newocean energy holdings limitednewocean energy holdings limited 新海能源集團有限公司...
TRANSCRIPT
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NewOcean Energy Holdings Limited新海能源集團有限公司
(HKSE Stock code - 0342)
Today – LPG market leader in Southern ChinaFuture – Entering into the era of high yield downstream value chain
July 2011
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Table of Contents
1Chapter 1 Corporate Profile
5Chapter 2 Business Overview
11Chapter 3 Business Outlook
22Appendix 1
23Appendix 2
24Appendix 3
16Chapter 4 Financial Highlights
25Appendix 4
LPG automotives Worldwide
The 1st class terminal in Zhuhai
LPG Bottling plants
Lianxin autogas fueling stations
Pages
20Chapter 5 Future Risks and Others
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1Chapter 1 Corporate Profile
Pages
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Private Company running public utilities business
Listing Place : Main board of Hong Kong Stock Exchange
Main Business
: Liquefied Petroleum Gas (“LPG”)
Major Assets : Zhuhai – 1st class LPG import TerminalGuangdong – 12 bottling plants in 7 citiesGuangxi – 4 bottling plants in 4 citiesGuangzhou – 17 autogas fueling stationsSouth China – 141 tanker trucks and LPG bottle wagons
: Outside the PRC:HK – 43 staffsMacau – 29 staffsPRC :Guangzhou autogas fueling stations – 512人Other area – 611人
Total employees: 1195人
Shareholding : Existing:Shum family – 41.41%;Public –58.59%
Post TDR:Shum family – 37.66%;Public –62.34%
1
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Company Milestone
2001 Focusing on LPG business
2002 Acquired 4 bottling plants in 4 cities in Guangxi whilst developing Guangdong market.
2003 Owning 4 bottling plants in both Guangxi and Guangdong
2004 Acquired the Zhuhai terminal from Iawatani and started LPG wholesale business
2005 Successfully completed the first shipment imported from the Middle East
2006 Acquired an additional bottling plant in Guangdong. And started the Zhuhai terminal expansion.
2007 Approval received for bonded tanks for LPG re-export business. The company owned 4 bottling plants in Guangxi and 9 bottling plants in Guangdong.
2008 Rank no.1 LPG import and export company in China. Set up own logistic business for LPG transport.2009 Develop into downstream supply chain.
2010 Penetrating into the Zhuhai and Macau bottled LPG market. Acquired 17 autogas fueling stations in Guangzhou.2011 Applying for the HK bottled LPG wholesale licence. Received Approval on TDR.
2
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Management StructureManagement Structure
ChairmanShum Siu Hung
(Aged 52)
Capital market and business development
Chiu Sing Chung, Raymond
Chief Financial Officer and Electronic BusinessCen Ziniu
International procurement and overseas sales
Siu Ka Fai, Brian
PRC procurement and
wholesalesCheng Kwok Leung, Anson
Operation and Project Manager
Cai Xikun
PRC Retail Executive
Lu Jin Wen
Retail networkDeng Xiaoming
Board of DirectorsExecutive Director
Cai Xikum (aged 63)Cen Ziniu (aged 42)Chiu Sing Chung (aged 52)
Shum Chun (Aged 32)Siu Ka Fai (Aged 48)Wang Jian (Aged 31)
Independent Non-Executive Directors
Cheung Kwan Hung (Aged 59)Chan Yuk Wai (Aged 52)DR. Xu Mingshe (Aged 55)
Remuneration Committee
Audit Committee
Managing DirectorShum Chun, Lawrence
Company SecretaryBilly Wu
ElectronicsLPG
PRC FinancingWang Jian
Technology and safety supervisor
Dai Lu
3
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Award WinningAward Winning
Industry Achivement Business Innovation Brand Local Contribution
Hong Kong Outstanding
Enterprise
SCB 1st cross border RMB trade settlement
HSBC 1st cross border RMB trade settlementDBS 1st cross border RMB trade settlement
People's Bank of China in RMB inter-trade Clearing
"advanced unit"
AAA + grade quality and
credibility of qualification units
Chinese Famous Brand
The top 100th tax paying
companies in Zhuhai
Zhuahi A-level tax paying
companies
4
