Antelope Enterprise Holdings Limited · NASDAQ:AEHL
Antelope Enterprise — China Ceramics — Investor Presentation (March 2012)
30 slides from Antelope Enterprise's investor presentation, Mar 13, 2012
Slide 1: Investor Presentation March 2012
Investor Presentation March 2012
Slide 2: Safe Harbor Statement
China Ceramics - Overview Safe Harbor Statement 2 This presentation contains 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 Se
Slide 3: China Ceramics - Overview
China Ceramics - Overview » Founded as Jinjiang Hengda Ceramics in 1993 » Manufactures six different types of ceramics tiles used for exterior siding » Ceramic tile market growth correlates with the strong urbanization and construction trends in China » Plant capacity to increase by 90% to 72 MM squ
Slide 4: Equity Snapshot
China Ceramics - Overview Equity Snapshot 4 NasdaqGM : CCCL FYE: Dec. 31 Revenue (FY2011 ) $231.4 MM Fully Diluted EPS ( FY2011) $2.24 Net Income (FY2011) $ 45.7 MM Debt (December 31) $29.4 MM Cash (December 31) $6.7 MM Market Capitalization $76.5 MM Primary Shares Outstanding* 20.4 MM Price (3/7/12
Slide 5: Corporate History
China Ceramics - Overview Corporate History Founded in 1993 as a manufacturer of outdoor ceramics tiles in Jinjiang, Fujian Province Received the certification of ISO9002, ISO9001 and ISO14001 in 1999; Gradually built up brand reputation Introduced state - of - the - art equipment from abroad; recen
Slide 6: Investment Highlights
China Ceramics - Overview Investment Highlights 6 1 Prominent manufacturer of exterior ceramic tiles Intent upon capitalizing upon China’s urbanization trend A 90% increase in plant capacity since 2010 enables capture of market share Favorable government policies stimulate demand in Tier II and Tier
Slide 7: Urbanization Trend Provides Underpinning to Real Estate Construction
» China’s total urban population reached 691 million in 2011 vs. 450 million in 2001 » The scale and pace of China’s urbanization trend is unprecedented: 219 cities of more than 1 million and an aggregate urban population nearing 1 billion are projected by 2025 » Tier I cities are expected to accoun
Slide 8: A Long-Term Trend of Strong Real Estate Growth in China
A Long - Term Trend of Strong Real Estate Growth in China 8 Forecast of Net Increase in Urban Residential Existing Residential Building Stock (2011 - 2020) Building Stock Chongqing 1,109 Poland 807 Chengdu 447 Greece 494 Zhengzhou 396 Portugal 424 Tianjin 389 Sweden 411 Beijing 350 Czech Rep. 369 Xi
Slide 9: Key Market Trends
China Ceramics - Overview Key Market Trends » Beneficiary of China’s long - term urbanization trend » Product trend – New outdoor ceramic tiles products are “Green”, lighter, heat insulating and noise - reducing » Potential of Tier II and III Cities • Much of the growth in China’s GDP is being drive
Slide 10: Competitive Landscape
China Ceramics - Overview Competitive Landscape » China’s outdoor ceramics tile industry is highly fragmented with hundreds of manufacturers » More than 200 manufacturers are located in Jinjiang, with a combined annual production volume of 70% of China’s total production volume » Others are mainly l
Slide 11: Comprehensive Product Suite
Comprehensive Product Suite Ultra Thin 4% of Sales Porcelain 68% of Sales Glazed 8% of Sales Glazed Porcelain 4% of Sales Rustic 14% of Sales The company has over 2,000 size and color combinations 11 Wide array of standardized and made - to - order products Polished Glaze 2% of Sales
Slide 12: Research & Development
Research & Development 12 » R&D is an integral component of the Company’s culture and a key to its competitive advantage » The 85 person team has developed over 2,000 types of different product combinations » Awarded a Top 500 Enterprise and a top 100 Fast Growing Enterprise by the China Building Ma
Slide 13: Modern Production Lines Ensure High Quality
Molding Raw Material Inspecting Modern Production Lines Ensure High Quality Mixing & Grinding Spray Drying Glazing Firing 13 Plant’s ISO 9001:2000 accreditation signifies high quality control processes
Slide 14: Established and Loyal Customer Base
China Ceramics - Overview Established and Loyal Customer Base » 89% of products sold to 40 exclusive domestic distributors and 6 international distributors » 11% of products sold directly to larger real estate developers via own sales force » The top ten customers have purchasing from CCCL over 10 y
Slide 15: Sales Process
Sales Process Meet / Introduction to customers Discuss design and product specifications Sign contracts Delivery After - sales service » Excellent communication between our sales force and distributors avoids overlapping of sales » Distributors required to make monthly reports on customer requiremen
Slide 16: Selected Hengda Projects
