Singapore Exchange Ltd. · SGX:S68

Singapore Exchange — China Minzhong Food — Q2 FY2013 Earnings Presentation

25 slides from Singapore Exchange's earnings presentation, Feb 14, 2013

  1. Slide 1: China Minzhong Earnings Presentation 2Q FY2013

    China Minzhong Earnings Presentation 2Q FY2013 14 Feb 2013

  2. Slide 2: Agenda

    Agenda Financial Performance Review Outlook & Growth Strategies Q&A 1

  3. Slide 3: Results Highlights for 2QFY2013

    Results Highlights for 2QFY2013 Cash and Net cash operating equivalents cash flow up increased Net profit from RMB384 rose 23.8% RMB10mln mln YoY Gross to margin RMB352mln stable at 36.5%. Revenue jumped 32.3% 2

  4. Slide 4: Income Statement Highlights

    Income Statement Highlights Financial Summary (Profitability) 6 months ended 31 Dec 3 months ended 31 Dec (RMB’million) 1H FY13 1H FY12 % Change 2Q FY13 2Q FY12 % Change Revenue 1,474.3 1,012.2 45.7% 860.9 650.8 32.3% (1) Processed business 925.5 600.1 54.2% 574.2 446.0 28.7% Cultivation business(2)

  5. Slide 5: Notes on Income Statement (2Q analysis)

    Notes on Income Statement (2Q analysis)  Notes on gross margin  Gross margin for the Cultivation business segment recorded a y-o-y increase of 5.2ppt to 47.6%, on the back of improved farmland yield and the Group’s continued shift towards higher value products.  Gross margin for the Processed bus

  6. Slide 6: Revenue Growth continued

    Revenue Growth continued … Processed Business Sales Cultivation Business Sales 3,000.0 2,569 2,500.0 1,929 Revenue (RMB’ million) 2,000.0 38.4% 1,423 1,474 1,500.0 31.0% 61.6% 1,058 32.3% 69.0% 1,012 1,000.0 37.2% 31.6% 67.7% 40.7% 62.8% 500.0 68.4% 59.3% 0.0 FY09 FY10 FY11 FY12 1H FY12 1H FY13 1H a

  7. Slide 7: 2Q revenue growth across all business segments

    2Q revenue growth across all business segments… 600 882760-001 516.2 Revenue (RMB ‘mil) 500 419.4 400 300 266.3 200 141.1 100 63.7 58.0 20.4 26.6 0 2Q13 2Q12 2Q13 2Q12 2Q13 2Q12 2Q13 2Q12 Fresh Other Mushroom 68% Processed vegetables 89% 23% processed 118% spores vegetables produce products  Cultiv

  8. Slide 8: Segmental Revenue by Proportion

    Segmental Revenue by Proportion Mushroom Mushroom spores 2QFY13 spores 2QFY12 2.4% 9.8% Fresh Fresh vegetables vegetables Processed produce 21.7% Processed produce vegetables vegetables 30.9% 60.0% 64.4% Others 4.1% Others 6.7%  Increasing proportion of sales contribution from fresh vegetables prod

  9. Slide 9: Segmental Gross Profit by Proportion

    Segmental Gross Profit by Proportion 2QFY13 Mushroom 2QFY12 Mushroom spores spores 4.1% Fresh 1.1% vegetables produce Fresh 42.3% vegetables Processed Processed produce vegetables vegetables 32.3% 63.9% 52.0% Others Others 4.6% -0.3%  Increasing proportion of gross profit contribution from fresh ve

  10. Slide 10: ASP and Sales Volume Breakdown

    ASP and Sales Volume Breakdown 882760-001 1HFY13 1HFY12 % 1HFY13 1HFY12 % ASP/ RMB ASP/ RMB Change Sales Sales Change per kg per kg volume/ volume/ ‘000 tonnes ‘000 tonnes Processed vegetables (1) 33.02 32.19 2.6% 22.9 17.2 33.5% Fresh vegetables produce 3.68 4.18 (12.0%) 124.4 71.1 74.9% (1) The AS

  11. Slide 11: Revenue breakdown (top vegetable types)

    Revenue breakdown (top 5 vegetable types) Vegetable Type % Revenue % Revenue % Revenue Remarks Contribution Contribution Contribution (1HFY13)* (1HFY12)* (FY12)* Black fungus 13.3% 14.8% 11.7% One of Group’s high value crop. Champignon mushrooms 13.2% 18.6% 25.3% Percentage contribution expected to