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Pages
第一章 液化石油氣(“LPG")
5Chapter 2 Business Review
第三章 新海集團–進入高收盛期
附錄一
附錄二
附錄三
第四章 收購聯新
附錄四
世界各地LPG汽車加氣網絡
珠海一級碼頭
三級站
聯新LPG汽車加氣站
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Liquefied Petroleum Gas (Liquefied Petroleum Gas (““LPGLPG””)) --Sources of supply and ApplicationsSources of supply and Applications
3
- A mixture of propane (C3H8) and butane (C4H10)- Traditionally, a clean energyLPG
Gas Field Source Oil Refinery
60% % of Global supply 40%
Natural derivatives Nature By product of crude oil cracking
Gas Form under normal condition Gas
RefrigerationPropane -42oC; butane -4oC
Liquefaction(for transportation & storage)
Pressurization (at 20oC)Propane 0.71Mpa; butane 0.14Mpa
Propane & butane separated Ex-factory status Propane & butane mixed
Refrigerated vessel Transportation Pressurized ship & tanker truck
Applications
Household use (cooking, heating)
Commercial use (cooking, heating)
Industrial use (heat processing, spraying)
Agricultural use (drying)
Petrochemical Production (feedstock)
Vehicles (fuel)
Pipeline or bottle
Pipeline or bottle
Bottle
Truck or bottle
Truck
Refueling Stations
Pipeline or bottle
Pipeline or bottle
Bottle
Bottle
5
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LPG demandLPG demand -- China lagging behind other developed China lagging behind other developed countries in applying LPG for industrial countries in applying LPG for industrial and and automotive useautomotive use
3
Industrial
485.6
500492.8
420
430
440
450
460
470
480
490
500
510
2007 2008 2009
4
Automotive
67.2
55.5 57
0
10
20
30
40
50
60
70
80
2007 2008 2009
China – LPG for Industrial use China – LPG for Automotive use
0
500
1000
1500
2000
2500
China Japan Korea
Unit:10,000 tons
Unit:10,000 tons Unit:10,000 tons
Household & Commercial
Industrial & Chemicals
Automotives
3%22%
75%
9%
40%
51%
25%21%54%
6
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LPG, a replacementLPG, a replacement fuel for Automotives fuel for Automotives --comparisons between fuels for automotivescomparisons between fuels for automotives
3
Fuel Type CNG LPG Gasoline
Power & Energy
efficiency
Total energy density (LHV) (kj/litre) 6,500 – 9,500 23,600✔ 31,700
Energy density ratio to Gasoline 0.26 0.74 ✔ 1.0
Tank volume equivalent to 20 gal of gasoline (litre) *20gal = 75.7litre 291 102 ✔ 75.7
Full tank weight (kg) 299 97 ✔ 68
EnvironmentalProtection
effectiveness
Carbon emission factor (climate) 0.71 ✔ 0.81 1
NOx emission factor (air quality) 0.005 ✔ 0.005 ✔ 1
Fine particles emission factor (air quality) 0.005 ✔ 0.005 ✔ 1
SafetyVaporization Temperature (oC) -162 -50 to 4 ✔ 27 -210
Typical pressure in tank (Mpa) 17.3 – 24.9 0.31 – 1.3 ✔ Ambient
ConvenienceStorage Refrigerated tank Cylinder or tank ✔
Portability Via fixed pipeline Very portable ✔
AutomotivesSource:NREL7
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NewOceanNewOcean --the leading LPG supplier in South Chinathe leading LPG supplier in South China
3
LPG Importation 2008 2009 2010
China 2,600,000 tons 100% 4,109,000 tons 100% 3,196,000 tons 100%
Guangdong Province 1,373,000 tons 53% 2,873,000 tons 70% 2,271,000 tons 71%
NewOcean 662,000 tons 25% 798,000 tons 19% 485,000 tons 15%
NewOcean’s ranking Largest Largest Second Largest
LPG Exportation 2008 2009 2010
China 675,000 tons 100% 818,000 tons 100% 916,000 tons 100%
Guangdong Province 404,000 tons 60% 568,000 tons 69% 729,000 tons 80%
NewOcean 259,000 tons 38% 264,000 tons 32% 227,000 tons 25%
NewOcean’s ranking Largest Largest Second Largest
LPG Consumption 2008 2009 2010
China (including export) 21,225,000 tons 100% 23,218,000 tons 100% 24,293,000 tons 100%
Guangdong (including export) 4,985,000 tons 23% 5,809,000 tons 25% 5,829,000 tons 24%
NewOcean’s supply 795,000 tons 1,060,000 tons 1,219,000 tons
NewOcean’s market share in Guangdong 16% 18% 21%
NewOcean’s market market in the whole China 3.75% 4.57% 5.02%
8
