Transcript 中国可利电气有限公司 China Keli Electric Company Ltd http://www.zkl.cc Investor Presentation (TSX-V: ZKL) Private & Confidential September, 2010 Disclaimer 中国可利电气有限公司 China Keli Electric Company Ltd. China Keli Electric Company Ltd (TSXV: ZKL) Forward-Looking Statements: All.

中国可利电气有限公司
China Keli Electric Company Ltd
http://www.zkl.cc
Investor Presentation
(TSX-V: ZKL)
Private & Confidential
September, 2010
Disclaimer
中国可利电气有限公司
China Keli Electric Company Ltd.
China Keli Electric Company Ltd
(TSXV: ZKL)
Forward-Looking Statements:
All statements, other than statements of historical fact, set forth, including without limitation,
assumptions and statements regarding reservoirs, resources and reserves, future production
rates, exploration and development results, financial results, and future plans, operations and
objectives of the corporation are forward-looking statements that involve substantial known and
unknown risks and uncertainties. Some of these risks and uncertainties are beyond
management’s control, including but not limited to, the impact of general economic conditions,
industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates,
environmental risks, industry competition, availability of qualified personnel and management,
availability of materials, equipment and third party services, stock market volatility, timely and cost
effective access to sufficient capital from internal and external sources. The reader is cautioned
that assumptions used in the preparation of such information, although considered reasonable by
the corporation at the time of preparation, may prove to be incorrect. There can be no assurance
that such statements will prove to be accurate and actual results and future events could differ
materially from those anticipated in such statements.
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Who are we
中国可利电气有限公司
China Keli Electric Company Ltd.
China Keli Electric Company Ltd
(TSXV: ZKL)
We are…
“A fast growing hi-tech enterprise in the
power industry focused on research &
development, manufacturing
and distribution of pressurized switches,
automated voltage controllers and other
advanced technology related products for the
transmission and distribution segment of
the power industry”
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中国可利电气有限公司
Company Profile: China Keli Electric Company Ltd
Profile
• Through its wholly own subsidiary,
Zhuhai Keli Electric Co., Ltd, China
Keli Electric Company Ltd. (TSX-V:
ZKL) is the only fully integrated
Chinese utility equipment producer
listed on the TSX-V.
China Keli Electric Company Ltd.
Revenue Growth
CAD$MM
• Operation is located in Zhuhai,
GuangDong Province of China
• One of five the AAA+ Companies
within the Chinese electric utility
equipment manufacturing industry
China Keli Electric Company Ltd
(TSXV: ZKL)
• Strong relationship with the many
provincial governments across
China
History
2008 – 2010 CAGR = 11.3%
Net Profit Margin Growth
• Established in 1995
• Became listed on the Toronto Stock
Venture Exchange in May, 2010
under the symbol ZKL through an
RTO transaction
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Company Profile: China Keli Electric Company Ltd
中国可利电气有限公司
China Keli Electric Company Ltd.
Production and R&D Facilities
• Fully independent R&D capabilities with
many years of proven success
• 15 Utility and Design patents registered
with State Intellectual Property Office of
China
• Over 18,000m2 of space available for
production and assembly
• Recognized as one of the technological
leaders within the Chinese electric utility
equipment manufacturing industry
Corporate Structure
2%
• Product qualities are ensured by
ISO9001:20008 and IQNet Certificates.
6%
12%
Upper Management
China Keli Electric Company Ltd
(TSXV: ZKL)
Middle Management
4%
Lower Management
Researchers
9%
60%
Assistants
7%
•
Technicians
Workers
Over 180 employees in total across all departments
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中国可利电气有限公司
Key Management
Name
China Keli Electric Company Ltd.
Title
Chairman
Experience
• Founder of the Company
• Has been involved in the manufacturing and marketing of
electrical components and equipment in PRC since 1995
Sou Wa Wong
CEO,
Director
• Joined the Company in July 2003 as senior manager of the
Production Department in Zhuhai Keli
• Promoted to become CEO of the Company in 2006
China Keli Electric Company Ltd
(TSXV: ZKL)
Lou Meng Cheong
CFO
• Qualified CICPA & AICPA with working experience in the U.S.
• Former senior manager PriceWater Coopers
• Worked in the PriceWater Coopers Seattle office with major
audit clients including China Unicom Limited, China Mass Media
Corp., T‐Mobile US
Kelvin Dong Zhang
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中国可利电气有限公司
Key Management
Name
China Keli Electric Company Ltd.
Title
Independent
Director
George Dorin
Independent
Director
Experience
• Registered Chartered Accountant
• 30 years of broad-based financial experience, including 15 years of services
as CFO and Directors in many publicly listed companies
• Granted as Corporate Finance specialist designation from the Canadian
Institute of Chartered Accountants in 2008
• Seasoned executive with very extensive CEO and Board experience
• Focused in a variety of fields including business management (emphasis on
the energy and technology sectors) , finance (venture capital, private equity),
government and R&D
Michael Raymont
China Keli Electric Company Ltd
(TSXV: ZKL)
Independent
Director
• Senior Chinese lawyer
• Over 10 years of experience in company law, securities and foreign
investment
Yan Zhang
Independent
Director
Wu Jian Wen
• Assistant Dean at The Beijing University of Aeronautics-and-Astronautics
• Obtained his Ph.D and Master degree from Xi'An JiaoTong University and
ShenYang University of Technology
• Former Department Manager of China Dong Fang Electronics Ltd. as well as
the Vice Department Chairman of the Aeronautics and Astronautics faculty
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Market Snapshot: Demand for Electricity
中国可利电气有限公司
China Keli Electric Company Ltd.
