2012 Annual Result March 28, 2013

Transcription

1 2012 Annual Result March 28, 2013 严格保密

2 Disclaimer This presentation and the presentation materials distributed herewith include forward- looking statements. All statements, other than statements of historical facts, that address activities, events or developments that Sinofert Holdings ( Sinofert ) expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward-looking statements. Sinofert s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, exploration and development outcomes, estimates of reserves, market shares, competition, environmental risks, changes in legal, financial and regulatory frameworks, international economic and financial market conditions, political risks, project delay, project approval, cost estimates and other risks and factors beyond our control. In addition, Sinofert makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements. 1

3 Sinofert Sinofert Holdings Ltd Ltd. is the largest s supplier pplier of agric agricultural lt ral inp inputs ts and agrochemical ser services ices in China, dedicated to becoming a global leader in the industry. Top China s largest fertilizer distributor and service provider Top China s largest fertilizer importer Corporate headquarter Branch offices Top China s leading phosphorus resource owner Top China s China s leading fertilizer producer 2

4 Key Financials for 2012 Net profit attributable to parent company (RMB mn) Sales volume (1,000 tons) 17,139 y-o-y Revenue (RMB mn) 41,190 y-o-y 878 y-o-y 3

5 I. Operation Review II. Financial Performance III. Future Outlook

6 Review of Market Environment Domestic fertilizer application amount (converted to pure amount, 10,000 tons) 5,562 5,704 5,800 Potash fertilizer Phosphate fertilizer Compound fertilizer Nitrogen fertilizer E Source: Data for is sourced from National Bureau of Statistics; Data for 2012 is estimated amount of the Company Market price of major fertilizer varieties in China (RMB/ton) 4,500 3,500 2,500 1,500 Factory price of DAP Port price of potassium chloride Factory price of urea in Shandong 500 Jan 2010 Jan 2011 Jan 2012 Source: China-fertinfo.com.cn Dec 2012 Price of major raw materials in China (RMB/ton) Pithead price of anthracite in Jincheng, Shanxi Bargaining price on the vehicles of 30% grade phosphorite ore in Kaiyang, Guizhou Pithead price of lignite in Hailar, Inner Mongolia 1, Jan 2011 Jun Source: China-fertinfo.com.cn Jan 2012 Jun Dec

7 Steady Progress of Our Strategies Upstream resource Acquire coal, phosphorus and potassium resources as strategic assets to fuel future growth Midstream production Continue technical innovation to strengthen the market leader position in the region or industry Downstream marketing Leverage network advantages, enhance marketing and promote marketing service transformation combining gproduct with service 6

8 Upstream Resource: Significant Breakthrough in Resource Acquisition Leading position in phosphorus resource reserve in China Phosphorus reserve of major chemical enterprises in China (100 million tons) 20.2 Qujing Xundian Kunming firm1 firm2 firm3 firm4 Sinofert firm5 Yunlong A relatively low transaction price for mining right Phosphorus resource transaction cases in recent years Dawan Two phosphorous mining rights: million tons of resources Peru (2010) Mabian, Sichuan (2009) 24% stake of 238- million-ton mining right million-ton mining right US$385 million (or RMB43/ton) US$490 million (or RMB15/ton) Sinofert 300-million-ton US$1.38 billion Yunlong (2012) phosphorite (or RMB4.6/ton) Source: Public data Phosphorous Meizhushao Fagudian Yuezhao Three phosphorous exploration rights: Totally 300 million tons of resources 7

9 Midstream Production: Compound and Phosphate Fertilizer Business Maintains the Industry Leader Position Sinofert Yunlong possesses resource advantages and advanced feed-grade calcium production capacity Gross profit margin Of feed-grade calcium products Sinofert Yunlong achieves better profit in the period Pretax profit of Sinofert Yunlong (RMB1,000) 103,321 11% 77,274 A MDCP production enterprise in line with European quality standard; MDCP standard included in Korean MDCP standard A national high-tech enterprise certified by Ministry of Science and Technology Feed-grade Sinofert Yunlong phosphate industry average Source: Industry research reports Feasibility for 2012 Actual for 2012 Sinofert Fuling boasts outstanding technical leadership in the industry Owns China s first wet process phosphoric acid device with proprietary IP Ranked among high energy efficiency company in China s petrochemistry industry Won the title of Pacesetter of China s Fertilizer Industry in 2012 Sinofert Fuling maintains industry-leading profitability despite downturn in the market Sinofert Fuling s phosphorite Sinofert Fuling s sulphuric acid consumption for producing consumption for producing 1 ton of phosphate 1 ton of phosphorus -8% -4% Obtained 15 nation-level authorized patent ttechnologies as of the end of