  12. Slide 12: Financial Summary: Balance Sheet Highlights

    Financial Summary Balance Sheet Highlights As at 31 December 2012 As at 30 June 2012 (RMB’million) (unaudited) (audited) % Change Total Assets 4,986.5 4,587.5 8.7% Non-current assets 2,996.0 2,928.3 2.3% Property, plant and equipment 1,983.6 1,832.0 8.3% Land use rights 125.1 126.5 (1.1%) Land impro

  13. Slide 13: Notes to Balance Sheet

    Notes to Balance Sheet Assets  Inventory level moderated from RMB104.1 million to RMB71.6 million due to faster turnaround as the Group steps into its operating peak season.  Despite higher revenue recognized in the financial period, trade receivables level decreased from RMB967.1 million to RMB91

  14. Slide 14: Receivables and Inventory Aging Profile

    Receivables and Inventory Aging Profile 882760-001 Receivables (as at end Dec 2012 – RMB913.9 mln)  83% of receivables are attributed to sales recognized in RMB12 mln Current 2QFY13. RMB146 mln  99% of our overdue receivables belong to long-term standing customers who have yet to default on any pa

  15. Slide 15: Financial Summary: Cash Flow Highlights

    Financial Summary Cash Flow Highlights For 6 months ended 31 Dec For 3 months ended 31 Dec 1HFY13 1HFY12 % Change 2QFY13 2QFY12 % Change (RMB’million) Net cash from operating activities 578.4 132.6 336.2% 352.1 10.4 3293.6% Net cash generated from/ (used in) (167.3) (326.4) (48.8%) (139.8) (162.5) (

  16. Slide 16: Key Financial Indicators

    Key Financial Indicators Key Financial Indicators For 12 months ended 31 Dec 2012 30 Jun 2012 (unaudited) (audited) Working Capital Days Trade Receivable Turnover Days (1) 86 85 Trade Payable Turnover Days (1) (38) (35) Inventory Turnover Days (1) 28 26 Cash Conversion Days 76 76 Liquidity Ratios To

  17. Slide 17: Agenda

    Agenda Financial Performance Review Outlook & Growth Strategies Q&A 16

  18. Slide 18: 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

  19. Slide 19: 10th consecutive year No. 1 central document focuses on rural issues

    10th consecutive year in which the “No. 1 central document” focuses on rural issues 882760-001  1st policy document for 2013, issued by the Central Committee of the Communist Party of China and the State Council highlights the importance of accelerating modern agriculture and rural development.  T

  20. Slide 20: 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

  21. Slide 21: Farmland Maturity Profile

    Farmland Maturity Profile 27,961 mu Industrialized 59,507 mu Industrialized 59,507 mu Industrialized farming farming farming 100% – 70 mu – 120 mu – 280 mu 6.4% (0.20%) 90% (0.25%) (0.47%) 37.1% Became 80% 37.3% Approx. productive only 70% 42.1% 56% of in 3Q/ 4Q, farmland averaging Land Area (mu) 60

  22. Slide 22: Increasing Cultivation Yield

    Increasing Cultivation Yield 882760-001 20.0 Overall yield per mu Increasing yield per mu (RMB per mu) over the years due to: 17.6  Group’s continued shift towards higher value products. (RMB’000 per mu) 18.0  Maturing farmland profile Yield per mu 16.0 14.1 12.9  Increased focus in industrialize

  23. Slide 23: Expanding industrialized farming footprint across PRC

    Expanding industrialized farming footprint across PRC King oyster mushroom cultivation capacity Advantages of industrialized farming  Ability to grow vegetables even during off-peak seasons when local climatic conditions are not Shanghai capacity Tianjin capacity conducive. Capacity (ton s/ Cu ltiv

  24. Slide 24: Agenda

    Agenda Financial Performance Review Outlook & Growth Strategies Q&A 23

  25. Slide 25: Investor Relations Contact

    Investor Relations Contact China Minzhong Food Corporation Limited Dave Tan, Investor Relations Manager Tel: +65 6346 7506 Mobile: +65 9839 0350 Email: dave@chinaminzhong.com Website: www.chinaminzhong.com.sg

China Minzhong Food — Q2 FY2013 Earnings Presentation on 6ix