China High Speed Transmission Equipment Group Co., Ltd. · HKEX:658
China High Speed Transmission Equipment — FY2007 Earnings Presentation
32 slides from China High Speed Transmission Equipment's earnings presentation, Apr 21, 2008
Slide 1: 2007 Annual Results Presentation
2007 Annual Results Presentation 21 April 2008 0
Slide 2: Disclaimer
Disclaimer The presentation is prepared by China High Speed Transmission Equipment Group Co., Ltd. (the “Company”) and is solely for the purpose of corporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit an offer to buy or to form any b
Slide 3: Agenda
Agenda 1 2007 2007Results ResultsReview Reviewand andAnalysis Analysis 2 2007 2007Operational OperationalReview Review 3 Industry IndustryOutlook Outlook 4 Future FutureProspect Prospect 5 QQ&&AA 2
Slide 4: 2007 Results Review and Analysis
2007 Results Review and Analysis 3
Slide 5: Financial Highlights
Financial Highlights Remarkable Growth in Net Profit Attributable to Equity Holders For the year ended 31 December RMB MM 2006 2007 % change Turnover 1,184.3 1,904.8 60.9 Gross Profit 340.8 553.1 62.3 Core EBITDA 216.0 355.7 64.7 Core EBIT 155.4 262.4 68.9 Net Profit Attributable to Equity Holders 8
Slide 6: Revenue Analysis
Revenue Analysis As a leading supplier of gear transmission equipment, the Company’s total revenue substantially increased by 60.9% from 2006-07 Revenue Breakdown by Business Segment Traditional Gear 2006 2007 change in revenue Transmission Equipment (% to total revenue) (%) High-Speed Gear 1.5 1.5
Slide 7: Wind Revenue Analysis
Wind Revenue Analysis 2006 2007 change of Revenue Breakdown by Products revenue (% to total revenue) (%) RMB MM 2MW Gearbox 0 1.0 N.A 717 % 25.8 600 1 th= ow 289 550 Gr 1.0, 1.3, 1.5MW 12.6 40.3 620.0 500 Gearbox 450 400 350 318 750kW Gearbox 65.8 42.8 46.8 300 40 307 250 200 Yaw Motor & Drive 16.2
Slide 8: Gross Profit Analysis
Gross Profit Analysis change 2006 2007 of GP Gross Profit Breakdown by Business Segment Traditional Gear Equipment (% to total GP) (%) High-Speed Gear 1.8 2.8 142.6 RMB MM 700 Gear for Rolling 27.7 18.2 7.0 600 .3% 553 t h=62 15 w Gear for Construction 18.4 19.5 72.4 500 Gr o 101 General Purpose 400
Slide 9: Gross Margin Analysis
Gross Margin Analysis Wind Gear Gear for Rolling Gear for Construction General Purpose Gear 30% 26.7% 27.5% 40% 34.4% 40% 50% 32.6% 32.1% 30.0% 40% 35.8% 30% 35.1% 30% 20% 30% 20% 20% 20% 10% 10% 10% 10% 0% 0% 0% 0% 2006 2007 2006 2007 2006 2007 2006 2007 High-Speed Gear Marine Gear Others Total 60%
Slide 10: Balance Sheet
Balance Sheet Net Debt / Total Cap Net Debt / Equity 100% 96.5% 90% 80% 70% 60% 50% 40% 22.9% 30% 20% 10% 0% -10% 2006 2007 -20% 2006 2007 -30% -40% -25.1% -50% -38.6% (3) Interest Coverage Ratio (1) Cash-on-hand RMB MM 12 10.8 1,800 1,693 10 (2) 1,500 8 7.3 1,200 6 900 4 600 389 2 300 0 2006 2007 0
Slide 11: Working Capital
Working Capital A/R Days A/P Days Days Days 150 130 250 120 200 184 88 146 90 150 60 100 30 50 0 0 2006 2007 2006 2007 (1) Inventory Days Net Working Capital Days RMB MM 2006 2007 200 1,600 1,443 160 134 125 1,300 120 1,000 80 700 40 400 0 100 2006 2007 (200) (135) Note 1.Net working capital=current
Slide 12: 2007 Operational Review
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Slide 13: Newly Acquired Wind Gear Customers
Newly Acquired Wind Gear Customers The Company has acquired 13 new wind gear customers in 2007 Both International Customers No. of customer and Domestic Customers included: with firm orders 30 28 27 25 24 20 19 15 10 6 5 3 0 2005 2006 2007 2008E 2009E 2010E 12
Slide 14: Wind Gear Sales
Wind Gear Sales Turnover of Wind Gearboxes 2MW 1.0, 1.3, 1.5 MW 750kW Yaw Motor Pitch Gearbox Gearbox Gearbox and Drive RMB MM RMB MM RMB MM RMB MM RMB MM 20.0 400 350 200 100 % 46.8 ro wth= G 180 90 350 0% 300 620. wth= 16.0 Gro 160 80 300 250 140 70 .3% th=66 w 12.0 250 120 Gro 60 200 7% 200 100 5
Slide 15: Wind Gear Production
Wind Gear Production Number of Wind Gearboxes Produced 2MW 1.0, 1.3, 1.5 MW 750kW Yaw Motor Pitch Gearbox Gearbox Gearbox and Drive Units Units Units Units Units 1,000 6,000 5,000 7.0 500 5.2% 8.3% w th=53 th=5 G ro Gro w 4% 0% 450 900 th=152. 4,500 th=228. 6.0 G row G row 5,000 400 800 4,000 5.0 35
Slide 16: Newly Acquired Traditional Gear Customers
Newly Acquired Traditional Gear Customers The Company has acquired 16 new traditional gear customers in 2007 No. of customer with firm orders 100 80 74 74 60 57 41 40 23 20 0 2005 2006 2007 2008E 2009E 15
Slide 17: Traditional Gear Production
