China Green Energy Industries, Inc. OTCBB: CGRE Investor Presentation – February 2011 www. chinagei.com
SAFE HARBOR This presentation may contain forward-looking statements. Such statements include, among others, those concerning the company's expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results of the Company to differ materially from those anticipated, expressed or implied in the forward-looking statements. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those anticipated include risks related to the company's ability to overcome competition in its market; the impact that a downturn or negative changes in the price of the company's products could have on its business and profitability; the company's ability to simultaneously fund the implementation of its business plan and invest in new projects; economic, political, regulatory, legal and foreign exchange risks associated with international expansion; or the loss of key members of the company's senior management; any of the factors and risks mentioned in the "Risk Factors" sections of the Company's amended current report on Form 10K/A filed on April 30, 2010. The Company assumes no obligation, and does not intend, to update any forward-looking statements, except as required by law. 2
INVESTMENT HIGHLIGHTS Growing end-markets and strong government support for environmentally friendly consumer products Newly-launched LEV business growing rapidly – to sustain revenue CAGR of more than 50% Proven LEV brand of NICONIA with existing annual sales of over 200,000 units Premier customer base and long-term relationships with major OEMs and Fortune 500 companies Rapid organic revenue growth and profitability 9 Mo. 2010 sales rose 152.8% to $23.9 million; net income increased 213.1% to $4.8 million Projected 2010 sales of $30 million ; plan to achieve > $100M in 1-2 and $200M in 3-5 years Highly-scalable operations and ability to gain operating leverage through increased utilization Clean capital structure ( no preferred shares, warrants or options outstanding ) Proven management team with established track records 3
ABOUT CHINA GREEN ENERGY China Green Energy is a manufacturer and distributor of high tech and environmentally-friendly consumer products Headquartered Changzhou, China Fortune 500 client base Wal-Mart, Carrefour, Home Depot, Ford, Pepsi, Coca-Cola, Carlsberg, Disney, etc. Products include: Light electric vehicles (“LEV”) Cryogen-free refrigerators HDMI cables 46,800 sq. meters manufacturing and office space 4
DEVELOPMENT 1993 Began operations of network cable 2001 Entered cryogen free refrigerator market 2003 Commenced sales of HDMI cables 2008 Launched LEV division 6/2010 Entered U.S. public capital markets 1/2011 Acquired NICONIA LEV brand * Real pictures of China Green Energy Industries, Inc. 5
BUSINESS TERRITORY Europe USA Changzhou PRC Australia By September 30, 2010, 27.1% of sales revenue contributed by overseas customers. Our major overseas customers are located in the USA, UK, Germany, the Netherlands, Taiwan, etc. 6
IMPROVING PRODUCT MIX 2009 2011 (E) 2011 1% 15% Light Electric Vehicle 38% Cryogen-free Refrigerator Cryogen-free Refrigerator 54% Cable & Wire 31% 61% Light Electric Vehicle 7
LIGHT WEIGHT ELECTRIC VEHICLES (LEV) Entered LEV market in 2008 Acquired NICONIA brand in Jan. 2011 LEV advantages vs. motorbikes: Less fossil fuel consumption Lower cost More convenient to park inside cities Less air and noise pollution LEV sales expected to account for 54% of revenue in 2011 vs. 1% in 2009 8
NICONIA LEV Acquired NICONIA LEV brand and sales network of approx. 350 retail stores in China Purchase price was approx. $3M NICONIA sells over 200,000 LEVs annually Projected sales for 2011 exceed $45M Estimated gross margins of 25% Economies of scale to be achieved through leveraging of production capacity 9
