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JINPAN INTERNATIONAL LTD.
(NASDAQ “JST”) March 2013
Forward-Looking Statements • This presentation and oral statements made in conjunction with it may contain or incorporate by reference information that includes or is
based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities and the effects of future regulation and competition.
• These statements are only our current expectations. They are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements involve risks, uncertainties and assumptions. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Actual results may differ materially from those expressed in these forward-looking statements due to a number of uncertainties and risks, including the risk s described in our latest annual report on Form 20-F and other risks, including:
– our ability to successfully implement our business strategy; – uncertainties about the future growth in electricity consumption and infrastructure development in the markets in which we operate; – inability to attract and retain qualified management and personnel; – increases in the costs of our raw materials; – the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less expensive
products and services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing;
– the effects of rapid technological changes and vigorous competition in the markets in which we operate; – the effects of additional or higher taxes in the countries in which we operate; – changes in competition and the pricing environments in the countries in which we operate; – the failure to keep pace with technological changes in our industry; – potential product liability claims; – the effects of the higher degree of regulation in the markets in which we operate; – general economic and political conditions in the countries in which we operate or other countries which have an impact on our
business activities or investments; – inability to successfully adapt our internal controls over financial reporting to changes in circumstance; – the monetary and interest rate policies of the countries in which we operate; and – exchange rates.
• You should not rely on any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after we distribute this presentation, except as otherwise required by law.
Use of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange
Commission. Refer to the Appendix for a discussion of these numbers and a reconciliation to their nearest equivalent financial measures calculated in accordance with GAAP.
Management Presenters
Albert Sheng Vice President of Investor Relations
Mark Du Chief Financial Officer
Management & Sales
Growth Drivers
Products
Company Highlights
Markets
Financials
Investor Relations
Contents
Company Highlights Ø Jinpan is a manufacturer of specialized
power distribution equipment.
q Leading supplier of cast resin
transformers in China.
q Supplier of choice to leading global
OEMs for innovative power
distribution solutions.
Ø Jinpan is well positioned to capitalize on
growth in –
q China’s electrical infrastructure
market; and
q Global green energy markets
Company Highlights
JINPAN INTERNATIONAL LTD.
HAINAN JINPAN ELECTRIC CO., LTD.
JINPAN ELECTRIC CHINA CO., LTD.
JINPAN INT’L (USA), LTD.
WUHAN JINPAN
ELECTRIC CO. LTD. SHANGHAI JINPAN
ELECTRIC CO. LTD.
Guilin Jun Tai Fu
Construction and
Development Co. Ltd.
This is a simplified organization
chart. Please refer to the
Company’s 20F filing for detailed
information on its legal
organization structure.
Company Highlights
JINPAN INTERNATIONAL LTD.
SHANGHAI JINPAN
ELECTRIC CO. LTD.
7
Company founded in Haikou Hainan PRC
1993
IPO & Listing on Amex
Expansion of Haikou Facility Buyout of Minority Interest UL Certification
Wuhan Manufacturing Facility Operational Move listing to NASDAQ
Shanghai Manufacturing Facility Operational Carlstadt NJ Facility Opened
2007
2008
1998
2009
2013 Guilin Manufacturing Facility Operational
1993
2006 PIPE raised $25 million
Products
8
Cast Resin Transformers
VPI Transformers and Reactors
Switchgears
MAX CUSTOMER
VALUE
Transformer Substations
Dry Type Cast Resin Transformer
Description: Cast Resin Transformer is
a type of transformer designed to use
air to cool its induction coils.
Key Applications:
Ø Transmission and distribution of
electricity.
Ø JST offers a range of medium
voltage cast resin transformers for
commercial & residential
developments, transportation
infrastructure projects, industrial
applications, and wind towers.
