gateway to china’s safety. forward looking statement the statements made in this presentation are...
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Gateway to China’s safety
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FORWARD LOOKING STATEMENTFORWARD LOOKING STATEMENT
The statements made in this presentation are forward- looking statements. Risk factors that could cause actual results to differ materially from those projected in forward-looking statements include, but are not limited to, general business conditions, managing growth, and political and other business risk. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk and other factor detailed in the Company's reports filed with the Securities and Exchange Commission. China Security & Surveillance Technology, Inc. undertakes no duty to update those forward-looking statements.
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CHINA’S LEADER IN TOTAL SECURITY & CHINA’S LEADER IN TOTAL SECURITY & SURVEILLANCE SOLUTIONSSURVEILLANCE SOLUTIONS
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As of 31st March 2008
* Excluding all Non-cash expenses
2008 Q1 FINANCIAL HIGHLIGHTS2008 Q1 FINANCIAL HIGHLIGHTS
Adjusted Net Income (in USD M)*
103%
Revenues (in USD M)
86%
Adjusted Diluted EPS (in USD)*
60%
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CORPORATE STRUCTURECORPORATE STRUCTURE
China Security & Surveillance Technology, Inc.China Security & Surveillance Technology, Inc.NYSE: CSR
CSST (PRC) Ltd.
Golden Group(Shenzhen)
Chain Star Investments Ltd(Hong Kong)
CSST(Hong Kong)
Link Billion Investment Ltd(Hong Kong)
Ocean Pacific Technology Ltd(Hong Kong)
Allied Rich Ltd(Hong Kong)
Cheng Feng(Shanghai)
Hongtianzhi Electronics(Shenzhen)
HiEasy (Wuhan)
MinKing (Changzhou)
Tsingvision(Hangzhou)
China Safetech Holdings Ltd (BVI)
Kitt Grant Ltd(Hong Kong)
Sincere On Ltd(Hong Kong)
Sharp eagle (HK) Ltd(Hong Kong)
Stonesonic(Chaozhou)
Longhorn(Shenzhen)
Guanling(Beijing)
100%
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CSR IS UNIQUELY POSITIONED TO BENEFIT CSR IS UNIQUELY POSITIONED TO BENEFIT FROM VERTICAL INTEGRATIONFROM VERTICAL INTEGRATION
Total Solution Provider
Addressing complete Security & Surveillance Needs of our clients
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SUITE OF PRODUCTSSUITE OF PRODUCTS
DVR Systems Camera Systems
Alarm SystemsAccessories
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WIDE-RANGE OF APPLICATIONSWIDE-RANGE OF APPLICATIONS
Transportation/Public Areas
• Traffic monitoring• Bus stations• Airports
• Shopping centres• Parks• Tourist destinations
Gov’t/Non-Profit
• Government buildings• Schools• Hospitals
• Police stations• Border controls• Sea ports
Others
• Factories• Industrial applications
• Entertainment venues• Exhibition halls
Commercial/Residential
• Commercial buildings• Banks• Hotels• shopping malls
• Residential estates
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REVENUE BREAKDOWNREVENUE BREAKDOWN
Revenues by Customers
• Corporate – 60%• Government – 40%
Revenues by Component
• System Integration – 83%• Manufacture – 11.3%• Distribution – 5.7%
NB : As of 31st March 2008
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GROWING INDUSTRYGROWING INDUSTRY
USD BN
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
2004 2005 2006 2007 2008 2009 2010
$4.30 $6.91
$12.08
$18.05
$26.06
$33.18
$43.10
China’s Security Market
Source : China Public Security Guide
Key Market Drivers
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KEY OPPORTUNITIESKEY OPPORTUNITIES
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SIGNIFICANCE OF SAFE CITY PROJECTSSIGNIFICANCE OF SAFE CITY PROJECTS
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The Hong Kong StandardFeb 15, 2006
SURVEILLANCE FOR ENTERTAINMENT VENUESSURVEILLANCE FOR ENTERTAINMENT VENUES
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COMPETITIVE ADVANTAGECOMPETITIVE ADVANTAGE
One-Stop-Shop
Large SalesNetwork
ComprehensiveProduct Portfolio
Approvals & Permits
Leadership Position
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COMPETITIVE ENVIRONMENTCOMPETITIVE ENVIRONMENT
More than 15,000 vendors in the market
3 Levels of competition Characteristics
None are vertically integratedNone are vertically integrated
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ACQUISITIONSACQUISITIONS
Date Company Principle Operations
Apr 2008 Beijing Aurine Divine (“Guanling”) Leading security equipment distributor in the Northeast region (Panasonic, Axis Communication, Samsung, etc)
Apr 2008 Stonesonic Leading monitoring equipment hardware manufacturer
Apr 2008 Longhorn Security Security alarm systems manufacturer
Jul 2007 Hangzhou Tsingvision Solution provider of intelligent management platform for network video
Jun 2007 Changzhou Minking Leading manufacturer of high-speed dome cameras
May 2007 HiEasy Provider of advance compression technology
Apr 2007 Shenzhen Hongtianzhi Leading digital camera manufacturer
Sept 2006 Ji’an Golden An Ke TechnologyShenzhen Golden Guangdian TechnologyShenyang Golden Digital TechnologyJiangxi Golden Digital Technology
Equipment distribution (CSST only acquired the Intangible Assets of all these companies).
