China Curtain Wall Market

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(Stock Code: 2789 )
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2
Company Overview
Shenyang Art Centre
Shareholding Structure
Mr.Kang Baohua
(Chairman)
Senior Management(1)
54.51%
9.04%
Public
36.45%
Yuanda China
(Listed Company)
BVI & HK Co
Overseas
Shenyang Yuanda
38 subsidiaries /
branches
Covering 30 provinces,
autonomous regions and
municipalities
China
Overseas
26 subsidiaries /
branches
(1) Management represents 6 directors and other senior management
4
Company Overview
The Group is a provider of one-stop integrated curtain wall solutions including
the design of curtain wall systems, procurement of materials, fabrication and assembly of curtain wall
products, performance testing, installation of products at construction sites, and after-sales services.
Global
provider of
integrated
curtain wall
solutions
We also provide ancillary products related to curtain wall systems, including
skylights, metal roofs, canopy systems, shading systems, balustrade and breast board systems, fire
doors and rolling doors, and energy-saving aluminum alloy doors and windows.
End customers to our curtain wall solutions mainly comprise non-residential and infrastructure
developments both in domestic and overseas market, such as
office building of
government authorities or headquarters for leading companies from various
industries, hotels, shopping center, center buildings for the use of conference,
culture, sports, art and exhibition, airport, railway station and hospital
and universities.
World’s Largest: 2011 revenue at RMB10.80 billion
(2011 market share(1) World: 7.84%; China: 23.0%)
Fastest growth: 2008 – 2011 revenue CAGR at 22.2%; 2008 – 2011 Domestic and World
Global leader
in curtain
wall industry
curtain wall market CAGR at 16.5%, 6.2% respectively.
Rooted in the fastest-growing curtain wall market: China, Undertaken projects globally in
over 40 countries and regions
Newly awarded 132
projects in 1H2012 with total contract value of approximately RMB8.0
billion.
The value of backlog amounted to approximately RMB20.0
(1)
billion in total as at 30 June, 2012
According to the Synovate report, Monitor analysis, and Cinda Securities, and expert interviews (calculated on 50million+ revenue curtain wall companies.)
based on 2011 revenue
5
5
Company Overview (Con’d)
Global
leading
curtain wall
technology
We believe we are a leading curtain wall provider with a comprehensive product
portfolio. Through research and development, we have further developed various
curtain wall products by using more complex designs, production and installation as
well as combining the new curtain wall products with new materials, technology,
energy, environment protection and energy conservation
We are striking to realizing “Low-carbon, Function, Safety” of curtain wall
products. Such products include double-skin curtain walls, photovoltaic curtain walls,
ecologically friendly curtain walls, video curtain walls and membrane structure curtain
walls
One of the world’s
largest R&D teams, with R&D centers in China, Switzerland, Japan
and Australia, 600+ R&D professionals and 1,500+ designers
Launched 80+ new products since 2008, pioneering the extensive use of curtain wall products
Attained 548 patented items
First brand
in global
curtain wall
industry
China‘s world-renowned curtain wall trademark
First time on the ENR’s Top 225 International Contractors List as the only curtain
wall supplier in 2011
Undertaken many
Landmark projects all around the world
Global marketing network, 38 Chinese and 26 overseas subsidiaries/branches
6
Milestones
Rapid domestic
growth
Incorporation
China
1993
 Founded Shenyang Yuanda
1994
 Undertook Shenyang ICBC
Tower project
1997
 Awarded the 1st Luban
Award for the Beijing Xidan
International Building
1993 – 1997
1998
 Founded Shanghai
Yuanda to strengthen
the coverage in
Eastern China market
2000
 Shanghai and Chengdu
production base
completed
2005
 Foshan production
base completed
By 2005, all 4 major
production base s
were completed
1998 – 2006
Completed landmark
domestic projects
2006
 China National Swimming
Center “Water Cube”
 Beijing New Poly Plaza
2007
 National Stadium of China
“Bird’s Nest”
2008
 Wuxi Shangneng R&D
