sinohub investor ppt sep-2010
TRANSCRIPT
September2010
Facilitating the Mobile Device Revolution
www.sinohub.com 2
This presenta,on contains “forward‐looking statements” within the meaning of the “safe‐harbor”provisionsofthePrivateSecuri,esLi,ga,onReformActof1995. Suchstatementsinvolveknownandunknownrisks,uncertain,esandother factors that couldcause theactual resultsof thecompany todiffer materially from the results expressed or implied by such statements, including changes ofan,cipatedsaleslevels,futureinterna,onal,na,onalorregionaleconomicandcompe,,vecondi,ons,changesinrela,onshipswithcustomers,accesstocapital,difficul,esindevelopingandmarke,ngnewproductsandservices,marke,ngexis,ngproductsandservices, customeracceptanceofexis,ngandnew products and services, and other factors, including those factors described on Exhibit 99.1 toSinoHub’s Current Report on Form 8‐K filed on September 28, 2009. Any statements that are nothistorical facts and that express, or involve discussions, as to expecta,ons, beliefs, plans, objec,ves,assump,ons or future events or performance (oVen, but not always, through the use of words orphrases such as "will likely result,” “are expected to,” “will con,nue,” “is an,cipated,” “es,mated,”“intends,” “plans,” and “projec,on”) arenothistorical facts,maybe forward‐looking statements andmay involve es,mates and uncertain,es. Accordingly, although the company believes that theexpecta,ons reflected insuch forward‐lookingstatementsare reasonable, therecanbenoassurancethatsuchexpecta,onswillprovetobecorrect. Thecompanyundertakesnoobliga,ontoupdatetheforward‐lookinginforma,oncontainedinthispresenta,on.
www.sinohub.com 3
ElectronicComponentPurchasing
(ECP)
Virtual Contract
Manufacturing
(VCM)
Manufactures and sells private-label
mobile phones
Electronic Component Purchasing
(ECP)
Purchases & sells electronic
components
Supply Chain
Management
(SCM)
Warehouses, imports & delivers
electronic components
SinoHub Business
Unit:
What Function?
Markets Served? China China
Southeast Asian Developing Countries
www.sinohub.com 4
2009 2010 2011NorthAmerica 151 166 176Japan 36 38 40WesternEurope 147 151 155
DevelopedCountries 335 356 373China 190 205 226Korea 12 11 11India 151 193 233RestofAsiaPacific 92 92 105La,nAmerica 127 128 138E.Europe,MiddleEast,Africa
225 266 302
DevelopingCountries 797 895 1015
(millions)
Source: JP Morgan
1 Billion Mobile Phones to be sold
in Developing Countries in 2011
YOY 13%
YOY 5.4%
www.sinohub.com 5
(mill
ions
)
Source: JP Morgan
797 million units
895
1Billion+
0
200
400
600
800
1,000
1,200
2009 2010 2011
Developed Countries Developing Countries
CAGR = 13%
www.sinohub.com 6
MarketOpportunity
*White‐boxmobilephonemarketChinaconsumedUS$100Bofelectroniccomponentsin2009;
producingUS$400BoffinishedgoodsSource:ReedElectronicsResearch(London,UK)
Business
Unit
TotalAddressable
Market
SCM $1.5B
ECP $8B
VCM $8B*
www.sinohub.com 7
STEP 1
• Design Houses in China upload new designs (“roadmaps”) to SinoHub’s VCM platform, displaying phone models planned for launch in 6 – 12 months
STEP 2
• Customer uploads mobile phone requirements to VCM platform, SinoHub connects customer requirements with design house roadmaps
STEP 3 1 days
• Customer signs contract with SinoHub to produce handsets; provides either (1) 20% deposit (restricted cash), & balance due pre-shipment, or (2) Letter of Credit
STEP 4 30 days
• SinoHub (1) purchases design, (2) customizes design, (3) begins production
STEP 5 3 days
• SinoHub collects payment, and ships to customer (point of Revenue Recognition)
45 DAYS: Purchase Order Production Payment Shipment
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Two Revenue Streams
Spot Sales Find arbitrage opportunities Perform spot purchases Deliver value to customers, generating return for SinoHub
B.O.M. Procurement Customer uploads Bill of Materials ECP team seeks better pricing If OK, customer approves supplier swap; cost savings shared SinoHub works with original parts & packaging, thus maintaining quality
In 2009, 80% of ECP revenue generated from spot sales, with 20% from BOM procurement
www.sinohub.com 9
SupplyChainManagement(SCM)
Hong Kong
China
At current run-rate, SinoHub processes $1BN of electronic component imports into China
www.sinohub.com 10
85%ofthecomponentsconsumedinChineseelectronicsmanufacturingareimportedintoChina(Source:ChinaCustoms)
Design Houses
Product Distributors
Finished Goods Manufacturers
Electronic Component Suppliers
Component Manufacturers
Increased Flexibility
Reduced Time
to Market
Lower Cost
Free to Customers
Open Access
Transparent
Customers are in charge of their business with SinoHub SCM
www.sinohub.com 11
ComponentSuppliers&
ManufacturersProduct
ManufacturersDesignHouses
ProductDistributors
Our customers in China work with China Mobile, Huawei, Samsung . . .
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● Founded2005,mobilephoneR&Dfirm● 5newphonedesignspermonth
● 30‐40designsinproduc,onatany,me● AnnualRevenue$250MM
HuaQin started using SinoHub SCM in March 2009: • Inventory management • Import / Export • Just-in-Time delivery • Movement of electronic parts Between Projects
“SinoHub SCM helped cut our production cycle time by 33% . . . we regard SinoHub as a vital tool for efficiency and profitability.”
