luzhou bio-chem technology limitedluzhou.listedcompany.com/newsroom/20151113_173254_l46_qrzo… ·...
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LUZHOU BIO-CHEMTECHNOLOGY LIMITED
Corporate
Presentation and
3QFY15 Results
November 13, 2015
A Mouth-Watering China Consumption Story
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2
Business Overview
Financial Highlights
Growth Strategies
Contents
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3
Business Overview
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Operating Climate
Luzhou has benefitted from favourable Chinese government
policy, notably the restriction on importation of raw cane sugar
in order to prop up domestic sugar producers
This has resulted in domestic food & beverage producers
switching to corn syrup products as a substitute
Raw corn prices have also been favourable in recent years due
to ample supply from government stockpiles
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Operating Climate
The USDA estimates that corn stockpiles in China are projected to
reach 90.6 million metric tons by 2016
Source: Bloomberg, http://www.bloomberg.com/news/articles/2015-11-03/drought-turning-china-
hope-for-record-crop-into-shrunken-harvest
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High price of cane sugar has resulted in food & beverage
manufacturers turning to alternative sweeteners
For comparison, the prices of sweetener products supplied by Luzhou
(as at Sep 2015) are as follows:
Fructose: RMB 2,954/tonne
Dextrose: RMB 2,619/tonne
High Maltose Syrup: RMB 2,471/tonne
0.00
2000.00
4000.00
6000.00
8000.00
Jan-0
5
May-
05
Sep-0
5
Jan-0
6
May-
06
Sep-0
6
Jan-0
7
May-
07
Sep-0
7
Jan-0
8
May-
08
Sep-0
8
Jan-0
9
May-
09
Sep-0
9
Jan-1
0
May-
10
Sep-1
0
Jan-1
1
May-
11
Sep-1
1
Jan-1
2
May-
12
Sep-1
2
Jan-1
3
May-
13
Sep-1
3
Jan-1
4
May-
14
Sep-1
4
Jan-1
5
May-
15
Sep-1
5
Cane sugar pricing in Nanning City, China
6 6
RMB/tonnes
Price Comparisons to Cane Sugar
Source: Company, 中国昆商糖网
Sep 2015:
RMB 5,280
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2,591
2,424
1,378
1,715
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
Corn Sweetener Corn Starch By-Products Corn
7
RMB/tonnes(excluding taxes)
Price Trends
Source: Company
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Financial Highlights
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9M15 Financial Highlights
Group Revenue increased by 18.5% y-o-y
Gross profit margin of 10.1%, 119.6% higher y-o-y;
Net Profit of RMB 20.4 million, a turnaround from net loss of
RMB 267.6 million in 9M2014
Net Profit Margin of 1.1%, 106.6% higher y-o-y
Cash and cash equivalents of RMB311.8 million as at
30 September, 2015 (RMB54.6 million as at 31 December,
2014)
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RMB’mil 3QFY15y-o-y
Chg (%)q-o-q
Chg (%)9MFY15
y-o-yChg (%)
Revenue 655.8 48.5 (4.2) 1,910.8 18.5
Gross Profit 71.2 244.8 13.0 192.1 158.9
Profit Before Tax 7.1 116.2 (13.4) 25.8 109.6
Net Profit 5.2 111.8 (18.2) 20.4 107.6
Gross Profit Margin 10.9% 131.9 18.5 10.1% 119.6
Net Profit Margin 0.8% 108.0 (11.1) 1.1% 106.6
Income Statement Highlights
3Q: Three months ended September 30
9M: Nine months ended September 30
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RMB’mil
Revenue
0
500
1000
1500
2000
2500
3000
3500
4000
FY10 FY11 FY12 FY13 FY14 9M15
647873 809 798
605 571
695
1034901 842
565 684
767
935
880751
442656
940
1063
810
618
463
1Q Revenue 2Q Revenue3Q Revenue 4Q Revenue
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Revenue by Product Categories
Total Revenue: RMB1,910.8milTotal Revenue: RMB1,612.1 mil
Cornrefining,
94.5%
Animalfeeds, 5.4%
Others, 0.1%
9MFY15
Cornrefining,
88.2%
Animalfeeds, 11.2%
Others, 0.6%
9MFY14
Y-o-y changein revenue
Y-o-y change insales volume
Y-o-y changein weightedaverageselling price
Grossprofitmargin
Y-o-ychange ingross profitmargin
Corn refining 26.9% 29.3% (3.9%) 10.5% 101.9%
Animal feed (42.5%) (37.7%) (7.7%) 1.1% 37.5%
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Food, 30.9%
Beverage,21.8%
Fermentation, 16.2%
Others,31.10%
9MFY15
13
Revenue by Industry
Total Revenue: RMB1,910.8mil
Total Revenue: RMB1,612.1 mil
Food, 30.5%
Beverage,24.3%Fermentatio
n, 11.4%
Others,33.80%
9MFY14
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RMB’mil
Net Profit/EBITDA
-400.0
-300.0
-200.0
-100.0
0.0
100.0
200.0
FY06 FY07 FY08 FY09 FY10 FY11 FY12 9M15
