E-commodities Holdings Limited · HKEX:1733
E-commodities — Winsway Coking Coal Holdings — IPO Roadshow (September 2010)
40 slides from E-commodities's IPO roadshow presentation, September 2010
Slide 1: Roadshow Presentation
ROADSHOW PRESENTATION WINSWAY COKING COAL HOLDINGS LIMITED September 2010
Slide 2: I. Company Introduction
I. Company Introduction
Slide 3: An Integrated Logistic Service Provider with Strategically Located Infrastructure
An Integrated Logistic Service Provider with Strategically Located Infrastructure 6
Slide 4: Our Mission and Vision
Our Mission and Vision Supplying a Scarce and Strategic Commodity for the Chinese Steel Industry Coking coal - a scarce and strategic asset for China’s future growth China China Became Became aa Significant Significant Coking Coking Coal Coal Importer Importer in in 2009 2009 Robust Robust Growth Gr
Slide 5: Our History
Our History A Growth Story Parallel with Soaring Demand of Coking Coal for China yC hina imp ort b oal ok i ng c u nt of c HOPU, China o g am Minmetals cr easin Commenced Corporation, Silver I n seaborne coal Grant and Itochu business and became our Commenced imported over 3 investors operatio
Slide 6: Our Market Position
Our Market Position One of the Leading Suppliers of Imported High-quality Coking Coal in China China’s China’s Coking Coking Coal Coal Import Import by by Year Year China’s China’s Coking Coking Coal Coal Import Import by by Origin, Origin, 2009 2009 (Mt) Mongolia 34.4 12% Canada 10% Russia 6.2 6.9
Slide 7: II. Our Business Model
II. Our Business Model
Slide 8: Our Business Model
Our Business Model Seven Core Constituents Our Our business business strategy strategy is is to to integrate integrate seven seven core core constituents constituents along along the the value value chain, chain, creating creating aa high high entry barrier for potential competitors entry barrier fo
Slide 9: #1 Border-crossing Facilities
#1 Border-crossing Facilities Limited Limited land land available available in in the the immediate immediate vicinity vicinity of of border-crossings border-crossings andand regulatory regulatory approvals approvals required required to to construct construct logistics park provide us with signific
Slide 10: #1 Border Crossings Facilities (Cont'd)
#1 Border Crossings Facilities (Cont’d) Near-term: Near-term: Additional Additional Future: Future: Additional Additional Border Border Border Border Crossings Crossings and and Crossings Crossings Today: Today: Two Two Border Border New New Border-crossing Border-crossing // Expansion Expansion ofo
Slide 11: #2 Railway Logistics Centres
#2 Railway Logistics Centres 中国铁道部 呼和浩特铁路局 Strategic Strategic Locations Locations Logistics Logistics Centres Centres Ancillary Ancillary Businesses Businesses Border crossings Jointly develop and operate Undertake bulk cargo —Ceke railway logistics centers to transshipment, storage and facil
Slide 12: #3 Railway Transportation Capabilities
#3 Railway Transportation Capabilities Local Local knowledge knowledge ofof Mongolian Mongolian and and Chinese Chinese transportation transportation industries, industries, augmented augmented by by strategic strategic relationship relationship with with Chinese railway authorities, enables us to c
Slide 13: #4 Coal Processing
#4 Coal Processing Main Main Raw Raw Coal Coal Source Source Target Target Markets Markets Ceke, Ceke, Urad Urad Inner Mongolia, Hebei, Zhongqi Zhongqi and and Mongolia and Shandong Jining Jining Provinces Inner Mongolia, Hebei, Manzhouli Manzhouli and and Russia Suifenhe and Shandong Suifenhe Provi
Slide 14: #5 Customer Service