10 Midstream Production: Strategic Nitrogen Production Plan to Achieve Future Regional Leading Position Emphasis on technical transformation Technical transformation projects completed in 2012 New urea capacity of 300,000 tons/year completed by Sinofert Changshan Sinofert Changshan s coal consumption for producing 1 ton of urea -13% Sinofert Changshan Steam gradient utilization Energy-saving and Consumption-reducing Transformation of Sinofert Changshan s Urea System Sinofert Pingyuan Ammonia Evaporative Condenser Transformation Coal Briquette Transformation of Sinofert Pingyuan with a capacity of 300,000 tons/year Actual Estimate t from Feasibility Study Sinofert Pingyuan introduces strategic partners Sinofert Changshan s power consumption for producing 1 ton of urea Sinofert Pingyuan s power consumption for producing High-quality 1 ton of urea and low-price coal supply Increase profitability -5% -3% Capital Increase and Equity Investment of RMB260 million

11 Midstream Production: Stable Production and Sales with Higher Profit Production Volume of holding Sales volume of holding Pretax profit of holding enterprises enterprises enterprises (1,000 tons) (1,000 tons) (RMB1,000) 3,572 3,691 3,658 3,331 3,449 3, ,131 7, ,118 10

12 Downstream Marketing: Marketing Service Model Achieved Good Results (1/2) Market share of imported fertilizers Fertilizer variety Sea-borne Potash Imports Import share 40% Sales volume of fertilizers produced by domestic enterprises (1,000 tons) 10,081 10,370 10,806 SOP based compound fertilizer 61% imports Phosphate Fertilizer Imports 75%

13 Downstream Marketing: Marketing Service Model Achieved Good Results (2/2) Crops/customer demands Soil sampling and soil test Formula design and recommendation of fertilizer application Channel-driven demands Agrochemical lecture and promotion Best solution selected from field test and demonstration Hainan Subsidiary Package Solution Gross Profit of Hainan Subsidiary (RMB1,000) 37,911 Application of soil test-based formula Soil test-based fertilizer formulation technology is applied in wax apple to increase the size by % 23,286 Tests of soil test-based fertilizer formulation and application technology and transverse planting technology show good results in Chinese yams

14 Downstream Marketing: Steady Growth in Sales and Profit Continuous increase in sales volume and gross profit of marketing business Sales volume (1,000 tons) 13,886 14,196 5% 14, Potash fertilizer Nitrogen fertilizer Gross profit (RMBmn) ,151 1,351 3% 1, Compound fertilizer Phosphate fertilizer 13

15 I. Operation Review II. Financial Performance III. Future Outlook

16 Expanding Operating Scale Sales Volume Turnover (1,000 tons) (RMB1,000) 15,505 16,458 12% 4% 41,190, ,684,963 17,139 29,271,

17 Profit Growth and Structure Optimization 2010 Gross Profit 2011 Gross Profit 2012 Gross Profit (RMB 000) (RMB 000) (RMB 000) 14% 2,377,802 2,089,689 1,490,998 59% 41% 35% 23% 65% 77% Marketing business Production business 16

18 Consistent Net Inflow for Operating Cash Flow Net Operating Cash Flow (RMB 000) Surplus Cash Coverage 3,998, ,487,765 2,062, Note: Surplus cash coverage = Net operating cash flow / Net profit 17

19 High Efficiency of Asset Management Account Receivable Turnover Days Inventory Turnover Days (Days) (Days)

20 Secure and Stable Solvency Liabilities to Assets Ratio Debt-Equity Ratio 49% 53% 47% 55% 41% 31% End of 2010 End of 2011 End of 2012 End of 2010 End of 2011 End of

21 Excellent Credit Ratios Debt/EBITDA Debt/Total Capital FFO/Debt % 28.9% 23.7% 24.1% 33.0% % End of 2010 End of 2011 End of 2012 End of 2010 End of 2011 End of 2012 End of 2010 End of 2011 End of

