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Transcript of HALFWAY\Artwork Design by HK Pres Center\POWERPOINT TEMPLATE\Pail2013\v2\Cover.psd HALFWAY\Artwork...
Jan. 2015
Important Notice
You must read the terms, conditions, limitations, notifications, restrictions, acknowledgments and representations in the following (the “Terms”) before reading or making any other use of this presentation. In reading or making any other use of this presentation, you acknowledge and agree to be bound by the following Terms.
These materials, and any further information made available to you during this presentation, are fully based on information that has already been in public domain. Ozner Water International Holding Limited (the “Company”) will not be discussing or providing any information or materials which are not already in the public domain. This presentation, the materials contained herein, and any further information made available to you, may not be copied, reproduced or redistributed to any other person in any manner or published, in whole or in part, for any purpose, at any time, without the prior written consent of the Company. You will return to the Company all materials provided to you at the end of this presentation.
This presentation does not purport to provide a complete description of the matters to which it relates. No representation, warranty or undertaking, express or implied, is or will be made or given by, and no responsibility or liability is or will be accepted by, any person (for the avoidance of doubt, including but not limited to, the Company, its subsidiaries, affiliates, controlling persons, directors, officers, employees, agents, representatives or advisers of any of the foregoing), with respect to the accuracy, reliability, correctness, fairness or completeness of this presentation or its contents or any oral or written communication in connection with this presentation. In addition, any analyses included herein are not and do not purport to be appraisals of the assets, stock or business of the Company or any of its holding companies, subsidiaries or other affiliates.
Nothing contained in this presentation is, or shall be, relied upon as a promise or representation as to the future or as a representation or warranty otherwise. Nothing in this presentation constitutes or forms part of, or should be construed as constituting or forming part of, any regulatory, valuation, legal, tax, accounting, investment, or other advice. Nothing in this presentation constitutes or forms part of, or should be construed as constituting or forming part of, any recommendation, solicitation, offer or commitment to purchase, sell, subscribe for or underwrite any securities by any party, or to extend any credit or provide any assurance to you or to enter into any transaction.
You should consult with such advisers as you deem necessary to assist you in making any investment decision with respect to the Company, including, but not limited to, your accountants, investment advisors and legal and/or tax experts. None of the Company, its subsidiaries, affiliates, controlling persons, directors, officers, employees, agents, representatives or advisers of any of the foregoing shall have any liability (in negligence or otherwise) in respect of the use of, or reliance upon, the information contained herein by you or any person to whom the information herein is disclosed.
The contents of this presentation are subject to corrections or changes at any time without further notice. The information contained in these materials also contains certain forward-looking statements, which are based on various assumptions and subject to risks and uncertainties. In light of these assumptions, risks, and uncertainties, the future facts, events and circumstances described in these materials may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward looking statements. The forward-looking statements are not a guarantee of future performance. Each of the Company, its subsidiaries, affiliates, controlling persons, directors, officers, employees, agents, representatives or advisers of any of the foregoing assumes no obligation to (1) provide access to any additional information, (2) correct any inaccuracies in this presentation, or (3) update or otherwise revise this presentation, for any reason whatsoever, including without limitation to reflect new information, events or circumstances that arise, occur or become known after the date of this presentation.
This presentation is for information purposes only and does not constitute an offer or invitation for the sale or purchase of any security. Any such offer or invitation will be made solely through a prospectus or offering circular in compliance with applicable laws and any decision to purchase or subscribe for any security should be made solely on the basis of the information contained in such prospectus or offering circular issued in connection with such offer or invitation.
2
3
Table of Contents
1. Company Overview 3
2. Unique Competitive Advantage 6
3. Products & Technology 17
4. Forward Looking Strategy 20
5. Financial Information 24
6. Appendix 27
只為安全淨水1. Company Overview
5
Company Overview
Ozner, as a leading drinking water solution provider in China, is a high-tech company focusing on R&D, manufacturing and leasing of water purifier. With superior proprietary technologies, our state-of-the-art purifiers produce high quality purified drinking water. We provide air sanitization services as well.
