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JINPAN INTERNATIONAL LTD. (NASDAQ “JST”) March 2013

Jinpan ndr presentation_march_2013

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Page 1: Jinpan ndr presentation_march_2013

JINPAN INTERNATIONAL LTD.

(NASDAQ “JST”) March 2013

Page 2: Jinpan ndr presentation_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.

Page 3: Jinpan ndr presentation_march_2013

Management Presenters

Albert Sheng Vice President of Investor Relations

Mark Du Chief Financial Officer

Page 4: Jinpan ndr presentation_march_2013

Management & Sales

Growth Drivers

Products

Company Highlights

Markets

Financials

Investor Relations

Contents

Page 5: Jinpan ndr presentation_march_2013

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

Page 6: Jinpan ndr presentation_march_2013

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.

Page 7: Jinpan ndr presentation_march_2013

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

Page 8: Jinpan ndr presentation_march_2013

Products

8

Cast Resin Transformers

VPI Transformers and Reactors

Switchgears

MAX CUSTOMER

VALUE

Transformer Substations

Page 9: Jinpan ndr presentation_march_2013

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)

Page 10: Jinpan ndr presentation_march_2013

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

Page 11: Jinpan ndr presentation_march_2013

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)

Page 12: Jinpan ndr presentation_march_2013

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)

Page 13: Jinpan ndr presentation_march_2013

•  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.

Page 14: Jinpan ndr presentation_march_2013

Markets

Page 15: Jinpan ndr presentation_march_2013

Markets

Page 16: Jinpan ndr presentation_march_2013

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.

Page 17: Jinpan ndr presentation_march_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.

Page 18: Jinpan ndr presentation_march_2013

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

Page 19: Jinpan ndr presentation_march_2013

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

Page 20: Jinpan ndr presentation_march_2013

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.

Page 21: Jinpan ndr presentation_march_2013

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.

Page 22: Jinpan ndr presentation_march_2013

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.

Page 23: Jinpan ndr presentation_march_2013

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

Page 24: Jinpan ndr presentation_march_2013

           

($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  

Page 25: Jinpan ndr presentation_march_2013

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  

Page 26: Jinpan ndr presentation_march_2013

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]