(NASDAQ “JST”) · BLOKSET Switchgear . Switchgear & Transformer Substation. Switchgear...
Transcript of (NASDAQ “JST”) · BLOKSET Switchgear . Switchgear & Transformer Substation. Switchgear...
INNOVATION FOR A LOW CARBON FUTURE
JINPAN INTERNATIONAL LTD.
(NASDAQ “JST”)
August 2011
JST
科技创新 低碳环保 绿色发展
Management Presenters
2
Albert Sheng Vice President of Investor Relations
Mark Du Chief Financial Officer
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Disclaimer
Forward-Looking Statements This presentation and oral statements made in conjunction with it may contain or incorporate by reference information
that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities and the effects of future regulation and competition.
These statements are only our current expectations. They are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements involve risks, uncertainties and assumptions. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Actual results may differ materially from those expressed in these forward-looking statements due to a number of uncertainties and risks, including the risk s described in our latest annual report on Form 20-F and other risks, including: our ability to successfully implement our business strategy; uncertainties about the future growth in electricity consumption and infrastructure development in the markets in which we
operate; inability to attract and retain qualified management and personnel; increases in the costs of our raw materials; the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less
expensive products and services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing;
the effects of rapid technological changes and vigorous competition in the markets in which we operate; the effects of additional or higher taxes in the countries in which we operate; changes in competition and the pricing environments in the countries in which we operate; the failure to keep pace with technological changes in our industry; potential product liability claims; the effects of the higher degree of regulation in the markets in which we operate; general economic and political conditions in the countries in which we operate or other countries which have an impact on our
business activities or investments; inability to successfully adapt our internal controls over financial reporting to changes in circumstance; the monetary and interest rate policies of the countries in which we operate; and exchange rates.
You should not rely on any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after we distribute this presentation, except as otherwise required by law.
Use of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures within the meaning of Regulation G promulgated by the
Securities and Exchange Commission. Refer to the Appendix for a discussion of these numbers and a reconciliation to their nearest equivalent financial measures calculated in accordance with GAAP.
Disclaimer
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Management & Sales
Growth Drivers
Products
Company Highlights
Markets
Contents
Financials
Investor Relations
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Company Highlights
Jinpan is a manufacturer of specialized
power distribution equipment.
Leading supplier of cast resin
transformers in China.
Supplier of choice to leading global
OEMs for innovative power
distribution solutions.
Jinpan is well positioned to capitalize on
growth in –
China’s electrical infrastructure
market; and
Global alternative energy markets.
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JINPAN INTERNATIONAL LTD.
HAINAN JINPAN ELECTRIC CO., LTD.
JINPAN ELECTRIC CHINA CO., LTD.
JINPAN INT’L (USA), LTD.
WUHAN JINPAN
ELECTRIC CO. LTD.
SHANGHAI JINPAN
ELECTRIC CO. LTD.
This is a simplified organization
chart. Please refer to the
Company’s 20F filing for
detailed information on its legal
organization structure.
Company Highlights
Guilin Jun Tai Fu
Construction and
Development Co. Ltd.*
* Primary assets is 38 acres of land, the site of part of a new manufacturing facility to be built in Guilin, Guangxi Province.
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Company founded in Haikou Hainan PRC 1993
ISO9001 Certification
IPO & Listing on Amex
ISO14001 Certification
OHSAS18001 Certification
“Best New Supplier Award” from OEM customer
“China Well Known Brand” & “Inspection Exempt Product”
UL Certification Forbes Best 200 Companies in Asia Under US$1 Billion
Wuhan Manufacturing Facility Operational
Shanghai Manufacturing Facility Operational US Sales Support Facility Opened
2004
2007
2008
2002
2005
2000
1998
1997
Company Milestones
2009
2011
Acquire land for Guilin Manufacturing Facility.