Traditional Gear Production Traditional Turnover of Traditional Gear Equipment High Speed Gear for Gear for General Others Gear Rolling Construction Purpose Gear RMB MM 400 85.3 % ro wth= G % 350 =1.5 r o wth G 300 0.6% wth= Gro 250 200 3.5% 362 wth= Gro 294 150 289 223 222 100 195 144 % 139 62.8 ro
Slide 18: Overseas Market Expansion
Overseas Market Expansion Overseas Overseas Revenue Contributions 25% Europe China US Japan 20% India 16.5% 15% 11.7% 10% Currently, the customer base of exports of the Company extends to the US, India, Japan and Europe 5% Export sales mainly consisted of the exports of gear transmission equipment f
Slide 19: Leadership Position in the Domestic Market
Leadership Position in the Domestic Market While the Company is expanding the overseas market share, CHST is still focused on maintaining the position as China’s NO.1 wind gear equipment provider 2007 newly installed wind turbines in China manufactured by domestic 2007 customer share in China (1) ma
Slide 20: Cost Analysis
Cost Analysis Breakdown of Cost of Goods Sold Price Trend of Raw Materials RMBMM RMB/ton 11,000 10,277 1352 10,000 844 2% 9,177 9,078 11% 9,000 8,470 2% 31% 11% 5% 4% 27% 8,000 17% 7,000 20% 6,000 5,505 4,852 36% 35% 5,000 4,226 4,257 4,782 2006 2007 4,000 4,354 3,850 (1) 3,000 Other raw material Ca
Slide 21: Certificates and Awards
Certificates and Awards During 2007, we proudly obtained…. ISO ISO 13281328-1:1995 and ISO1328-2:1997 The ISO system of accuracy and are international standards relating to the limits and fits for cylindrical gears ISO ISO14001 environmental management system certification 20
Slide 22: Industry Outlook
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Slide 23: Flourishing Global Wind Market
Flourishing Global Wind Market Rapid Growth in Wind Power Demand has Led to Capacity Ramp-up Cumulative Installed Capacity (MW) 287,940 237,155 Europe 2007: 56,824MW Americas 2012E: 129,489MW 192,320 2007: 19,391MW 2012E: 75,891MW 152,865 8. 4% Asia G R: 2 120,570 2007: 13,973MW E CA 2 2012E: 67,548
Slide 24: The PRC Government Has Set Aggressive Targets To Grow Wind Capacity
The PRC Government Has Set Aggressive Targets To Grow Wind Capacity Historical and PRC Government’s Target of Wind Power Installed Capacity MW 70,000 70,000 60,000 .7 % 50,000 = 20 0E 02 7–2 0 40,000 R 20 G CA 30,000 .5 % 000–2 007=50 CAGR 2 20,000 10,000 10,000 6,050 2,604 469 567 764 1,260 346 402
Slide 25: The Eleventh Five-Year Plan Has Favorable Policies To Accelerate Wind Power Development
The ““Eleventh Eleventh Five-Year Plan Five-Year ” Has Favorable Plan” Policies To Accelerate Wind Power Development Enhance the development of wind power equipment sector Increase competitiveness Improve the wind of wind power equipment relative to other The PRC technology power generation governme
Slide 26: The Fast Growing Total Wind Power Capacity In China
The Fast Growing Total Wind Power Capacity In China Total Wind Power Wind Power Turbine Wind Power Component Capacity Manufacturing Capacity Manufacturing Capacity MW MW MW 15,000 10,000 8,000 12,000 8,000 6,000 9,000 6,000 4,000 (1) 6,000 4,000 8,000 (1) (1) 10,000 5,000 (2) 2,000 3,000 6,050 2,000
Slide 27: Future Prospect
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Slide 28: Company Development Outlook
Company Development Outlook Solidify • To develop wind gear transmission equipment of 2.5MW and 3MW Position as • To increase the production capacity of wind power equipment to 3,500 MW in 2008 Leader of Wind • Partnership with GE to expand the joint development and manufacture of wind gear Gear Equ
Slide 29: Partnership With GE: Great Success On Development On Wind Gear Box
Partnership With GE: Great Success On Development On Wind Gear Box Cooperation with GE on the development of the 1.5MW wind power gearbox product is a huge success: According to the data of the performance test, all the results has exceed the performance of the same type of machine in Europe The des
Slide 30: Partnership With Alstom & ZF Company: Expand Rail System & Marine Business
Partnership With Alstom & ZF Company: Expand Rail System & Marine Business Cooperation with ZF Company to Entered into a development develop transmission equipment support service agreement with for large vessels and hydraulic Alstom for mechanical paddle (CPP paddle) transmission equipment for Inve
Slide 31: Q&A
(f CP LEG rey 28 1 8 ok fi Bl A PR ZS ol China High Speed Transmission Equipment Group Co., Ltd. Q&A
Slide 32: Thank You
Thank You Investor Relations Contact www.chste.com 31
China High Speed Transmission Equipment Group — FY2007 Earnings Presentation on 6ix