Sino Agro Food — Investor Presentation (September 2013)
46 slides from Sino Agro Food's investor presentation, Sep 18, 2013
Slide 1: Sino Agro Food Investor Presentation H2 2013
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Sino Agro Food Investor Presentation H2 2013 Stockholm, September 2013 Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0
Slide 2: Agenda
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Agenda 1 . Executive Summary 2. Company Overview 3. Financial Review 4. Industry Overview 5 . Appendix 2
Slide 3: Executive Summary
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Sino Agro Food Sino Agro Food, Inc. (“SIAF”) is a vertically integrated specialist food producer listed on the US OTC Bulletin Board, p
Slide 4: Key Investment Highlights
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 • Continuing record growth in sales and operating income as businesses reach maturity with LTM EBITDA amounting to US$86m (H2 2013) • D
Slide 5: Sino Agro Food's Contribution to China's Development
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 • SIAF is a key supplier of high quality natural/organic food; meanwhile, China is experiencing limited arable land acreage resulting i
Slide 6: Agenda
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Agenda 6 1 . Executive Summary 2. Company Overview 3. Financial Review 4. Industry Overview 5 . Appendix
Slide 7: History and the Company's Five-Year Plan
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 History and the Company’s Five - Year P lan Company History Five - Year P lan 2007 • A cquires first Joint Venture company in China whi
Slide 8: Group Revenue Development Since Inception
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 16 16 22 41 52 139 260 2007A 2008A 2009A 2010A 2011A 2012A 2013B • Rising prices of produced goods, aggressive production capacity expa
Slide 9: Group Revenue & EBITDA Margin Development
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 20 24 30 41 40 37 47 52 65 83 111 139 178 207 51% 47% 52% 52% 52% 54% 47% 41% 40% 41% 46% 46% 36% 37% Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '1
Slide 10: Group Development of Net Tangible Assets
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 40 49 57 68 81 95 106 118 125 139 166 189 210 231 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q
Slide 11: Group Capital Expenditure
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 14 6 4 3 38 109 24 15 14 18 9 231% 41% 20% 45% 27% 41% 45% 2007A 2008A 2009A 2010A 2011A 2012A 2013E Capital expenditure Capital expend
Slide 12: Sino Agro Food Group Operations
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 7% 39% 54% Sino Agro Food Group Operations Cattle, Organic Fertilizer and Livestock Feed (3) Dragon Fruit Plantation Recirculating Aqua
Slide 13: Group Geographic Footprint
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Group Geographic Footprint Beef Cattle Division Qinghai Province, Xining City Operations: • Beef Cattle farming • Organic Fertilizer pr
Slide 14: Vertically Integrated Growth Strategy
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 • In order to maximize growth and sustainable high margins, SIAF pursues a vertical integration strategy that limit the middlemen at po
Slide 15: Operating Model – Joint Ventures
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 1 st Operating Model – Joint Ventures • A cornerstone in SIAF’s funding of projects is the use of Joint Ventures (JV) with targeted Chi
Slide 16: Operating Model – Cooperative Farming
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 2 nd Operating Model - Cooperative Farming • The Cooperative Farming model is built on Agribusiness projects with strong growth potenti
Slide 17: Proprietary Technologies
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Proprietary Technologies APRAS Livestock Indoor Growing System Fishery Livestock Semi - free ranging Growing System • A Power Re - circ
Slide 18: Group Division Overview
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Group Division Overview Beef Cattle Farm Division Cattle Division HU Plantation Division Fishery Division Marketing and Trading Divisio
Slide 19: Group Revenue Development per Division
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Beef Cattle Farm Cattle Farm Fertilizer (Part of Beef Cattle Farm) Plantation Fishery Group Revenue Development per Division Dairy ( di
Slide 20: Fishery Division
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Fishery; 54% 1 4 26 86 93% 74% 42% 54% 2009 2010 2011 2012 Revenue Gross Profit margin • The Fishery is the largest Division and operat
Slide 21: Seafood Production Through Recirculating Aquaculture (2/4)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 21 Seafood P roduction T hrough Recirculating Aquaculture (2/4) • Since 1980's Chinese aquaculture has been growing dramatically and to
Slide 22: Case Study: Fish Farm 1 (3/4)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Case Study : Fish Farm 1 (3/4) • In 2010, SIAF executed a service and consulting contract for “Fish Farm 1” with a group of Chinese inv
Slide 23: Selection of SIAF's Aquatic Farms (4/4)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Selection of SIAF’s Aquatic Farms (4/4) 23 Grow - out tanks, Fish Farm 1 (FF1) Grow - out tanks, Prawn Farm 1 Sleepy Cod resting pipes