Jul 2006 Shanghai Cheng Feng Leading security & surveillance software developer and DVR manufacturer
Dec 2005 Shenzhen Yuan Da Wei Si Engaged in sales and development of security & surveillance systems(CSST only acquired the Intangible and tangible Assets)
Closed
Wandaiheng Industrial Park in Shenzhen
Shenzhen Jin Lin Technology Traffic Management System provider
Alean Shenzhen Security Access control systems manufacturer
Pending
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PARTNERHIPSPARTNERHIPS
Date Company Principle Operations
Mar 2008 Mobotix AG IP Camera provider
Mar 2008 Shanghai LG Security systems provider
Jan 2008 Beijing DM System Integrator in Beijing
Sept 2007 Chuangguan System Integrator in Shenzhen
Closed
Yingke System Integrator in the Northeast region
Nantun Security consultancy and training service providerPending
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OVERALL STRATEGYOVERALL STRATEGY
Higher Margins
Recurring Revenues
Greater Visibility
Phase 1 Phase 2 Phase 3
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SEGMENTATION OF BUSINESSSEGMENTATION OF BUSINESS
5 Business Segments
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Notes:• Figures in USD millions
• 2004 : Child Van Wagoner & Bradshaw, PLLC | 2005 - 2007: GHP Horwath
FINANCIALSFINANCIALS
Organic Growth (% of Revenues)
93%
79%
89%
Organic Acquired
Revenues
CAGR: 97%
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Notes:• Figures in USD millions
• 2004 : Child Van Wagoner & Bradshaw, PLLC | 2005 - 2007: GHP Horwath
FINANCIALSFINANCIALS
$0.35 $0.41 $0.89 $1.20 $0.32Adjusted EPS
$0.34 $0.39 $0.86 $0.91 $0.11USGAAP EPS
Gross Profits
CAGR: 76%
Net Income
Net Income (USGAAP) Net Income (Adjusted)
Net Inco
me (Adjuste
d) CAGR: 7
7%
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FINANCIALSFINANCIALS
Key Balance Sheet Items
Cash and cash equivalents
Working Capital
Total Assets
Total Liabilities
FY 2006
FY 2007
Q1, 2008
$31.0
$63.5
$114.4
$159.7
$24.5
$377.4
$177.6
$89.1
$165.8
$395.8
$177.8
$77.1
USDMM
Balance Sheet Highlights
Revenues increased 87%
Adjusted Net Income increased 103%*
Gross Profits Increased 120%
Income from Operations Increased 72.4%
• From $38.4M to $71.8M
• From $6.76M to $13.7M
• From $10.1M to $22.3M
• From 26.3% to 31.0% of revenues
• From $6.5M to $$11.1M
Q1, 2008 Financial Highlights (YoY)
* NB: Adjusted for non-cash expenses such as D&A, EIP and the redemption accretion on the convertible notes
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FINANCIAL GUIDANCEFINANCIAL GUIDANCE
* NB : Cash earnings
Key Financials Guidance
Revenues
Adjusted Net Income
Adjusted EPS*
FY 2008 Q2, 2008
$70 - $76
$1.59 - $1.76
$380 - $400
$15.9 - $16.5
$0.36 - $0.38
$85 - $87
USDMM
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KEY PERSONELKEY PERSONEL
Key Management Team
Mr. Guoshen TuChief Executive Officer
• Successful entrepreneur with proven track record• Founder and major shareholder
Mr. Terence YapChief Financial Officer
• CFO since January 2007, Director since March 2006 & Vice Chairman since May 2006• Previously held key management positions in other multi-national companies
Mr. Daiyou QianChief Operating Officer
• Founder of Tsingvision Intelligence System Co. Ltd• Senior Engineer of CETC Institute 52
Mr. Zongxin XieChief Audit Executive
• More than 15 years experience in China banking industry• Audit and regulatory compliance
Dr. Ruimin HuHead of R&D
• Member of Wuhan University Academic Association• PhD from Central China Scientific Technology University
Independent Board of Directors
Mr. Peter MakIndependent Director
• Chairman of Audit Committee• Previously served as the Snr Managing Partner of Arthur Anderson South China• Significant board experience with other leading companies in Asia
Mr. Runshen LiIndependent Director
• Chairman of Corporate Governance and Nominating Committee• Served in several high level positions within China’s Ministry of Public Security• More than 40 years experience in China’s security industry
Mr. Robert ShiverIndependent Director
• Chairman of Compensation Committee• Over 30 years experience in the security and communication solutions field.
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INVESTMENT HIGHLIGHTSINVESTMENT HIGHLIGHTS
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THANK YOUTHANK YOU