We attribute our success also to the breakthrough “water purification lease and service” model, which revolutionized the conventional equipment-selling model. Incorporating Internet/Cloud technology, our proprietary logistics, warehousing, technician and service teams keep providing top-notch post-sales service to end users. The company generates revenue from annual service fees during the whole product life cycle, ensuring steady cash inflow and strong profitability.
Ozner serves more than 540k accounts and over 10 million customer base. Managing about 2,000 distributors, our proprietary post-sales team provides installation and maintenance services to customers in more than 150 cities in 30 provinces in China (excl. Tibet only ).
Ozner’s Shaanxi manufacturing base has officially kicked off operation on August 2014. Together with the existing Zhejiang base, it will become one of the pillars for future development.
Ozner( SH)Headquarter
Ozner(HZ) Base
Ozner Shaanxi Base
6
2003 2011 20122010 2013
Drinking water supplier for:
1) 26th World University Games
2) Beijing Aerospace
Control Center
Deputy Chief of Industry Standard
Promulgation Panel for water
purification industry
Mr. Xiao founded Ozner’s
predecessor
Investment from SAIF
Investment from Goldman Sachs
Most Promising Chinese Enterprise Award from Fudan
University and Ernst & Young
History
Key Milestones
Drinking water supplier for
Shanghai Expo
Source: Prospectus, Company Information
Investment from Ares
2014
Successful IPO on the HKSE’s main board: 2014.HK
Company History
只為安全淨水2. Unique Competitive Advantage
8
Unique lease and service business model – difficult to duplicate the sophisticated distribution and service network
Superior proprietary technologies and strong R&D capabilities
Deputy Chief of the official standard-setting panel
Experienced professional management team
Large addressable market with strong growth in China1
2
3
4
5
Industry
Potential
Setting Industry Standard
Innovative Business Model
R&DCapability
Management Team
Unique Competitive Advantage
Water Resource 33% of major rivers, 40% of major lakes and reservoirs, and 60% of groundwater in China were contaminated and not drinkable¹
Water Treatment Plants
90%+ of water treatment plants¹ were equipped with water treatment technologies that cannot remove certain metal ions and chemicals
Water Delivery Aged and eroded pipes cause water leakage and subsequent breeding
of pathogenic microorganisms in tap water
Toxic substances leak into tap water from inner lining of water pipes
Secondary Water Supply
Water tanks on building roofs vulnerable to secondary pollution caused by air pollution, container erosion and lack of maintenance
End Use as Drinking Water
Tap water may be potable after boiling, though certain metal ions and chemicals would remain
Increased Focus on Drinking Water Quality Due to Worsening Water Contamination
Source: Frost & Sullivan Report¹ Data as of 2012.
Pollution from contaminated primary water sources and from secondary pollution
9
China Tap Water Supply Chain Situation
20
08
20
09
20
10
20
11
20
12
20
13
E
20
14
E
20
15
E
20
16
E
20
17
E
0
50
100
150
200
15.4 20.8 27.7 34.9 42.554.4 69.5
86.4105.0
125.1
Top 10 Players 9.9%
Other Players90.1%
Industry Leaders Are Well-Positioned to Capture Share in a Fragmented Industry in Infant Stages
Source: Frost & Sullivan Report1 2012 Data
Continuous Double-Digit Growth in the Drinking Water Purifier Market in China
(RMB bn)
Significant Penetration Potential in a Fast Growing Yet Highly Fragmented Market
2013E-2017E CAGR 23.1%
Setting Industry Standard
Setting Industry Standard Pioneer and Leader in Water Purification Industry
Sales Growth Outperformance Over IndustryLeading Market Position1
First to adopt leasing and service business model in China’s water purification industry
First to introduce the Internet of Things (IoT) to China’s water purification industry
Largest market share in the water purification service market
Leading water purification technology
Source: Prospectus, Company Information1 Sales value for Ozner is calculated based on contract sales value.
