment n and Stee! High-temp Technology tT Graphite Electrodes Graphite Brake Disk Graphite Golf Shaft Satelite Technology ‘Aerospace, Defense Marine Technology Graphite Mold for Airplane Wing Graphite Rocket Nozzle Graphite Bearings Nuclear
Slide 16: Sales & Marketing
Sales & Marketing © Sell primarily through distributors © Over 200 customers in 22 provinces in China © Diversified overseas markets, such as Japan, the United States, Canada, Britain, Germany, South Korea, India, Pakistan, Iran, Venezuela, Nicaragua, Ukraine, Georgia, Nigeria and Taiwan China @ Top
Slide 17: Strong R&D
Strong R&D @ 36 technical employees engaged in research and development @ One Chinese patent, Patent No IL: 2004 1 0044348.7, for high-density, high strength and wear-resistant graphite material @ Technology cooperation agreement with Hunan University, the only university in China that offers a majo
Slide 18: Environmental Management
Environmental Management pecerestrsy RRMA The company meets ISO9001 The company meets IS014000* F environmental management quality management standards jemi *_ 15014001 Is an internationally accepted specification for an environmental management system (EMS). Tt specifies requirements for establishi
Slide 19: Honors
Honors the “Top 10 High-Tech Enterprises in Inner Mongolia”, "Top 50 Private Enterprises in Inner Mongolia”, "National Hi-tech Enterprise." Of the 400 plus carbon graphite producers in China, China Carbon is the only non- state-owned company to receive this honor “Outstanding Private Enterprise of T
Slide 20: Equity Snapshot
Equity Snapshot Symbol: _ OTCBB:CHGI “Current Share Price $2 (as of 02-15-2011) Shares Outstanding: 20.16 million Float 10.7 million Revenue (3 Quarter): $10 million - Net Income (3 Quarter); $1.9 million Quarterly Growth Rate: 105 % Total Assets(Sept. 30,2010) $97 milion Total Liabilities(Sept. 30,
Slide 21: Financial Highlights
Financial Hghlionts (In thousands) Cost of Goods Sold Gross Prot Gross Margin Net Income Net Marg Earrings Per Share diluted) Welchied average luted shares culstanding Jmonths ended Sept. 302010 9 months ended Sept 302010 608 14348
Slide 22: Quarter Results
34 Quarter Results $9.97 million 5.58 million 78.80% $2.47 million S152 million 62.30% S1.9 million $0.94 million 100%. $0.06 50%
Slide 23: Recent development
Recent development First to develop fine grain graphite blocks with a length of 3500 mm - the largest size available in China's carbon market. Had bought additional 1000 m2 land in 2009 at a price of 10 times less than today’s market price, which not only provide sufficient land for future capacity
Slide 24: Growth Strategy
Growth Strategy ‘Doubling capacity from 30,000 tons to 60,000 tons Concentrating on the sales of higher margin producs, such as ute-high electrodes, fine grain and high purity graphite. Developing isostatic graphite, such as solar , semiconductor and nuclear graphite products. Integrating natural gr
Slide 25: Solar Graphite Opportunities
Solar Graphite Opportunities © Huge market shortage of Poly-Si silicon. © Over 95% of semiconductor appliances are made on the basis of silicon. @ Electronic industry consumes nearly 80% of globally produced Poly-Si silicon, annual growth is estimated at least 30%. Solar industry creates rocketing d
Slide 26: Nuclear Graphite Opportunities
Nuclear Graphite Opportunities Definition: is used as a moderator or reflector within nuclear reactors slow down neutrons to ‘make them more efficient in producing fission in the fuel Opportunities: > China has 13 nuclear power reactors in commercial operation, 27 under construction, and 50 planned
Slide 27: Nuclear Graphite Opportunities Cont.
Nuclear Graphite Opportunities Cont. Growth Potential and Strategy > The average price of nuclear graphite is 5x that of fine grain graphite, approximate RMB 100,000-200,000/MT (US $15,000 ~ 30,000/MT) » The company expects to start Nuclear Graphite production in 2012, and generate 2,000 MT in 2012
Slide 28: Management Team
Management Team @ —_ Denghai Yu, CEO and Director + Chief Financial Officer since November 2007 + Appointed as CEO to lead the company to execute the expansion plan in Nov. 2008 + MBA degree from Oklahoma City University. @ —_Zhenfang Yang, interim Chief Financial Officer + Since 2007, Mr. Yang has
Slide 29: Management Team
Management Team @ Philip Zhang, Independent Director, Chairman of the Audit Committee ¥ Chief Financial Officer of Universal Travel Group + More than 13 years of experiences in portfolio investment, corporate finance, and accounting + Certified Public Accountant, State of Delaware; Member of AICPA %
Slide 30: Professional Team
Professional Team: Auditor: BDO US. Legal Counsel: Kramer Levin Na Investor Relations: 1 ie Relations Contact: ‘A Group, LLC Kevin Fickle: kevin@nuwagroup.com Tel: 925-330-8315 Website: www.nuwagroup.com
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