HONG LEONG ASIA LTD ANNUAL GENERAL MEETING

Transcription

1 HONG LEONG ASIA LTD ANNUAL GENERAL MEETING

2 MACROECONOMIC ENVIRONMENT IN PERSPECTIVE

3 Macroeconomic Factors Strong GDP growth in operating countries 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% Chinese government stimulus program -1.3% 14.5% 8.7% 10.3% % % China Singapore Malaysia Vehicle rural subsidy scheme ( 汽车下乡 ) and New for Old Vehicles Scheme ( 以旧换新 ) both discontinued in 2011 Electrical goods rural subsidy program ( 家电下乡 ) extended to all provinces since 2009 and Exchange New for Old Program ( 以旧换新 ) implemented in 9 major cities

4 Macroeconomic Factors Chinese government s initiative to move goods and people Demand for trucks and buses Proactive Singapore government policies to balance construction activities via public housing and infrastructure projects Continued sustainable level of demand for building materials in Malaysia as a result of its Economic Transformation Program (In Billion) Value of Construction Activities Singapore Malaysia (in SGD) (in MYR)

5 Macroeconomic Factors Volatility of China s level of manufacturing activities China s Purchasing Managers Index 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% -1.00% -2.00% -3.00% Inflationary pressure Consumer Price Index China Singapore

6 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 Macroeconomic Factors High energy and material costs (USD/Barrel) Brent Crude Oil (spot) (USD/MT) 12,000 10,000 8,000 6,000 4,000 2,000 - Copper (spot) (USD/MT) 12,000 10,000 8,000 6,000 4,000 2,000 - Copper (spot) (USD/MT) Steel (3mth futures)

7 Macroeconomic Factors Rising cost of doing business in China (RMB per person) 35,000 30,000 25,000 20,000 15,000 10,000 5,000-15% 14% Annual Labor Cost 19% 17% 12% RMB Growth (%) (% growth) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Source: National Bureau of Statistics of China

8 GROUP FINANCIAL HIGHLIGHTS

9 Share Price

10 HLA Group Financials (In S$ million) 6,000 5,000 4,000 3,000 2,000 1,000 2,269 Revenue 15% 5,102 4,448 3,617 3,233 2,481 (In S$ million) PATMI 6% (In S$ million) EBITDA 51% (In S$ million) 9% 619 1,400 1,200 Cash & ST Deposits 1,168 1, ,

11 Comparable PATMI (In S$ million) %

12 YUCHAI

13 Key Investment Highlights Strong financials Serving under-penetrated and high growth automobile Chinese market Leading market position in sales & manufacturing of diesel engines in China Extensive sales, distribution, and after-sales service network in China combined with access to international markets Well-recognized and trusted brand name Full product range on par with global quality standards Beneficiary of PRC government subsidy policies and rising China consumerism Pioneer of low-emission and environmentally-friendly engines in China

14 Financial Highlights Revenue (RMB million) 18,000 16,000 14,000 12,000 10,000 8,000 6, (RMB million) Cash 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, % 12% PAT (RMB million) 1,800 1,600 1,400 1,200 1, (thousand units) Unit Sales % 18%

15 Under-penetrated & High Growth Market Car Ownership (cars per 1,000 inhabitants) Units in thousands 20,000 15,000 10,000 5, EU Japan USA South Korea Russia Brazil China India Source: Eurostat, Global Insight Automobile Sales Growth in China ( ) % 40.0% 30.0% 20.0% 10.0% % Unit Sales Growth % Source: Autostats China

16 Top 20 Diesel Engine Manufacturers 11.2% CNHTC FOTON 11.2% DFM WEICHAI XCEC CHAOCHAI DCEC FAW-VW 13.4% CCEC DACHAI Qingling LAIDONG CHENGFA NANQI 6.2% YUNNEI XICHAI 13.8% YUCHAI JIANGLING YANGCHAI SHANGCHAI