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Earnings growth Earnings growth --in line with supply chain integration and economy of scalein line with supply chain integration and economy of scale
3
0.00
200,000.00
400,000.00
600,000.00
800,000.00
1,000,000.00
1,200,000.00
1,400,000.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
RetailingWholesaling
tons
0.00
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
120,000.00
140,000.00
160,000.00
2004 2005 2006 2007 2008 2009 2010
Net ProfitHK$'000
2007 2008 2009 2010
Total Storage (tons) 17,972 18,072 19,722 20,322
Sale volume (tons) 650,000 795,000 1,060,000 1,219,000
Storage Turnover Time 10.09 days 8.3 days 6.79 days 6.08 days
Volumes growth Earnings growth
Adopt high storage turnover strategy
Wholesaling mostly on back to back cost plus basis
Always pursue high growth in sales volume
Always pursue the integration of supply chain inside China
Started LPG wholesaling through self-owned Sea
terminal in Zhuhai
9
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Integrated supply chain Integrated supply chain --competent to provide fullcompetent to provide full--fledged servicesfledged services
3
LPG production
Terminal storage transportation
Bottling Plants
Retailers End users
Households, Commercial Customers
Industries with storage
Industries without storage
Pipeline distributors
LPG Producing Countries
Refrigerated Vessel
Imported LPG
Local Refineries
Domestic LPG
NewOcean integrated supply chainOversea Market -
Hong Kong, Macau, Vietnam,
Philippines
transportation
ZhuhaiTerminal
ZhuhaiTerminal
16 Bottling plants in
Guangdong and Guangxi
17 Auto-gas stations in
GuangzhouGuangzhou 8,000
buses, 18,000taxies
Over 220 Retailing shops in
China
Tank Lorries
Tank Lorries
pressurizedship
Tank Lorries
Tank Lorries
10
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第一章 液化石油氣(“LPG")
第二章 新海集團
附錄一
附錄二
附錄三
第四章 收購聯新
附錄四
世界各地LPG汽車加氣網絡
珠海一級碼頭
三級站
聯新LPG汽車加氣站
11Chapter 3 Business Outlook
Pages
第四章 收購聯新
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Business strategy –To enter the lucrative downstream market
Guangzhou
Zhuhai ShenZhen
Hong KongMacau
LPG Autogas marketAcquisition of Lianxin completed in Dec 2010. Currently operating 17
LPG autogas fueling stations
Zhuhai bottled LPG marketBottled LPG distribution commenced in Apr 2010, also
ready to serve Macau distributors in bottle refilling.
Macau bottled LPG marketEntered into the Macau bottled LPG market in Mar
2010
HK bottled LPG marketExpecting to receive the license of “Registered Gas supply company “ for bottled LPG distribution in HK
by the end of 2011.
Refined oil product wholesale businessConstructing 80,000 tons refined oil products
storage facilities
Pearl River Delta Economic Zone
11
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Up-shifting into the autogas market
Guangzhou autogas market Lianxin
• The only city in Guangdong using LPG as vehicle fuel.
• Started in 1996.• Number of vehicles – 18,000
taxies and 8,000 buses• The city has total of 38 fueling
stations • Annual LPG consumption is
400,000 tons
• Company established in 1996 to cater the City’s autogas policy development.
• Currently the largest autogas operator.
• Holding 17 autogas fueling stations in Guangzhou
• Most stations situate in the prime location with heavy traffic flow.
• 13 out of 17 stations are located in the bus terminal.
• Annual trade volume reached to
250,000 tons
• 60% market share
Short termThe Group LPG retail
volume increase by 250,000tons per annum
Long termPenetrate other cities in
Guangdong province
(Foshan、Zhuhai、Zhongshan、Shunde)
And HK , Taiwan autogasmarket 12
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Hong Kong and Macau bottled LPG business
Transit warehouse and distribution center in
the Zhuhai city
Terminal and bottling plant
in Zhuhai
Transit warehouse and
distribution center in Tuen
Mun, HK
HK – Business model
‧ No terminal, storage and bottling facilities
‧ Leveraging on our existing facilities to supply LPG to the HK market.
