investor presentation - tri-tech.cn · investor presentation ... 2010 2009 founded as a ... water...
TRANSCRIPT
This presentation contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, underlying assumptions, and any other statements other than statements of historical facts.
These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in statements filed from time to time with the Securities and Exchange Commission.
All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Safe Harbor Statement
1
About Tri-Tech
Customers
CoreBusiness
Organization
• Municipalities, MWR (Ministry of Water Resources), • State-Owned Enterprises, such as CNPC, SINOPEC, PetroChina & CNOOC • Public and private sectors in China, India, Middle East and North America
• Water, Wastewater Treatment and Municipal Infrastructure• Water Resources Management Systems and Engineering Services• Industrial Pollution Control and Safety
• Headquartered in Beijing• 330 employees in 10 subsidiaries and one JV• Branch offices across China, India, and the U.S., entering lucrative water
treatment/processing markets in India, and other Asian/Middle East countries.
• A 40 acres R&D and manufacturing facility under construction in Tianjin
Tri-Tech Holding Inc. is a turnkey technology, products and engineering solutions provider to water resources management, municipal water and industrial water/wastewater treatment in China and international markets.
2
Milestone
2012
2011
2010
2009
Founded as a provider of technical solutions and services for water resource management.
IPO on NASDAQ Capital Market and became the first public Chinese company providing solutions to water resources engineering, municipal wastewater treatment and industrial pollution control.
Raised $33.1 million in gross proceeds in secondary offering. Established Tri-Tech U.S and Tri-Tech India Acquired BSST and began to provide services in industrial sectorsWon $60 Million contract Inner Mongolia Drinking Water Treatment Plant
Acquired J&Y International Inc. a Wisconsin water company and began to penetrate into seawater desalination, water recycling and zero liquid discharge of high salinity wastewater.Acquired a majority ownership of Yuanjie Water and expanded water supplying systems for high-rise buildings.Won Total $51 million international contracts in India, Qatar and Canada
2002
Won $3.6 Million water processing unit contract for a steel plant in MexicoAwarded Top 10 Chinese Emerging Water Enterprise
3
Warren Zhao, Chairman & Co-CEO, Co-Founder• 24+ yrs mgmt skills, technical and electric engineering expertise in Environmental Protection industry • Bachelor’s and Master’s degrees in electrical engineering from Northwestern Polytechnical University of
China
Philip Fan, President and Co-Founder• 23+ yrs mgmt skills, technical and engineering experience in water resources and environmental sectors• Bachelor’s and Master’s degrees in environmental engineering from Hunan University and Master’s
degree in civil engineering from Louisiana State University (LSU)• Registered professional engineer (PE, inactive) in the U.S. since 2001
Peter Dong, CFO and Co-Founder• 18+ yrs mgmt skills and finance expertise • Bachelor’s degree in computer science from Nanjing University of Aeronautics and Astronautics and
Master’s degree in economics from Renmin University of China
Gavin Cheng, Co-CEO• 25+ yrs mgmt skills and engineering expertise• Bachelor of Engineering and Master of Engineering degrees from Nanjing University of Aeronautics and
Astronautics• Executive MBA from Peking University in 2001
Experienced Leadership
4
Market Cap (4/12/2012) : $51.5 MShares O/S: 8.26 million Float : 60.6% of O/STotal institutional Positions: 24 institutional holders (14 North Americans), 13% of O/S;21 mutual funds, 13.6% of O/S Current % of O/S held by Top 10 institutional holders: 12.5%
Regional Institutional & Mutual Funds Concentration
North America 11%
Europe 15.6% Asia
39.4%
Stock Ownership (as of April. 2012)
5
Key Financial Facts & Projection$M