Specifications:
Voltage: Max 35 KV
Transforming Capacity: Max 40 MVA
Transformer (2.5 MW
Wind Towers) Isolation Transformer
(Gas Turbines)
Dry Type Cast Resin Transformer
Ø Our transformer products meet the following international codes and standards: § GB § IEC § ANSI/IEEE/NEMA § CSA § JEC
Ø Our transformer products have been certified by: § UL (US) § KEMA (Holland and US) § CE (EU) § GOST-R (Russia)
UL&KEMA Certificates
VPI Transformer and Reactors
Reactor
Description: VPI transformers and
reactors are components of converters
and inverters. They are used to change
voltage and filter electricity.
Application: wind, solar, rail
transportation. VPI Transformer
(2.5MW Wind)
Reactor(1.5MW Wind) Reactor (2.5MW Wind)
Specification:
Voltage: Max 1 KV
Transforming Capacity: Max 500KVA
Reactor VPI Transformer
(2.5MW Wind)
Transformer Substation
BLOKSET Switchgear
Switchgear & Transformer Substation
Switchgear
Description: Switchgears are used to
isolate electric equipment in the grid and
de-energize equipment to allow technicians
to perform maintenance.
Transformer Substation
Description: Integrated assembly of low
and high voltage switchgears, transformers,
and monitoring and control systems in a
compact fully, enclosed unit. Lowers the
voltage of electricity drawn from the grid to
levels that can be fed into general purpose
transformers
Gas Insulated Switchgear (Ring Main Unit 12KV)
• Revenue – 2012: US$ 210.5M
• Jinpan’s products are used in a wide range of applications:
– Industrial Factories, refineries, ship yards, etc. – Utilities and Infrastructure Utilities: power plants , wind farms,
electrical distribution networks. Infrastructure: airports, train/subway
stations, and other municipal projects.
– Residential and Commercial Office buildings, shopping centers,
high rise apartments, etc.
Markets
• Wind Energy
• Jinpan manufactures VPI reactors and cast resin transformers for wind energy applications.
• Jinpan has been a qualified supplier for a leading global OEM for wind energy equipment.
• Sales of equipment for wind energy contribute approximately 12% of total sales.
Markets
Markets
Growth Drivers
Ø Jinpan manufactures equipment for the distribution of electrical power. Demand for our products is driven by demand for electricity.
• In 2012, total electricity consumption in China reach approximately 4.95 trillion KWH.
Growth in Electricity Consumption & Infrastructure Ø Sales of electrical equipment is also driven
by infrastructure development.
v The completed investment in fixed assets of the country in 2012 was 37,467.6 billion yuan, up by 20.3 percent over the previous year. The real growth was 19.0 percent after deducting the price factors.
Source:”Statistical Communiqué of the People's Republic of China on the 2012 National Economic and Social Development” released by the China National Bureau of Statistics on February 22, 2012.
Source: Compiled based on data sourced from China Electric Council releases. Year 2012 data is sourced from “2012 Electricity Industry Operations Brief” China Electricity Council on January 17, 2013.
Growth Drivers
Wind Energy
Source: “Global Wind Energy Statistics”, Global Wind Energy Council (Feb 2013)
• Sales of transformers and reactors for wind energy applications is a significant contributor to our revenue.
• Jinpan has been a qualified supplier to a leading global wind power OEM for more than half a decade. We continue to cultivate relationships with new customers that specialize in wind.
v Leverage R&D and engineering capabilities to increase the sale of high margin custom transformers.
v Increase capacity and automation
to enhance efficiency and lower the cost of standard transformers. Leverage economy of scale to compete in the market for standard products.
v Diversify our product offerings by through new product development. (e.g. Gas Insulated Switchgears)
v Increase sales by partnering with OEM customers to supply new markets.
Growth Strategy
JST USA Established: 1998 [Carlstadt NJ Facility Built 2009] Products: Cast Resin Transformers*
JST Haikou Established: 1993 Products: Cast Resin Transformers / Conventional Switchgears
JST Shanghai Established: 2009 Products: VPI Transformers & Reactors; Gas Insulated Switchgears
1
JST Wuhan Established: 2008 Products: Cast Resin Transformers
Manufacturing Facilities
*Jinpan’s Carlstadt NJ facility supports product
testing, after sales service, and limited scale
manufacturing on site.