‧ To increase the frequency of Zhuhai– HK route (about 275km per trip)
‧ GP in the HK market= 10x the PRC market
‧ Projected annual trade volume 10,000– 18,000 tons
Macau – Business model
‧ Acquired transit warehouse in the Zhuhai city
‧Cross border delivery to local distributors
‧ GP in the Macau market = 3x the PRC market
‧ Projected annual trade volume 20,000 tons
13
Zhuhai–HK(Heavy bottles/Empty bottles transport route)
Zhuhai–Macua(Heavy bottles / Empty bottles transport route)
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Refined oil storage facilities and wholesale business
97# Gasoline - 10,000 toms
97# Gasoline – 10,000 tons
90# Gasoline – 10,000 tons
98# Gasoline – 5,000 tons
90# Diesel fuel - 10,000 tons
0#Diesel fuel – 20,000 toms
0#Diesel fuel l – 10,000 tons
Reserve tank– 5,000 tons
Tanker filling station
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Refined oil storage facilities:
1. Approx. 80,000tons refined oil product storage capacity
2. Est 12-months construction period.
3. Target completion in mid-2012.
4. Mainly to provide facilities storage and logistic service
5. To apply for bonded warehouse post construction, and to operate bunker oil business
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Further enhancement of logistic efficiency Further enhancement of logistic efficiency of the existing supply chainof the existing supply chain
3
Wholesaling by ships - to build two additional berths for cargo distribution
Wholesaling by trucks - to cut short tanker trucks filling time from currently 50 minutes to 30 minutes
Retailing in bottles - to deploy more bottle wagons than relying on shops for direct distribution to end users
15
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第一章 液化石油氣(“LPG")
第二章 新海集團
附錄一
附錄二
附錄三
附錄四
世界各地LPG汽車加氣網絡
珠海一級碼頭
三級站
聯新LPG汽車加氣站
第三章 新海集團–進入高收盛期
16Chapter 4 Financial Analysis
Pages
第三章 新海集團–進入高收盛期
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Revenue and Profit after taxtons HK$'000Volume growth Earning growth
Stable Gross and Net margin;Earning growth led by increased sales volume
5.27%6.10%3.69%4.40%Gross Profit Margin
HKD in million 2007 2008 2009 2010
Revenue 3,890 6,159 ↑ 58% 6,483 ↑ 5% 8,478 ↑ 31%
Gross Profit 171 227 395 447
Other Net income (Related to Capital Mngt of Operation)
60 72 8 74
Total Gross Profit 231 299 403 521
Gross Margin 5.93% 4.85% ↓1.08% 6.22% ↑1.37 % 6.15% ↓0.07%
Profit After tax 50 53 112 137
Net Margin 1.29% 0.86% ↓0.43% 1.73% ↑ 0.87% 1.62% ↓0.11%
0.00
200,000.00
400,000.00
600,000.00
800,000.00
1,000,000.00
1,200,000.00
1,400,000.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
RetailingWholesaling
0.00
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
120,000.00
140,000.00
160,000.00
2004 2005 2006 2007 2008 2009 2010
Net Profit
16
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Income Statement
HKD in million 2007 2008 2009 2010
Revenue 3,890 6,159 +58% 6,483 +5% 8,478 +31%
Cost of sales (3,719) (5,932) (6,088) (8,031)
Gross Profit 171 227 395 447
Other net income 60 72 8 74
Total Gross Profit 231 299 +29% 403 +35% 521 +29%
Administrative and other expenses (94) (161) (157) (164)
Changes in fair values of derivatives financial instrument (23) 12 3 (82)
Finance costs (34) (53) (53) (68)
Depreciation and Amortisation (28) (43) (41) (52)
Profit before taxation 52 54 155 155
Taxation charge (2) (1) (43) (18)
Net Profit 50 53 +5% 112 +113% 137 +22%17
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Key financial indicators
2007 2008 2009 2010
Average inventory turnover period 9.08 Days 8.15 Days 16.91 Days 20.36 Days
Average receivable turnover period 26.74 Days 26.05 Days 34.06 Days 32.68 Days
Debt/ asset ratio** 68% 64% 65% 61%
Current ratio 101% 101% 106% 118%
Net asset value per share HKD 0.9854 HKD 1.1506 HKD 1.0418 HKD 1.2352
Earning per share HKD 9.52 cents HKD 8.48 cents HKD 11.53 cents HKD 11.59 cents
ROIC 9.54% 7.38% 11.02% 9.27%
Weighted average share outstanding (shares) 531,625,851 623,672,335 975,483,511 1,197,071,698
** Excluding derivatives related bank loans to the net debt calculation 18
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Balance Sheet
