Huadi International Group Co., Ltd. · NASDAQ:HUDI
Huadi International — IPO Roadshow (December 2020)
26 slides from Huadi International's IPO roadshow presentation, Dec 4, 2020
Slide 1: Huadi International Group: Leader in Stainless Steel Seamless Pipe Solutions
Huadi International Group Co., Ltd. LEADER IN STAINLESS STEEL SEAMLESS PIPE SOLUTIONS Issuer Free Writing Prospectus Dated December 4, 2020 Filed Pursuant to Rule 433 Relating to Preliminary Prospectus Dated November 25, 2020 Registration Statement No. 333 - 248919
Slide 2: Forward-Looking Statements
2 Forward - Looking Statements This presentation includes statements that are, or may be deemed, “forward - looking statements“ . In some cases these forward - looking statements can be identified by the use of forward - looking terminology, including the terms ”believes,” “estimates,” “anticipates,
Slide 3: Free Writing Prospectus Statement
3 Free Writing Prospectus Statement This free writing prospectus relates to the proposed public offering of ordinary shares of Huadi International Group Co . , Ltd . (the “ Company ” ) and should be read together with the Registration Statement filed by the Company with the SEC for the offering to w
Slide 4: Contents
4 Contents 1 2 3 4 Company Overview Financial Highlights Investment Highlights Growth Strategies 5 Industry Overview 6 Appendix 3
Slide 5: Preliminary Offering Summary
5 Preliminary Offering Summary 2 4 Issuer • Huadi International Group Co., Ltd. Listing / Ticker • NasdaqCM : HUDI Securities • Ordinary Shares Offering Type • Initial Public Offering (Firm Commitment) Base Offering • 3,125,000 Ordinary Shares Over - Allotment Option • 468,750 Ordinary Shares (15% o
Slide 6: A benchmark reference of stainless steel seamless pipes with 22 years of operation history
A benchmark reference of stainless steel seamless pipes with 22 years of operation history Exporting to 20 countries and regions worldwide Products widely used in oil and gas transmission, chemistry engineering, food processing and many other challenging applications United States, Mexico, Thailand,
Slide 7: Produces 3000 distinct pipe and tube products
Produces 3000 distinct pipe and tube products Leading maker of certain steel products ( e.g automotive 304L and 347H stainless steel pipes ) Cold drawn seamless (CDS) technique differentiates us from other steel pipe producers Product strength; leading industry scale; mature logistics & production f
Slide 8: Our Products Offerings: A Global Player in a Fast Growing Market
Our Products Offerings: A Global Player in a Fast Growing Market Oil & gas: widely used as key components of drilling, exploration and production processes of oil and natural gas, and used in the production equipment of by - products Other industries (chemistry, food): high product reliability & qua
Slide 9: Strong International Presence with Products Sold Worldwide
Strong International Presence with Products Sold to 20 Countries and Regions over the World During the past two years, average 34% of total sales generated from international markets U.S. and India account for 11% and 14% of total sales, respectively 8 Industry Position Content Company Industry Inve
Slide 10: Efficient operations, diversified market, rigorous quality control, experienced management
Efficient operations Diversified market & territory outreach Rigorous Quality Control Experienced Management Team • Significant scale and purchasing power • Lean manufacturing process, lower inventory levels, efficient change - overs and reduced customer lead times • Cost and production efficiency •
Slide 11: Numerous National and Province-Level Awards
1. Numerous National and Province - Level Awards, Reflect Widespread Recognition of Our Innovative Products, National - Recognized Reputation as Well as Success in Our industry • National top 3 steel manufacturer in 2008 and • top 10 seamless steel tube maker in 2013; • “Distinguished Reliable Enter
Slide 12: Extensive Customer Base and Rigorous Quality Management System
2. Extensive Customer Base and Implement A Rigorous Q uality Management System to Provide Clients with High - Quality and Reliable Products • 41 talents dedicating to product quality control system • Use three - tier of product quality testing system • The products manufactured has a pass rate of 99
Slide 13: Leading Scale and Network Ensure Efficient Cost Structure