17 Sales & Distribution Network Urumqi Lhasa Xining Hohh Beijing Yinchuanot Taiyuan Lanzhou Tianjin Shijiazhuang Xi an Zhengzhou Hefei Nanjing Suzhou Chengdu Wuhan Shangh ainingbo Chongqi Hangzho ng unanchan Changsh g Guiyanga Fuzhou Xiamen Kunming Guangzhou Taiwan NanningYulin Shenzhen Haikou Harbin Changchun Shenyang Dalian Sales offices (31) Service centers (>1500) Sales network Nationwide network of 31 sales offices Strong partnership with major automobile producers in China After-sales service Nationwide after-sales service network with >1500 after-sales service points 24-hour toll free hotline International footprint Sales offices and service centers in Vietnam, Cuba, Egypt, Moscow, Thailand, Malaysia, Latin America, Middle & South Africa, Kazakstan, Saudi Arabia

18 The Brand Founded in 1951 and took off with Hong Leong investment in1993 Top home-grown diesel engine brand in China Associated with high quality and performance Engine engraved with Yuchai 玉柴 brand name RMB Billion Yuchai Brand Value % increase Ranked #109 in China s Top 500 Most Valuable Brands by the World Brand Laboratory

19 Government Subsidy Policies New for Old Vehicles Rural Subsidy Reduction of Vehicle Purchase Tax Description RMB5,000 to 18,000 subsidy for purchase of new motor vehicles with trade-in of selected motor vehicles 10% off retail price subsidy for purchase of selected motor vehicles by rural folks (capped at RMB5,000) Reduction of vehicle purchase tax on purchase of passenger cars 1.6L and below Duration Nationwide: Jun Nationwide: Mar Nationwide: 2009 (10% 5.0%) 2010 (10% 7.5%) Estimated subsidy amount from government RMB5 billion RMB5 billion Government receives less tax revenue Products covered Small and medium size buses and trucks and yellow label motor vehicles Mini vans and light trucks Passenger cars of 1.6L and below

20 Environmentally-Friendly Engines Recent Milestones Year Joined the UN Global Impact Jun 2008 Became exclusive domestic green power supplier for the Beijing Olympics st Chinese heavy duty diesel engine producer to receive On-Board-Diagnostics ( OBD ) emission certificates 2008 Amongst 2008 s Chinese Merit Enterprises in Energy Conservation & Emission Reduction Mar 2009 Won the Award for Independent Innovation in China s Auto Industry May 2009 First in the industry to produce the national-5 diesel engine Dec 2009 Successfully developed World s 1 st renewable pneumatic hybrid engine Dec 2009 Launched new engine YC6K & flagshipheavy-duty truck U460 with CIMC-Chery Dec 2010

21 Awards and Accolades Quality Awards & Recognitions Year Top 500 Chinese Enterprises, Rank 257 Aug 2008 Top 500 Chinese Manufacture Enterprise Rank 135 Aug 2008 The Chinese Brand of the year 2008 Dec 2008 Ranked No.1 in the Internal Combustion Engine Category Dec 2008 Top 500 Chinese Most valuable Brands, Rank 111 Jun 2009 Satisfactory Product (effective for 3 years) Nov China Foundries Top 100 May China Outstanding Enterprise Culture Nov 2010

22 Yuchai Projects Xiamen Yuchai RMB 200 mil Yuchai Foundry RMB 960 mil Nanning R&D Center RMB 310 mil Y&C Engine RMB 780 mil Jining Yuchai RMB 275 mil Zhejiang Yuchai RMB 226 mil Yuchai Manufacturing RMB 340 mil

23 XINFEI

24 Key Investment Highlights Strong financials Serving under-penetrated and high growth market of refrigeration products in China Leading market position in refrigeration products in China Extensive sales, distribution and after-sales service network in China combined with access to international markets Well-recognized and trusted brand name Sufficient capacity to meet increased demand Achieved quality standards with R&D collaboration Meeting customers needs thru strong product offering with global quality standards Beneficiary of PRC government subsidy policies and rising China consumerism Winner of several awards in China on quality and innovation