22 I. Operation Review II. Financial Performance III. Future Outlook

23 Grain Supply and Demand in Tight Balance Leading to Higher Price Population growth of China Lack of agricultural acreage per capita in China 14 ( 00 Million) (mu/person) Source: EIU Grain supply and demand of China Source: FAO China India Brazil US Globle average China s grain price going up (Million Tons) Output Demand E Source: National Bureau of Statistics of China Medium and Long-term Plan for National Food Security ( ) Source:NBS, Ministry of Agriculture 22

24 Central Government Continues to Increase Investment on Three Agricultural Themes and Encourage Farming General subsidy for purchasing agricultural supplies Improved Varieties Subsidy Central Finance continues to increase investment in Three Agricultural Themes (RMB 00 Million) (RMB 00 Million) ,078 (RMB 00 Million) , ,419 7,253 8, ,956 Subsidy for purchasing agricultural Direct grain subsidy machinery and tools (RMB 00 Million) (RMB 00 Million) Source: Ministry of Finance 23

25 Agricultural Modernization Is in a Take-off Stage Industrialization ti in China is currently in the process and urbanization in accelerating mode, continuously driving the progress of agricultural modernization. China s GDP per capita (US$) Stage of undeveloped economy China's urbanization rate (%) Source: EIU Early stage of industrialization First half of medium-term industrialization Second half of mediumterm industrialization Acceleration of urbanization Source: National Bureau of Statistics of China Medium 24

26 Agricultural Modernization Impels the Growth of Fertilizer and Agrochemical Service Demands The 12th Five-Year Plan on Agricultural l and Technological l Growth explicitly itl put forward to further adjust agricultural structure, strengthen land transfer, develop multi-form operation with appropriate scale and specialized farmer cooperatives and intensify construction of modern agricultural model areas. Essential characteristics of modern agriculture Guided by science and technology Scale production Diversified functions Integrated operation Sustainable growth Economic crops saw increase in planting production Proportion of land transfer area Increasing number of specialized farmer cooperatives (Million Ton) 614 (0 000 unit) Fruits & vegetables Rice % 8.9% 17.8% 21.5% Source: National Bureau of Statistics of China Medium Source: Ministry of Agriculture of China Source:2011 China Economic Development Research Report, the State Administration for Industry and Commerce Opportunities: beneficial to the growth of marketing services-oriented enterprises. 25

27 With China s Fertilizer Industry under consolidation, Advanced Production Capacity is expected to Achieve Significant Advantage in the Future Continuous integration of fertilizer market Oversupply of China s fertilizer industry Supply and demand of China s fertilizer industry (converted to pure amount, 10,000 tons) Supply Demand Number of nitrogen fertilizer enterprises During the 12th Five-Year Plan period, large-scale nitrogen fertilizer suppliers will account for over 80% of the total capacity Fewer than 250 nitrogen fertilizer suppliers in China 6,385 6,028 6,338 6,213 6,318 5,239 5,404 5,562 5,704 5, E Source: Data of from National Bureau of Statistics of China, data of 2012 from the expected figure of the company End of 08 End of 09 End of 10 End of 11 End of 12 Number of phosphate fertilizer enterprises End of 08 End of 09 End of 10 End of 11 End of 12 During the 12th Five-Year Plan period, large-scale phosphate fertilizer suppliers will account for over 70% of the total capacity Fewer than 150 phosphate fertilizer suppliers in China Source: China Petroleum and Chemical Industry Association Opportunities: beneficial to the growth of such enterprises with scale, technology and capital advantages. 26

28 Sinofert s Strategy Industry Trends Company Strategies Integrate products and services Strengthen agro-chemical services Marketing services: to provide end users with total solutions and comprehensively improve end-user-oriented marketing capability by leveraging strengths in network, technology and service Advanced manufacturing Combine fertilizer with chemistry business Advanced manufacturing: to achieve scale, low-cost, highquality, information-based and clean production through strategic layout and continuous technical innovation Converge to resource location Combine resources with fertilizer business Resource acquisition: based on the company s business planning, to actively screen and acquire resources that support the company s strategic development 27

29 Nurturing China's Modern Agriculture! Thank You!