Cbak Energy Technology, Inc. · NASDAQ:CBAT
Cbak Energy Technology — China BAK Battery — Investor Presentation (February 2006)
24 slides from Cbak Energy Technology's investor presentation, Feb 21, 2006
Slide 1: China BAK Battery Inc.
China BAK Battery Inc. OTC BB: CBBT
Slide 2: Safe Harbor Statement
Safe Harbor Statement CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation includes or incorporates by reference statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Slide 3: Investment Considerations
Investment Considerations A BAK (ste + One of the world's fastest growing Li-lon battery cell manufacturers; founded in 2001; US public company with operations in China + Whyare Li-lon batteries the “defacto standard’ in most applications? — Higher power and longer duration + Large & growing market:
Slide 4: Investment Considerations
Investment Considerations BAK Steen aS + Company's growth plans focus on three key initiatives: — Grow organically in Company's original market (mobile phone battery cells to 34 party replacement battery manufacturers) — Develop new Li power products serving new applications — Develop a greater pres
Slide 5: New 90-Acre industrial campus
+ New, 90-Acre industrial campus. + 1.9 million sq, ft. of manufacturing space + 8250 employees SD.” Wortd-ciass R&D center + Low cost expansion
Slide 6: Applications for Li-ion Cells
Applications for Li-ion Cells Li-ion is the battery technology of Bax choice, and demand is significantly Increasing. + Utilized in : Mobile phones — Digital cameras and camcorders — MP3 players ms ca = Laptops = Bluetooth headsets = Power tools — General industrial applications
Slide 7: Li-ion vs. Competing Technologies
Li-ion vs. Competing Technologies Feature Operating Voltage Cycle Life Rapid Charge Memory Effect Environmental Cadmium (poisonous) NiMH 1.2 500 Good No None
Slide 8: Li-Ion producers growing more rapidly in China than rest of world
Li-lon cell/battery producers growing more rapidly in China than rest of of world Production shift of OEM's factories to China Lower cost vs. Japan and Korea: manufacturing costs, logistics, import duty Replacement cell phone market unique to China: — 380 million cell phone subscribers growing by an
Slide 9: The "Razor Blade" Business Model
The “Razor Blade” Business Model + Consumables are sold to the installed base + Potential market expands at a geometric rate + Stability; Predictability; “Evolutionary rather than Revolutionary” changes 1 2 3 4 Year Miilstaled Base -+-Dnite
Slide 10: Company Growth Plans
Company Growth Plans Distribution Channels Replacement Battery OEM nal Equipment Manufacturers (Original Equips i Mobile Phones. 60%+ Market Share * Lenovo + Other Tier 1 OEM's Laptop Computers _| + Production in April + Production in April Lithium Polymer + Mass production Nano Li-Ph (High + A123 P
Slide 11: Cordless power tools
Cordless power tools o MP3/Portable Bluetooth Headsets Cell Phones Entertainment 1"
Slide 12: Lenovo
+ Lenovo Lenovo purchased the IBM PC business Pian to make cell phones the second “product pillar” of the company Announced goal is to become the largest manufacturer in China Sells a unique perfume emiting cel phone which has achieved high volume sales CBBT has been producing Lithium-ion cells for
Slide 13: Laptop Power Products
Laptop Power Products + Utilizing capital raised in 2005 to build capacity for laptop battery cell manufacturing + 2006 progress to date: — All production equipment for this product line ordered — Production line is currently under construction — Qualifications with OEMs underway — Estimate that fac
Slide 14: Lithium Polymer Product Line
Lithium Polymer Product Line K caeean + Utilized for small-format batteries customized in size and shape for specific applications + Current Capacity = 1 million pieces per month. + Current applications include: — MP3 players - Bluetooth headsets Ultra light cell phones 14
Slide 15: High Power Li Ph: A123 Manufacturing Agreement
High Power Li Ph: A123 - Manufacturing Agreement powered balteries = Ullize a new nano-ithium phosphate technology based on patented technology developed at IT — 123s the exclusive leensor ofthis technology + A123Systems: emerging supplier of specialty high- | Eg ‘Tun pownr oF compED + BAK began col
Slide 16: Competitive Advantage: World Class Technical Capability
Competitive Advantage : World Class Technical Capability BAK facilities meet or exceed international standards — EUand CE attestation, UL Authentication, ISO9001: 2000 quality management system certification of the ZJQC; |S04001: 1996 environmental management system certification of the 2JQC Most ad
Slide 17: Competitive Advantage: Low Cost Producer
Competitive Advantage Low Cost Producer + Relentlessly address all elements of product cost — Land and Construction Costs — Low labor costs, both direct and indirect + Key competitors have significantly higher SG&A — Proactive management of strategic material costs + Domestic sourcing + Labor rates
Slide 18: Competitive Advantage: Low cost producer
Competitive Advantage Low cost producer + Factory structure is a combination of automated manufacturing processes and manual processes that utlize low cost Chinese cost labor — Objective is cost optimization by employing automation where it imparts improved yield, throughput or process repeatability
Slide 19: Company Management
Company Management + Mr. Xiangqian Li, Chief Executive Officer: = Founder provided initial capital of $2.4 million from personal funds = Fulltime, operating CEO + Dr Huanyu Mao, Chief Operating Officer = Significant expertise in Li lon technology: equipment, materials and production processes — Succ
Slide 20: Financial Overview
Financial Overview
Slide 21: Shares Outstanding
Shares Outstanding Float Insider ownership Institutional Ownership Market Capitalization 48.9 million 9.6 million 75% 20% $452 million a
Slide 22: Income Statement
Income Statement Fiscal Year Fiscal Year | 1" Qtr | Estimate Ended Ended Ended | Fy 2006 9/30/04 9730/05 | 12/31/05 Revenues $63.7M S101.0M | $26.1M Gross Profit S15.5M $25.7M $7.1M Operating Expenses $7.3M $10.4M $3.1M Operating Income $8.1M $15.3M S4.0M Pre-tax Income 71M $12.9M $3.9M Net Income $
Slide 23: Balance Sheet
Balance Sheet Current Assets Total Assets Cash & Restricted Cash Current Liabilities Short term Bank Loans & Notes Payable Shareholders’ Equity Total Liabilities and Stockholders’ Equity 12/31/05 $124.9M $199.0M $36.3M $107.0M $33.6M $92.0M $199.0M 9/30/05, $119.7M $187.7M $52.4M $99.7M $39.5M $88.0
Slide 24: China BAK Battery Inc.
[LOGO OF CHINA BAK BATTERY INC.] China BAK Battery Inc. OTC BB: CBBT [GRAPHICS APPEAR HERE] Safe Harbor Statement [LOGO OF CHINA BAK BATTERY INC.] CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation includes or incorporates by reference statements that constitute forward-look
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