Management Presentation June 2016

Transcription

1 HKEx Stock code: 985 Management Presentation June 2016

2 Corporate Overview 20% 92% 100% Other Investments Market Capitaization of approximatey HK$5.0 Biion At the end of September 2015 the Company had approximatey HK$431 Miion Cash, the Company has no debt, book vaue was approximatey HK$0.21/share Proposed pacement of shares of US$300 Miion at HK$0.10/share with Chen Weixing s subscription of US$80 Miion Top Sharehoders is to be Weixing Chen (10%), Howard Wong (8%), Tao Chiu (6%) and Chung Kiu Cheung (4%) upon the competion of pacement 2

3 Board and Management Chiu Tao Chairman Chen Wei Xing Executive Director (Kuaidi Founder) Richard Hui Executive Director 3

4 The core management team of First Cargo has more than 10 years experience in Internet and ogistics-reated industries as we as deep first-hand knowedge of entrepreneurship Chen Junqiao, CEO Hed senior saes management position in internationa firms, such as HP and CISCO 15 years or above experience in saes management position Sophisticated in team buiding and saes operating Entrepreneur of a PRC internet security company Wang, Honggang, COO Chen Aisheng, CTO Peng Fahua, VP He had more than 10-year experience in PRC ogistic sector and hed senior operationa positions in ogistic operators in the PRC, such as S.F. Express He had his undergraduate education at Peking University and his postgraduate education at University of Gottingen (German) He was a sub-contractor of Yahoo China for research and deveopment projects More than 15 years of ERP research and deveopment experience ERP products and technoogies were wereceived from customers and in IT sector He was Director of CCTV Goden Bridge Internationa Media Group, responsibe for providing tota brand operation and promotion services to banks and Internet customers 4

5 Our Mission Redefine Logistics for a Connected Word 5

6 Strategic Overview In 2015, the tota vaue of socia ogistics goods reached RMB triion, freight market reached RMB 10.8 triion and 3PL road freight market accounted for RMB 2.5 triion (forecast). Through the acquisition of First Cargo and investment in Kuaihuoyun, The Company has three core competitive advantages: management team with extensive experience in reated industries, broad customer resource and partner network, and innovative App design concept The Company s goa is to buid the biggest ogistics ecosystem in China In terms of its monetization mode, First Cargo wi provide new VAS aong with the traditiona ones. It wi aso provide third-party partners with innovative services based on ogistics big data to assist mutua cooperation and improve profitabiity 6

7 In 2014, the third-party genera road freight market reached RMB 2.1 triion and is expected to keep growing at 12% China third-party genera road freight market RMB triion FTL 2.1 LTL F Express F +12% p.a F F F F Projected CAGR, % 11% 18% In the next five years, the thirdparty genera road freight market is expected to grow at CAGR 12%, and reach RMB 4.4 triion by 2020 The LTL (11%) and express markets (18%) grow at a faster rate than FTL, mainy driven by e-commerce and sma/medium B2B business Source: Mckinsey & Company research 7

8 Both shippers and truckers have pain points with subcontract companies, e.g., poor safety contro and voatie cargo voume Pain points of shippers Pain points of truckers Poor safety contro security Quaity of transport varies significanty, given the imited certification of franchised companies and evauation system to screen the truckers Low information transparency Lack of systematic truckerinformation recording (contact info and assessment) Absence of an IT system to keep rea-time tracking of truck/cargo ocation High ratio of empty backhau Voatie cargo voume Weak deveopment capabiities of the back-hau shippers eads to ong waiting times and ow oading ratios Reying on cargo transfer among peers, e.g., freight forwarders and information centers, to secure cargo sources resuts in voatie shipment voume Lack of punctuaity Low brand awareness Not abe to ensure exact pick up and arriva time, and ack of standardized and systematic requirements of timeiness Highy fragmented industry with ow brand awareness and varied quaity makes it difficut to find subcontract companies with a good reputation Lack of back-end support Lack of scae in economy of backend investment Absence of a route optimization system to improve the timeiness of deivery Insufficient investment in the maintenance of outsourced trucks and drivers (e.g., truck maintenance services, trainings for the driver) 8

