(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

科技创新低碳环保绿色发展 3

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


Management, Sales, and New Products

Growth Drivers

Products

Company Highlights

Markets

Contents

Financials

Investor Relations

JST


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


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


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

JST


Products

Cast Resin Transformers

VPI Transformers and Reactors

Switchgears

MAX

CUSTOMER

VALUE

Unit Substations

JST


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)

JST


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

JST


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


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)

JST


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.

JST


Reactors

Unit

Substations

Transformers

Switchgears

4%

12%

7%

2010 Revenue by Product

77%

2010 Revenue

China vs. International

Int'l

China

8%

92%

Markets

JST


2010 Revenue

Conventional vs. Wind Energy

Wind

Coventional

89%

11%

Custom

Standard

2010 Transformer Revenue

Standard VS. Custom

55%

45%

Markets

JST


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

JST


• 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

JST


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

JST


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

JST


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.

JST


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

JST


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.

JST


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


• 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


• 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

JST


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)

JST


New Product – Manufacturing Facility

Laser Guided Welding System

(Imported From Germany) Laser Cutting System

(Imported From Germany)

JST


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


$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

JST


($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


JST


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)



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]

mailto:[email protected]

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