(NASDAQ “JST”) · BLOKSET Switchgear Switchgear & Unit Substation Switchgear Description:...
Transcript of (NASDAQ “JST”) · BLOKSET Switchgear Switchgear & Unit Substation Switchgear Description:...
INNOVATION FOR A LOW CARBON FUTURE
JINPAN INTERNATIONAL LTD.
(NASDAQ “JST”)
March 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
JST
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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
JST
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Management, Sales, and New Products
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.
JST
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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
JST
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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
2009
2004
2007
2008
2002
2005
2000
1998
1997
Company Milestones
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Products
Cast Resin Transformers
VPI Transformers and Reactors
Switchgears
MAX
CUSTOMER
VALUE
Unit 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)
China Energy Savings Product (China)
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
JST
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Unit Substation
BLOKSET Switchgear
Switchgear & Unit Substation
Switchgear
Description: Switchgears are used to
isolate electric equipment in the grid
and de-energize equipment to allow
technicians to perform maintenance.
Unit Substation
Description: Functions as a mini-
power transformation station that
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 2009: US$159 M
2010: US$ 144.5M
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.
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Reactors
Unit
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.
•2009 Electricity Consumption: 3.643 Trillion KWH.* •Consumption by Industry: 3.185 Trillion KWH (5.14% over 2008)* •Consumption by Consumers: 0.457 Trillion KWH (11.87% over 2008)*
Sales of electrical equipment is also driven by infrastructure development.
•China’s investment in fixed assets 2009: RMB 22,486 Billion (30.1% over 2008) ** • Secondary Industry: RMB 8,227.7 Billion (26.8% over 2008)** •Real Estate Development: RMB 3,623.2 Billion (16.1% over 2008)**
Electricity Consumption In China*
1.8
2.1
2.4
2.8
3.2
3.6
3.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2003 2004 2005 2006 2007 2008 2009
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 2009 National
Economic and Social Development.” (February
25, 2010)
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.
• The Global Wind Energy
Council announced that
the world’s wind power
capacity grew by 31% in
2009, adding 37.5 GW to
bring total installations to
157.9GW.
Source: Global Wind Energy Council New Release March 2, 2010
Wind Energy
Growth Drivers
17
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Growth Drivers
Source: Global Wind Energy Council New Release March 2, 2010
The main markets driving significant growth continue to be Asia, North America, and Europe, each of which installed more than 10GW of new wind capacity in 2009.
China was the largest market for wind energy equipment in 2009. China added 13 GW of new capacity, nearly doubling its wind generation capacity from 12.1 GW in 2008 to 25.1 GW at the end of 2009.
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
Employees
Capacity*
Haikou
1993
50,000㎡
Customized
Transformers;
Switchgears
689
6 Mil KVA
2008
20,000㎡
Standard
Transformers
157
3 Mil KVA
2009(Phase I)
72,000㎡
Reactors; CIGS
Switchgear (2011)
138
142,000㎡
984
Wuhan Shanghai Total
Manufacturing Facilities
Stats
*Transformer manufacturing capacity
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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.
JST
科技创新 低碳环保 绿色发展
• China: Direct sales network consisting 35 regional sales offices located in major cities with 59 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
24
JST
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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.
• Europe
Europe was our top export market in
2009 for wind energy products.
Although exports to Europe were down in 2010, we continue to build relationships with large European OEMs that serve the global market.
2.3
6.0
19.6
23.7
11.5
0.0
5.0
10.0
15.0
20.0
25.0
2006 2007 2008 2009 2010
Millions (USD)
International Sales
Sales
25
Year 2009 2010 2011*
OEM 1 3 4
2011 OEM figures are based on
management’s current expectations.
Number of OEMs that List JST as a Qualified Supplier
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New Product – Gas Insulated Switchgear
Description: High voltage switchgears used to
isolate equipment in the electrical grid. The switch
is encapsulated with sulfur hexafluoride gas (SF6) in
a sealed air tight enclosure.
Specifications: 12KV/24KV/35KV+40.5KV
Currently, the RMU (12KV) is in production. JST
will rollout the other models in the product line
over 2011 and 2012.
Advantages Over Conventional Switchgears: • Resistant to environmental variables;
• Smaller size (b/c the SF6 can better suppress
electrical arc than air);
• Requires less maintenance.
Market Size: US$
800M to US$ 1 billion
Annually in China.
(Management’s
Estimate)
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New Product – Manufacturing Facility
Laser Guided Welding System
(Imported From Germany) Laser Cutting System
(Imported From Germany)
JST
科技创新 低碳环保 绿色发展
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
28
JST
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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
2006 2007 2008 2009 2010
Net Sales 82.3 119.6 154 158.9 144.1
% Growth 53.5% 45.4% 28.8% 3% -9.4%
Gross Profit 22.9 41.6 48.9 67.2 56.1
% Margin 27.8% 34.8% 31.7% 42.3% 38.9%
EBITDA 10.5 20.9 24.8 35.6 21.2
% Margin 12.8% 17.4% 16.1% 22.4% 14.7%
EBIT 9.7 19.6 23.1 32.0 17.5
% Margin 11.8% 16.4% 15.0% 20.1% 12.2%
Net Income 7.4 16.4 19.8 28.9 13.3
% Margin 9.0% 13.7% 12.9% 18.2% 9.2%
Diluted Earnings per share 0.55 1.01 1.21 1.78 0.81
Financial Performance
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Balance Sheet Statement of cash flow
31-Dec-10 31-Dec-10
Cash 27.5
Current assets
145.4 Net Cash provided by operating activities 1.9
Other assets
53.6 Net cash used in investing
activities (8.3)
Total assets
226.5 Net cash provided by financing
activities 10.3
Net increase in Cash
3.9
Current liabilities
73.5
L/T Liability
1.60
Equity
151.4
Total liabilities & equity
226.5
($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