China Clean Energy Inc · OTC:CCGY
China Clean Energy — Investor Presentation (February 2007)
26 slides from China Clean Energy's investor presentation, Feb 8, 2007
Slide 1: China Clean Energy Inc.
Website: www.chinacleanenergyinc.com China Clean Energy Inc. 中国清洁能源有限公司
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or ac
Slide 3: Equity Snapshot
Equity Snapshot OTC BB Quoted: CCGY Price (02/7/2007) $2.50 Market Cap $53.3 mil Shares Outstanding: 21.3 mil Float: 2.4 mil Revenues (9-months to 09/30/2006): $9.78 mil Net Profits (9-months to 09/30/2006): $1.28 mil Source: Standard & Poor's, Company SEC Filings 3
Slide 4: Company Overview
Company Overview Headquartered in Longtian, Fuqing City, Fujian Province, PRC 311,000 square feet ISO-certified production facilities 4,800 tons (1.44 mill gallons) per year of biodiesel capacity expected to grow to 10,000 tons (3 mill gallons) in 2007 18,000 tons per year of specialty chemi
Slide 5: Key Accomplishments
Key Accomplishments Nov 2006: Started being quoted on OTC BB under ticker symbol: CCGY. Oct 2006: Consummated a reverse takeover of OTC BB-quoted Hurley Exploration, Inc. Feb 2006: Became a wholly-owned foreign enterprise (“WOFE”). Dec 2005: Commenced production of biodiesel fuel from cottonseed lea
Slide 6: Public Recognition
Public Recognition China Clean Energy’s operating subsidiary has been honored with over 30 achievement awards, including: Company Honors High-Tech Corporation Award, Technology Office of Fujian Province Advanced Technology Innovation Honor, CCP Committee of Fuzhou City Measure Up Corporation H
Slide 7: Investment Highlights
Investment Highlights Emerging Producer of Biodiesel in China Low-Cost Manufacture Proprietary Technology and Commitment to R&D Experienced Management Profitable and Rapidly Growing Business Enormous demand for renewable energy in China 7
Slide 8: Advantages of Biodiesel
Advantages of Biodiesel Alternative fuel made from renewable resources such as vegetable oil or its waste Can be used on any diesel engine with no modification to the engine Produces lower carbon monoxide and sulfur emissions Safer handling due to higher flashpoint Biodegradable Strong P
Slide 9: Biodiesel Opportunity in China
Biodiesel Opportunity in China Strong economic growth has fueled demand for energy in general, and fossil diesel in particular, on the back of strong growth in the fleet of motor vehicles. China nominal GDP (RMB Trillion) Motor Vehicles in China (Million) 25 35 31.6 CAGR: 12.9% 30 CAGR: 14.5% 20.1 2
Slide 10: Biodiesel Opportunity in China
Biodiesel Opportunity in China To support robust growth, reduce reliance on imported oil and protect the environment, the Chinese government established a goal for renewable energy to represent 20% of total energy consumption in China by 2020. Energy Mix in China Chinese Biodiesel Demand Forecast (M
Slide 11: Biodiesel Opportunity in China
Biodiesel Opportunity in China Feedstock accounts for 80% of cost of producing biodiesel. Cost of Biodiesel US$/Barrel Chinese biodiesel producers $150 have an inherent cost $131 advantage due to their Current Diesel Price In China ($96/Barrel) reliance on waste vegetable $100 oil as feedstock $67
Slide 12: Early Entrant in Biodiesel
Early Entrant in Biodiesel China Clean Energy is one of only two publicly-traded or publicly-quoted biodiesel producers from China Developed a proprietary technology for producing biodiesel fuel from vegetable oil waste that gives it a cost advantage Key competitive advantages • Vertically-int
Slide 13: Diversified Revenue Base
Diversified Revenue Base Biodiesel Fuel Revenue Breakdown First three quarters 2006 Specialty Chemicals • Monomer Acid Chemicals Biodiesel 72.6% • Stearic Acid 27.4% • Dimer Acid • Printing Inks • Dimer Acid-Based Polyamide Hot Melt Adhesives • Low Molecular Weight Liquid Polyamide Resin • High
Slide 14: Attractive Specialty Chemicals Niche