GLOBAL LEV MARKET OVERVIEW Shift in consumers preferences toward more energy efficient and lower emission vehicles Worldwide sales of electric two-wheel vehicles are expected to increase at a 9.4% CAGR through 2016 (Pike Research Report) China is the largest consumer and manufacturer of LEVs; Chinese market for LEVs grew at 29% CAGR 2004-2009 The fastest growth of LEVs will occur in the Middle East (54% CAGR), Latin America (30%), and North America (24%) Europe and the U.S. have started to provide government aid for LEV purchases Highly-fragmented market with no established leader Source: China Electronic Components Association 10
CRYOGEN-FREE REFRIGERATORS Entered appliance market in 2001 Cryogen-free refrigerators use less electricity at a lower price Contain zero cryogen (CFC/Freon); do not cause pollution during the manufacturing process Long-term OEM Fortune 500 customer base Includes global companies such as Ford, Pepsi, Coca-Cola, Disney, etc Extending product line to include portable refrigerators, wine cabinets, etc 11
SMALL HOME APPLIANCE MARKET Global home appliance sales increased to $85.9B in 2008 from $77.9B in 2007 China accounted for 18% of this market in 2008 Small electrical appliance demand in China grew at 16.5% CAGR between 2006 and 2008; faster than other export markets The kitchen sector is the largest and fastest growing segment of the small appliance market in China representing $12.4 billion in sales and 18.5% growth in 2008 China is the leading manufacturer of small home appliances Produced 1.6 billion units in 2008 Exports accounted for 74.3% of manufacturing output Cryogen-free refrigerator market highly fragmented with no major manufacturers Source: CCID Consulting, 2008-2009 Annual Report of Chinese Small Home Appliance Industry 12
HDMI AND NETWORK CABLE Commenced operations in 1993 High quality and competitively priced products Excellent customer services World-class customer base includes: Wal-Mart Carrefour Home Depot ISO9001, ISO14001, UL Certified 13
HDMI AND NETWORK CABLE MARKET HDMI Cable HDMI cable market projected to grow at ~250% CAGR to $1.7 billion in 2010 from $140 million in 2009 Increased HDTV installations in China and abroad driving demand Entry of 20 Gigabit/s HDMI 2.0 in 2010 with higher avg. selling prices Network Cable China’s cable industry has surpassed U.S.; projected 7 -8% annual growth rate U.S. demand for insulated wire and cable is expected to grow 4.3% annually to $21.5 billion in 2010 Product innovations will help boost demand, although pricing competition will remain intense 14
GROWTH STRATEGY Rapidly expand LEV sales through new OEM relationships and international sales channels Deepen penetration of Fortune 500 customer base and multinational retailers Expand product offering, focusing on environmentally friendly consumer products Extend cryogen-free product line to include new products such as thermostatic wine cabinets and thermostatic cosmetics cases Plan to launch solar-powered water heaters Increase sales of higher-margin, own-brand products Expand international sales force Strategic and highly accretive acquisitions 15
SALES & MARKETING Light Electric Vehicles (LEVs) Utilize overseas agents and direct OEM arrangements Primary focus on expanding OEM sales channels in Europe Identifying OEM customers in Australia, the U.S. and Asia Cryogen-free Refrigerator Utilize overseas agents and direct OEM arrangements Strategy to establish strategic alliances with additional multinational companies Network cable and HDMI cable Direct sales to multinational retailers including Wal-Mart, Carrefour and Home Depot Focus on adding new retailers and expanding within existing retail channels 16
COMPETITIVE ADVANTAGES Growing brand awareness for own brand products World-class OEM customer base and global distribution channels Reputation for high quality products and customer service Ability to rapidly launch new products into market Low-cost manufacturer with excess capacity and stable supply of raw materials 17
NINE MONTHS 2010 HIGHLIGHTS Sales revenue increased 152.8% to $23.9 million Gross profit increased by 174.5% to $8.2 million Net income increased 213.1% to $4.8 million Diluted EPS of $0.22 versus $0.07 for the same period last year $2.1 million of cash and no long-term debt as of September 30, 2010 Clean capital structure with no preferred, warrants, or options outstanding 18
Recommend
More recommend