China Ceramics - Overview Selected Hengda Projects 210,000 sq. meters Chengdu Kanjun Garden China Resources Land Limited Lanxi Town The 11th National Games Village 100,000 sq. meters 95,000 sq. meters Hangzhou Redbud Garden 53,000 sq. meters Xiamen Blue Gulf Peninsula Shenyang Institute of Aeronauti
Slide 17: Stable Supplier Base
Stable Supplier Base Raw Material % of COGS # of Suppliers Clay 28 11 Coal 21 8 Coloring 19 8 Glazing 5 4 » Clay and coal are the two major raw materials for tile production, accounting for 48% of COGS » Over 10 years’ cooperation with key suppliers ensures on - time supply and reasonably stable pri
Slide 18: Sustainable Gross Margins
Sustainable Gross Margins » Continued steady demand – backlog and channel checks indicate a steady pace of new construction projects. » Customized product – nearly all production is built to order for specific projects. » High quality manufacturing – ISO certified; international manufacturing equipm
Slide 19: Plant Expansion and Fully Funded Capital Expenditures
Plant Expansion and Fully Funded Capital Expenditures (All Capacity figures in Square Meters) Hengda Hengdali Total Capacity as of Dec. 2010 28.0 M 10.0 M 38.0M 2010 and 2011 Capacity Expansion 14.0 M 20.0 M 34.0 M 2012 Capacity (in Aggregate) 42.0 M 30.0 M 72.0 M Targeted Utilization Timeline Q3 /
Slide 20: Growth Strategy
Growth Strategy Key focus is to ramp market share domestically and to exploit market opportunities abroad 20 » Continue to capitalize upon strong brand awareness » Utilize the near doubling of production capacity » Reach new markets – new Gao’an facility extends reach while reducing costs » Continue
Slide 21: Robust Revenue Growth
FYE: Dec 31 (USD In millions) Robust Revenue Growth 21 For statements of financial position data, translation of RMB into U.S. dollars has been made using historic spot exchange ra tes published by www.federalreserve.gov. For statements of comprehensive income data, translation of RMB into U.S. doll
Slide 22: Strong Financial Margins
Strong Financial Margins Planned reduction in OEM outsourcing and increased capacity should continue to improve margins 22 19% 22% 23% 25% 30% 31% 29% 33% 34% 0% 5% 10% 15% 20% 25% 30% 35% 40% Q3, 2011 Q4, 2010 Q4, 2011 Net Profit Profit Before Tax Gross Margin
Slide 23: Strong Balance Sheet
Shareholders’ Equity 189.7 133.7 Debt 29.4 14.7 Cash 6.7 39.9 (USD, in millions) As of Dec 31 2011 2010 Strong Balance Sheet Total Working Capital 49.8 62.7 Days Sales Outstanding 119 95 23 ROAE 28% 25% Inventory Turnover 73 73 As of Dec 31
Slide 24: Capital Markets: Key Differentiators
Capital Markets: Key Differentiators Management CEO founded the company and is a well - known industry expert CFO an English - speaking CPA formerly at Deloitte Touche Strong fundamentals, 30% revenue CAGR, 28% ROE, net margins of 20%+ Oversight Independent Board directors with prominent business ba
Slide 25: Purchase Agreement Pay-Out
China Ceramics - Overview Net Income Target (US$ in million) Implied Growth Shares Released to Seller 2009 22.3 1,214,127 on 5/26/10 2010 31.4 ~ 40% 1,794,800 on 4/7/11 2011 43.5 ~ 40% (a) Purchase Agreement Pay - Out An additional 3 million shares are held in escrow based upon stock price targets:
Slide 26: Management Team
Edmund Hen CFO Peizhi Su Sales Deputy GM & Director Jiadong Huang CEO » Lawyer at Fujian Minrong Law Firm from 2005 to 2007 » Graduated from the School of Law of Xiamen University » Also a Director of the Company » Former CFO of a Sichuan switchgear manufacturer and accountant for Dickson Concepts L
Slide 27: Board of Directors
Cheng Yan Davis Ding Wei Dong Paul K. Kelly Non - Executive Chairman » Was a Partner at Pricewaterhouse Coopers and has over 36 years of experience in public accounting with clients in a wide variety of industries » On Board of Directors of Fox Chase Cancer Center in Philadelphia and the Visiting Nu
Slide 28: Summary Investment Thesis
China Ceramics - Overview Summary Investment Thesis □ China Ceramics is a key competitor in a highly fragmented space □ Plant expansion and a near - doubling of production will enable more competitive market positioning □ Sustainable advantages due to capacity expansion, R&D, exclusive distributor r
Slide 29: Appendix: Corporate Structure
China Ceramics Co. Ltd. (CCCL:NASDAQ) (BVI) Nov 2009 Success Winner Limited (BVI) May 2009 Stand Best Creation Limited (HK) Jan 2008 100% On - shore: PRC Off - shore WOFE Nov 2009 Jinjiang Hengda Ceramics Co., Ltd. Sep 1993 100% 100% Jun 2009 Appendix: Corporate Structure Former SPAC: China Holdings
Slide 30: Contact Information
China Ceramics - Overview China Ceramics Co. Ltd. CCG Investor Relations Edmund Hen, CFO Email: info@cceramics.com David Rudnick Tel: (1) 646 626 4172 Email: david.rudnick@ccgir.com SEC Attorney Auditors Loeb & Loeb Mitchell Nussbaum, Partner Tel: (1) 212 407 4159 Email: mnussbaum@loeb.com Giovanni