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Products
Cast Resin Transformers
VPI Transformers and Reactors
Switchgears
MAX
CUSTOMER
VALUE
Transformer Substations
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Dry Type Cast Resin Transformer
Description: Cast Resin Transformer is
a type of transformer designed to use
air to cool its induction coils.
Key Applications:
Transmission and
distribution of electricity.
JST offers a range of
medium voltage cast resin
transformers for commercial &
residential developments,
transportation infrastructure
projects, industrial
applications, and wind towers.
Specifications:
Voltage: Max 35 KV
Transforming Capacity: Max 25
MVA
Transformer (2.5 MW
Wind Towers)
Isolation Transformer
(Gas Turbines)
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Dry Type Cast Resin Transformer
Our transformer products meet the following international codes and standards:
GB
IEC
ANSI/IEEE/NEMA
CSA
JEC
Our transformer products have been certified by:
UL (US)
KEMA (Holland and US)
CE (EU)
GOST-R (Russia)
UL&KEMA Certificates
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VPI Transformer and Reactors
Reactor
Description: VPI transformers and
reactors are components of converters
and inverters. They are used to change
voltage and filter electricity.
Application: wind, solar, rail
transportation.
VPI Transformer
(2.5MW Wind)
Reactor(1.5MW Wind) Reactor (2.5MW Wind)
Specification:
Voltage: Max 1 KV
Transforming Capacity: Max 500KVA
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Transformer Substation
BLOKSET Switchgear
Switchgear & Transformer Substation
Switchgear
Description: Switchgears are used to
isolate electric equipment in the grid
and de-energize equipment to allow
technicians to perform maintenance.
Transformer Substation
Description: Integrated assembly of
low and high voltage switchgears,
transformers, and monitoring and
control systems in a compact fully,
enclosed unit. Lowers the voltage of
electricity drawn from the grid to levels
that can be fed into general purpose
transformers
Gas Insulated Switchgear (Ring Main Unit 12KV)
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Markets
40% 50%
2010 Revenue by End Market
Industrial
Residential and
Commercial
Utilities and Infrastructure
10%
40%
50%
Revenue 2010: US$ 144M
2011*: US$184M – US$190M
Jinpan’s products are used in a wide range of applications:
Industrial (40%)
Factories, refineries, ship yards, etc.
Utilities and Infrastructure (50%)
Utilities: power plants, wind farms, and electrical distribution networks.
Infrastructure: airports, train/subway stations, and other municipal projects.
Residential and Commercial (10%)
Office buildings, shopping centers, high rise apartments, etc.
*Revenue guidance based on management’s current expectations.
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Reactors
Transformer
Substations
Transformers
Switchgears
4%
12%
7%
2010 Revenue by Product
77%
2010 Revenue
China vs. International
Int'l
China
8%
92%
Markets
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2010 Revenue
Conventional vs. Wind Energy
Wind
Coventional
89%
11%
Custom
Standard
2010 Transformer Revenue
Standard VS. Custom
55%
45%
Markets
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Growth Drivers
Jinpan manufactures equipment for the distribution of electrical power. Demand for our products is driven by demand for electricity. •2010 Electricity Consumption: 4.1923 Trillion KWH.*
•Secondary Sector (Industry): 3.1318 Trillion KWH (10.91% average annual growth rate from 2005 to 2010)* •Consumer: 0.5125 Trillion KWH (12.65% average annual growth rate from 2005 to 2010)*
Sales of electrical equipment is also driven by infrastructure development. •China’s investment in fixed assets 2010: RMB 27,814 Billion (23.8% over 2009) **
• Urban : RMB 24,141.5 Billion ( 24.5% over 2009) Rural: RMB 3,672.5 Billion (19.7% over 2009) • Real Estate: RMB 4.826.7 Billion (33.2%
over 2009)**
Electricity Consumption In China*
2.1
2.4
2.8
3.23.4
4.2
3.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2004 2005 2006 2007 2008 2009 2010
Trillion kWh
* Based on data published by the China Electricity Council.
