sorl auto parts, inc. nasdaq: sorl
DESCRIPTION
SORL Auto Parts, Inc. NASDAQ: SORL. Global Chinese Financial Forum SHANGHAI CONFERENCE 2007. Safe Harbor Statement. - PowerPoint PPT PresentationTRANSCRIPT
SORL Auto Parts, Inc.NASDAQ: SORLSORL Auto Parts, Inc.NASDAQ: SORL
Global Chinese Financial ForumGlobal Chinese Financial Forum
SHANGHAI CONFERENCE 2007SHANGHAI CONFERENCE 2007
Safe Harbor StatementSafe Harbor Statement
This presentation contains "forward-looking statements" within the meaning of
the “safe-harbor” provisions of the Private Securities Litigation Reform Act of
1995. Such statements involve known and unknown risks, uncertainties and
other factors that could cause the actual results of the Company to differ
materially from the results expressed or implied by such statements, including
changes from anticipated levels of sales, future national or regional economic
and competitive conditions, changes in relationships with customers, access
to capital, difficulties in developing and marketing new products, marketing
existing products, customer acceptance of existing and new products, and
other factors. Accordingly, although the Company believes that the
expectations reflected in such forward-looking statements are reasonable,
there can be no assurance that such expectations will prove to be correct.
The Company has no obligation to update the forward-looking information
contained in this presentation.
Overview: Production Overview: Production
Leading manufacturer of Commercial Vehicle Air Leading manufacturer of Commercial Vehicle Air Brake Valves in ChinaBrake Valves in China
– Based in Wenzhou City, Zhejiang Province Based in Wenzhou City, Zhejiang Province
• the “Hub of auto parts” in China– The largest manufacturing base for air brake valves in China The largest manufacturing base for air brake valves in China – 40 categories of air brake valves in over 800 specifications40 categories of air brake valves in over 800 specifications
– ISO/TS16949 Quality Management System, OHSAS18001 System, and ISO/TS16949 Quality Management System, OHSAS18001 System, and ISO14001 Environmental Management SystemISO14001 Environmental Management System
Overview: Sales and MarketingOverview: Sales and Marketing
Leading Distributor of Commercial Air Brake Valve in China
– 39 domestic OEM customers, including all major truck makers 39 domestic OEM customers, including all major truck makers in Chinain China
– 28 distributors and over 800 sub-distributors, covering 7 28 distributors and over 800 sub-distributors, covering 7 regions nationwideregions nationwide
– Distributing products to 72 foreign countries or regions Distributing products to 72 foreign countries or regions internationallyinternationally
– Gaining the first international OEM customer, TATA motor in Gaining the first international OEM customer, TATA motor in IndiaIndia
Overview: From OTCBB to NASDAQ GMOverview: From OTCBB to NASDAQ GM
Reverse Merger
– In May 2004, Enchanted Village, Inc. acquired Fairford who owned 90% of the air brake valve business of Ruili Group
– Shares of Preferred Stock were converted into common stock
– In July 2004, Enchanted changed the name to SORL
NASDAQ Capital Market
– In April 2006, transferred from OTCBB to NASDAQ Capital Market
NASDAQ Global Market
– November 2006, upgraded to NASDAQ Global Market
– Secondary Public Offering with proceeds of $36 million USD
Significant Domestic MarketSignificant Domestic Market
• ’06 sales commercial vehicle increase: – commercial vehicle 15.2%commercial vehicle 15.2%– truck 16.2%truck 16.2%– heavy truck 34.3%heavy truck 34.3%
• less sensitive prices: CV vs. PV
• 50% price advantage: Domestic Brands over Imported Brands
• 90% of market share was taken by Local brands
• Long-term Development: Highway Expansion, Construction of 2 & 3 tier Cities, Big Logistics
• Substantial export market growth for trucks made in China
Significant Domestic MarketSignificant Domestic Market
Heavy truck consist of heavy-duty truck, chassis for heavy truck and trailer
• 12.2% CAGR of commercial vehicle during 2001-2006
• 16.8% CAGR of truck during 2001-2006
• 14.1% CAGR of heavy truck during 2001-2006
Significant Domestic MarketSignificant Domestic Market
For the five months ended May 31, 2007
– The Chinese commercial vehicle sector experienced a solid 24% growth
– The unit output of heavy trucks posted a robust 62% growth
– SORL grew overall sales by 31.6% and the sales to OEM increased by nearly 68%, in comparison with the same period of 2006
SORL: 2007 Q1 Revenue and Profit GrowthSORL: 2007 Q1 Revenue and Profit Growth
YOY Sales Growth: increased 25.7% to 24.4M
OEM $8.9M :: :: AftermarketAftermarket $7.1M :: $7.1M :: Export Export $8.4M
YOY Profit Growth: increased 31% to 2.1M
• 37% CAGR of sales during 2003-2006
• 86% CAGR of net income during 2003-2006
1.2
4.85.0
33.1
46.8
64.2
SORL: from 2003 to 2006SORL: from 2003 to 2006
Net Income Net Income ($millions)($millions)
2003 2004 2005
RevenueRevenue ($millions)($millions)
2003 2004 2005
84.9
2006 2006
7.7
Key Strengths of SORLKey Strengths of SORL
Success factors to win in the intensified competitionSuccess factors to win in the intensified competition
Established Nationwide
Sales Network
Close Relationship with Big OEM Manufacturers
Performance-Cost
Competitiveness
Warranty and
ReliabilityTimely
Delivery
Efficient Customer Services
Other Small Manufacturers No No Low Low Poor Poor
SORL Auto Parts Yes Yes High High Good Good
New Export OpportunitiesNew Export Opportunities
New Office: In early 2007, SORL opened its
forth oversea office in Pune, India with 4 sales representatives and 2 engineers
New Contracts: In 2006, accepted by TATA
Motors to supply to TATA’s commercial vehicles and aftermarket replacement division
On March 12th, 2007, SORL entered into a new sales agreement with TATA Motors
Capacity GrowthCapacity Growth
Reorganized production lines from traditional straight-line layout to U-shape track, enabling it to quickly adjust its production plan, and shortening the logistic distance among diverse procedures
Up to May, 2007, installed 10 additional die casting machines, added 47 computerized numerical control machines to 198 machines previously in use, purchased 4 new tooling machines for clutch servo and streamlined the production facility to increase the total capacity by nearly 25%.
Booked More equipments which were expected to be available in succession
Growth StrategyGrowth Strategy
M&A Project Pipeline:– Step 1: acquisition of international distribution network, repair factories,
and assembling facility
– Step 2: domestic acquisition for product-line extension
– Step 3: seeking strategic alliance opportunities
Organic Growth– Establishment of new sales centers in countries with auto industry
– Further expand production facilities to meet additional demand
– Cost Control:
• reduce material and energy consumption
• strict waste measurement
– Maintenance of high standard quality control
SORL Auto Parts, Inc.NASDAQ: SORLSORL Auto Parts, Inc.NASDAQ: SORL
Richard CaiRichard Cai
Senior Manager, Capital Market
Phone: +86 (577) 6581 7720
Fax: +86 (577) 6581 7733
Email: [email protected]
Web: www.sorl.cn