China Commercial Credit Inc. September 2013

Transcription

1 China Cmmercial Credit Inc. September 2013 April 2013

2 Fulfilling the Market Need in a Fast Grwing Industry China Cmmercial Credit, Inc. ( CCC ) is a micrcredit cmpany prviding direct lans and lan guarantee services t small-t-medium enterprises ( SMEs ), farmers and individuals perating in the District f Wujiang, Suzhu City, Jiangsu Prvince, Peples Republic f China ( PRC ) CCC s perating cmpany has exhibited substantial annual grwth since inceptin in 2008 Net incme margins in excess f 60%, with significant perating leverage t service grwth f lan prtfli Net Revenue Incme Befre Incme Taxes ($ in U.S. millins) ($ in U.S. millins) $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $7.0 $9.0 $10.9 $12.6 $12.0 $10.0 $8.0 $6.0 $4.0 $4.4 $7.8 $9.5 $10.5 $2.0 $2.0 $ $ (1) (1) Excludes apprximately $500,000 in IPO and audit related csts and expenses 2

3 China s Credit Mismatch Driving Industry Grwth Traditinal Chinese banks supply f credit favrs state-wned enterprises, lcal gvernment vehicles and larger cmpanies 8 ut f 10 jbs in China are in SME s SME s accunt fr nearly 60% f China s GDP and mre than 50% f ecnmic utput Accunt fr nly 18% f bank lending CCC s custmer base is a segment f the market which has been significantly underserved and has histrically brrwed at high interest rates frm undergrund lenders 2008 regulatins enabled micrcredit cmpanies t bridge the gap between Chinese statewned and cmmercial banks and undergrund lenders, spurring explsive grwth f micrcredit lenders t match lan demand Apprximately 6,000 micrcredit cmpanies in China at end f 2012 Up ver 40% frm 2011 Aggregate utstanding lan prtfli f $84 billin as f September 30, 2012 Up ver 50% frm 2011 Jiangsu Prvince has the greatest number f micrcredit cmpanies in natin 3

4 Fueled by Macrecnmic Tailwinds China is the wrld s mst ppulus cuntry, cmprising mre than 1.3B citizens, r apprximately 19% f the wrld s ppulatin (1) Apprximately 4x the ttal ppulatin f the United States, with rughly the same land mass #2 largest GDP in the wrld, expected t surpass the U.S. by GDP f ~$8.3T Expected t grw at a ~8% CAGR thrugh 2016, (2)(3) Wrld s largest exprter exprted ~$2.1T f merchandise in 2012 (4) Operates in the District f Wujiang, Suzhu City, Jiangsu Prvince One f the mst ecnmically successful and rapidly grwing cities in China with 19% GDP grwth Lcated n the prsperus Eastern Cast f China and hme t many f the wrld s leading prducers f electrnic equipment, chemicals and textiles (1) Surce: Wrld Bank, Ppulatin Reference Bureau (2) Surce: China Natinal Bureau f Statistics (3) Surce: Internatinal Mnetary Fund (4) Surce: Wrld Trade Organizatin (5) Surce: Wrld Trade Organizatin (6) Surce: China State Administratin f Freign Exchange ( SAFE ) 4

5 March

6 Marcum LLP as CCC Auditrs One f the largest independent public accunting firms in the U.S. Served Chinese clients fr ver 10 years Fur ffices in China, with 70 SEC prfessinals serving 20 U.S. SEC clients Cmplete and clean pinins frm 2012 PCAOB inspectins N SEC issues frm Chinese audit practice 6

7 Deep Lending and Public Cmpany Experience Huichun Qin Lng Yi Chairman f the Bard, Chief Executive Officer Chief Financial Officer Huichin Qin, Chairman f the Bard and Chief Executive Officer Served previusly as Deputy Directr f Accunting and Finance and Vice President f the Wujiang Branch at the Peple s Bank f China ( PBOC ) frm and , respectively While serving as Vice President f the Wujiang Branch, als served as a Deputy Directr f the Wujiang State Administratin f Freign Exchange Bachelr s degree frm Suthwest Tech University in Miangyang, China Lng Yi, Chief Financial Officer Public cmpany experience frm rle at Sutr Technlgy Grup (NASDAQ: SUTR) CPA, State f Illinis Master s Degree in Accunting frm University f Rtterdam, the Netherlands Graduate Diplma in Accunting frm McGill University, Canada Bachelr s Degree in Accunting frm Nrtheastern University, China 7