** Data from the National Bureau of Statistics of China. See “Statistical Communiqué of the People’s Republic of China on the 2010 National Economic and Social Development.” (February 28, 2011)
Growth in Electricity Consumption & Infrastructure
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科技创新 低碳环保 绿色发展
• Wind is one of the fastest growing sources of alternative energy, because the technology is clean, reliable and easy to install.
• According to the Global Wind Energy Council, 38.3 GW (US$ 71 billion) of new wind power capacity was added in 2010, bring total installed capacity to 197GW. Total installed wind power generation capacity increased by 24.1% during 2010.
Source: “Global Wind Report: Annual Market Update 2010”, Global Wind Energy Council (April 2011)
Wind Energy
Growth Drivers
17
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Growth Drivers
Source: “Global Wind Report: Annual Market Update 2010”, Global Wind Energy Council (April 2011)
The top markets for wind energy equipment are China, EU, and the US.
In 2010, China led the world in newly installed and cumulative capacity.
Newly Installed Capacity: 18.9 GW (half of the global total in 2010)
Cumulative Capacity: 44.7 GW (ranked No.1 for the first time)
In 2010, both the U.S. and EU experienced declines in newly installed capacity.
US: 5.11GW (-50% y-y)
EU: 9.26GW (-10% y-y)
Wind Energy
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Growth Drivers
Source: “Global Wind Report: Annual Market Update 2010”, Global Wind Energy Council (April 2011)
The Global Wind Energy Council forecasts a recovery in growth in North American and European markets and robust growth in Asian markets in 2011.
As a supplier of transformers and reactors for wind power applications, we see a recovery in international orders from the U.S. and Europe for transformers and reactors for wind power applications.
Wind Energy
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Conventional Power Distribution
Generate more revenue by increasing the sale of high margin custom transformers
Improve the manufacturing efficiency of standard transformers by further automating the production process
Develop and market new products (e.g. Gas Insulated Switchgears)
Wind Power Equipment
Increase the number of OEM customers
Develop new wind power products with OEM customers
Capitalize on domestic wind market opportunities
Growth Strategy
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JST USA*
JST R&D Center JST Haikou
JST Shanghai JST Wuhan
Manufacturing Facilities
*Jinpan’s US headquarter serve as an office,
storage, and sales support facility.
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Established
Size
Products
Max Capacity*
Haikou
1993
44,000㎡
Cast Resin
Transformers;
Switchgears
Cast Resin
Transformer (6 Mil
KVA)
Switchgears
(5600 Units)
Unit Substation (400)
2008
20,000㎡
Cast Resin
Transformers
Cast Resin
Transformer
(5 Mil KVA)
2009
71,000㎡
VPI Transformers and
Reactors;
Gas Insulated Switchgears
VPI Transformers and
Reactors (20000 Units)
Gas Insulated Switchgears
(New product line still in
ramp up phase.)
135,000㎡
Wuhan Shanghai Total
Manufacturing Facilities
Stats
*Capacity data as of May 2011.
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Management
Strict implementation of international quality, environmental, and work health and safety standards enables us to efficiently manage manufacturing on a large scale.
• ISO 9001 Certified • ISO 14001 Certified • OHSAS 18001 Certified
Run Enterprise Resource Planning system (SAP) that combines management information, inventory control and cost control into a single integrated platform.
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Engineering
Jinpan Electric has more than 90
degreed engineers.
State of the art CAD tools allow our
engineers to build 3D models and 2D
projections, to verify design
constraints, and to collaborate online.
Proprietary software to design the
electromagnetic system in dry type
cast resin transformers.
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• China: Direct sales network consisting 35 regional sales offices located in major cities with 66 direct sales employees.
• International sales office in the
U.S. • Diversified customer base
Jinpan’s extensive sales network is a significant barrier to entry for foreign and domestic competitors seeking to enter the China market.
Sales
25
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• International Market Strategy
Supply the international market through OEMs.