25 Financial Highlights (RMB million) 6,000 Revenue 19% (RMB million) PAT 52% 5, ,000 3,000 2, , (RMB million) Cash (thousand units) 3,500 3,000 2,500 2,000 1,500 1, ,000 Unit Sales 15% 19%

26 Under-penetrated Market Ownership per 100 households Refrigerator Ownership in China pp ownership differential Main target market of Xinfei Urban Rural

27 Leading Market Position High market share in refrigerators and freezers in China (Top 5 suppliers in China) Demand for replacement and upgrade in tier-1 and tier-2 cities reinforced by the Home Appliance Replacement Policy Rising demand in rural areas has been further supported by the Rural Subsidy Policy

28 Sales & Distribution Network Xinjiang Tibet Qinghai Yunnan Sales offices (268) Warehouses (76) Inner Mongolia Jilin Liaoning Hebei Beijing Shanxi Ningxia Shandong Gansu Shaanxi Henan Jiangsu Sichuan Guizhou Hunan Hubei Anhui Zhejiang Guangdong Guangxi Hong Kong Hainan Jiangxi Fujian After-sales service centres (33) Heilongjiang Sales network More than 15,000 sales points After-sales service Nationwide after-sales service network with 33 service centres and > 5,000 after-sales service points 24-hour toll free hotline Distribution network Warehouses in almost every province

29 The Brand Frestech brand in place since 1996 中国 新加坡合资企业 Well-recognized among Chinese consumers and associated with high quality and affordability RMB Billion Xinfei Brand Value % increase Ranked #165 in terms of company brand value in China by the World Brand Laboratory Ranked amongst China s Top 500 Most Valuable Brands for the past 6 years by the World Brand Laboratory

30 Xinfei Capacity Expansion Facilities Capacity (1) (in mil 31 Dec 2010 Additional Total Refrigerators Freezers and showcases Total (1) based on 2 shifts and 300 working days

31 R&D Collaboration Xi an Jiaotong University Chinese Academy of Sciences (Institute of Chemistry) China Household Electric Appliance Research Institute

32 Global Quality Standards Design Long history of incorporating functional and aesthetic design features into its products First in China to manufacture refrigerators with drawer doors Works closely with international design firms to incorporate stylistic features that cater to the preferences of modern consumers Energy saving technology First manufacturer in China to commence manufacturing of a super energy efficient refrigerator EU Energy Label A+ refrigerator achieved international recognition in 2002 Introduced an EU Energy Label A++ refrigerator in 2003 First in China to manufacture refrigerators that consume less than 0.26 kwh/day Control technologies Introduced a first-generation electronically controlled intelligent refrigerator Introduced refrigerators with individual temperature controls for each compartment Currently researching other control technologies for implementation into its products, such as Inverter Technology, Super E Control, Simple E Control and fuzzy logic Key Innovative Technologies Freshness and anti-bacterial technologies First to manufacture an energy saving and anti-bacterial all-in-one refrigerator Introduced refrigerators with freshness features using water supplement technology Worked with the China Association of Standardization to make its antibacterial refrigerator standard a national standard Environmental impact technologies Incorporated technologies into its products to reduce any negative environmental impact First manufacturer in China to produce refrigerators that do not contain any CFCs

33 Wide Product Range Meeting customers needs No. of series No. of models in the market Refrigerators Full range of home appliances products Freezers and showcases Wine chillers Washing machines 3 51

