China Energy Recovery — Investor Presentation (September 2008)
29 slides from China Energy Recovery's investor presentation, Sep 10, 2008
Slide 1: Investor Presentation September 2008
Investor Presentation September 2008
Slide 2: Disclosure
Disclosure ‘Safe Harbor Statement Certain of the statements set forth in this presentation constitute "Forward Looking Statements." Forward-Looking Statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and ma
Slide 3: Agenda
Agenda , NETS) NTE Il. in verview. otal jals and Gr Strate, 2 ceR
Slide 4: China Energy Recovery
China Energy Recovery What We Do: We finance, design, build and install systems that recover unused energy from inefficient industrial facilities and eliminate harmful emissions for environmental compliance Today: An emerging leader and low-cost provider of energy recovery systems in China, among th
Slide 5: Company Overview
Company Overview 4 China Energy Recovery (“CER” or the “Company” is an international leader in designing, manufacturing, installing and servicing energy recovery systems (‘Recovery Systems”) 4 Enables industrial partners to reduce their energy costs and shrink their emissions footprint, creating sel
Slide 6: Investment Opportunity
nvestment Opportunity CER enjoys several attractive characteristics that make it a highly attractive investment opportunity in the clean energy sector 4 The Company's Recovery Systems enable many industrial facilities to meet between 50% to 80% of their energy needs 4 Produces among what we believe
Slide 7: Introduction
Introducti Il. in verview. otal jals and Gr Strate, 6 ceR
Slide 8: What is Energy Recovery?
What is Energy Recovery? Industrial facilities and power plants release Conventional significant amounts of excess heat into the Central atmosphere in the form of hot exhaust gases Generation or high pressure steam. 4 Vast majority of wasted energy is recovered and converted into usable electricity,
Slide 9: Benefits of Energy Recovery
Benefits of Energy Recovery Recovery Systems boost efficiency, slash costs and protect the environment by reducing harmful emissions 4 Reduction in energy costs and process costs: Energy Recovery Systems save fuel/energy costs by producing typically 2-3 times the useable energy from the same fuel, a
Slide 10: Energy Cost Comparison
Energy Cost Comparison CER’s technology generates power at a small fraction of the cost of other leading clean energy technologies, thus producing faster payback on invested capital and substantially higher IRRs Generation Cost Generation Cost Capital Cost 100% Utilization 25% Utilization (SIKW) (s/
Slide 11: China Energy Consumption
China Energy Consumption Energy demand is rising and accounts for over 15% of the world’s energy consumption, soon becoming the world’s largest consumer of petroleum Historical Oil Prices Forecasted Petroleum Consumption ($USD per Bare) (1.000 bp) 2 ms 2H “In addition to reducing the buying power of
Slide 12: Power Generation in China
Power Generation in China ‘Chinese Power Generation Capacity (GW) oS BESE888S ee ae ee ae ie aed 6 China has emerged as the world’s second-largest consumer and generator of electrical energy with a generation capacity of 622 GW at the end of 2006 4 In 2006, power generation grew 13.5% to 2,834 billi
Slide 13: China's Manufacturing Industry
China’s Manufacturing Industry ‘As China's heavy manufacturing industry continues to grow, solutions are required for both the (i) increasing energy needs and (ii) harmful emissions Retox) 20 ‘Manufacturing Component of GOP 2010, 80 70 with 2005. implementation of 60 50 40 30 20 10 00 mm mm aS mM MS
Slide 14: China's Pollution Crisis
China’s Pollution Crisis China receives mounting pressure to curb its intolerable levels of pollution 4 Eclipsed Standards: 1% of the country’s 560 mm city dwellers breathe air considered safe by EU standards + The EU stipulates that any reading above 40 micrograms per cubic meter of air is unsafe +
Slide 15: III. Business Overview
, ieee ae) , NETS) NTE Ill. Business Overview otal jals a I Strate, 14 ceR
Slide 16: Domestic China Opportunity
Domestic China Opportunity CER is primarily focused on providing solutions to China’s vast industrial facility base 4 6 Ly China is the world’s second largest consumer of energy (soon to be largest), with a demand forecasted to double in the next § years China's double-digit growth in demand for ele
Slide 17: International Opportunity
International Opportunity CER expects to capitalize on changing environmental regulations and increasing demand for clean energy alternatives in Europe, the United States and the rest of the world 4 As concerns over emissions and fuel prices become driving factors in the addition of new power genera
Slide 18: Target Industries
Target Industries Focused on sectors with highest energy waste and fastest investment payback Historically focused its products on four key industries: + Chemical Industry - Largest current market, with deployments in numerous sub-sectors + Paper Manufacturing - Proprietary technology eliminates hig
Slide 19: Recovery Systems
Recovery Systems >> >>>> Customizable technology meets the varying needs of a diversified customer base Recycles typically over 90% of the energy that would otherwise be lost in its customers’ industrial processes Provides customer investment payback usually within one to three years Captures and el
Slide 20: Research and Development
Research and Development 4 90 engineers located in Shanghai are engaged in refining the core technology of energy recovery systems 4 Engineers are focused on developing intellectual property rights and enhancing energy efficiencies and decreasing environmental impact for customers 4 CER's engineers
Slide 21: Intellectual Property
ntellectual Property 4 The Company has a portfolio of core Chinese patents on various components of the energy recovery systems + Due to historic working capital constraints, CER has only applied for Chinese domestic patents on a handful of key components and is now focused on securing additional in
Slide 22: Technology Design
Technology Design : The production of sulfuric acid involves highly exothermic ‘chemical reactions; most of the heat is released into the atmosphere through cooling towers. Without the use of an energy recovery mn “ton of sulfuric acd will —y 1 ton of steam. ‘Combustion ‘Oxidation Sufuris burned i p
Slide 23: Customer Base
Customer Base 4 Broad Existing Customer Base + Provided over 100 unique customers with Recovery Systems, over 25 of which have purchased multiple products & services + Deployed its Recovery Systems in 15 of China's 31 provinces + Sold into numerous international markets, including Egypt, Turkey, Kor
Slide 24: Experienced Executive Team
Experienced Executive Team CER’s executive team oversees a team of 330 employees in Shanghai, including 250 in the manufacturing facility and 80 at the corporate office 4 Mr. Qinghuan Wu, Chief Executive Officer and Chairman of the Board + Devoted 40 years to the design and production of energy reco
Slide 25: Experienced Executive Team (Cont.)
Experienced Executive Team (Cont.) 4 Mr. Richard Liu, Chief Financial Officer + Senior executive for private and public U.S. and Chinese companies, spent time at Arthur Andersen and has managed over 6 private and public equity financings + MBA from The Anderson Graduate School of Management at UCLA
Slide 26: IV. Financials and Growth Strategy
, ieee ae) , NETS) NTE I, in rview. IV. Financials and Growth Strategy 25 ceR
Slide 27: Historical Financials
Historical Financials 4 The Company completed its $8.5m financing in April 2008. The growth experienced in the first half of 2008 was mostly organic without requiring use of the Financing proceeds 4 We expect that the financing will help accelerate growth going forward For Year Ended For Six Months
Slide 28: Strategy
Strategy Phase | Continue to fulfill current orders 4 Establish long-term strategic purchasing agreements with key suppliers Phase Il 6 Start construction of manufacturing facility to increase capacity, margins and efficiency 4 Purchase specialized equipment to drive efficiencies 4 Grow R&D efforts
Slide 29: Investor Relations Contact
Investor Relations Contact Jim Blackman PR Financial Marketing LLC 713-256-0369 [email protected] 28 ceR
China Energy Recovery — Investor Presentation (September 2008) on 6ix