China High Speed Transmission Equipment Group Co., Ltd. · HKEX:658
China High Speed Transmission Equipment — FY2008 Earnings Presentation
34 slides from China High Speed Transmission Equipment's earnings presentation, Apr 20, 2009
Slide 1: 2008 Annual Results Announcement Presentation
2008 Annual Results Announcement Presentation 20 April 2009 0
Slide 2: Forward Looking Statement
Forward Looking Statement The presentation is prepared by China High Speed Transmission Equipment Co., Ltd (the “Company”) and is solely for the purpose of corporate communication and general reference only. The presentation is not intended as an offer to sell, or to solicit an offer to buy or to fo
Slide 3: Agenda
Agenda 1 2008 2008Annual AnnualResults ResultsReview Reviewand andAnalysis Analysis 2 2008 2008Business BusinessReview Review 3 Industry IndustryOutlook Outlook 4 Future FutureProspect Prospect 5 Plants Plants 6 QQ&&AA 2
Slide 4: 2008 Annual Results Review and Analysis
2008 Annual Results Review and Analysis 3
Slide 5: Financial Highlights
Financial Highlights Sales revenue increased significantly by 80.6% to approximately RMB3.44 billion RMB MM 2008 2007 Change Sales Revenue 3,439.2 1,904.8 80.6% Gross Profit 992.2 553.1 78.4% Core EBITDA 773.9 355.7 117.6% Core EBIT 613.1 262.4 133.7% Net Profit Attributable to Equity Holders 692.4
Slide 6: Continuous Strong Demand for Gear Transmission Equipment As a Whole
Continuous Strong Demand for Gear Transmission Equipment As a Whole Revenue Breakdown by Business Segment Wind and Marine Gear 2008 2007 change in (% to total revenue) revenue Transmission Equipment (%) Wind Gear 52.4% 37.7% 151.0% 3,439 RMB MM % 80.6 Marine Gear 11.6% 7.1% 193.4% 3000 = th ow Gr [-
Slide 7: Increased Consolidated Gross Profit
Increased Consolidated Gross Profit Succeeded in price transfer, cost control and enhancement in production efficiency change Wind and Marine Gear 2008 2007 of GP Gross Profit Breakdown by Business Segment (% to total GP) Transmission Equipment (%) 992 Wind Gear 50.3% 35.7% 153.1% RMB MM 800 9 .4% 9
Slide 8: Gross Profit Margin Analysis (by products)
Gross Profit Margin Analysis (by products) Wind Gear Marine Gear Gear for Construction General Purpose Gear 30% 40% 50% 30% 27.5% 27.7% 30.7% 36.7% 29.8% 40% 35.8% 30% 25% 22.7% 30% 20% 22.1% 20% 20% 10% 20% 10% 10% 0% 15% 0% 0% 2007 2008 2007 2008 2007 2008 2007 2008 Gear for bar rolling, wire-roll
Slide 9: Cost Analysis
Cost Analysis Breakdown of the Cost of Goods Sold (RMB MM) 2007 2008 2.2% 1.8% 9.7% 10.7% (1) 3.1% Other raw materials 4.5% Subcontracting & processing 9.7% Manufacturing fee 30.7% 37.7% Cast iron and forged steel 16.9% Direct labor cost Power fee 35.0% 38.0% 1,352 2,447 Note: (1) Including bearing
Slide 10: Balance Sheet
Balance Sheet Net Debt / Total Asset Net Debt / Shareholder’s Equity 10% 3.4% 10% 1.5% -10% 2007 2008 -10% 2007 2008 -30% -30% -25.1% -38.6% -50% -50% Interest Coverage Ratio (1) Cash(2) (2) RMB MM 30 27.0 2,500 2,166.0 20 2,000 1,693.0 1,500 10.8 10 1,000 500 0 0 2007 2008 2007 2008 Note (1) EBITDA
Slide 11: Working Capital
Working Capital A/R Days A/P Days Days Days 150 250 120 200 88 146 150 129 90 75 60 100 30 50 0 0 2007 2008 2007 2008 (1) Inventory Days Net Working Capital Days RMB MM 200 2,000 160 148 1,466 134 1,600 1,443 120 1,200 80 800 40 400 0 2007 2008 0 Note 2007 2008 (1) Net working capital=current assets
Slide 12: 2008 Business Review
2008 Business Review China High Speed Transmission Equipment Group Co., Ltd.
Slide 13: Significant Growth in Sales of Wind Gear Transmission Equipment
Significant Growth in Sales of Wind Gear Transmission Equipment % to total revenue change in unit revenue 2008 2007 2008 2007 (%) Revenue Breakdown by Products 2MW Gearbox 94 6 6.4% 1.0% 1,446% RMB MM 2,000 1,800 1.0, 1.3, 1.5MW Gearbox 1,458 451 57.2% 40.3% 257% 1% 15 115 = h 1,600 wt G ro 750kW Ge
Slide 14: Strong Client Portfolio for Wind Gear Transmission Equipment
Strong Client Portfolio for Wind Gear Transmission Equipment Overseas Customers Location USA Denmark Germany Germany Japan Cooperating 2005 2008 2007 2007 2006 since: Domestic Customers Location China China China China China Cooperating 2004 2006 2005 2006 2008 since: 13
Slide 15: Rapidly Increasing Sales of Marine Transmission Equipment
Rapidly Increasing Sales of Marine Transmission Equipment Cooperation China High Speed ZF China Investment Co., Ltd. Sales of marine Further Expanded transmission equipment in investment in production the domestic markets fixed asset capacity was further strengthened Revenue From Marine Gear Busines
Slide 16: Success in R&D of Transmission Equipment for High-speed Locomotive and Urban Light Rails
Success in R&D of Transmission Equipment for High-speed Locomotive and Urban Light Rails The Group’s transmission equipment passed the product quality certification conducted by in April 2008. Such equipment has been installed in the high-speed trains in places such as Beijing, Shanghai and Nanjing
Slide 17: Strong Sales of Traditional Gear Transmission Equipment
Strong Sales of Traditional Gear Transmission Equipment Vertical roller press grinding mills developed by the Group sells well in the market. Sales of cold- rolled, hot-rolled, strip and bar-rolling, wire-rolling and plate-rolling mills, proactively developed by the Group, have also been excellent.