34 Government Subsidy Policies Description Duration Estimated government subsidy Products covered Home Appliance Subsidy Policy Government subsidy equivalent to 13% of the retail price of certain appliances subject to a ceiling price per product category Nationwide: i.e. 4 years (except for 3 provinces which started in 2008) RMB208 billion over 4 years Refrigerators, air conditioners, TVs, washing machines, water heaters, PCs, mobile phones, electric magnetic cookers, microwave ovens, smoke exhaust ventilators, gas stoves, pressure cookers, electric cookers and DVD players Home Appliance Replacement Policy Government subsidy equivalent to 10% of the retail price of new appliances when consumers trade in old ones upon purchases subject to a subsidy cap per product category Aug 2009 to May 2010 for 9 regions. Extended to end of 2011, covering 19 additional regions RMB2 billion Refrigerators, air conditioners, TVs, washing machines and PCs Details of impact on refrigerator, freezer and air-con 13% rebate, up to a maximum of RMB520 on purchase of refrigerator and freezer, subject to a ceiling price of RMB4,000 (2009: RMB2,500) 13% rebate, up to a maximum of RMB455 and RMB780 on purchase of wall-mounted and standing air-con, subject to a price cap at RMB3,500 and 6,000 respectively (2009: RMB2,500 and RMB4,000) 13% rebate, up to a maximum of RMB455 on purchase of washing machine, subject to a celiing price of RMB3,500 (2009: RMB2,000) 10% subsidy on purchase of new refrigerator and freezer with trade-in, capped at maximum of RMB300 per unit 10% subsidy on purchase of new air-con with trade-in, capped at maximum of RMB350 per unit 10% subsidy on purchase of new washing machine with trade-in, capped at maximum of RMB250 per unit

35 Awards and Accolades Quality Awards & Recognitions Year China Refrigerator Industry No.1 Competitive Brand 2009 China Freezer Industry No.1 Competitive Brand 2009 Consumers Satisfaction Household Appliance Brand for Refrigerator 2009 Top 500 Most Valuable Brands in China, Top 3 in Henan 2009 National Name Card (representative of China s corporate image) 2009 Henan Province Governor Quality Award 2010 Top 10 of the Most Competitive National Brands 2010

36 BUILDING MATERIALS

37 Key Investment Highlights Strong financials Leadership positions Supportive government initiatives Raw material prices

38 Financial Highlights (S$ million) Revenue (S$ million) PAT 4% 44% (S$ million) 250 Cash 8% (thousand MT) 4,000 Unit Sales 200 3,500 3, ,500 2,000 1,500 1, Cement Precast RMC

39 Leadership Positions RMC Market Distribution 2010 PUC ICPL ACS 5% 5% 4% 4% 5% 24% Concrete division: Holcim 6% YTL G&W 13% Samwoh 21% ICPL s market share in 2010 was 21% vs. 20% in 2009 Star RMC 13% Precast division: HLBM s market share in 2010 was 15% vs. 13% in % 2%2%2% 6% 6% Precast Market Distribution % 6% 7% 8% 15% 9% 10% HLBM Sunway CES EP Syscon Excel G&W Qian Jian Hor Kew SPC Contech Hanson Others

40 Government Initiatives Singapore government s initiative of using public sector infrastructure projects to balance demand in the construction industry LTA to double the MRT coverage by th Malaysian Plan (10MP) Economic Transformation Program (ETP) Value of Construction Activities Singapore (in SGD) Malaysia (in MYR)

41 BCA Indices Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Concreting Sand (S$/ 000 MT) Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Cement (S$/ 000 MT) Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Granite (S$/ 000 MT) Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 RMC (S$/ 000 MT) Raw Material Price Trends

42 REX

43 Key Investment Highlights Profitable Serves high profile customers Wide product range Good geographical spread

44 Financial Highlights (S$ million) Revenue (S$ million) PAT (MT) 28,000 26,000 24,000 22,000 20,000 18,000 19% Unit Sales 19% 19% 16,

45 High Profile Customers

46 Wide Product Range

47 Geographical Spread

48 GPAC

49 Key Investment Highlights Losses sharply reduced Low cost production base (Senai Factory) Access to raw material source

50 Financial Highlights (S$ million) Revenue (S$ million) PAT (pallets) 356, , , , , ,000 56,000 56% Unit Sales 77% 85% 6,

51 Low Cost Production Base Senai Factory

52 Raw Material Source Access

53 Thank You