AVIC International Investments Limited. 4Q/FP2011 Corporate Presentation. 22 February 2012

Transcription

1 AVIC International Investments Limited 4Q/FP2011 Corporate Presentation 22 February 2012

2 Disclaimer The presentation is prepared by AVIC International Investments Limited(the Company ). The information contained in this presentation is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the Company. Neither the Company nor any of its affiliates, advisors or representatives make any representation regarding, and assumes no responsibility or liability whatsoever (in negligence or otherwise) for, the accuracy or completeness of, or any errors or omissions in, any information contained herein nor for any loss howsoever arising from any use of these materials. The information contained in these materials has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of, the information or opinions contained herein. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company's financial or trading position or prospects. The information and opinions contained in these materials are provided as at the date of this presentation and are subject to change without notice. In addition, the information contains projections and forward-looking statements that reflect the Company's current views with respect to future events and financial performance. These views are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over time and in many cases are outside the control of the Company and its directors. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. Actual results may differ materially from those forecast and projected. 2

3 Presentation Outline 1 Corporate Profile 2 Financial Highlights 3 Industry Outlook 4 Strategies and Future Plans 5 Key Investment Merits 3

4 Corporate Profile

5 Our business We are the shipbuilding management arm of AVIC International Beijing, which is a member of the PRC Central Government-owned AVIC Group - ranked 310 amongst international Fortune 500 companies in 2011 ( AVIC Group ) We provide shipbuilding project management and consultancy ( M&C ) services, including ship-design which is out-sourced, procurement, new building management and marine finance arrangement We work with established shipyards in the PRC as co-sellers, whereby the shipyard constructs the vessels and we are responsible for the non-construction aspects 5

6 Our corporate milestones AVIC International Beijing began to provide M&C Services, when a Middle Eastern shipowner ordered five 21,000 DWT multipurpose( MPP ) ships Paved the way for the Chinese shipbuilding industry to begin exporting vessels using Export Credit financing arrangements Set up a new division, AVIC Shipbuilding Management Business, to focus on M&C Services Secured contracts for two 27,000 DWT bulk carriers, two 35,000 DWT bulk carriers and two 51,000 DWT bulk carriers, when the industry was experiencing a downturn Restructuring of Division to become AVIC Singapore Listed on SGX-ST in September Secured contracts for 39 vessels with an aggregate value of US$1.35 billion, before the global financial crisis Expanded to engineering ships, such as dredgers, tug boats and offshore vessels, since

7 Competitive strengths Strong support from the AVIC Group As a member of the AVIC Group, we are well-positioned to capitalise on AVIC Group s excellent business relationships, overseas network and strong fundamentals to expand our business An experienced and driven management team with in-depth industry knowledge Most of the members of our senior management team have extensive experience in the shipbuilding industry and some have been with the AVIC Group for over 10 years Strong backing from financial institutions We have strong support from major PRC financial institutionsand are able to assist the shipyards that we have worked with in obtaining loans and/or procuring the issuance of refund guarantees by banks and the shipowners in obtaining financing, when required 7

8 Financial Highlights

9 Revenue RMB m CAGR : 32.9% : 30.2% 99.5 : 32.0% ^ Pro Forma Service Fee Income Commission Income Management Service Fee Income *For the financial period from the Company s date of incorporation on 11 November 2010 to 31 December However, the Group did not record any business activities from 11 November 2010 to 31 December Revenue comprises: (i) service fee income derived from the services we provided in relation to shipbuilding contracts (ii) commission income relating to marketing services we provided to a related company in securing shipbuilding contracts (iii) management service fee income relating to marketing and consultancy services we provided to a shipyard 9

10 Revenue by geographical segments / regions 100% 80% 29.3% 49.1% 33.4% 39.4% 60% 40% 70.7% 16.3% 100.0% 11.6% 100.0% Asia Europe Middle East 20% 50.9% 50.3% 49.0% 0% FY2008^ FY2009^ FY2010^ FP2011* 4Q2010^ 4Q2011 ^ Pro Forma *For the financial period from the Company s date of incorporation on 11 November 2010 to 31 December However, the Group did not record any business activities from 11 November 2010 to 31 December Note: The pro forma financial information represents the income and expenses of the Shipbuilding Management Division of AVIC Beijing. Following the restructuring exercise, AVIC Beijing and our Company entered into a Management Agreement which aims to ensure a smooth completion of outstanding projects. As a result, our service fee income from the provision of project management and consultancy services ( M&C Services ) for 19 vessels in FP2011 was derived from AVIC Beijing, i.e. Asia, instead of the customers country of origin. 10

11 Net profit RMB m : 8.3% # : 11.1% # ^ Pro Forma # Year-on-year growth rate excluding listing expenses Listing Expenses *For the financial period from the Company s date of incorporation on 11 November 2010 to 31 December However, the Group did not record any business activities from 11 November 2010 to 31 December Excluding one-off listing expenses, 4Q2011 and FP2011 net profit would have been approximately RMB34.2 million and RMB60.8 million, respectively. Other operating income, comprising mainly interest income, decreased mainly due to faster payments to shipyards during the period. Following the global financial crisis, ship-owners have generally requested to make lesser and fewer upfront and progress payments, and at the same time shipyards have sought faster payments from us. Employee benefits and office expenses grew in line with higher headcount. Travelling and entertainment expenses increased in tandem with higher business activities. Other operating expenses, comprising mainly advertising, promotion and exhibition costs, as well as import and export related expenses, increased in line with the growth in revenue. 11