JST Guilin Established: 2011 Construction Completed 2013 Products: Cast Resin Transformers
Management
Strict implementation of international quality, environmental, and work health and safety standards enables us to efficiently manage manufacturing on a large scale.
ISO 9001 Certified ISO 14001 Certified OHSAS 18001 Certified
Run Enterprise Resource Planning system (SAP) that combines management information, inventory control and cost control into a single integrated platform.
Engineering
Ø Jinpan Electric has more than 200
engineers and technicians.
Ø State of the art CAD tools allow our
engineers to build 3D models and 2D
projections, to verify design
constraints, and to collaborate online.
Ø Proprietary software to design the
electromagnetic system in dry type
cast resin transformers.
Ø Jinpan Electric has more than 200
engineers and technicians.
Ø State of the art CAD tools allow our
engineers to build 3D models and 2D
projections, to verify design
constraints, and to collaborate online.
China Market Strategy • Leverage our engineering and R&D capabilities
to increase sale of customized transformers for advanced industrial and alternative energy applications.
• Increase capacity and leverage our economy of scale to increase sales of standard distribution transformers.
• Direct sales network consisting 35 regional sales offices located in major cities in China.
• Diversified customer base
Jinpan’s extensive sales network is a significant barrier to entry for foreign and domestic competitors seeking to enter the China market.
Sales International Market Strategy • Supply the international market through OEMs.
• Leverage the marketing reach of large international OEMs and our expertise in manufacturing power distribution equipment to expand our presence in international market.
• Currently, Jinpan is one of two manufacturers of UL certified cast resin transformers in the world.
• Established a transformer assembly and testing facility in Carlstadt NJ.
• In 2012, North America is our top export market followed by Europe.
Ø Continue to focus on China’s growing electrical infrastructure market.
Ø Promote and develop high end products (transformers for alternative energy and industrial applications and complementary power control and distribution products).
Ø Invest in new, state-of-the-art facilities to increase manufacturing capacity and efficiency . Leverage the resulting economy of scale to expand market share of standard power distribution transformers.
Ø Leverage our relations with OEMs and UL certification to expand our global reach.
Compelling Growth Strategy
23
($Millions, except per share data) FYE December 31
2007 2008 2009 2010 2011 2012
Net Sales 119.6 154 158.9 144.0 218.9 210.5
% Growth 45.4% 28.8% 3% -9.4% 52.2% -3.8%
Gross Profit 41.6 48.9 67.2 56.0 80.3 68.8
% Margin 34.8% 31.7% 42.3% 38.8% 36.7% 32.7%
EBITDA 20.9 24.8 35.6 20.9 31.4 21.6
% Margin 17.4% 16.1% 22.4% 14.5% 14.3% 10.3%
EBIT 19.6 23.1 32.0 17.3 27.1 16.3
% Margin 16.4% 15.0% 20.1% 12.0% 12.4% 7.7%
Net Income 16.4 19.8 28.9 13.4 23.8 14.1
% Margin 13.7% 12.9% 18.2% 9.3% 10.9% 6.7% Diluted Earnings per share 1.01 1.21 1.78 0.81 1.45 0.84
Financial Performance
Balance Sheet Statement of cash flow
31-Dec-12 31-Dec-12 Cash 18.5
Current assets
190.3 Net Cash provided by operating activities 19.3
Other assets
100.5 Net cash used in investing
activities (43.1)
Total assets
309.3 Net cash provided by financing
activities 18.0
Net decrease in Cash (5.8)
Current liabilities
86.7
L/T Liability 29.7
Equity
192.9
Total liabilities & equity
309.3
($Millions)
Financial Performance
科技创新 低碳环保 绿⾊色发展
Albert Sheng Vice President of Investor Rela8ons Jinpan Interna8onal (USA) Ltd. 390 Veterans Blvd. Carlstadt, NJ 07072 T: 201 460 8778 (x135) F: 201 460 8775 E: [email protected]