illio
n
6
8.416.8
43.5
85.9
128
1.7 3.9 7.1 8.1 12.1
0
20
40
60
80
100
120
140
2008 2009 2010 2011 2012E
$0.92 $0.98 $0.98
$1.47
$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60
2009 2010 2011 2012E
Diluted EPSRevenue and Net Income
Backlog and Pipeline
11.5
59.6
94.589.7
127.1
0
20
40
60
80
100
120
140
09/12/31 10/12/31 11/12/31
Backlog
Pipeline
Total backlog of $94.5 million (as of Dec. 31, 2011)•$63.1 million (Municipal)•$16.1 million (Water Resources)•$15.3 million (Industrial)
Projected Pipeline of 127.1 million (as of Mar. 2012)• $66.8 million (Municipal)• $15.7(Water Resources)• $44.6 (Industrial)
$Mill
ion
Sector Significant AwardsContract Ceiling
($Mil)Water
TreatmentOdors Water Treatment Plant initial and Expansion Phases 60
Water Treatment System for a Canadian Hotel 0.69
Sewage and Industrial
Wastewater Treatment
Three sewerage collection system and sewerage treatment plants projects for three townships in India
42
Reused Water Quality Upgrade Project for Wastewater Treatment Plant of TAEZ
1.46
Water processing unit contract for a steel plant in Mexico 3.63
Solid Waste Disposal
Solid Waste Sanitary Landfill Project for Xinle, Hebei Province 3.7
Water Conservancy
32 flash flood monitoring and forecasting projects in 28 Chinese provinces and municipalities, were implemented during 2011, improving safety for over 100 million people and their properties
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Seawater Desalination
Seawater desalination unit contract in Qatar 8.3
Industrial Production
Safety
Yanchang petroleum Group production security system and emergency command center contracts
4
Selected Project Portfolio
Segment 1- Water and Wastewater Treatment
Scope• Water Supply – High-rise Bldg and Water Treatment Plant• Wastewater – Treatment Plants, Water Reuse, and Sludge Disposal• Municipal Solid Waste – Treatment and Disposal Facilities
Business Model• EPC• Proprietary Technologies and Products• Installation and Commissioning Services• BT, BOT• Qualified WWTP Operator
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Competitors• Sound Environment (ShenzhenEx, HKE and SGX listed)• OriginWater (ShenzhenEx listed)• Beijing Enterprises Water Group (HKE listed)• Beijing Capital Co. (ShenzhenEx Listed )• BCEG Environment Development Co. (State-Owned)• Veolia• Siemens• Degremont
Segment 1- National Footprint & Peers
Key Customer• Odors Yuande Water Co. Ltd.• Municipal Government of Xinle, Hebei Province• Kuitun Wastewater Treatment Plant of Xinjiang• Buerjin Government of Xinjiang
Segment 2 - Water Resources Management
ScopeDrought and Flood ControlGround and Surface Water MonitoringWater Quality Monitoring and Irrigation
Business ModelProprietary Technologies and ProductsSoftware and System EngineeringSystem Integration
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Competitors• Beijing Richway Tech. Development (State-Owned)• Automation Research Institute for Water Conservancy
of Nanjing (State-Owned)• Beijing Golden Water Information Tech. (State-Owned)• Beijing Huitu Tech. (private)• Xi’an Summit Tech. Co. (Private)• Shenzhen Hongdian Tech. Co. (Private)• Nari Company (State-Owned)
Segment 2- National Footprint & Peers
Key Customer• Ministry of Water Resources• Water Conservancy Departments and Bureau• Hydrology and Water Resources • Administration of different provinces and regions • Flood Control and Drought Relief Offices of
Different provinces and regions
Scope• Industrial Water/Wastewater Treatment/ZLD• Seawater Desalination• Air Pollution Control• Safety and Emergency Response
Business Model• Turnkey Solutions• Proprietary Technologies• System engineering• Qualified WWTP Operator
Segment 3 – Industrial Pollution Control and Safety
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Key Customer• PetroChina• Interface Modular Carpet (China) Co. Ltd.• SINOPEC• Yanchang Petroleum Group • Odors Xinsheng Natural Gas Development Co.• Dawangdian Industry Park of Hebei• Tianjin Airport Economic Park Water Co.