Slide 24: Beef Cattle Farm Division (1/2)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Beef Cattle Farm; 25% 0 2 15 23 57% 54% 30% 2009 2010 2011 2012 Revenue Gross Profit margin Beef Cattle Farm Division (1/2) Share of Gr
Slide 25: Beef Cattle Farm Division Products (2/4)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 95,000 Head of Cattle and Sheep • SIAF cultivates 2,600 hectares of pasture together with affiliated farmers to produce pasture and sil
Slide 26: Cooperating with Local Farmers in Rearing Beef Cattle (3/4)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 SIAF C ooperate with L ocal Farmers in the R earing of Beef Cattle (3/4 ) Cooperative Beef Cattle Production 26 1. SIAF Process raw mat
Slide 27: Beef Cattle Farm Division Images (4/4)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Beef Cattle Farm Division Images (4/4 ) Baling of silage Beef Cattle in SIAF’s cattle houses Feeding of SIAF’s beef cattle SIAF’s Conce
Slide 28: Guangdong Province Cattle Division
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Cattle; 14% 0 0 4 17 40% 55% 2009 2010 2011 2012 Revenue Gross Profit margin Guangdong Province Cattle Division Share of Group Sales Ov
Slide 29: HU Plantation Division
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 HU Plantation; 7% 3 5 6 12 72% 61% 66% 58% 2009 2010 2011 2012 Revenue Gross Profit margin HU Plantation Division Share of Group Sales
Slide 30: Corporate (or SIAF) Division
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Corporate (or SIAF) Division Company Distribution activitie s Overview • In order to maximise growth and sustain high margins, the comp
Slide 31: Management Team
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Management Team • M anagement team has significant experience in the aquaculture and food industry with an aggregate industry experienc
Slide 32: Independent Director Yap Koi Ming (George)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Yap Koi Ming (George ) Independent Director • Mr. Yap has been an Independent Director of the Company since January 1, 2013. • He was a
Slide 33: Agenda
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Agenda 33 1 . Executive Summary 2. Company Overview 3. Financial Review 4. Industry Overview 5 . Appendix
Slide 34: Balance Sheet
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Existing debt New debt Non - interest bearing liabilities Equity Equity & liabilities Other assets Other property and equipment Land Us
Slide 35: Income Statement and Key Ratios
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Income Statement 35 Income Statement and Key Ratios (2) • Management expects topline growth to remain robust, while the percentage YoY
Slide 36: Agenda
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Agenda 36 1 . Executive Summary 2. Company Overview 3. Financial Review 4. Industry Overview 5 . Appendix
Slide 37: Industry Overview
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 1) OECD Economic Outlook No. 92 (database ) / OECD economic surveys: China 2013 2) The World Bank; China 2030, Building a Modern, Harmo
Slide 38: Economic Outlook in China
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 -2,0 0,0 2,0 4,0 6,0 8,0 10,0 2012A 2013E 2014E Euro Area USA Brazil Russia India China China’s real GDP growth estimated to 8.5 % in 2
Slide 39: Agriculture in China (1/2)
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 0 100 200 300 400 500 600 1984 1989 1994 1999 2004 2009 Agriculture in China (1/2) 2 39 Agriculture in Chinese economy • China is the w
Slide 40: Expenditure on food
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Expenditure on food • Food is the largest class of household expenditure for all Chinese income groups • Urban residents spend substant
Slide 41: The Market for Aquatic and Aquaculture in China
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 The Market for Aquatic and Aquaculture in China 2,1% 5,6% 4,6% Wild catch Fish Farming Total Aquatic Production 3 41 • China has the wo
Slide 42: The Market for Meat in China
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 0 6 12 18 24 30 36 2006 2007 2008 2009 2010 2011 Urban Rural Asia and Pacific 56% North America 8% Europe 6% Other 4% Africa 8% Latin A
Slide 43: The Market for Fertilizer in China
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 235 240 245 250 255 260 265 2013E 2014E 2015E • Demand for fertilizer in China is forecasted to increase 3.3% per annum through 2015 •
Slide 44: Agenda
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Agenda 44 1. Transaction Summary 2 . Company Overview 3. Financial Review 4 . Industry Overview 5 . Appendix
Slide 45: Group Organisational Structure
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Group Organisational Structure Capital Award Belize (CA) Prawn Farm 2 China (ZSAPP) Prawn Farm 1 China (EBAPCD) Cattle Farm 2 China Mac
Slide 46: Group Legal Corporate Structure
Old 1st: 49 152 68 2nd: 128 192 47 3rd: 4 74 47 Highl: 255 192 0 Text: 83 86 90 New 1st: 123 167 65 2nd: 205 220 68 3rd: 123 205 244 Highl: 201 28 26 Text: 82 94 82 Group Legal Corporate Structure Capital Award Belize (CA) Capital Stage Belize (CS) Capital Hero Belize (CH) Zhongshan A Power Prawn Cu
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