Transcript AGM Presentation

Annual General Meeting
Forward-looking Statements
The contents of this presentation contain statements that may constitute
“forward-looking statements” within the meaning of applicable securities
legislation. Forward-looking statements may include financial and other
projections, as well as statements regarding future plans, objectives or
economic performance, or the assumptions underlying any of the
foregoing. Forward-looking information involves significant risks,
assumptions, uncertainties and other factors that may cause actual future
results or anticipated events to differ materially from those expressed or
implied in any forward-looking statements and accordingly, should not be
read as guarantees of future performance or results.
Actual results, performance or achievement could differ materially from
those expressed in, or implied by, any forward-looking statements made
and, accordingly, investors should not place undue reliance on any such
forward-looking statements. New factors emerge from time to time, and it
is not possible for management to predict all of such factors and to assess
in advance the impact of each such factor on Migao’s business.
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A Different Kind of Fertilizer Producer…
• Specialty Fertilizer Production (low-chloride)
– Potassium Sulphate (SOP)
– Potassium Nitrate (NOP)
– Specialty Compound NPK + micronutrients and minerals
• Serving China’s High-value Crops
– Fruits, Vegetables, Tobacco, Cotton, Flowers
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OUR VALUE PROPOSITION
Migao Enables Improved Crop Yields and Quality
Products
Customer
Applications
Three core
products
High-value crops
including
• Potassium
sulphate (SOP)
• Potassium
nitrate (NOP)
• Specialty NPK
Co-products
• Ammonium
chloride
• Hydrochloric acid
Advantages
• Increases yield
• Tobacco
• Enhances quality
• Fruits
• Strengthens
resistance to
drought, disease
• Cotton
• Flowers
• Vegetables
• Lowers water
usage
• Electroplating
• Higher returns for
farmers
• Steel processing
• Water treatment
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NOP Average Selling Price/MT (RMB)
8,000
NOP
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1
F2006
F2007
F2008 F2009 F2010
F2011
F2012
F2013F2014
Amm. Chlor. Average Selling Price/MT (RMB)
Ammonium Chloride
1,600
1,400
1,200
1,000
800
600
400
200
0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1
F2006
F2007
F2008 F2009 F2010
F2011
F2012
F2013F2014
SOP Average Selling Price/MT (RMB)
SOP
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1
F2006
F2007
F2008 F2009 F2010
F2011
F2012
F2013F2014
HCL Average Selling Price/MT (RMB)
Hydrochloric Acid
700
600
500
400
300
200
100
0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1
F2006
F2007
F2008 F2009 F2010
F2011
F2012
F2013F2014
Average Selling Price/MT (RMB)
Compound
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
F2010
F2011
F2012
F2013
F2014
Impact of Hydrochloric Acid
25
Gross Profit
(Percentage of Revenue)
20
15
10
5
0
Q1 2011 Q2 2011 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014
-5
-10
-15
10
REVENUE ($M)
$402
$316
$289
$300
$269
$187
2008
2009
2010
2011
2012
2013
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1. MARKET LEADER
A Leading Player in Our Markets
Supplier of
potassium nitrate
(NOP) in China
Supplier of
potassium
sulphate (SOP) in
China
#1
#2
Importer of
potash
into China
#3
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Financial Position ($M)
Balance Sheet (June 30, 2013)
Working Capital
$184
Cash & Restricted Cash
102
Accounts Receivable
117
Short-term Obligations
208
Long-term Loan
5
Inventory
86
13
Facilities Serve Diverse Geographies / End Markets
Changchun Migao
Liaoning Migao
Tianjin Migao
Shanghai Migao
Sichuan Migao / SQM JV
Zunyi Migao
Yunnan Migao
Guangdong Migao
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Strategy
1
2
3
4
Continue to focus on core fertilizer business in China
– Increased sales and marketing
Hydrochloric Acid
– Explored applications, markets
– Patience
Leverage customers and distribution channels
– new products
Manage balance sheet effectively
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Yunnan Migao
16
Yunnan Migao
17
Yunnan Migai
18
www.migaocorp.com