Segment 3 - National Footprint & Peers
Competitors• Beijing Water Business Doctor Co.
Ltd. (China GEM listed)• GE RCC Thermal
Global Footprint & Peers
Key Global Customers • Jasper Park Lodge, Canada• Bihar Urban Infrastructure Development Corporation
Limited, India• Qatar Petrochemical Co.• Ambbio in Mexico• CNOOC• CNPC Nigeria
Competitors in International Markets• GE – RCC Thermal Products• IDE• Veolia - Sidem• Aqua-Tech
Industrial Growth Drivers
China 12th Five-Year Plan on Environmental Protection
• $536 billion for environmental protection• Add 42 million tons of daily sewage treatment
capacity, 85% treatment rate by 2015Continued increase the use of recycled water
• Limit 635 billion cubic meters annual consumption by 2015Drinking Water TreatmentNew Safe Drinking Water Standard GB5749-2006
• 71 New water quality indexes added• RMB 220 billion for upgrading of purification
facilities.
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State Council Circular No. 1• RMB 4 trillion in water conservancy over
next 10 yearsNewly Initiated National Flash Flood Forecasting Program in 1800+ counties throughout China to be completed by 2013Strong Fund Allocation to flash flood projects
$69 billion in industrial wastewater treatment during 12th Five-Year Plan Period
• Zero Liquid Discharge (ZLD) for industrial wastewater treatment particularly in North and Northwest China
• Seawater Thermal Desalination for industrial processing waterIndustrial Emission Control opportunities in Air Pollution Control, toxic wastes treatment, particularly in oil and chemical industries
Water and Wastewater Market in India • The overall market is estimated to be more than $4 billion per year with a projected
annual growth rate of 10–12% for the next 5 to 10 years• $900 million per year in wastewater treatment with an annual growth rate of 14%• $2.07 billion water supplying contracts and $5.7 billion waste water projects from
2011 to 2013
Seawater Desalination Market• The Middle East holds 50% of the world capacity with daily output of 11 million cubic
meters fresh water• Global seawater desalination market will be $70 to $95 billion by 2015• The Middle East and U.S. will be the fastest growth market
Solutions to Oversea Markets• Offers EPC, Turnkey and Specialty Solutions, Engineering, and Products, etc.
Oversea Market Opportunities
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Strategy of Growth – Diversification
Geographical Diversification• Domestic – West and Northwest regions of China• International – India, the Mideast and North America
Sector Diversification• Public Sectors - Municipalities, Government agencies• Private and SOE industries, such as oil, gas, petrochemical and power generation
Business Model Diversification• EPC• Turnkey Solutions• Specialty and Products• BOT• Facility Management, etc
14
R&D Activities
Tianjin Baoding R&D Center Under Construction
• 40 Acres Land Property
• Phase I – completed 20,000 square meters construction
Forward Osmosis Products Localization
• Landfill Leachate Treatment Feasibility Study
• Localization of Personal Hydration Package
MBR – Membrane Technologies
Groundwater Monitoring Remote Terminal
Unit Software Upgrade
Drought Information and Decision-Making Systems
15
Core Technologiesand Solutions
Patents / Software Certificates
Qualifications
Core Technologies and Capabilities
• ZLD Solutions for Industrial Wastewater Treatment• VOC Treatment• Forward Osmosis Technology• Flash Flood Disaster Warning Information Dissemination
System
• 11 patents • 39 software copyrights
• System Integration (Level 3)• Research and Evaluation for Hydrology and Water Resource
(Level B)• Operation License for the Waste Water Plant (Level B) …
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Corporate Operation & Management