Attractive Specialty Chemicals Niche China presents a large and market for specialty chemicals with underlying growth of 6 to 8 percent a year. China Clean Energy’s intermediary chemical products have a wide array of applications across several industries. Premium quality and low costs have al
Slide 15: Strong Customer Relationships
Strong Customer Relationships Top Customers Revenue Contribution first 9 months, 2006 Top 10 International Customers: 1 Hong Kong Advanced Chemical Co. Ltd Others 2 Singapore Air Products Chemical Pte, Ltd. 52% 3 India Arihant Chemical & Resin Pvt. Ltd. 4 India Amizara Agencies Top 10 Domestic 5 Ind
Slide 16: Low Cost Structure
Low Cost Structure Gross Margin (%) Near 100% utilization of cottonseed 27.6% waste, leveraging specialty chemical by- 27.4% 27.7% products Proprietary technology for producing 2004 2005 First 9 months, biodiesel utilizing monomer acid 2006 Low labor costs 16
Slide 17: Proprietary Technology
Proprietary Technology Proprietary method of manufacturing biodiesel from monomer acid (patent pending) Proprietary and patented multi- purpose polyamide hot-melt adhesive for use in: • Inks • Adhering Polyolefin • Engineering Plastics • Films • Pyrocondensation Goods, and Others Proprietary c
Slide 18: Distinguished R&D Advisors
Distinguished R&D Advisors Zicai Liang, Professor and R&D Advisor Professor, Doctor / Mentor and Master Instructor at Sichuan University Macromolecule Institute and formerly a researcher at Chengdu Technology University. Published over 60 industry papers and 4 patents and has 4 years of research e
Slide 19: Growth Strategy
Growth Strategy Focus on rapidly-expanding biodiesel capacity Build on current technology and manufacturing processes expertise Continue to improve operational efficiencies Leverage the use of chemical by-products Build strong brand to capture market share 19
Slide 20: Biodiesel Focused Expansion Plan
Biodiesel Focused Expansion Plan 11stst Half Half 2007 2007 22nd nd Half Half 2007 2007 2008 2008 2009 2009 Existing plant Jiangyin, Fuqing Hebei, close to Xinjiang expansion 20 miles from cotton oil existing plant production plants Location Location Access to deep sea port and railway A
Slide 21: Experienced Management Team
Experienced Management Team Tai-ming Ou, Chairman and CEO • Co-founded the Company in 1995. Prior to forming China Clean Energy, Mr. Ou was the Director of General & Administrative Office of Fuqing First Secondary School. Mr. Ou was also in charge of a factory operated by the school. He is a license
Slide 22: Financials Overview
Financials Overview Revenues ($Million) $10 million sales in 2005, $9.8 million from Jan. ’06 to Sept. ‘06 $10.0 $9.8 $6.6 Over 50% sales growth in ’05 Over 62% net income growth in ’05 2004 2005 1st 9 months 2006 Net income margin of 13% in ’05, Net Income ($Million) and 12.9% in the first
Slide 23: Summary Financial Data
Summary Financial Data Pro forma Summary Income Statement Years Ended 9 Months Ended December 31 ($ in thousands) Sept. 30, 06 2005 2004 Revenues $9,779 $10,040 $6,590 Operating income 2,012 2,059 1,228 Net income 1,263 1,310 774 Source: Company’s SEC filings 23
Slide 24: Summary Financial Data
Summary Financial Data ($ in thousands) Balance Sheet 09/30/06 12/31/05 (Pro forma) Cash and Cash Equivalents $2,608 $3,175 Total Current Assets 4,973 6,028 Total Assets 11,649 10,833 Total Current Liabilities 1,863 2,582 Total Liabilities 1,863 2,582 Total Stockholders’ Equity 9,786 8,251 24
Slide 25: Investment Highlights
Investment Highlights Emerging producer in China’s biodiesel market Low-Cost Manufacturer Proprietary Technology and Commitment to R&D Experienced Management Profitable and Rapidly-Growing Business Enormous demand for renewable energy in China 25
Slide 26: Thank You
Thank You China Clean Energy Inc. c/o Fujian Zhongde Technology Co., Ltd Fulong Industry Zone Longtian Town Fuqing City Fujian, China 35013 Phone: +86-591-85773387 Contact Information: Gary Zhao, CFO Email: [email protected] China Mobile: 86-13801339172 US Mobile: 917-751-1252 www.ch
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