Top 3 in Overall MarketTop 3 in Commercial Segment
402
140
105
(RMB mm)Market Share
5.4%
1.9%
1.4%
935
700
460
(RMB mm)Market Share
2.2%
1.6%
1.1%
Commercial SegmentResidential Segment
Industry
231.8
22.5%
2011-2013 CAGR
Industry
48.8%
36.8%
2011-2013 CAGR
11
231.8%
Help set national technical standards for water purifying machines in China
Appointed as deputy chief of “Industry Standard Promulgation Panel” under the “National Household Electric Appliance Technical Standardization Committee”
Win-Win Management Philosophy
Distributors manage end user sourcing only with zero inventory / Ozner’s proprietary post-sales team provides service to end users
Activation Card: Each card corresponds to one purifier only, bearing distributor’s exclusive ID number. Produced by Ozner.
Recharge Card: To pay service fees, corresponding to specific distributor’s exclusive ID number only, hence continuous income for distributors. Produced by distributors.
Unique Dual-Card / Cloud Management System
Innovative Lease and Service Business Model Difficult to Duplicate
Only For Sourcing End Users
Inventory Management
MachineInstallation
Post-installationService
End UserDistributors
Strong economic incentives to ensure distributors’ loyalty
Minimum reliance on distributors
Manage our assets more effectively
Faster penetration and better access to potential end users
Recurring revenue stream
No need to purchase or maintain inventory
No need to provide post-installation services
Benefits for Distributors Benefits for Ozner
Business Model Drinking process
Benefits to End Users
Water Quality Services Cost Convenience
13
Ozner’s Leaseand
ServiceModel
PurifierSalesModel
vs.
vs.
Tap Water
Water Purification Service Drinking Water
Tap Water
Water Purifier Drinking Water
Buy water purifiers
After-sales Service
On-site Service (in c.7-10 days)
Pay extra service charges
Barreled WaterModel Barreled
WaterWater Delivery Daily
Changing of Barrels
Drinking Water
Water Storage
Delivery to End Users’ Premises
Contact service center
Pay annual service fee and enjoy 24/7
after-sales service
Lease and service business model providing tangible benefits to end users
Innovative Lease and Service Business Model Difficult to Duplicate
* 30% - 60% cost saving for barreled water users
14
• Nearly 200 service centers covering 30 provinces and more than 150 cities
• More than 1,000 service professionals (online call / dispatch center + ground engineers)
• Established standardized proprietary inventory, logistics and service operational systems fundamentally tackled problems associated with water purification industry’s conventional contempt for service
• Established more than 1,000 standardized service procedures, e.g. “77 Rule”
Service and Distribution Network
Beijing
Guangxi
Hunan
Hubei
Hainan
Xinjiang
Ningxia
Jiangsu
Shanghai
Hebei
Inner Mongolia
Shanxi
TTianjin
Shandong
Sichuan
Henan
Heilongjiang
Jilin
Anhui
Zhejiang
Fujian
Shaanxi
Guangdong
South China(centered in Guangzhou
and Shenzhen)
East China(centered in Shanghai)
North China(centered in
Beijing)
Liaoning
Chongqing
Jiangxi
Yunnan
Qinghai
Guizhou
Gansu
Innovative Lease and Service Business Model Difficult to Duplicate
15
Recognized By Domestic and Global Institutions
International SGS Test
Drinking Water Permit from China’s Ministry of Health
CB Certificate
CE Certificate(European Union)
RoHS Certificate(European Union)
Patented Inventions and Designs Breakthrough Technology
Most safe and stable water purification technology: APO+ technology to ensure drinking water quality (filter + sterilization)
RO water recovery technology: water recovery ratio increased from 25% to 95% and passed CNAS’ test
Apply internet technology to Ozner’s Cloud Platform, enhance customers’ experience and lay down foundation for future value-added service
100+ patents, including:
– Patents on ozone technology
– Patents on reverse osmosis technology
– Patents on water and air purification technology
Strong R&D capabilities and achievements recognized globally
Set up own R&D center with accomplished researchers, and supported by collaborations with Hong Kong Polytechnic University and Zhejiang University, to develop:
Water quality meets or surpasses many domestic and global industry standards
Purifying machines pass numerous product and process safety tests conducted periodically
USA NSF Test
Superior Proprietary Technologies and Strong R&D Capabilities
Experienced Professional Management Team
Founderand
Chairman
Mr. XIAO Shu
