Yasheng Group · OTC:HERB
Yasheng — Investor Presentation (April 2013)
28 slides from Yasheng's investor presentation, Apr 19, 2013
Slide 1: Yasheng Group: Agriculture & Industry Leader in China
WG YASHENG GROUP AGRICULTURE & INDUSTRY LEADER IN CHINA 2013 *« OTCQB: HERB
Slide 2: Safe Harbor Statement
Safe Harbor Statement Any statements in this summary about Yasheng Group’s expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the “Act”
Slide 3: Company Overview
Company Overview LARGEST AGRICULTURE COMPANY IN NORTHWEST CHINA Operated through 7 wholly-owned subsidiary ‘Agro Bases’ Nationwide distribution covering 18 provinces and over 100 cities 30-year history PRODUCTS: Large portfolio of premium specialty agriculture products MISSION: Feed China and
Slide 4: Market Data at a Glance
Market Data at a Glance HERB (OTCQB) (as of 9/30/12) FYE: December 31 Price $.46 Shares Outstanding 155.1 M Market Cap $71.3M Cash $10.9 M Total Assets $2.1 B LT Debt $28.1 M Revenue $993.1 M Net Income $126.4 M EPS $0.82 FY 2012 Revenue Guidance $1.03 B 4
Slide 5: Investment Highlights
Investment Highlights Profitable Business Model with Strong Track Record 30 years of successful operations in Northwest China Agricultural leader in China: Over 30 major products History of strong sales and earnings growth Assets Highly qualified management team, experienced workforce Over
Slide 6: Market Trends − Domestic
Market Trends − Domestic Growth in domestic Growth in consumer demand for commodity market – Demand for wholesome foods, – Safe, high-quality foods which drives need for organic – Organic all natural foods fertilizers and healthy processing practices – Protein-based foods (meats, milk) – Demand for
Slide 7: Market Trend − Global
Market Trend − Global Rising demand for food and agro commodities presents global long-term growth opportunity. Yasheng is expanding to meet this demand. World Population Growth Forecast (Billion) Agro product prices still near all time records. 10.0 9.5 8.9 Agro demand forecast to increase: 14% / 1
Slide 8: Less Arable Land for Cultivation
Less Arable Land for Cultivation 3.5 B acres arable land in 2005 Worldwide average loss of 24.7 M acres p.a. Factors: Urbanization, soil overuse / Arable land acreage per capita degradation, climate shifts, cost of land 0.60 Land allocated to growth of bio mass for biofuel production 0.50 0.50 0.42
Slide 9: 7 Large-scale Agro Production Bases
7 Large-scale Agro Production Bases • Focus on agriculture, biotech, and chemical industries with originally over 126 operating divisions and R&D capabilities • Over past 30 years transformed family plot style farm into industrial agro operations with infrastructure to support long-term growth Jinta
Slide 10: Major Products in 8 Segments
Major Products in 8 Segments • Field Crops: Cotton, Soybean, Alfalfa, Barley, Wheat • Vegetables: Onions, Potatoes, Beets, Peas/Corn • Fruits: Fuji Apples, Chinese Pears, Apricots • Specialty Crops: Hops, Chinese Wolfberry, Cumin, Flax Seeds • Seeds: Black Melon, Sunflower, Corn • Husbandry: Poultry
Slide 11: Sales into Various Markets
Sales into Various Markets Strategic Commodities Institutional Contract Growing Consumer Direct Wholesale Markets Domestic & Export Food Distribution Animal Husbandry Agro Business Medical & Biotech Alternative Energy Products 11
Slide 12: Competitive Advantage − Land
Competitive Advantage − Land Yasheng’s Agro Bases strategically placed in geological locations with natural environmental benefits: Long sunny days with short nights during growing seasons produce larger yields than other areas in China Very hot days / very cold nights allow agro products with m
Slide 13: Advanced R&D Capabilities
Advanced R&D Capabilities Maintains strong R&D relationships / capabilities in agro industry R&D investment to develop hybrid strains (higher yields, drought, pest, & disease resistance) Focus on bio non-food feedstocks & biomass waste (alternative energy production) Association with GanSu Y
Slide 14: Operational Excellence − Example
Operational Excellence − Example WATER CONSERVATION SOLUTIONS Company-wide Modern Drip Irrigation Technology Projects The technology controls both biochemical and physical indices for crop and flower growth and allow precise adjustment of water, fertilizer and insecticide usage It moderates the
Slide 15: Institutional Contracts Growing