Building
2009
 Theme Pavilion of Expo
2010
(1)
No.1 in China : 23.0% market share
No.1 in the world: 7.3 market share
China‘s world-renowned curtain wall
trademark
Granted as the first chose curtain wall
company by customer in the China
Curtain Wall Net
2006 – 2009
Expansion of international business
Overseas
Leadership position in the
Global and China
curtain wall industry
2002
 Signed the Huangjian Tower project in
Singapore, representing the Group’s first
overseas project
2004 – 2007
 Established a number of overseas branches
2007 – 2010
 Completed various overseas projects such as
Cocoon Tower in Japan, the Legacy at
Millennium Park in USA, Executive Towers at
Business Bay in Dubai, Airrail Center Frankfurt
in Germany, etc
By 2010, became the world’s largest
curtain wall company
2002 – 2009
600+ R&D professionals and 1,500+
designers
Undertaken projects in 40 countries
and regions
Launched 80+ curtain wall products
during the past few years
Has 38 branches in China covering 30
provinces and autonomous regions;
and 26 overseas branches
2010
7
Landmarks Projects in the World
Beijing Galaxy SOHO
China National Swimming
Center “Water Cube”
National Stadium of
China “Bird’s Nest”
Theme Pavilion of Expo
2010 Shanghai China
Federation Tower
Sales network
R&D centers
COCOON Tower
The Legacy at
Millennium Park
Airrail Center Frankfurt
Leadenhall Building
in London
Executive Towers at
Business Bay
Meydan Racecourse
8
Technology Concept
Energy-saving
Membrane Structure
Introduced the “green”
concept in curtain wall
products
Beijing Van Palace
Microsoft (China)
Headquarters
Double-skin energy-saving curtain walls
 Improve the thermal insulation of the outer
Safety
Energysaving
Shenyang Art Center
“Water Cube”
Membrane structure curtain walls
 Possess characteristics such as high
building structure, indoor ventilation, sound
insulation and daylighting
transparency, light weight, high resistance to
aging and long life
Ecologically Friendly
Photovoltaic
Low Carbon
Wuxi Shangneng R&D Theme Pavilion of Expo
Building
2010 Shanghai China
Theme Pavilion of Expo
2010 Shanghai China
Photovoltaic curtain walls
 Integrate photo-voltaic system installed on the
glass of the curtain wall to generate electricity
from solar energy
Theme Pavilion of Expo
2010 Shanghai China
Ecologically friendly curtain walls

Outer building structure covered by a botanical layer
with a bioclimatic buffering layer, designed to achieve
resource conservation and reduce pollution
9
Corporate Strategy
Global marketing strategy
Core technology strategy– Technology Leads Market
Corporate
strategy
Brand Strategy– Build the world’s first brand
Extension of industrial chain strategy–
Vertical and horizontal integration
M&A and restructuring strategy
10
Curtain Wall Market
Dalian Hang Lung Plaza
Curtain Wall Market Size
Growth in China curtain wall market size
Growth in global curtain wall market size
2,500
700
2,263
650
2,017
600
2,000
1,803
1,617
500
(Rmb 00'mn)
450
374
400
311
300
259
1,455
1,500
1,313
1,243
1,144
1,028
1,000
919
840
210
200
169
98
109
128
500
(1)
2015E
2014E
2013E
2011
2010
2009
2008
2007
2006
2005
2015E
2014E
2013E
2012E
2011
2010
2009
2008
2007
0
2006
0
2012E
100
2005
(Rmb 00'mn)
541
According to the Synovate report, Monitor analysis, and Cinda Securities, and expert interviews (calculated on 50million+ revenue curtain wall companies.)
12
Global Curtain Wall Market Distribution &
Yuanda Curtain Wall Market Share

U.S. market and the European market constitute each 1/4 of the global
curtain wall market
Brazil, Southeast Asia and other emerging markets are growing fast
Australia, Russia and other markets still in great growth potential


Low Market Share in the Blooming American Market by now
Market share(1) around the world for Yuanda
Other areas in the world
25%
4%
12%
Global
Market share
Distribution
Europe
30%
USA
25%
23.0%
24.1%
Global Market Share:7.4%
China
Middle East
20%
Other areas in Asian
15%
10%
25%
5.8%
2.9%
5%
1.7%
0.1%
0%
13%
China
Regional Market
Size(RMB bn)
21%
(1)
31.2
Middle East Other areas Other areas
in the world
in Asia
6.0
17.3
18.7
Europe
36.8
USA
35.5
According to the Synovate report, Monitor analysis, and Cinda Securities, and expert interviews (calculated on 50million+ revenue curtain wall companies.)
