Asian Citrus Holdings Limited · HKEX:73
Asian Citrus — FY2008/09 Earnings Presentation
26 slides from Asian Citrus's earnings presentation, October 2009
Slide 1: Corporate Presentation
Corporate Presentation
Slide 2: Disclaimer
Disclaimer This document is issued by Asian Citrus Holdings Limited (the “Company”) and comprises slides for a presentation to investors and potential investors of the Company. By attending the meeting and accepting this document, you agree to be bound by the following limitations. This presenta
Slide 3: Contents
Contents Asian Citrus and market Positioned for growth Financial information Conclusion 2
Slide 4: Introduction to Asian Citrus
Introduction to Asian Citrus Overview Asian Citrus is the single largest orange producer and plantation owner in the People’s Republic of China (PRC) Two operational plantations occupying a total area of c.68sq.km of farmland with total of c.2.9 million trees planted Hepu Plantation is fully o
Slide 5: Introduction to Asian Citrus (con't)
Introduction to Asian Citrus (con’t) Asian Citrus operations • Operate in accordance with international standards • Two operational plantation bases in PRC, approximately 68 sq. km of land in total and over 2.9 million orange trees planted • New plantation in Hunan Zigui Base (Hubei) Potential sou
Slide 6: Growth potential of the PRC orange market
Growth potential of the PRC orange market Characteristics of the PRC orange market Global production of oranges (m tonnes) Rapid growth compared with other global 20 Brazil USA China EU-27 Mexico producers, particularly since 1980s 15 Increasing domestic consumption 10 5 Low cost agricultural
Slide 7: Increasing yields
Increasing yields Average production life of an orange tree Orange tree yields and maturity profile commences after 4 years and lasts for over 30 years Inherent benefit from maturing plantations Orange output grows until reaching full maturity at around 10 years Volume increased by 83% from
Slide 8: Seasonal production of high-quality oranges
Seasonal production of high-quality oranges Summer oranges March to May Winter oranges October to December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Timeline relates to the existing Hepu Plantation and Xinfeng Plantation with the Peak harvesting period expected Hunan Plantation harvest period
Slide 9: Contents
Contents Asian Citrus and market Positioned for growth Financial information Conclusion 8
Slide 10: Key strengths
Key strengths Key factors Well located plantations, high quality oranges and Barriers to entry inherent growth potential Significant capital requirements US varieties of oranges Time to plantation maturity 50% of trees aged 5 years or less driving Land lease procedures medium-term grow
Slide 11: Strategy
Strategy Strategy Increasing profitability through growing sales to supermarkets Increasing production volumes and sourcing from third parties Expanding vertically Juicing Nursery Building a national brand Investing to capitalise on market growth Hunan Plantation Juicing Investin
Slide 12: Investing to capitalise on market growth
Investing to capitalise on market growth Hunan Plantation Juicing Basic infrastructure of Hunan Government Limited availability of fresh orange juice in commenced in FY2008/09 with nursery PRC, therefore significant growth potential expected to be completed in September 2009 Increasing disposa
Slide 13: Investing to capitalise on market growth (cont.)