#5 Customer Service We We have have built built aa network network of of premium premium clients clients through through consistent consistent delivery delivery of of high high quality quality products products and and we we have have also also entered entered long-term long-term strategic strategic
Slide 15: #6 Seaborne Coal and Related Facilities
#6 Seaborne Coal and Related Facilities Seaborne Seaborne coal coal business business broadens broadens our our product product offering, offering, diversifies diversifies our our sources sources of of coal coal supply supply and and adds adds blending blending alternatives alternatives Mining Minin
Slide 16: #7 Upstream Resources
#7 Upstream Resources Secured Secured Coking Coking Coal Coal Supply Supply Long-term Long-term Offtake Offtake Agreement Agreement // MOU MOU Mongolian coal sourced from key coal deposits in Time Period Volume Mongolia including Ovoot Tolgoi, Nariin Sukhait and Higher of 5.0 Mt per year Tavan Tol
Slide 17: #7 Upstream Resources (Cont'd)
#7 Upstream Resources (Cont’d) Strategic Strategic Investment Investment in in Upstream Upstream Assets Assets Exploration Licenses in South Gobi Peabody – Winsway In June 2010, we acquired 50% interest in Peabody-Winsway JV from Polo Resources The JV holds owns 50 coal-related mineral licenses
Slide 18: III. Financial Overview
III. Financial Overview
Slide 19: Our Scale and Growth
Our Scale and Growth Total Total Sales Sales Volume Volume Total Total Revenue Revenue (Mt) (RMB mm) 5.1 % % 4,656 .55% .11% 64 4,299 255. 199. % 4.3 % .6.6% .1.1% =442 =331 66 44 tthh= tthh= 2200 3388 RR== 2.9 = = oww oww R GG 2.0 GGR 2,834 2,329 GGrro GGrro CCAA CCAA 1.0 994 818 2.1 1.0 2.2 1,957
Slide 20: Diversified Customer Base
Diversified Customer Base Top Top Customer Customer Revenue Revenue Contribution Contribution Single Single Largest Largest Five Five Largest Largest (% of Total Revenue) (% of Total Revenue) 95.3% 91.1% 82.1% 56.7% 41.4% 33.0% 14.2% 9.7% 2007 2008 2009 1H2010 2007 2008 2009 1H2010 23
Slide 21: Our Margins
Our Margins COGS COGS Gross Gross Margin Margin (RMB mm) 92.3% 94.0% 44.4% 81.5% 181 112 36.5% 85.3% 83.4% 88 113 27.2% 25.7% 19.7% 3,515 3,152 12.4% 9.7% 37 78 32 66 15 1.5% 450 556 8 136 2007 2008 2009 1H2009 1H2010 2007 2008 2009 1H2009 1H2010 Cost of Materials Transportation Cost Cost of Materia
Slide 22: Our Margins (Cont'd)
Our Margins (Cont’d) Unit Unit Net Net Profit Profit Net Net Margin Margin (RMB/ton) 242 24.5% 124 12.3% 89 9.8% 7.9% 29 1 2007 2008 2009 1H2010 2007 2008 2009 1H2010 1 Note: Non-GAAP 1H 2010 net margin is 13.6%, excluding non-cash one-off expenses: ESOP, interest on liability component of convertib
Slide 23: Working Capital
Working Capital Inventory Inventory Turnover Turnover Days Days 247 164 66 57 2007 2008 2009 1H2010 A/R A/R Turnover Turnover Days Days A/P A/P Turnover Turnover Days Days 29 58 26 24 35 31 27 8 2007 2008 2009 1H2010 2007 2008 2009 1H2010 26
Slide 24: Credit
Credit Net Net Debt/Equity Debt/Equity Current Current Ratio Ratio 1.5x 1.4x 59.8% 58.5% 1.2x 1.2x 37.9% 24.1% 2007 2008 2009 1H2010 2007 2008 2009 1H2010 Net Net Debt/EBITDA Debt/EBITDA EBITDA/Interest EBITDA/Interest 88.4x 1.8x 1.4x 1.0x 0.7x 11.0x 20.8x 15.4x 2007 2008 2009 1H2010 2007 2008 2009
Slide 25: Capex and Use of Proceeds
Capex and Use of Proceeds Future Future Capital Capital Expenditure Expenditure Use Use of of Net Net Proceeds Proceeds (RMB mm) Working Capital and 1,607 General Corporate Purposes 10.0% Future Acquisition of Upstream Coal Resources 15.0% 925 Future Acquisition of, and Investment in, New Infrastruc
Slide 26: IV. Conclusion
IV. Conclusion
Slide 27: Growth Strategies
