Hong Leong Asia Ltd. Annual General Meeting 29 April 2008 CEO s Presentation Introduction Listed in SGX Singapore. Group with over 80% of our businesses in China 1
Introduction Started in 1941 by the late Mr Kwek Hong Png Part of Hong Leong Group one of Singapore s largest conglomerates with businesses worldwide in properties, hotels, financial services, manufacturing and trading Today, HLA business includes home appliances, diesel engines, industrial packaging, green packaging and building materials Capitalisation in excess of S$1 billion Executive Summary Group s revenue reached a record high of $3.23b in 2007, representing a y-o-y increase of 30% The main contributors are Home Appliances and Diesel Engines division from China and Singapore based Building Materials Unit 2
Executive Summary Five Years Revenue Trend 3500 3000 2500 S$ million 2000 1500 1000 500 0 2003 2004 2005 2006 2007 Revenue 1883.1 2059.6 2269.2 2481 3233.2 Executive Summary Group s net profit attributable to shareholders improved significantly to $95.4m vs $61.1m in 2006 Excluding non-operating income, the adjusted net profit would be $88.1m vs $50.8m in 2006, representing a y-o-y increase of 73% 3
Executive Summary Five Years Net Income Trend 120 100 S$ million 80 60 40 20 0 2003 2004 2005 2006 2007 Net Income 112.6 41.6 23.3 61.1 95.4 Executive Summary The China economy grew strongly by 11.4% in 2007 despite the Chinese Government s austerity measures in controlling new capital investments and inflation The Group s China business units (Xinfei and Yuchai) continued to perform better in terms of unit sales and revenue growth, but faced keen competition 4
Location of Group s Business Units Xinfei Diesel Engines - Yuchai Yuchai Industrial Packaging - Rex Green Packaging - GPac Building Materials - BMG China No. 2 fridge and freezer maker with market share of approximately 12% Total sales volume for 2007 was 2.94m units, 7% more than 2.75m units sold in 2006 A new factory with investment of Rmb400m to increase production capacity by 1.5m units was completed in March 2008 5
Corporate Office Technology Centre Refrigerator Plant Freezer Plant Air-con / Wine Chiller Plant Assembly Line 6
Side-Panel Line Side-Panel Line Π Side-Panel Line Π Side-Panel Line 7
Cabinet Thermo Forming Line Powder Coating Line Cabinet Thermo Forming Line Door Thermo Forming Line Cabinet Foaming Line Cabinet Foaming Line Vacumning Line Cooling Performance Testing Line 8
Diesel Engines - Yuchai One of the largest diesel engine manufacturers in China, mainly for commercial and industrial uses. Total unit sales in 2007 of 384k units was 35% higher than 284k units sold in 2006 According to the Chinese government industry statistics, there was an increase of approximately 23% on the sales of trucks and buses in China in 2007 Diesel Engines - Yuchai China Yuchai International Ltd 绿色发展和谐共赢 Green Development Win-win in Harmony 9
Diesel Engines - Yuchai Assembly line for heavy-duty engines Assembly line for light-duty engines Diesel Engines - Yuchai Heavy-duty YC6L Heavy-duty YC6M Light-duty YC4F Medium-duty YC6G 10
Industrial Packaging - Rex Industrial Packaging - Rex Operating in China, Malaysia and Indonesia Facing keen competition and pressure on raw materials costs due to increased oil prices Realign business to focus on the more profitable products 11
Industrial Packaging - Rex New plant capacity expansion in Dongguan, China (Rmb 21m) Green Packaging - GPac Asia Star 2005 Winners 12
Green Packaging - GPac Unable to achieve economies of scale and is still loss making In the process of streamlining its product range, to relocate production to Malaysia Positive prospect in view of ISPM15 compliance which requires fumigation of all wooden pallets World market demand of pallets are 5 billion units per year and currently only 5% is made up of compressed wood Building Materials Group - BMG Island Concrete Singapore Cement Quarry - Karimun Precast Singapore Cement Tasek 13
Building Materials Group - BMG Singapore largest building materials group with investments in Malaysia & Indonesia Benefit from the increase of new construction projects in Singapore According to the Building and Construction Authority, total new construction contracts awarded in 2007 amounted to approximately $24.5b The Group s subsidiary, Island Concrete Pte Ltd, commanded a market share of 25% as at 31 Dec 07. Outlook The outlook for 2008 is positive with forecasted economic growth in China of approximately 8% to 10% and the continuing growth momentum of the property development and construction sectors in Singapore Our China operations are expected to grow their sales due to the continued strong domestic demand The Group s BMG, especially the ready-mixed concrete division, will continue to benefit from the continuing growth momentum and shortage of supplies in the construction industry, as well as Tasek s participation in Iskandar Malaysia and other infrastructure projects in Malaysia 14
The End Thank you! 15