Investing to capitalise on market growth (cont.) Investing beyond existing orange production business Investing in brand Drives demand Supports increased pricing Driving supermarket sales Enhancing refrigeration and processing facilities Sourcing of additional oranges from third parties
Slide 14: Revenue driven by increasing volume and average selling price
Revenue driven by increasing volume and average selling price Revenue progression Revenue by customers—FY 2008/09* Other 0.5% Revenue RMB (000s) Supermarket 700,000 chains 650,000 36.7% Corporate customers 600,000 38.9% 550,000 500,000 Wholesale 450,000 customers 23.9% 400,000 350,000 668,529 Revenu
Slide 15: Contents
Contents Asian Citrus and market Positioned for growth Financial information Conclusion 14
Slide 16: Pre-tax profit growth and strong operating cash inflow
Pre-tax profit growth and strong operating cash inflow Profit before tax* Strong operating cash inflow RMB (000s) RMB (000s) 250,000 300,000 14.3% 250,000 200,000 231,635 278,989 200,000 202,741 228,341 214,275 150,000 150,000 2008 2009 2007 2008 2009 Starting from 1 January 2008, the Group’s inco
Slide 17: EBITDA growth in last five years
EBITDA growth in last five years EBITDA* Revenue by type breakdown—FY 2009 EBITDA RMB (000s) 300,000 Winter Summer oranges oranges 56.8% 43.2% 250,000 Total RMB634.9m 291,240 270,137 Cost of sales breakdown FY 2009 200,000 248,637 Others 3.1% 218,810 Depreciation 16.3% Fertilisers 184,525 44.7% Dire
Slide 18: Key Highlights – Annual results
Key Highlights – Annual results Reported financial information Jun 2009 Jun 2008 (RMBm) (RMBm) % change Revenue 668.5 533.8 +25.2 EBITDA 501.9 413.6 +21.3 Profit before tax 442.3 367.7 +20.3 Net profit 440.1 399.3 +10.2 Basic EPS (RMB) 5.81 5.38 +8.0 Dividend per share (RMB) 0.8 0.8 - Reported finan
Slide 19: Key Highlights – Annual results
Key Highlights – Annual results Jun 2009 Jun 2008 Reported financial information (£m*) (£m*) % Change # Revenue 58.8 39.0 +50.8 EBITDA 44.1 30.2 +46.0 Profit before tax 38.9 26.8 +45.1 Net profit 38.7 29.1 +33.0 Basic EPS (GBP) 51.1p 39.3p +30.0 Dividend per share (GBP) 7.0p 5.8p +20.7 Reported fina
Slide 20: Operational Highlights – Annual Results
Operational Highlights – Annual Results Operational highlights Revenues from the sales of oranges up 20.5% to RMB634.9m, achieved by an increase of 16.7% in production and a 3.2% increase in average selling price Revenues from the sales of retail units in Xinfeng Development was RMB31.3m (FY2007
Slide 21: Operational Highlights – Annual Results
Operational Highlights – Annual Results Hepu Plantation Fully developed with approximately 1.3m orange trees, of which approximately 1.2m trees were fruit-bearing Production increased by 3.5% to 124,394 tonnes (FY2007/08: 120,189 tonnes) Gross margin decreased slightly to 68.6% (FY2007/08: 69.
Slide 22: Operational Highlights – Annual Results
Operational Highlights – Annual Results Hunan Plantation Commenced the basic infrastructure with RMB20.3 million invested during the year Started the construction work of a new nursery at Hunan Plantation which occupies approximately 7,000 square metres Plan is to plant a total of 2.4 million
Slide 23: Contents
Contents Asian Citrus and market Positioned for growth Financial information Conclusion 22
Slide 24: Conclusion
Conclusion Investment summary Leading producer in fragmented market benefiting from Demand led growth Increasing average selling prices Low cost production High margins Strong track record Turnover up 20.0% CAGR over last 5 years Investment behind market growth Anticipated increase
Slide 25: Appendix I - Corporate Structure
Appendix I - Corporate Structure Board • Mr Tong Wang Chow (Executive Chairman & CEO) • Mr Tong Hung Wai, Tommy (Executive Director) • Mr Cheung Wai Sun (Executive Director) Remuneration • Mr Pang Yi (Executive Director) Audit Committee • Mr. Sung Chi Keung (Finance Director) Committee (NEDs) • Mr I
Slide 26: Ownership Structure (as at 20 October 2009)
Ownership Structure (as at 20 October 2009) Mr. Tong Mr. Tong Mr. Lee Wang Chow, Hung Wai, Kun Chung Chaoda Modern Tony Tommy Agriculture (Holdings) Public Public Ms. Tong Limited (682HK) Ms. Tong Lee Fung Cayman Islands Mei Lin Kiu 76% 6% 6% 6% 6% 100% Market Ahead Investments Limited Huge Market (
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