HKD in million 2007 2008 2009 2010
Cash 106 5% 144 5% 195 5% 380 7%
Pledge bank deposits - Derivatives instruments related 691 30% 732 27% 1,392 33% 2,036 35%
Inventories 127 5% 138 5% 426 10% 470 8%
Current Assets 1,583 68% 1,877 70% 3,364 80% 4,774 82%
Fixed Assets 736 32% 823 30% 862 20% 1,025 18%
Total Assets 2,319 100% 2,700 100% 4,226 100% 5,799 100%
Bank trust receipts loans 396 17% 631 23% 690 16% 1,250 22%
Bank loans - Derivatives instruments related 669 29% 678 25% 1,362 32% 1,963 34%
Current Liabilities 1,569 68% 1,857 79% 3,173 75% 4,046 70%
Long term liabilities 226 10% 125 5% 37 1% 275 5%
Shareholders’ equity 524 22% 718 26% 1,016 24% 1,478 25%19
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第一章 液化石油氣(“LPG")
第二章 新海集團
附錄一
附錄二
附錄三
附錄四
世界各地LPG汽車加氣網絡
珠海一級碼頭
三級站
聯新LPG汽車加氣站
20Chapter 5 Future Risks and Others
Pages
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Future RisksFuture Risks
3
1. Investors cannot completely depend on those statistical data and information on prospectus.2. Those proactive statements on the prospectus might involve risks and uncertainties.
(The factors of risk please refer to page 7 to 9 in the prospectus.)
Risks Offering and Issuance of TDR
Company-based Risks Main Operating Area Risks
1. Risks of Fluctuation in raw material price2. Risks of expanding into foreign markets and operating3. Risks of fluctuation in currency4. Risks of highly dependent on China market5. Risks of accidents and equipment failure6. Risks of restrictions on LPG price by government7. Risks of force majeure
The Group’s major business is sales and distribution of LPG through retail and wholesale mainly in China. It only registers at Hong Kong, Macau, Bermuda and BVI, but not runs their business there. Thus, only discuss the factors in China:1. Political risk, Economic risk and Social risk2. Legal risk3. Risks of restrictions on environmental protection act
20
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The Info required to be supplied in the prospectus The Info required to be supplied in the prospectus by Competent Authorityby Competent Authority
21
The following info is required to be supplied in the prospectus by Competent Authority. Please refer to the attachments.
1. The evaluation of the TDR issue price rationality
2. The condition of the issuer's distribution of dividends and the evaluation of its dividend policy clarity and rationality in last three years
3. The info of process, counterpart and source of funds in acquisition of Lian-Xin in 2010 and the evaluating the reasonableness of acquiring price, legality and economic efficiency.
4. The effect of LNG development on the future of the TDR issuer
5. The declaration by the issuer and the underwriter for not involving in the selling process and clients.
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Appendix 1Appendix 1 -- LPG automotives worldwideLPG automotives worldwide
3
AfricaCounties Automotives StationsAlgeria 167,500 350 The no. of LPG Automotives
EuropeCounties Automotives StationsFrance 140,000 1,865Czech Republic 200,000 800Germany 300,000 4,400Italy 930,000 2,350Holland 240,000 1,900Poland 2,080,000 6,350Turkey 2,240,000 7,449British 153,000 1,403Russia 600,000 2,000
AsiaCounties Automotives StationsAustralia 650,000 3,200China 76,500 234India 550,000 738Japan 289,148 1,900Korea 2,321,272 1,589
AmericaCounties Automotives StationsAmerica 650,000 3,200Dominica 170,000 115Mexico 540,000 2,300
Source: WLPG 2008
It's a large increase
from 6.5 million(2000) to 14.6million (2008)
Promoted for contributing to the materialization of a low carbon society.
LPG is more cost-effective than traditional fuels
22
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Appendix 2 : 11stst class terminal in class terminal in ZhuhaiZhuhai
3
23
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Appendix 3Appendix 3 :: Bottling PlantsBottling Plants
3
24
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3
Appendix 4Appendix 4 :: LianxinLianxin LPG LPG autogasautogas fueling stationsfueling stations
25