Over 15 years of industry and business experience; inventor of several patented water and air purification technologies
Established Shanghai Comfort in 2005, formerly head of production and R&D at several appliance companies
Oversees strategic development and execution of business plans
Production
Mr. XIAO Lilin
Over 10 years of experience in production and supply chain management Previously in the production department of numerous electronics and appliance manufacturers Oversees purifying machine production and construction of facilities
TechnologyandR&D
Mr. ZHU Mingwei
Nearly 20 years of industry and technical experience
Qualified engineer; member of technology certification committee
Oversees R&D and air sanitization business
Salesand
Services
Mr. HE Jun
Over 12 years of industry and business experience
Accredited as senior quality and environment manager
Oversees service and sales of water purification business
Finance
Mr. TAN Jibin
10 years of experience in finance Formerly senior auditor in Deloitte and associate finance manager in Hong Kong-listed company Oversees financial and administrative affairs
Source: Prospectus, Company Information
16
Experienced Professional Management Team
只為安全淨水3. Products & Technology
Key Model Types
UsageHub model:
for corporate headquarters and department stores
For office use
For schools and hospitals
For kitchen use, countertop style
For kitchen use, under-cabinet style
Diversified Portfolio of Water Purifying Machines
First Generation Second Generation
Service Renewal
Recharge on-site Remotely via wireless
ServicingEnd users call for
on-site troubleshooting
Machine automatically reports to service center
Water Recovery Ratio
20% to 50% ≥95%
Machine Management
Manual recordingReal-time tracking
via GPS
Corporate Models Household Models
Source: Prospectus, Company Information
Strong Focus on Advanced Products and High-quality Service Drives Significant Growth
18
Advanced Features of Water Purifying Machines
Superior Proprietary Technologies and Strong R&D Capabilities
Most safe and stable water purification technology: APO+
technology to ensure drinking water quality (filters + O3
sterilization + RO Membrane)
Self-developed durable material: self-developed
“antioxidant ABS” shell, 12-year lifespan
Only certified control system in the industry: control
through card and the internet
Most advanced RO water recovery ratio in the world
Non- standard spare parts to ensure “purity” of machines
Multiple absorption filters
Remove harmful substances in water
Reverse osmosis with 0.0001 micrometer pore filter
Improved by patented technologies
Ozone sterilization to kill germs and prevent secondary pollution
Energy efficient and no chemical contamination
Periodic water quality testing and consumption tracking
Alerting service center to assign repair service
A
PO
+
Innovative APO+ Technology
19
Source: Prospectus, Company Information1 95%+ for second generation machines; water recovery ratio for first generation machines is c.20%-50%.
Absorption
Purification
Ozonation
Cloud Technology (+)
Proprietary, patented technologies tailored specifically for water purification in China
Superior Proprietary Technologies and Strong R&D Capabilities
20
Conventional Sterilization Method vs. Ozner’s Ozone Technology
1. Heat• Danger of getting burnt• Time and energy consuming• Inefficient sterilization effect
Technology
• Airtight seal up ensures safety• High voltage treatment, less energy
consumption
2. Chemicals• Chemical odor• Bacteria resistance • Harming residue
• Natural source of oxygen• Environmental friendly
3. UV-Rays • Blind angle
• No blind angle as ozone dissolves into water
• Repeated heating leads to bad taste; chemical odor Taste
• Oxygenation leaves fresh taste
Proprietary Technology Tailored to Meet Water Purification Demand in China
Superior Proprietary Technologies and Strong R&D Capabilities
只為安全淨水
4. Forward Looking Strategy
22
Intensify Sales and Marketing Efforts
Increase Production Capacity
Expand Distribution Network
Our Strategies
Maximize offline access to experience of Ozner’s water and service, sourcing online traffic
Multiple online channels to promote stickiness and conversion
Social networking platforms to promote word-of-mouth advertising
Our Implementations in 1H2014
B2B2C: The domestic and overseas public companies and chain enterprises and their employees and subsidiaries will install our water purification machines
O2O: Forming O2O platform with the initial advantage of on-ground distribution channels and online platform.