Leverage the marketing reach of large
international OEMs and our expertise in manufacturing power distribution equipment to expand our presence in international markets.
• North America
Currently, Jinpan is one of two
manufacturers of UL certified cast resin transformers in the world.
Established a transformer assembly and testing facility in Carlstadt NJ.
We expect the U.S. and Canada to be
our top export market in 2011.
• Europe Europe was our top export market in
2009 for wind energy products.
Although export orders to Europe declined in 2010, we are witnessing a recovery in European orders in 2011.
6.0
19.6
23.7
11.5
24.0
0.0
5.0
10.0
15.0
20.0
25.0
2007 2008 2009 2010 2011
Millions (USD)International Sales
Sales
26
Year 2009 2010 2011*
OEM 1 3 4
*2011 OEM figures and 2011 export sales figures are based on management’s current expectations.
Number of OEMs that List JST as a Qualified Supplier
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Continue to focus on China’s growing electrical infrastructure market
Invest in new, state-of-the-art facilities to increase manufacturing capacity and efficiency
Promote and develop high end products, particularly in wind energy
Leverage our relations with OEMs and UL certification to expand our global
reach
Compelling Growth Strategy
27
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$5.1$7.2
$10.5
$20.9 $21.2
$35.6
$24.8
$0
$5
$10
$15
$20
$25
$30
$35
$40
2004 2005 2006 2007 2008 2009 2010
$3.5
$7.4
$16.4
$19.8
$29.0
$13.3
$4.5
$0
$5
$10
$15
$20
$25
$30
2004 2005 2006 2007 2008 2009 2010
$42.3$53.6
$82.3
$119.6
$154.0 $159.0$144.0
$0
$30
$60
$90
$120
$150
$180
2004 2005 2006 2007 2008 2009 '2010
Net Income & Margins
($Millions)
$14.7 $17.2$22.9
$41.6
$67.2
$56.1
$48.9
$0
$10
$20
$30
$40
$50
$60
$70
$80
2004 2005 2006 2007 2008 2009 2010
Gross Profit & Margins Net Sales
EBITDA & Margins
(1)
(1)
Financial Performance
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($Millions, except per share data) FYE December 31
2007 2008 2009 2010 6 months
2010 6 months
2011
Net Sales 119.6 154 158.9 144.0 56.3 88.2
% Growth 45.4% 28.8% 3% -9.4% 56.7%
Gross Profit 41.6 48.9 67.2 56.0 23.2 33.2
% Margin 34.8% 31.7% 42.3% 38.8% 41.2% 37.6%
EBITDA 20.9 24.8 35.6 20.9 7.8 13.8
% Margin 17.4% 16.1% 22.4% 14.5% 13.9% 15.6%
EBIT 19.6 23.1 32.0 17.3 6.0 11.7
% Margin 16.4% 15.0% 20.1% 12.0% 10.7% 13.3%
Net Income 16.4 19.8 28.9 13.4 3.2 10.0
% Margin 13.7% 12.9% 18.2% 9.3% 5.7% 11.3%
Diluted Earnings per share 1.01 1.21 1.78 0.81 0.19 0.61
Financial Performance
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Balance Sheet Statement of cash flow
30-June-11 30June-11 Cash 8.3
Current assets
185.7
Net Cash used in operating activities (34.5)
Other assets
55.4
Net cash used in investing activities (2.3)
Total assets
249.4
Net cash provided by financing activities 16.1
Net decrease in Cash
(20.7)
Current liabilities
83.8
L/T Liability
1.6
Equity
164.0
Total liabilities & equity
249.4
($Millions)
Financial Performance
科技创新 低碳环保 绿色发展
Albert Sheng Vice President of Investor Relations Jinpan International (USA) Ltd. 390 Veterans Blvd. Carlstadt, NJ 07072 T: 201 460 8778 (x135) F: 201 460 8775 E: [email protected]