Mr. Jiang Qinlin Director of Purchasing
Results
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Hong Kong
China Beijing Regional Office & Support Center
Shanghai Regional Service Center
Warehouse (5,300 sq. ft.)
Shenzhen 1) Headquarters (Nanshan) 2) VCM Factory (Baoan) 3) Customs Office (Futian) 4) VCM Sales Office (Futian) Hong Kong Warehouse
(80k sq. ft.) Capacity: $200MM monthly throughput
Shenzhen
Shanghai
Beijing
www.sinohub.com 14
Grow Customer Base
StrongpushformobilephonesalesinIndonesia,India,Vietnam,&Malaysia
VCMSalesteamlaunchedin2010
VCMFactory500+employees
FactorynowproducingPCBAmotherboardsin‐house
EnhanceSCMserviceoffering
DeployECPandVCMInternet‐basedplaiorms(plannedfor2010)
ConvertmoreSCMcustomersintoECP/VCMcustomers
IncreasenumberofproductsperVCMcustomerUp-Sell & Cross-Sell
VCM: Deepen Southeast Asian
Market Penetration
www.sinohub.com 15
$19.1 $29.0
$79.5
$128.4
$0
$20
$40
$60
$80
$100
$120
$140
2006 2007 2008 2009
Mill
ions
Revenue
$1.2
$3.5
$8.5
$12.4
$0
$2
$4
$6
$8
$10
$12
$14
2006 2007 2008 2009
Mill
ions
Net Income
Founded: NYSE Amex: Headquarters: 2000 SIHI Shenzhen, China
2010 Guidance of 40% Growth to $180MM
www.sinohub.com 16
(Audited, USD millions, except EPS) 2007 2008 2009
Revenue $28.8 $79.5 $128.4
Grossprofit $6.7 $16.2 $22.4
Netincome $3.5 $8.5 $12.4
Earningspershare–dilutedNumberofshares(millions)–diluted
$0.2215.9
$0.4021.5
$0.4825.7
YOYGrowth
Revenue 51% 176% 61%
Grossprofit 65% 143% 38%
Netincome 192% 142% 46%
www.sinohub.com 17
(Audited, USD millions, except EPS) Q2
2010*Q22009
YOY
Revenue $43.9 $31.4 40%
Grossprofit $7.6 $5.7 33%
Netincome $2.9 $3.2 9.4%
Earningspershare(fullydiluted)Numberofshares(millions)(diluted)
$0.1028.78
$0.1325.16
* 2010 figures unaudited
www.sinohub.com 18
$9.4
$48.5
$78.2
$18.1
$25.2
$53
$78.2
Assets: Cash & Cash Equivalents Working Capital
Total Assets
Liabilities & Shareholders’ Equity Total Debt, including current portion
Total Liabilities
Total Shareholders’ Equity
Total Liabilities & Shareholders’ Equity
(USD, millions) June 30, 2010*
* Unaudited
www.sinohub.com 19
HenryT.Cochran–CEOandChairmanoftheBoard 30+yearsfoundingandmanagingcompanies FormerCEOandpresident–ContentIntegrity&AdvancedVisualSystems FormerVP–Sybase StrongMISbackground
LeiXia–President 15yearsinelectronicindustryinChina SignificantseniormanagementexperienceintheChineseelectronicsindustry FirstsalesmanagerofArrowElectronics’Shanghaioffice FoundedRGLBeijing(high‐enddistributorandsolu,onprovider)andNEFABChina
(manufacturerandpackagingsolu,onprovider)
WillaLi–CFO YearsofexperienceworkingwithChinesebanks Significantknowledgeofelectroniccomponentsindustry PriorCFOofShenzhenExcellenceInvestmentDevelopmentCo.whereheraisedRMB120million PriorCFOofHongKongB&DEngineCompany
www.sinohub.com 20
AfshinYazdian–EVP&GeneralCounsel,iPayment
‐SECreporBngknowledge,strongM&Aexperience
BOARDOFDIRECTORSAudit
Committee
HarryCochran–ChairmanoftheBoardandCEO
LeiXia–President
WillWangGraylin–CEO,ROAMData
‐ExtensiveoperaBonalandentrepreneurialskillsinmobilephoneindustry
CharlesKimball–Consultant‐SignificantWallStreetandfinancialmanagementexperienceas30‐yearveteranofJPMorgan Dr.RichardKing–FormerAllAmericanElectronicsAnalystandInvestmentBanker;ScienceAdvisoryBoard,NYU
‐Extensiveexperienceinfinancialmarketsasanelectronicsanalystandinvestmentbanker,advancedeconomicstudies
DanielLui–CEO,PorcheersConsultants‐CFOofU.S.listedChinesecompany,significantexperiencewithinternalcontrols,MBA *
EXEC
UTI
VE
IND
EPEN
DEN
T
* Chairman, Audit Committee
www.sinohub.com 21
ExcellentManagement
World‐ClassCorporateGovernance
5consecu,veyearsofhighgrowth&profits
Strongdemandformobiledevices
HighBarriertoEntry:ProprietaryPlaiorms
Top‐10Accoun,ngFirm:BakerTilly(London)
USlawfirm:SeyfarthShaw(800atorneysinUS)
www.sinohub.com 22
COMPANY:
SusanLiu DouglasMenelly
SinoHub,Inc. SinoHub,Inc.
Phone:+861501377‐2683 Phone:+861392524‐5053Email:[email protected] Email:[email protected]
INVESTORRELATIONS:
TedHaberfield
HCInterna,onal,Inc.
Phone:+1(760)755‐2716
Email:thaberfield@hcinterna,onal.netwww.hcinterna,onal.net
Facilitating the Mobile Device Revolution