8 Direct, Secured Lan Services Direct lans t SME s, farmers and individuals with prceeds generally used fr peratinal purpses $88.5MM prtfli t 249 brrwers (1) Lan sizes between $16,000 and $320,000, with average f apprximately $250,000 (1) Terms ranging frm 1 t 12 mnths maximum (1) Average interest rate f 15.01%, payable mnthly (1) (1) As f three mnths ended March 31,

9 Types f Secured Lans Cllateral-backed lans 10.5% f prtfli Pledge by brrwer f land-use rights r building wnership Appraisal used t determine value, then apprpriate lan-t-value rati f 50-70% applied Guarantee-backed lans 88.5% f prtfli Guaranteed by third parties Guarantr and brrwer are jintly and severally liable Pledge-backed Lans 1.0% f prtfli Pledge by brrwer f negtiable instruments, f which the Cmpany accepts pssessin 9

10 Direct Lans Offering prceeds t prvide cash t increase registered capital and meet unmet highquality lan demand Direct Lan Prtfli $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 ($ in U.S. millins) $85.8 $88.5 $76.8 $68.7 $ LTM 3/31/2013 Regulatry requirements limiting direct lans t 2x capital 10

11 Lan Guarantees Prvides guarantees t third-party lenders n behalf f the brrwer Cperatin agreements with six state-wned and cmmercial banks where the Cmpany is accepted as guarantr Guarantees fr $84.1 millin f underlying lans t 115 brrwers (1) Fee incme f 1.5% - 1.8% per year f guarantee Cmpany s prvisin f guarantee subject t: Cllateral pledge f land-use rights r building wnership t third-party lender; and Cash depsit f 10-20% f lan amunt which gets depsited by CCC with third-party lender (1) As f 3/31/13 11

12 Lan Guarantees (cnt.) Initial public ffering t increase regulatry capital t increase guarantee business Lan Guarantee Prtfli $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 ($ in U.S. millins) $88.7 $86.4 $84.1 $71.7 $ LTM 3/31/2013 Regulatry requirements limiting lan guarantees t 3x capital 12

13 Strng Grwth with Managed Risk Management expertise has led t successful implementatin f lending prcess with lw lss experience Grwth in reserves with n lsses ver last 3 years Fr Years Ended December 31, Reserve Direct Lan $ 696,321 $ 766,673 $ 857,813 Guarantee Services $ 719,728 $ 887,426 $ 880,725 Actual Lsses Direct Lan $0 $0 $0 Guarantee Services $0 $0 $0 Reserves based upn greater f 1% f prtfli r 5-Tier methd in accrdance with applicable PRC regulatins Significant Cnsequences fr nt repaying debt 13

14 Financial Summary Selected Incme Statement Data Strng annual tp and bttm line grwth Net Interest Incme CAGR f 17.3% Net Incme CAGR f 13.8% Q vs. Q Flat tp line due t lwer interest rates and limited capital t meet demand Lwer Net Incme due t prvisin fr lan lsses Year Ended, Three Mnths Ended, ($ in millins) 12/31/10 12/21/11 12/31/12 3/31/12 3/31/13 Ttal interest incme $9.0 $11.2 $12.3 $3.0 $3.0 Ttal interest expense (1.0) (1.6) (1.3) (0.4) (0.3) Net interest incme $8.0 $9.6 $11.0 $2.6 $2.7 Less: Prvisin fr lan lsses (0.1) (0.0) (0.1) (0.0) (0.5) Net interest incme after prvisin $7.9 $9.5 $10.9 $2.5 $2.2 Plus: Cmmissin and fees n guarantee services Net Revenue $9.0 $10.9 $12.6 $2.9 $2.7 Plus: Ttal nn-interest incme Less: Ttal nn-interest expense (1.8) (2.1) (2.4) (0.6) (0.8) Incme befre incme taxes $7.8 $9.5 $10.5 $2.6 $1.9 Less: Incme tax expense (1.0) (1.2) (1.7) (0.6) (0.3) Net incme $6.8 $8.3 $8.8 $2.0 $1.6 (1) Excludes apprximately $500,000 in IPO and audit related csts and expenses 3/31/2013 bk value f apprximately $7.50 per share (1) 14