126.0
54.5
1.3-14.3
6.0
50.5
14.6
-113.8
-339.8
20.4
165.2 162.5
104.892.7
125.6
195.7
146.0
40.1
-80.9
131.0
Net Profit EBITDA
FY13
FY14
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RMB’milAs at
end 9MFY15As at
end FY14Chg (%)
Current Assets 733.3 502.0 46.1
- Cash & Cash Equivalents 311.8 54.6 471.1
- Inventories 178.5 238.9 (25.3)
- Trade and Other Receivables 242.2 207.6 16.7
Total Assets 1,426.6 1,240.8 15.0
Current Liabilities 664.3 550.4 20.7
- Trade and Other Payables 281.5 319.5 (11.9)
- Short Term Borrowings 372.5 224.0 66.3
Long Term Borrowings 607.4 577.2 5.2
Total Liabilities 1,308.0 1,168.6 11.9
Balance Sheet Highlights
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RMB’milAs at
end 9MFY15As at
end FY14Chg (%)
Inventory Turnover Days 33 47 (29.8)
Receivables Turnover Days 27 33 (18.2)
Payables Turnover Days 34 40 (15.0)
Debt to Equity Ratio# 8.27 10.96 (24.5)
Balance Sheet Highlights
Price to Book Value* 0.80 0.60 33.3
# Total interest bearing loans / Total equity
* Based on share price of RMB 0.16 as at October 22, 2015
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RMB’mil 9MFY15 9MFY14 Chg (%)
Net Cash Generated from Operating Activities 110.6 87.1 27.0
Net Cash (Used in) Investing Activities (11.6) (13.5) (14.1)
Net Cash Generated from/(used in) Financing Activities 27.2 (36.9) 173.7
Net Increase in Cash & Bank Balances 126.2 36.7 243.9
Cash & Bank Balances at Beginning of Period 50.6 66.2 (23.6)
Cash & Bank Balances at End of Period 176.8 103.0 71.7
Cash Flow Statement Highlights
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Growth Strategies
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Focusing on products where the Group has pricing advantages as a high
volume producer (e.g. Sorbitol), and high margin products such as
fructose, high maltose syrup, maltitol, etc.
Targetting sales to established customers with proven track records,
including existing customers such as Coca-Cola, Pepsico, Wahaha,
Tsingtao Beer, China Resources Snow Breweries, etc.
Continue marketing and sales efforts to develop new customer
relationships
Organic growth driven by increasing consumption levels in China
Growth Strategies
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Safe Harbour Statement
This presentation may contain forward looking statements that involve risks and uncertainties. Actualfuture performance, outcomes and results may differ materially from those expressed in forwardlooking statements as a result of a number of risks, uncertainties and assumptions. Representativeexamples of these factors include (without limitation) general industry and economic conditions,interest rate trends, cost of capital and capital availability, competition from other companies, shiftsin customer demands, customers and partners, changes in operating expenses, including employeewages, benefits and training, governmental and public policy changes and the continued availabilityof financing in the amounts and the terms necessary to support future business. You are cautioned notto place undue reliance on this presentation and the information contain therein, which are based oncurrent view of management on future events.
Without prejudice to or derogating from the generality of the foregoing, no representation orassurance is given by Luzhou Bio-chem Technology Limited that this presentation contains allinformation that an investor may require. To the extent permitted by applicable law, by Luzhou Bio-chem Technology Limited or its related persons (and their respective directors, associates, connectedpersons and/or employees) shall not be liable in any manner whatsoever for any consequences(including but not limited to any direct, indirect or consequential losses, loss of profits and damages)arising from the reliance or use of the information contain in this presentation.
Investors are advised to make their own independent evaluation from this presentation, consider theirown individual investment objectives, financial situation and particular needs and consult their ownprofessional and financial advisers as the legal, business, financial, tax and other aspects as investorsmay regard as relevant.
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For more information, please visitwww.luzhoufood.com
Analyst/Media Contact:
NRA Capital Pte. Ltd. – Evan Ong/Eruwin Sudirman
Tel: 6236 6895
LUZHOU BIO-CHEMTECHNOLOGY LIMITED
THANK YOU