Slide 18: Increased Overseas Sales driven by Wind and Marine Gear Transmission Equipment
Increased Overseas Sales driven by Wind and Marine Gear Transmission Equipment Overseas clients of the Group spread over USA, India, Japan, Europe, etc USA Germany, Italy Japan Turkey Vietnam India Thailand, Malaysia Brazil % of revenue from overseas 40% market in total revenue 30% 21.9% 20% 16.5% 1
Slide 19: Industry Outlook
~ Industry Outlook China High Speed Transmission Equipment Group Co., Ltd.
Slide 20: Gearbox – a key part in wind turbines
Gearbox – a key part in wind turbines Gearboxes is one of the most critical parts in manufacturing wind turbines Spare parts Gearbox Wind Turbine Wind Farm Wind power generates reliable and clean energy. Wind turbines worldwide generated 260TWh in 2008, representing more than 1.5% of the global elec
Slide 21: Promising Future for Wind Energy
Promising Future for Wind Energy Total installed capacity of wind turbines worldwide increased by 27,261 MW to 121,188MW in 2008 By 2020, wind energy will contribute at least 12% of the world’s total energy consumption, and a global capacity of wind turbines worldwide over 1,500,000 MW is expected Ν
Slide 22: China as one of the internationally leading markets for wind power in 2008
China as one of the internationally leading markets for wind power in 2008 International Ranking of Installed Capacity Countries’ Share in New Installed Capacity of of Wind Turbines Wind Turbines in 2008 Total Installed 2008 Total Installed Growth Capacity of Wind New Capacity of rate in Ranking Tur
Slide 23: Favourable Policies To Accelerate Wind Power Development
Favo urable Policies To Accelerate Wind Power Favourable Development China USA The PRC government expects to increase the installed capacity of wind power with a Obama plans to adjust the energy CAGR of 49% from 2007 to 2010 policy in USA, and invest US$ 150 The PRC government will provide capital b
Slide 24: Promising future for High-speed Locomotive and Urban Light Rails Market
Promising future for High-speed Locomotive and Urban Light Rails Market With increasing population in Chinese cities, the national railway construction has entered into a rapidly developing period the Chinese government will proactively facilitate the construction of high-speed passenger transport n
Slide 25: Outlook
Outlook China High Speed Transmission Equipment Group Co., Ltd.
Slide 26: Company's future prospects
Company’s future prospects Increase products mix to increase the growth points of business revenue, in addition to taking a firm stand in the wind gear transmission equipment market Maintain industrial competitiveness by enhancing technological research and development and strengthening product qual
Slide 27: Breakthrough in Research & Development
Breakthrough in Research & Development Wind Gear Transmission Equipment the 1.5MW gearbox, jointly developed with GE, has passed the technical tests in one go, which outperformed similar products produced by European competitors; it has now entered the stage of mass production the 2.5MW gearbox ente
Slide 28: Plants
Plants China High Speed Transmission Equipment Group Co., Ltd.
Slide 29: Production Base of Wind Gear Transmission Equipment
Production Base of Wind Gear Transmission Equipment Size : 258 acreage (~ 172,000 sq. m) Capacity : To be completed in 2009 (4,000MW) Main Products Ν Wind Gear Box Production Flow: Spare parts Heat treatment Measuring Assembling Finished processing products 28
Slide 30: Production Base of Wind Gear Transmission Equipment
Production Base of Wind Gear Transmission Equipment Size : 400 acreage (~266,000 sq. m) Capacity : To possess a capacity of 6,000MW by the end of 2009 Main Products Ν Wind Gear Box Plant perspective Production will commence in July 2009 29
Slide 31: Production Base of Traditional Gear Transmission Equipment
Production Base of Traditional Gear Transmission Equipment Size: 163 acreage (~110,000 sq. m) Main Products: Gear transmission equipment for Construction Gearbox transmission equipment for bar rolling, wire-rolling and plate-rolling mills of metallurgy industry Exterior Interior Gear transmission eq
Slide 32: Production Base of Marine Gear Transmission Equipment
Production Base of Marine Gear Transmission Equipment Size: 100 acreage (~67,000 sq. m) Main Products: Controllable Pitch Propeller (CPP) Exterior Interior 31
Slide 33: Q&A
Q&A China High Speed Transmission Equipment Group Co., Ltd.
Slide 34: Thank You!!
Thank You!! Investor Relations: Website : www.chste.com Email : ir@chste.com Tel : (86) 25 5241 5583 Fax : (86) 25 5241 2731 33
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