Institutional Contracts Growing Contracts growing for institutional food and beverage companies Established long-term relationships with institutions and large food and beverage processors to grow products that meet their needs and standards Yasheng Group works closely with processors to estab
Slide 16: Sales & Marketing
Sales & Marketing Extensive domestic sales and distribution Global Market Presence 2010 network in 18 provinces: • Direct clients (30) • Distributors (200), 70% of sales Diverse customer base (food processors, supermarkets and wholesale stores) Stable long-term group of distributors selling pr
Slide 17: Recognition for Quality & Leadership
Recognition for Quality & Leadership Industrial and Technology Awards: “China AAA Image Enterprise” “National Key Hi-Tech Enterprise” “Leading Enterprise” for National Agriculture Industrialization “Organic Food“ certification for many products by the National Organic Food Development Center
Slide 18: Growth Plan: Market Focus & Product Innovation
Growth Plan: Market Focus & Product Innovation Maintain and expand existing domestic market position in premium products with a focus on customer satisfaction Continue strategic consolidation and segmentation of Yasheng products. Emphasis on high margin and high growth product segments Continu
Slide 19: Growth Plan: Expand Know How
Growth Plan: Expand Know How Continue to acquire and develop new hybrid strains for agro products that improve quality, yield, and overall cultivation methods Expand cultivation area by using more high-tech irrigation systems and other modern agriculture techniques Expand seeding and propagati
Slide 20: Growth Plan: Diversify Market
Growth Plan: Diversify Market Expand domestic and international business development and sales departments to enter new markets Strategic product development to meet demands of specialized markets (institutions, organic niche markets, and retail volume outlets) Continue to establish long-term
Slide 21: Competitive Advantages
Competitive Advantages Scale advantage over local competitors: Largest competitor in fragmented domestic market More diversified products Economies of scale through higher production capacity, greater resources Successfully set up modern agricultural operating model (further advanced than ot
Slide 22: Financial Highlights (audited)
FINANCIAL HIGHLIGHTS (audited) 22
Slide 23: Consolidated Balance Sheet
Consolidated Balance Sheet Year Ended December 31 Year Ended December 31, Current liabilities: 2012 2011 2010 2012 2011 2010 Accounts payable and accrued expenses 25,058,592 41,030,878 44,593,435 ASSETS Short term loans 9,545,780 13,014,014 15,099,582 VAT Tax payable 828,517 952,005 988,429 10,980,3
Slide 24: Experienced Management Team
Experienced Management Team Mr. Zhou Changsheng, Chairman & CEO Founder and Chairman of Yasheng Group, Mr. Zhou leads the overall operation and management of the Company. He is also a standing council member of International Hops Grower Association and holds many other positions in industrial and ag
Slide 25: Independent Board Directors
Independent Board Directors Mr. Wei Tingwu Since March 2009 Mr. Wei has served as General Manager and Engineering Technical Director for Lanzhou Jiaoda Engineering Consulting Co., Ltd., where he has overseen the development and construction of many large projects throughout China. Previously, from 1
Slide 26: Investment Recap
Investment Recap PROFITABLE BUSINESS MODEL WITH STRONG TRACK RECORD • 30 years of successful operations in Northwest China • Agricultural leader in China: Over 30 major products • History of strong sales and earnings growth ASSETS • Highly qualified management team, experienced workforce • Over 250,
Slide 27: Contact
Contact YASHENG GROUP INVESTOR RELATIONS 805 Veterans Boulevard Jared Gulliver Redwood City, CA 94063 (650) 363-8345 ext. 2 www.yashenggroup.com jared.ir@yashenggroup.com LEGAL COUNSEL INDEPENDENT AUDITOR Steven M. Kaplan, Esq. Gansu Hongxin CPA ROSENFELD & KAPLAN, LLP 12nd Floor, Xingzhong Mansion
Slide 28: Facts on China's Agro Sector
Facts on China’s Agro Sector • China has 6% of the World’s arable land and 22% of global population • Rising food prices and ago policy has become a major concern of the PRC • PRC Government Policy directives implemented to grow and protect domestic agro industry long term • 12th 5-Year Plan for Agr