12 Cash flow Cash Flow (RMB m) 4Q2011 FP2011* Net cash from operating activities Net cash used in investing activity (0.2) (4.6) Net cash from financing activity Cash and cash equivalents at the end of the period *For the financial period from the Company s date of incorporation on 11 November 2010 to 31 December However, the Group did not record any business activities from 11 November 2010 to 31 December Note: The unaudited pro forma statements of cash flow for the financial year ended 31 December 2010 were not prepared as the Shipbuilding Management Division of AVIC Beijing did not maintain a divisional bank account or have divisional assets or liabilities. 12

13 Key financial indicators Profitability Ratios 4Q2011 FP Earnings Per Share 2 (RMB cents) Weighted average number of shares 282,081, ,710,424 Profitability Ratios As at 31 Dec 2011 Net Asset Value Per Share 3 (RMB cents) Number of ordinary shares in issue ,576,000 Liquidity Ratios As at 31 Dec 2011 Current Ratio 3 (times) (Defined as current assets / current liabilities) Debt to Equity 3 Ratio (%) (Defined as total debt / total equity) For the financial period from the Company s date of incorporation on 11 November 2010 to 31 December However, the Group did not record any business activities from 11 November 2010 to 31 December The Company was incorporated on 11 November As at 31 December 2010, the share capital of the Company comprised 1 ordinary share. The Group did not record any business activities from 11 November 2010 to 31 December Therefore, earnings per ordinary share of the Group for the financial year ended 31 December 2010 was not prepared. 3 The unaudited pro forma statement of financial position of the Group as at 31 December 2010 was not prepared as the Shipbuilding Management Division of AVIC Beijing did not maintain a divisional bank account or have divisional assets or liabilities, and thegroup did not record any business activities from 11 November 2010 to 31 December

14 Delivery plan 1 of order book at a glance Type of Vessel Number of Vessels ,500 DWT bulk carrier 4 Delivered 118,000 DWT bulk carrier 2 Delivered 28,000 DWT MPP Ship 1 Delivered 92,500 DWT bulk carrier 1 28,000 DWT MPP Ship 6 12,000 CBM LPG vessel 1 82,000 DWT bulk carrier 2 Cutter Suction Dredger CSD Tugboat Landing craft vessel Multi-craft workboat Barge Backhoe Dredger 2 Cutter Suction Dredger CSD ,000 DWT MPP Ship 2 Suspended 1 Delivery plan of order book is subject to changes upon mutual agreement between the customer and the sellers 2 Number of vessels which commenced steel cutting as at 31 December

15 Industry Outlook

16 The PRC aims to become the largest shipbuilding nation in the world The PRC government s supportive policies In June 2009, the State Council released a stimulus plan which outlined measures to support the PRC shipbuilding industry. The Ministry of Transport has been reported to be planning to introduce a series of favourable policies, such as tax rebate or tax reduction, together with incentive subsidies. The PRC enjoys low costs of labour, plentiful resources, good infrastructure for development and a huge market with a fast-growing economy. The recent global financial crisis has also helped to eliminate smaller unqualified businesses. 16

17 Positive factors amidst challenging macro-environment Offshore and LNG sectors continue to be healthy, propped by robust demand due to rising oil prices. We will increase R&D efforts in technologically-advanced vesselssuch as higher efficiency LNG carriers, LPG carriers, chemical tankers and offshore vessels, to tap this buoyant market. Emerging markets like Asia, Africa and South America still present healthy growth opportunities. We will continue to leverage the AVIC Group's existing overseas network, especially offices in emerging countries, to expand our presence in these economies. European banks have adopted a more selective lending policy in view of the Euro-zone crisis. Chinese banks, with abundant liquidity and access to US dollar funding, are well positioned to enter the maritime financing market and fill the lending gap. As part of the state-owned AVIC Group, we have strong support from the PRC domestic financial institutions and are able to assist the shipyards to secure new shipbuilding contracts through obtaining loans and/or procuring the issuance of refund guarantees by banks, as well as assist the ship-owners in obtaining financing, when required. 17

18 Strategies and Future Plans

19 Establish and improve our shipbuilding capabilities and efficiencies Establish our own shipbuilding capabilities by acquiring reputable shipyards in China and overseas, when suitable opportunities arise Expansion into shipbuilding and improvements on the manufacturing processes will complement our existing businesses and broaden our revenue streams Intend to position our Group as an investment-holding vehicle in the ship-trading and shipbuilding industry intention is to make longterm strategic investments and acquisitions in this industry globally through our Group Intend to acquire shipbuilding and related businesses from AVIC International and its subsidiaries, including AVIC International Beijing in the near future, subject to relevant governmental and regulatory approvals 19

20 Establish our research and design capabilities We intend to expand our products/services and value chains in the next few years, including establishing and building up on our capability in ship design. Acquire or form strategic alliances with ship design houses and other business partners Develop new, better and environmentally-friendly products for customers, and to enable us to own proprietary rights in our future ship designs Maximise the potential of our shipbuilding strategies and further develop our Group s shipbuilding business 20

21 Improve on our business model Provide greater variety of financing arrangements & value-added services 21

22 Expand our global reach and build our overseas network AVIC International has over 60 overseas offices across the world, with its business covering over 180 countries and regions. We plan to leverage on AVIC International s existing network in order to expand our business activities globally. 22

23 Develop more sophisticated and higher valueadded vessels We intend to enhance and develop our design and manufacturing capabilities in order to be able to build higher value-added vessels. LNG carriers LPG carriers Chemical tankers Offshore vessels 23

24 Key Investment Merits

25 Key investment merits We are a member of the AVIC Group, one of the largest industrial groups owned by the PRC Central Government We have an experienced and driven management team with in-depth industry knowledge As a member of the AVIC Group, we have strong backing from major PRC financial institutions The PRC remains one of the world s largest shipbuilding countries 25

26 Thank you