Growth Strategies Strengthen Strengthen our our leading leading market market position position in in supplying supplying Mongolian Mongolian coking coking coal coal through through further further 11 infrastructure infrastructure investments investments and and expansion expansion toto other other
Slide 28: Thank You Q&A
INSWAY> Thank You Q&A
Slide 29: Appendix I: Corporate Structure
Appendix I: Corporate Structure
Slide 30: Our Corporate Structure
Our Corporate Structure Pre-IPO Other Mr. Wang Investors¹ Shareholders² 67.82% 25.80% 6.38% Winsway WinswayCoking CokingCoal CoalHoldings HoldingsLimited Limited(BVI) (BVI) 100% 100% 100% 100% 100% 100% 90% 100% Winsway Winsway Winsway Coking Winsway Mongolian Reach Goal Winsway Logistics Winsway Co
Slide 31: Appendix II: Management Team
Appendix II: Management Team
Slide 32: Dedicated Management Team with Rich Experience and Outstanding Execution Capability
Dedicated Management Team with Rich Experience and Outstanding Execution Capability Name Position Time with Biography Winsway Responsible for formulating the overall business development strategies for our company and communication with key suppliers and customers of our group Chairman Xingchun Wang
Slide 33: Appendix III: Industry Overview
Appendix III: Industry Overview
Slide 34: Strong Fundamentals for Global Coking Coal Demand
Strong Fundamentals for Global Coking Coal Demand Outlook Outlook for for Steel Steel Industry Industry is is Strong… Strong… …Driving …Driving Coking Coking Coal Coal Consumption Consumption Estimated Global Steel Production 2004 to 2012 Estimated World Coking Coal Consumption (Mt) (Mt) 2004 to 201
Slide 35: Growth in Supply is Constrained by Infrastructure, Capital Funding and Lack of New Coking Coal Reserves
Growth in Supply is Constrained by Infrastructure, Capital Funding and Lack of New Coking Coal Reserves Major Major Coking Coking Coal Coal Supply Supply Routes Routes Global Global Coking Coking Coal Coal Market Market is is Expected Expected to to Grow Grow Estimated Coking Coal Exports by Key (Mt
Slide 36: Chinese Domestic Coking Coal Market Will Remain Structurally Short-Supplied
Chinese Domestic Coking Coal Market Will Remain Structurally Short-Supplied into Foreseeable Future China China Became Became aa Significant Significant Net Net Importer Importer in in 2009 2009 …Australia …Australia and and Mongolia Mongolia are are Expected Expected to to Be Be the the and is Expe
Slide 37: Mongolia – One of the Last Untouched Frontiers of Potential Coking Coal Supply
Mongolia – One of the Last Untouched Frontiers of Potential Coking Coal Supply Significant Significant Reserves Reserves Potential Potential Growing Growing Production Production Estimated Mongolian Coal Production 2004 to 2009 Recent surveys suggest that there are approximately 300 coal deposits
Slide 38: Russia – Large Reserve Base but Faces Infrastructure Challenges
Russia – Large Reserve Base but Faces Infrastructure Challenges Large Large Coal Coal Reserves Reserves Sizable Sizable Export Export Volume Volume Estimated Global Hard Coal Reserves (~411bt) Estimated Russian Coking Coal Exports 1990 to 2012 (Mt) 35 16% 30 .9 % 14% AG R=5 2, C 12% 25 1 Russia 9- 2
Slide 39: Appendix IV: Capex Breakdown
Appendix IV: Capex Breakdown
Slide 40: Capex Breakdown
Capex Breakdown (RMB million) Capital Expenditure Requirements Estimated Estimated Amount Spent Amount Estimated to Be Spent Commencement Completion Location Project Status Date Date (1H 2010) (2H 2010) 2011 2012 Railway Logistics Centers Gants Mod Railway logistics centre1 Planning /Joint venture c
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