• China uses only 1/10 as much energy per
capita as the U.S. and 1/6 as much as the
OECD, allowing for a lot of room for domestic
growth
Smart Grid Technology
China Keli Electric Company Ltd
(TSXV: ZKL)
• In May 2009, the National Grid
Company proposed to convert all grid
networks to smart grid technology by
2020
• In March 2010, Premier Wen Jiabao
announced the support of the PRC
Government for the conversion to
smart grid technology
1.
2.
Sources from China Daily, Jan 2010
Source from: “2009-2010 Report on China Electric Power Industry” by 168report
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Transmission and Distribution Equipment Industry
中国可利电气有限公司
China Keli Electric Company Ltd.
Industry Development
• Between 2005 to 2009, per capita electricity consumption in China
increased from 1,888kWH to 2,730kWH (~10% CAG)
• Average annual per capita electricity consumption will exceed 4,000kWH,
overtaking the US as the No.1 electricity consumer in the world by 2015
• As of September 2010, over 660Billion RMB (approx. CAD$103Billion) has
been invested into the Chinese electricity industry. Of which, 150Billion
RMB (approx. CAD$23.4Billion) was invested specifically into the
pressurized switch gears industry.
Industry Outlook
• Government’s policy towards the utility equipment manufacturing
industry is encouraging consolidation of market participants
China Keli Electric Company Ltd
(TSXV: ZKL)
• Continuance of urban expansion will increase the demand for electricity
and electricity’s supporting infrastructure (transmission and distribution)
• Fewer market participants combined with growing markets for utility
equipment will enhance the profit margins of the remaining companies
• Independent R&D capabilities and QA/QC will become an important
factor in deciding which market participants will survive and prosper in
the long term
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中国可利电气有限公司
Structure & Shares Distribution
China Keli Electric Company Ltd.
Legal Structure
China Keli Electric Company Ltd.
(TSX-V: ZKL)
Shares Distribution
100%
Creative Grace Ltd (HK)
100%
China Keli Electric Company Ltd
(TSXV: ZKL)
Zhuhai Keli
Electric Co., Ltd
Public
Float,
30.42%
100%
Zhuhai Qunhui
Electronic Equipment
Co., Ltd.
Insider,
69.58%
Shares Outstanding:
52w High/Low
Market Capitalization:
P/E:
89.95Million
C$0.65/C$0.26
C$26.99Mil
13.95x
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Growth Strategy
中国可利电气有限公司
China Keli Electric Company Ltd.
• Expansion of product portfolio
• Expansion of manufacturing capacity
to meet continuously growing demand
Organic Growth
• Continue to develop and strengthen
relationships with the many provincial
governments
China Keli Electric Company Ltd
(TSXV: ZKL)
• Continue improving efficiency and
margins
• Continuation of R&D and the
development of technologically
advanced products, including smart
grid applications
Opportunistically look at strategic acquisitions in the same market
sector (consolidation and roll-up play)
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Proof of Strategy
中国可利电气有限公司
China Keli Electric Company Ltd.
Recent Development
China Keli Electric Company Ltd
(TSXV: ZKL)
 For the fiscal year ended April 30, 2010, the
Company has recorded an Operating Revenue of
76,520,787RMB (approximately C$11.9Million),
an increase of 21.9% over the previous year’s
operating revenue.
 Between May and June of this year, the
Company was successful in securing a winning
bid with the China Southern Power Grid
Company for a series of equipment orders with
market value of 10,438,093RMB (approximately
C$1.62Million)
Source from: Company’s press release
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中国可利电气有限公司
Selected Financials: Income Statement
FYE – APR 30
CAD/RMB = 6.5792
CAD$
China Keli Electric Company Ltd.
2008
2009
2010
2010
Vs. 2009
Revenue
$ 9,056,189
$ 9,543,745
$11,630,713
21.9%
Gross Profit
$ 2,353,544
$ 3,810,055
$4,739,286
24.4%
EBITDA
$ 1,064,108
$ 2,231,481
$2,851,583
27.8%
Net Income
$ 652,389
$ 1,483,017
$1,927,863
30.0%
2010 Profitability Ratios
Gross Profit Margin
40.75%
Net Profit Margin
16.58%
China Keli Electric Company Ltd
(TSXV: ZKL)
CAD$000
Source from: Company’s 2009, 2010 Audited Financial Statements
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中国可利电气有限公司
Investment Highlights
China Keli Electric Company Ltd.
 Established industry participant with strong track
record and a reputation for quality products
 Proven management team with extensive industry
experience
 Fully integrated R&D capabilities for new product
development
 Proven delivery of solid financial results
China Keli Electric Company Ltd
(TSXV: ZKL)
 Robust market segment growth with solid margins
points to continuing vigorous financial performance
 Favorable industry with strong government support
for further rapid expansion
TSXV -- ZKL
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中国可利电气有限公司
China Keli Electric Company Ltd.
Thank You
China Keli Electric Company Ltd
(TSXV: ZKL)
Contacts
Mr. Cheong Lou Meng
Director & CEO
Mr. Kelvin Dong Zhang
CFO
Michael Raymont
Independent Director
Tel: (86) 13926991010
Email: [email protected]
Tel: (86) 13911511601
Email: [email protected]
Tel: (403) 3893488
Email: [email protected]
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