Our Strategies
Expand production facility in Shaanxi province
Our Implementations in 1H2014
We have completed construction of our new factory in Shaanxi on August 18, 2014 and started commercial production, which will bring our overall production capacity to 370,000 machines per year
Our Strategies
Further expand distribution network and increase market share
Our Implementations in 1H2014
We have engaged more than 250 new distributors in the 1H2014 to enhance our sales forces
Our distribution network has entered into 15 new cities in 1H2014 and is now covering over 140 cities across 30 provinces in China
1 2
43
Source: Prospectus, Company Information
Acq
uir
ing
En
d U
sers
Retain
ing
En
d U
sersA
cqu
iring
En
d U
sers
Enhance Service Quality & Shorten Response Time
Our Strategies
Expand regional sales offices and local service teams
Using technology to shorten service response time Our Implementations in 1H2014
We have launched our new products, “cloud” water purifier which is able to remote manages the water purification machines through internet
Further enlarged service center staff team and increased our service vehicles in 1H2014
Forward Looking Strategy
23
Offline Access to Ozner Experience
Ozner Experience BarAirports, Railway Stations,
Cinema, Parks, Supermarkets, etc.
Ozner Smart CupMass market, existing or
potential customers
B2B2CLarge corporate user base
Branding CooperationBroader existing and potential client base
Online Interaction and Conversion
Traffic
Multiple channels to acquire traffic leading to successful online conversion
Forward Looking Strategy
Maximizing awareness and access
Revolution -quantifying
water quality
Efficient utilizationof existing strong
client base
Value-added serviceto retain and attract
customers
SNS Interaction
Viral Expansion
24
Forward Looking Strategy Established offline and online platform
Existing B2B Advantages
Huge distribution network – solid base for O2O strategy
• B2B2C/Group-purchase
• Potential resource facilitating establishment of offline
experience points
Differentiated B2B model ensures sustainable expansion
of corporate client base
Virtuous Circle created
Well-Managed Online Platform
Seasoned CRM professionals managing :
• Proprietary and self-managed customer database
“Li Ka Tong” membership system : the online users
acquired through offline stores, code scanning , APPs, and
strategic branding partnerships will converge on this
platform.
只為安全淨水5. Financial Information
26
1H 2014 - Financial Highlights
Revenue increased 29.6% to RMB232.0 million, mainly attributed to the growth of the water purification business
Net profit decreased by 9.0%, mainly due to exchange gain/loss, one-off listing expense and share option expense. After excluding such effects, the adjusted net profit was RMB93.2 million in 1H 2014, increased by 42.3% YoY
Adjusted Net profit Margin increased from 36.6%(1H2013) to 40.2%(1H2014)
Six month ended June 30
(RMB In million)2014
(unaudited)2013
(unaudited)% change
Revenue 232.0 179.0 29.6 %
Water purification services 187.0 148.8 25.6 %
Air sanitization services 45.0 30.2 49.1 %
Gross Profit 157.7 120.9 30.4 %
Gross Profit Margin 68.0 % 67.5 %
Net Profit 67.1 73.7 (9.0)%
Net Profit Margin 28.9 % 41.2 %
Adjusted Net Profit1 93.2 65.5 42.3%
Adjusted Net Profit Margin 40.2% 36.6 %
2011 2012 2013 1H 20140
50 100 150 200 250 300 350 400 450
53 124
185
58
53
196
305
182
72
120
123
2011 2012 2013 1H 2013 1H 20140
100
200
300
400
57
197
313
149 187
(RMB mm) (RMB mm)
Revenue Gross Profit and Margin
Water Purification Business
2011 2012 2013 1H 2013 1H 20140
100
200
300
400
0.0%
30.0%
60.0%
90.0%
47
159
247
112 143
81.8% 80.5% 78.7% 75.4% 76.4%
Source: Prospectus, 1H 2014 Interim Results, Company Information1 Including revenue from trainings and sales of goods2 RMB 34mm of contract sales from previous fiscal year is to be recognized in 2H 2014
Revenue from water purification business continues to be the key growth driver
2011 2012 2013 1H20140
50
100
150
200
250
300
350
400
53 124
185
58
72
120
157
144 125
244
342
202
Contract Sales
(RMB mm)(RMB mm)
Recognized Revenue in Current Year (Rental Income)
27
2
Rental Income to be Recognized in Next Fiscal Year
Rental Income to be Recognized in Current Fiscal YearRental Income from Previous Fiscal Year
Rental Income in the Current Fiscal Year
YoY Growth = 25.6%
Source: Prospectus, interim result1 Renewal rate represents the percentage of our water purifying machines that remained installed and in service at the same end user’s premises after one-year service period.