To shape Tri-Tech into a world-class company with modernized management practices of international standards and interfaces to adopt regional differences with a tailored approach,
Talent Development and Retaining• Backbone Employee Training System• Performance Evaluation and Comprehensive Compensation systems
Internal Control • Deployment of ERP• Evolving implementations of SOX404
Business Development and Management• CRM and other management information systems
17
Investment Highlights (NASDAQ: TRIT)
Seasoned and Devoted Management Team
Well Established Presence in Large, Well-Funded Growing Global Market
Water Resource Management/Pollution Control Very High Chinese National Priorities
Advanced and Proprietary Technologies and Products
Strong Backlog and Pipeline
Fast Growing
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For the Year Ended December 31, 2011
Segment 1%
Segment 2%
Segment 3%
Total%
System integration $ 58,025,035 99.8 $ 9,633,141 74.5 $ 14,743,297 99.4 $ 82,401,473 96.0
Hardware products 98,904 0.2 3,278,426 25.4 83,280 0.6 3,460,610 4.0
Software products $ 0 0 $ 10,838 0.1 $ 0 0 $ 10,838 0
Total revenues 58,123,939 67.7 12,922,405 15.0 14,826,577 17.3 85,872,921 100
Segment 1 - water, wastewater treatment and municipal infrastructure Segment 2 - water resource management systems and engineering services Segment 3 - industrial pollution control and safety
Revenue Breakdown
67.7%
15%
17.3%
By SegmentSegment1 Segment2 Segment3
96%
By CategorySystem Integration Hardware Products
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Period Ending 31-Dec-11 31-Dec-10
Total Revenue 85,873 43,535
Cost of Revenue 64,018 28,768
Gross Profit 21,855 14,767
Operating Expenses
Selling General and Administrative 10,937 5,834
Others 179 279
Operating Income or Loss 10,739 8,654
Net Income Applicable To Common Shares 8,088 7,077
In ‘000 USD.
Diluted EPS $ 0.98 $0.98
Income Statement - Years ended Dec. 31, 2011
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Period Ending 31-Dec-11 31-Dec-10AssetsCurrent Assets
Cash And Cash Equivalents 14,024 24,901 Net Receivables 29,904 22,677 Inventory 7,706 5,887 Other Current Assets 6,121 1,903
Total Current Assets 57,755 55,367 Non-Current Assets*
Long-Term Unbilled Revenue 59,299 15,938Plant and Equipment, Net 1,437 1,045Construction in Progress 4,567 -Intangible Assets, Net 11,610 4,331Long-Term Restricted Cash 2,542 203Long-Term Prepayment on Land Use Right Purchasing - 5,285Goodwill 1,441 594
Total Non-Current Assets 80,896 27,396 Total Assets 138,651 82,763
LiabilitiesCurrent Liabilities
Accounts Payable 41,777 12,497Short/Current Long Term Debt 10,784 2,718Other Current Liabilities 1,887 1,665
Total Current Liabilities 54,448 16,880Long Term Debt - -Other Liabilities 3,456 1,562Minority Interest 6,018 2,028Total Liabilities 63,922 20,470 Stockholders' Equity
Total Stockholder Equity 74,729 62,293
In ‘000 USD
Balance Sheet
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Breakdown of Non-Current Assets
59.3
4.6
81Mil Ending Dec 31, 2011
Long-Term Unbilled Rev.
Plant& Equipment,Net
Construcition in Progress
Intangible Assets,Net
Long-Term Restricted Cash
Long-Term Prepayment onLand Use Right PurchasingGoodwill
15.9
5.3
27Mil Ending Dec 31, 2010
Million in USD
Contact Information
Tri-Tech Holding Inc.Phil Fan, PresidentJanice Wang, IR Manager+ 86 010 5732 3696+ 86 010 5732 [email protected][email protected]
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Auditor: Marcum Bernstein & PinchukContact: Brew BernsteinEmail: [email protected] York City, NY646.442.4811
Legal Counsel: Kaufman & CanolesContact: Bradley A. HanebergEmail: [email protected] East Cary Street, Suite 1400Two James CenterRichmond, Virginia 23219T (804) 771.5700F (804) 771.5777
Michael Gaugler Dmitriy Shapiro
Brean Murray &Carret Co., Inc.212-702-6539
Global Hunter Securities, LLC646-264-5606
Analyst Coverage: