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Corporate Presentation
FY2011 Results
July 28, 2011
2
This presentation and the accompanying slides (the “Presentation”) which have been prepared by China Green (Holdings)
Limited (“China Green” or the “Company”) do not constitute any offer or invitation to purchase or subscribe for any
securities, and shall not form the basis for or be relied on in connection with any contract or binding commitment
whatsoever. They are only being furnished to you and may not be photocopied, reproduced or distributed to any other
persons at any time without the prior written consent of the Company. This Presentation has been prepared by the
Company based on information and data which the Company considers reliable, but the Company makes no
representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy,
completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive
and may not contain all of the information that you may consider material. Any liability in respect of the contents of or any
omission from this Presentation is expressly excluded.
Certain matters discussed in this presentation may contain statements regarding the Company’s market opportunity and
business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are
not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are
difficult to predict. The Company’s actual results, levels of activity, performance or achievements could differ materially and
adversely from results expressed in or implied by this Presentation, including, amongst others: whether the Company can
successfully penetrate new markets and the degree to which the Company gains traction in these new markets; the
sustainability of recent growth rates; the anticipation of the growth of certain market segments; the positioning of the
Company’s products and services in those segments; the competitive environment; and general market conditions. The
Company assumes no obligation to update any forward-looking information contained in this presentation. Any forward-
looking statements and projections made by third parties included in this Presentation are not adopted by the Company
and the Company is not responsible for such third-party statements and projections.
Confidentiality & Disclaimer
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Agenda
FY2011 Annual Results
Business Overview
Future Plans & Growth Strategy
Q&A
4
(RMB million)
FY Revenue
CAGR 23.7%
Total revenue in FY2011 was RMB 2.2 billion, +17.6% y-o-y, driven by branded beverages
� Branded beverage sales increased 80.5% y-o-y to RMB 738 million
� Reflected popularity of multi-grain “Cu Liang Wang” products
� Contributed 67.4% of total branded beverage product sales
Branded Food and Beverage
43%
Processed products
34%
Fresh produce
23%
0
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010 2011
954
1,267
1,548
1,901
2,235
FY2011 Revenue by Category
Outstanding Revenue Growth
5
• Growth in domestic sales -- increased 32.9% YoY
• Export market accounted for 37.8% of total sales in FY2011
• Strategic move to engage export agents for overseas distribution:
� Leverage agents’ extensive overseas network
� Streamline resources to enhance efficiency
� Further strengthen working capital and foreign exchange risk management
Export45%
Domestic55%
FY2010
Export38%
Domestic62%
FY2011
Sales by Geography
6
(RMB Million)
52.2%
53.4%
51.7%
52.6% 50.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0
200
400
600
800
1,000
1,200
1,400
2007 2008 2009 2010 2011
Gross Profit (RMB 1,119 million in FY2011 ) Gross Profit by Segment
(RMB Million)
0
200
400
600
800
1,000
1,200
FY2010 FY2011
122 82
238 397
413395
228245
Branded Food Branded Beverage
Processed Products Fresh Produce
11.9%
Increasing Gross Profit
7
Direct Cost Structure
0%
20%
40%
60%
80%
100%
120%
FY2010 FY2011
2% 1%11% 14%
57%55%
30% 30%
Factory labor Processing overhead
Packaging materials Materials costs
Branded Beverage Cost Structure
0%
20%
40%
60%
80%
100%
FY2010 FY2011
14% 13%
21% 20%
6% 6%
19% 19%
21% 21%
18% 20%
Seeds, fertilizers, pesticides etc Farmers & Factory labor
Land rental Cultivation/processing overhead
Packaging materials Materials costs
Fresh Produce and Processed Products Cost Structure
8
(RMB million)
• The significant increase in S&D was due to
1). increased advertising expenses associated with branded beverage marketing, representing 12% of
branded F&B sales
2). Increased freight charges due to an increase in coverage of beverage sales network to around 30 provinces
• The increase in G&A costs was due to non-cash items:
1). Exchange loss of RMB 54 million
2). Provision of RMB 13 million for equipment due to suspended instant-noodle production
70.2%
63.1%
0
50
100
150
200
250
300
Selling and Distribution General and Administration
FY2010
FY2011
Operating Expenses
Operating Expenses
9
346
471 455
576
459
36.3%37.2%
29.4%
30.3%
20.5%
4.0%
14.0%
24.0%
34.0%
44.0%
54.0%
64.0%
0
100
200
300
400
500
600
700
2007 2008 2009 2010 2011
Net Profit and Margin
0
100
200
300
400
500
600
700
800
2007 2008 2009 2010 2011
360
510549
753 711
(RMB million)
Operating Profit
CAGR 18.5%
• Declared a final dividend of HKD 0.065 per ordinary share in FY2011
• Represents a payout ratio of 25%
(RMB million)
Net Profit and Margin
10
2011(Audited)
2010(Audited)
Fiscal Years Ended April 30,
Change(RMB 000)
Turnover
Gross profit
Gross profit margin (%)
Operating profit
Profit attributable to shareholders
Earnings per share – diluted
Final Dividend per share
2,234,620
1,119,353
50.1%
711,180
458,802
RMB 0.52
HKD 0.065
1,900,784
1,000,374
52.6%
752,660
575,996
RMB 0.64
HKD 0.090
+ 17.6%
+ 11.9%
- 2.5 points
- 5.5%
- 20.3%
-18.8%
- 27.8%
Income Statement Summary
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(RMB 000) April 30, 2011 April 30, 2010
Cash and Cash Equivalents 1,711,631 2,326,516
Accounts and other Receivables 58,870 83,331
Net Current Assets 1,904,070 2,281,486
Total Current Assets 2,039,798 3,248,111
Total Current Liabilities 135,728 966,625
Shareholders’ Equity 3,348,818 3,070,424
Accounts Receivable Turnover Days 4.5 5.6
Inventory Turnover Days 16.5 8.4
Strong Balance Sheet
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Agenda
FY2011 Annual Results
Future Plans & Growth Strategy
Q&A
Business Overview
13
Investment Highlights
Vertically integrated platform and value chain
Market leadership and strong brand recognition
Robust growth driven by branded food and beverage sector
Industry leading quality and advanced production technology
Extensive distribution network
Committed and experienced management team
Strong cash flow generation and solid balance sheet
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Cultivation
Fresh Produce
Benefits of Vertical Integration:
Seeding, growing, irrigating, fertilizing +
Advanced technology & R&D
Harvesting
Vertically Integrated
Platform & Strategy
Sterilizing, processing packaging
Safe Crop Certificate +
ISO 9001:2000 +
HACCP +
Other international standards
New product development +
Logistics & distribution
Marketing, advertising & promotion +
Channel management +
Partnership with retailers
Processed Products Branded F & B
Control of Product Quality
Control of Product Variety
Control of Product Safety
Control of Cost Structure
Production Branding & Distribution
15
Fujian (Huian)
Fujian (Zhangpu)
Hubei (Changyang)
Hebei
Jiangxi
Hubei (Tianmen) Zhejiang
TOTAL
April 30, 2011
Fujian (incl. Zhejiang)
Hubei
Hebei
Jiangxi
92,700 380,000
Cultivation Bases Capacity (tons)
Area (mu)
245,000
72,000
34,000
60,000
47,600
23,000
12,000
10,100
Cultivation
- Bases and Capacity Growth
� Maintain 5-10 year lease payment terms (i.e., no plans to change existing pre-payment terms)
� Average cost of farmland rental has remained stable (i.e., RMB 500-600 per mu per year)
� Continue to upgrade cultivation infrastructure, including irrigation systems, water reserve, farm shelters
and crops’ rotation in order to minimize the impact on unfavorable weather conditions
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• Sales-driven model, China Green custom-made vegetable products for overseas clients
• Annual average yield: approx. 4-5 tons per mu, depending on product mix
• Long term leases (mostly over 20 years) and hire farmers as employees to work on cultivation bases
• Sales channel: 1. Overseas market ~26%, mostly catered for Asian clients
2. Domestic ~74%, clients are largely local wholesalers based nearby our cultivation bases
• Main products: sweet corn, broccoli, hairy beans, etc.
Business Segment
- Fresh Produce
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� Over 90% of processed products are exported, the remaining < 10% are for domestic market
� Sales-driven model, China Green custom-make vegetable products for overseas clients
Business Segment - Processed Products/ Branded Food
FY2011
Fujian incl. Zhejiang
Hebei
Jiangxi
TOTAL
Processing capacity (tons)*
Hubei
282,000
103,500
42,000
141,300
568,800
Canned food
34%
Frozen Food
30%
Water boiled
Food
26%
Pickled Food
10%
Processed Food (FY2011): RMB 760 million
* Including packaging capacity for fresh products
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Brands: Multigrain under “Cu Liang Wang”; Vegetable Juice under “Qing Cai Yuan”
� Becoming the most renowned green brand in China
� Improving lifestyles and creating a healthier China
� Product types: ~28
� Local and 2nd tier distributors: > 1,200
� Current distributors covered area: Nationwide
� Areas with higher penetration
� Fujian, Jiangsu, Zhejiang, Jiangxi and Anhui
� Sales channels: Through distributors to:
� Traditional
� KA
� Catering and specialty channels Zhejiang
Hubei
Jiangsu
FY2012
Expansion Route
Anhui
HebeiXinjiang
Guangdong
Fujian
Business Segment - Branded Beverage
19
Huian Plant
Hubei Plant (beverage)
Hebei Plant (beverage)
Production - Branded Beverage Facilities
� Current capacity is approximately 120,000 tons/year, provided
by Huian beverage plant
� Hubei and Hebei beverage plants are under construction
� Aim to become a nationwide brand in China
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Quality checks throughout the cultivation, raw material
sourcing, production,
packaging and transportation processes
Advanced food processing technology and equipment
High internal quality standards
Compliance with European and Japanese export
standards
ISO9001 certified processing facilities
• HACCP (Hazard Analysis & Critical Control Point)
series qualification
• Certification of the British Retail Consortium (BRC)
• Certified Green Product
• “Halal” and “kosher” certifications
• Certified “Pollution-Free”
World Class Quality Assurance
- Across All Stages of Vertical Integration
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FY2011 Annual Results
Q&A
Business Overview
Future Plans & Growth Strategy
Agenda
22
Future Growth Strategy
23China Green Wheat series
China Green Mixed Grain series
China Green Vegetable & Fruit Juice series
� FMCG has become one of the fastest growing markets in China. China’s beverage market has been growing rapidly at about 20% annually
� China Green strategy:
� Introduce new flavors and packaging to enhance product varieties
� Position “China Green” as a premium nationwide healthy brand in China
� Promote “China Green” as high quality and trusted brand through its stringent quality control process
Build Brand Recognition
and Develop New Products
Examples of current branded products:
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Moving into Fast Growing
FMCG Market
Benefits of Becoming a leading FMCG Green Consumer Brand:
Reduced volatility – less reliance on fresh produce business (i.e., weather
risk)
1) Brand leverage – as brand is built, sales efficiency improves as well
as pricing power
2) Enhanced revenue growth
3) Potential for improved equity valuation
• Leverage branded Cu Liang Wang and Qing Cai Yuan products, enrich
flavours and packaging
• China Green is well poised to grow its canned and frozen food product
in the China’s FMCG sector
• Launch new branded products including “Cu Liang Dang Dao” and “Jin
Yu Liang Pin”
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Agenda
FY2011 Annual Results
Business Overview
Future Plans & Growth Strategy
Q&A
26
China Green (Holdings) Limited
Mr. Evan Wong
Chief Financial Officer
Phone: (852) 2598 9838
Fax: (852) 2598 9899
Investor Relations Contacts
CCG Investor Relations
John Harmon, CFA
Sr. Acct. Manager
Phone: +86 (10) 6561 6886 ext.807
Thank You
Creating a healthier China & better returns