High Renewal Rates1
Machine Model 2012 2013 1H2014
Corporate 98.6% 97.2% 97.1%
Household 99.5% 99.4% 99.3%
28
Large Installment Base and High Renewal Rate
Fast Growth in Installment Base
2011 2012 2013 1H20140
100
200
300
400
500
101276
371 414
6
33
92126
107
309
463
Corporate Household
540(‘000 Units)
2011-1H2014 CAGR = 91.1%
Our total installed base was over 540,000 by end June 30, 2014
The renewal rates for our existing customers are consistently above 97%, with household renewal rates as high as 99.3%
Our large customer base and high customer renewal rate serve as strong foundations for our sustainable growth
Strong Foundations for Sustainable Growth
2011 2012 2013 1H 20140
50
100
37 51
42
7
30
38 50
42
67
88 92
49
2011 2012 2013 1H 20140
50
100
37 51 42
7
37
81 80 41
30 38
34
2011 2012 2013 1H 2013 1H 20140
20
40
0%
5%
10%
15%
20%
25%
30%
35%
11
28 26
9
15
24.7%
30.5% 28.9% 28.7%
33.1%
(RMB mm)
Revenue
Contract Sales
(RMB mm)
Air Sanitization Business
29
Gross Profit and Margin
Sales Revenue
(RMB mm)
2011 2012 2013 1H 2013 1H 20140
20
40
60
80
100
120
140
45
93 88
30 45
(RMB mm)
Source: Prospectus, 1H 2014 Interim Results, Company Information1 RMB 16mm of contract sales from previous fiscal year is to be recognized in 2H 2014
Stable air sanitization business to provide revenue diversification
1
Contract Sales to be Recognized in Next Fiscal Year
Contract Sales to be Recognized in Current Fiscal YearRevenue From Contract Sales of Current Fiscal YearRevenue From Contract Sales of Previous Fiscal Year
YoY Growth = 49.1%
2011 2012 2013 1H 2013 1H 20140
20
40
60
80
100
120
140
0%
5%
10%
15%
20%
25%
13 21
45
14
44
13%
7%
11%
8%
19%
% of Revenue
2011 2012 2013 1H 2013 1H 20140
20
40
60
80
100
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
19
38
57
27
33
19%
13%14%
15%14%
% of Revenue
Effective operating cost control
(RMB mm) (RMB mm)
Selling and Distribution Expenses Administrative Expenses
Selling, Distribution & Administrative Expenses
30
Source: Prospectus, 1H 2014 Interim Results, Company Information
Selling and Distribution Expenses in 1H2014 increased by 22.1% from 1H 2013, mainly due to promotion of the second generation water purification machine in March and the increase in costs of selling, marketing and service representatives resulted from the growth in sales activities
Administrative Expenses increased by 29.8 million, primarily attributed to an one-off listing expense amounting to RMB 21.4 million and share option expenses amounting to RMB3.5 million
c.8% ex. IPO
expenses
Highly visible recurring revenue and stable cash flow
(2,000)
(1,000)
0
1,000
2,000
3,000
4,000
5,000
(1,660)
1,145
450 450 450 450 450 450 450 450 450
(RMB)
Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10
Illustrative Cash Flow Structure (1st Generation Household Model)
Accumulated cash flow for Ozner
Manufacturing Cost
Source: Prospectus, Company Information1 Yr. 1 cash flow is assumed to be the mid-point of the range of first-year annual leasing fee (RMB 1,010-1,280); Yr. 2 to Yr. 10 cash flow is assumed to be the mid-point of the range of subsequent year annual
leasing fee (RMB 400-580), less the service fee of RMB 40, 2 Renewal rate represents the percentage of our water purifying machines that remained installed and in service at the same end user’s premises after one-year service period.