3. Leading Scale and Network Ensure Efficient Cost Structure 1% 3% 6% 3% 7% 80% Freight Overhead (Fixed) Overhead (Variable) Direct labor SG&A Raw Materials We maintain the lowest cost structure via expanding our economies of scale and our connected network of facilities located in close proximity t
Slide 14: Experienced Management Team
• Chairman of the Board since Huadi Steel’s inception in 1998 • E xtensive experience in manufacturing and managing manufacturing plants • Senior management of three manufacturing plants prior to founding Huadi Steel in 1998 • Leader and member of many industry associations, including vice president
Slide 15: Independent Directors' Expertise Enhance Corporate Governance
5. Independent Directors’ Expertise in the Industries Enhance Our Corporate Governance Jiancong Huang Independent Director Chair of Nominating Committee Henry He Huang Independent Director Chair of Audit Committee • An Associate Professor of Accounting at Yeshiva University’s Sy Syms School of Busin
Slide 16: Growth strategies: sustaining growth in earnings and cash flows
Our primary objective is to create value by sustaining growth in earnings and cash flows from operating activities over various economic cycles Expand leading market positions ▪ We aim to continue enhancing operating leverage via offering new products and serving additional end markets and increasin
Slide 17: Dedication is Our First Priority to Implement the Business Strategies
Dedication is Our First Priority to Implement the Business Strategies We are dedicated to efficient manufacturing and cost management to offer high - quality product at competitive prices We are dedicated to maintain our close relationships with key suppliers and have invested in devising a smart sy
Slide 18: Products for a Wide Range of Applications Thanks to Strong Steel Demand from China
Products for a Wide Range of Applications Thanks to Strong Steel Consumption Demand from China China’s steel production grew by 9.9% in the first half of 2019 whereas rest of the world fell by 0.7% • Sizeable gap between China and rest of the world continues to grow and the contrast likely will rema
Slide 19: Steel Product Consumption in China Since 2011
Steel Product Consumption in China Since 2011 641 660 741 710 672 680 737 737 722 2011 2012 2013 2014 2015 2016 2017 2018F 2019F In Million Tonnes China’s steel consumption is of critical importance to the global steel market, accounting for 51% demand in 2018 • Construction sector , including the i
Slide 20: Sustained Profitability Though Impacted by the Covid Pandemic
Sustained Profitability Though Impacted by the Covid - 19 Pandemic R evenue Distribution USD thousand $5,248 FY 2 0 1 8 1H2020 FY 2 0 1 9 $2,040 $2,681 0.52 0.54 0.20 0.27 FY2018 FY2019 1H2019 1H2020 Net Income USD thousand $60,386 31% FY 2 0 1 8 1H2020 1H 2 0 1 9 16% 31% 17% 24% 28% $65,518 Oil & G
Slide 21: Net Revenue by Top 5 Markets, Income and Gross Profit
71.04% 13.14% 6.99% 2.93% 2.12% 3.78% China India US Australia Canada Other foreign countries 71.16% 4.05% 12.16% 0.27% 4.43% 7.93% 1H FY2019 Net Revenue by Top 5 Markets 1H FY2020 Net Revenue by Top 5 Markets $8,197 FY 2 0 1 8 1H2020 Income From Operations USD thousand FY 2 0 1 9 $3,510 $3,149 $13,
Slide 22: Coping with Covid for the Six Months ended Mar 2020
22 21 Coping with Covid - 19 for the Six Months ended Mar 31, 2020 • Revenue decreased by 20.46% from the same period in 2019, largely due to the Covid19 outbreak that have caused material disruption to businesses worldwide • Production of our production facility and logistics services were suspende
Slide 23: Appendix: Consolidated Balance Sheets
23 22 Appendix: CONSOLIDATED BALANCE SHEETS As Of March 31, 2020 (unaudited) and September 30, 2019 22
Slide 24: Appendix: Consolidated Statements of Income
24 23 Appendix: CONSOLIDATED STATEMENTS OF INCOME For the Six Months Ended March 31, 2020 and March 31, 2019 (unaudited) 23
Slide 25: Appendix: Consolidated Statements of Cash Flows
25 24 Appendix: CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended March 31, 2020 and March 31, 2019 (unaudited) 24
Slide 26: Underwriter contacts
Underwriter contacts At Company Jianping Xiang , Director of Finance Huadi International Group xjp@huadigroup.com +86 577 86598888 Underwriter Stephen Kiront skiront@craftcm.com +1 516 833 1325 Investor Relations Janice Wang EverGreen Consulting Inc. IR@changqingconsulting.com +1 908 510 2351 +86 13
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