9 First Cargo aims at buiding dua patform business mode, first focusing on the truck-cargo matching patform and then extending its services to the asset-ight ogistics carrier Cose oop of dua patforms Onine payment system C A transactions adopt onine payment systems to enabe rea-time tracking and contro of transactions and prevent customer osses Large patform is the entry point of traffic for the dua patforms, directing quaity truck and cargo owners to the sma patforms Sma patform - high vaue for money carrier service A B Sma patforms provide higher income and stabe cargo sources for truckers to incentivize big patform payers to improve service quaity Provide differentiated services to shippers, better meeting customer requirements Large patform free truck-cargo matching D Evauation system Evauation systems can hep track the performance of truckers, shippers and the vaue-added services providers, ensuring information transparency and quaity of services and enabing customer segmentation and a duapatform rating mechanism 9

10 First Cargo has an extensive customer resource and broad partner network It has abundant KA resources In addition, its broad partner network provides business support to First Cargo Excusive partner Manufacturing industry The biggest integrated buiding materias industria group in China. Product covers gass fiber, compound materias, etc. A arge stee producer in China A packing materia producer that integrates with professiona design, production and saes Taishan Stee Ministry of Pubic Security Network-wide truck GPS service Automatic user information checking, ensuring patform security Financia oan services Onine payment services A eading container operator for domestic trade Insurance services Food and beverage industry B2B restaurant and hote food materia procurement patform Foton Automotive Trucks saes on First Cargo patform 10

11 With the eading IT system architecture, App 2.0 not ony heps match cargo and trucks, but aso meets the user demand of sociaization and provides VAS Diversified user interface Community of ogistics companies Community of drivers Truck/cargo matching service Carriage service TMS VAS Sociaization service Community of insurance company Community of truckers Regiona community E2E core operation supporting system BOSS Shipper Trucker VAS provider VAS community Community of ogistics finance App 2.0 Community of shippers Community of industry Customers Big data anaytics Community of truck OEM Community of FFs 11

12 As for monetization, in addition to traditiona VAS, First Cargo can offer innovative vaue-added services based on big data coected from the patform Traditiona VAS VAS based on big data Truckers Truck/feet management (e.g., cost anaysis) Auto finance (free or differentiated interest rate offering based on rating) Oi card Maintenance Auto insurance Shipper recommendation Recommend target shippers based on truckers requirements (e.g., time, margin) Offer cargo match on return trip based on deivery address Increase patform exposure Forecast cargo voume in the future Route panning Optimize route based on the truck owner s requirements (e.g., time, margin) Recommend route based on cargo distribution Other support for truckers (e.g., parking and accommodation) Dispute settement Patform entry Cargo/truck search and match Transportation Deivery Warehouse storage Consignment Packaging Freight insurance Enroute GPS Payment coection on deivery Shippers One-stop ogistic panning Trucker recommendation Loan (free or differentiated interest rate offering based on rating) 12

13 and aso provide ogistics big data based VAS, incuding precise Ad aunch and customer referra, to third party partners to achieve win-win and improve profitabiity Basic information of truckers Trucker info: company/feet size, area, business type, evauation Truck info: condition, size, horsepower Truck basic info (condition, size, horsepower) Truck historica accident record Truck producer Parts whoesaer/ retaier Truck garage Insurer Logistics big data Bank Logistics property (e.g., parking ot) Mote& Catering Provide customer record (e.g., satisfaction rate) as reference for evauation grade Anayze historic transaction data (cargo type, vaue-added service bought) and forecast financia demand of insurance/financia product from truckers and shippers Driver basic info (age, ID number) Truck rea-time positioning, O&D route panning and historica record Truck basic info (condition, size, horsepower) Truck rea-time positioning, O&D route panning and historica record Vaueadded service type Raw data Trucker and shipper basic information Transaction record Anaytics Precise Ad aunch Customer behavior anaysis Customer recommendation and deveopment Extended operation Operation (e.g., contract and operate part of mote rooms) Cross-seing of products from different third parties 13

14 Deveopment path Three-Phase approach to buid "First Cargo Ecosystem" is as foows: Phase 1 (Ju-Dec, 2016) : Increase patform traffic and user activeness, aying foundation for next phase as a carrier Phase 2 (Jan-Jun, 2017) : Continue arge patform promotion, start sma-patform piot Phase 3 (Ju, 2017 Jun, 2018) : Rapidy repicate business mode nationwide and reaize profit In the coming 2 years, user registrations at First Cargo wi increase 6 fods to 5 mn; as user activeness improves, transaction voumes wi reach ~20k per day A tota investment of RMB1.8 bn is needed in 3 phases to increase traffic, buid carrier capacity and management capabiity 14