Service resources in 150 cities for sufficient end user coverage
Timely response and standardized service procedures to on-site servicing requests
High Renewal Rates2
Machine ModelAverage Renewal
Rates
Corporate 97%
Household 99%
3,5351
31
Payback period of c.2 years
IRR of 37%
High End User Satisfaction
Recurring revenue and stable cash flow
只為安全淨水
6. Appendix
33
Income Statement
Year ended December 31, Six Months ended Jun 30
2011 2012 2013 2013 2014
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Revenue
Water purification services 57,379 197,793 313,690 148,829 186,952
% of Revenue 56.1% 68.1% 78.0% 83.1 % 80.6 %
Air sanitization services 44,913 92,603 88,374 30,218 45,070
% of Revenue 43.9% 31.9% 22.0% 16.9 % 19.4 %
Total 102,292 290,396 402,334 179,047 232,022
Cost of sales
Water purification services (10,467) (38,601) (66,746) (36,560) (44,161)
Air sanitization services (33,832) (64,403) (62,796) (21,557) (30,137)
Total (44,299) (103,004) (129,542) (58,117) (74,298)
Gross Profit 57,993 187,392 272,792 120,930 157,724
% Margin 56.7% 64.5% 67.8% 67.5 % 68.0 %
Other income and gains 5,282 2,486 20,792 9,649 7,484
Selling and distribution costs (19,205) (38,284) (56,969) (27,320) (33,358)
Administrative expenses (12,798) (20,966) (45,008) (13,931) (43,759)
Other expenses (2,368) (6,595) (6,180) (3,100) (5,118)
Finance costs (20) - (1,848) - (664)
Profit before tax 28,884 124,033 183,579 86,228 82,309
% Margin 28.2% 42.7% 45.6% 48.2 % 35.5 %
Income tax expense (5,933) (22,342) (30,667) (12,495) (15,242)
Profit and total comprehensive income for the year/period 22,951 101,691 152,912 73,733 67,067
% Margin 22.4% 35.0% 38.0% 41.2 % 28.9 %
Total Comprehensive Income for the year / period 22,951 101,691 152,912 73,733 67,042
Diluted EPS - - - 5.82 5.16
34
Balance Sheet
As of December 31, As of June 302011 2012 2013 2014
RMB’000 RMB’000 RMB’000 RMB’000
Revenue generating assets 148,051 384,127 585,346 714,806Property, plant and equipment 23,897 87,121 231,962 341,740Land use rights - - - 38,521Intangible assets 774 44,417 68,891 65,352Goodwill 545 26,037 26,037 26,037Prepayment for acquiring property, plant and equipment 5,476 19,215 32,007 23,507Deferred tax assets 4,343 5,460 7,141 11,640Total non-current assets 183,086 566,377 951,382 1,221,603
Inventories 29,538 38,800 36,891 65,903Trade receivables 10,662 37,639 50,629 36,030Prepayments, deposits and other receivables 66,658 50,504 49,443 43,824Pledged deposits - - 67,019 74,858Cash and cash equivalents 170,241 169,198 154,341 933,171Total current assets 277,099 296,141 358,323 1,153,786Total assets 460,185 862,518 1,309,705 2,375,389
Interest-bearing bank loans and other borrowings - - 212,717 105,655Trade payables 43,197 37,040 57,813 94,637Other payables, advances from customers and accruals 49,756 88,586 130,396 168,102Due to a shareholder - 17,026 - - Due to a related party 287,757 422,820 407,955 - Deferred revenue 46,405 75,083 96,532 118,525Income tax payable 10,151 34,209 64,167 79,684Total current liabilities 437,266 674,764 969,579 566,603
Deferred tax liabilities - 7,124 6,584 6,742Total non-current liabilities - 7,124 6,584 6,742 Total liabilities 437,266 681,888 976,163 573,345
Equity
Share capital - - - 13,928Share Premium - - - 1,384,068Reserves 22,919 180,630 333,542 404,048Total equity 22,919 180,630 333,542 1,802,044
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