15 First Cargo deveopment path wi have three phases, i.e., arge patform traffic infow, sma patform carrier mode set up, and nationa repication for profit Phase 3 (Ju, 2017-Jun, 2018) Phase 2 (Jan-Jun, 2017) Start regiona carrier service piot Phase 1 (Ju-Dec, 2016) Large patform traffic infow Comprehensivey improve downoad, user registration and user activeness Set up compete and effective trucker/shipper rating system Upgrade shippers and truckers from arge patform to sma patform using the rating system Set up and piot sma patform carrier service Nationa repication for profit Rapidy repicate sma patform mode nationwide Promote vaue-added services to shippers, truckers and third party partners to reaize profit 15

16 In 2 years, the number of registered users wi increase 6 fod to 5 mn, and as user activeness improves, transaction voume wi reach 20k per day Registered customer Miion peope Juy (2016) December (2016) June (2017) June (2018) Daiy transaction voume 1000 deas/day By Feb , registered users reached 630K. Assuming 2 drivers per truck, trucker voume accounts for 31% of market share 2 Trucker voume accounts for 49% of market share 3 Trucker voume accounts for 70% of market share 16

17 A tota investment of RMB1.8 bn is needed in 3 phases to increase traffic, buid carrier capacity and management capabiity First Cargo funding requirement RMB mn Phase 2 (Month 7-12) Phase 3 (Month 13-24) Phase 1 (Month 0-6) , Traffic Transportation generation 1 network 2 Fixed asset 3 Sub tota Traffic generation Transportation network Fixed asset Sub tota Traffic generation Transportation network Fixed asset Grand tota 1 Incuding on-ine and off-ine promotion, reward and incentive a) First year offine promotion reward is RMB per person, second year RMB per person b) Phase1 additiona reward is RMB 400 per transaction, Phase2 is RMB 300, Phase 3 is RMB Incuding operationa cost of carrier network, personne expense and materia cost 3 Incuding investment of IT, equipment and other fixed assets 17

18 Discaimer The materias used herein and this presentation (coectivey, the Presentation ) have been prepared by CST Mining Group Limited (the Company ) soey for use at presentations to be hed during June By viewing the Presentation, or by reading the materias used at the Presentation, you agree to be bound by the foowing imitations: The Presentation may not be copied, pubished, distributed or transmitted or discosed by recipients to third parties. The Presentation does not constitute or form part of any offer or invitation to se or issue, or any soicitation of any offer to purchase or subscribe for, any securities or an inducement to enter into any investment activity, nor sha any part or a of the Presentation form the basis of, or be reied on in connection with, any contract or investment decision in reation to any securities. The Presentation is being provided by the Company for informationa purposes ony and has not been independenty verified. The Company does not make any representation or warranty, express or impied, as to the fairness, accuracy, correctness or competeness of the information in the Presentation, and nothing in the Presentation is (or sha be reied upon as) a promise or representation by the Company. The Presentation is based on the pubicy avaiabe information about the Company as at 1st June, 2016 and the Presentation is quaified in its entirety by reference to the Pubic Information. Copies of certain information reating to the Company are avaiabe at You are urged to review the other Pubic Information in its entirety. The Presentation contains forward-ooking statements based on the currenty hed beiefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonabe. Forward-ooking statements invove known and unknown risks, uncertainties and other factors, which may cause the actua resuts, financia condition, performance, or achievements of the Company or industry resuts, to differ materiay from the resuts, financia condition, performance or achievements expressed or impied by such forward-ooking statements. Given these risks, uncertainties and other factors, viewers of the Presentation are cautioned not to pace undue reiance on these forward-ooking statements. The Company discaims any obigation to update these forward-ooking statements to refect future events or deveopments. The Presentation is ony directed at quaified investors and investment professionas and other persons shoud not rey on or act upon the Presentation or any of its contents. The Presentation does not constitute a recommendation regarding the securities of the Company. By attending this presentation you acknowedge that you wi be soey responsibe for your own assessment of the market and the market position of the Company and that you wi conduct your own anaysis and be soey responsibe for forming your own view of the potentia future performance of the business of the Company. The Presentation speaks as of 1st June, Any further discussions of the Company with any of the recipients sha not, under any circumstances, create any impication that there has been no change in the affairs of the Company since such date. Nothing in the Presentation constitutes an offer of securities for sae in the United States or any other jurisdiction, nor does it constitute an invitation to subscribe for, purchase or se any securities. 18

19 Thank You 19