13
based on 2011 revenue
China Curtain Wall Market
Three major
driving factors
of China
curtain wall
market
development
Inner driving force - Replacement needs
New Driving Force - Energy saving construction
Original driving force - Urbanization
12th Five-Year Plan: Expected production value of Rmb400 bn in the curtain wall market by 2015
(Rmb 00'mn)
4,500
4,000
3,500
3,000
2,500
4000
2,000
1,500
1,000
1500
500
620
0
2005
(1)
According to Industry Association
2010
2015
14
China Curtain Wall Market
Urbanization
China's urbanization rate reached
51.27% in 2011(2)
The rise of the Midwest, the
second and third tier cities
Continued strong demand for
commercial real estate
Urbanization
Continued growth in the
construction of public buildings
expected that the urbanization rate
will exceed 55% in 2015
80%
70%
Regional average annual urbanization
growth rate in 2005-2010 around the world(1)
60%
51.27%
50%
Fastest urbanization rate in China
3%
2.0%
40%
2%
2%
30%
1%
20%
0.4%
1%
0.2%
0.4%
0.1%
0.2%
10%
U.K.
0%
(1)
Source:Bloomberg
(2)
2015E
2011
2010
2009
2008
2007
2006
2005
2004
U.S.
2003
Russia
2002
Middle Australia
East
2001
China
2000
0%
Source:National Bureau of Statistics
15
China Curtain Wall Market
Urbanization - Commercial real estate & public buildings (con’d)
Office building investment
growth accelerating
Completed investment value in office building (Bmb 100m)
YoY growth (Right Axis)
Investment in commercial business
buildings growing fast
Investment value in commercial business building (Bmb 100m)
YoY growth (Right Axis)
Completed Investment value of office
building maintains rapid growth
Completed investment value in real estate development:
Office Building: Accumulated value (Rmb 100m)
Accumulated YoY (Right Axis)
Investment in commercial business
buildings maintains rapid growth
Completed investment value in real estate development:
Commercial Business Building: Accumulated value (Rmb 100m)
Accumulated YoY (Right Axis)
16
China Curtain Wall Market
Urbanization - Commercial real estate & public buildings (con’d)
Chart : …which account for more than 95% of the
market in China
Landmark projects awarded in 1H2012
(RMB 100m)
2007 – 2012 China curtain wall market breakdown
300
250
200
150
100
50
0
262
215
104
38
5
2007
8
2008
2009
Residential
9
2010F
Commercial
107
89
74
62
48
7
176
146
122
11
2011F
South Australian Institute of Health and
Medical (RMB160 mn)
BBVA Bank, Mexico (RMB220 mn)
13
2012F
High-end Residential inYekaterinburg,
Russia (RMB120 mn)
Public(1)
(1) Public buildings include government buildings, schools, libraries, pharmaceutical and public systems
According to the Synovate report, Monitor analysis, and Cinda Securities, and expert interviews
(calculated on 50million+ revenue curtain wall companies.)
Dalian Henglong Plaza (RMB320 mn)
Shenyang Art Centre (RMB190 mn)
• The 12th Five-Year Plan driven further
development on new energy, culture, tourism,
health care, finance, electricity, logistics,
automotive and other industries, which brings a
new round of development of commercial real
estate and public buildings
Bohai Bank Tianjin Branch (RMB180 mn)
Beijing Gezhouba Building (RMB120 mn)
Fuzhou Administrative Center (RMB150 mn)
17
Operating information
财务摘要
World One Tower
Shanghai Tower 632m
印度最高楼
444m
Operation Scale
Value of Backlog
Backlog by Region
Overseas
China
20,015
20,000
17,186
32.6%
11,900
38.7%
12,488
20%
43.1%
45.2%
15%
51.1%
67.4%
48.9%
54.8%
10.64%
9.59%
10%
China
56.9%
51.9%
11.77%
6.73%
61.3%
5,000
16.99%
Overseas
48.1%
10,000
23.46%
13,196
(%)
(RMB¥ mn)
25%
14,331
15,000
5%
6.05%
5.31%
4.28%
3.84%
1.33%
0%
0
MiddleEastFarEast Australia Europe American Others
2008
2009
2010
(For the year ended 31 Dec)
2011
1H2011
NortheastN orthern Eastern WesternSouthern
1H2012
(For 6 months ended 30 Jun)
19
Newly-awarded Projects
Chart 2:Newly-awarded Projects
by region
Chart 1:Value of Newly-awarded Projects
China
12,000
Overseas
Overseas
40%
China
37.24%
35%
10,000
(%)
25%
6,000
10,272
4,000
5,354
2,000 4,755
6,257
6,003
3,767
4,528
2,295
3,380
10%
2,054 1,786
17.32%
200 8 200 9 201 0 201 1 1H201 1H201 2
(For the 6 months
ended 30 Jun)
200 8 200 9 201 0 201 1 1H201 1H201 2
(For the year
ended 31 Dec)
4.16%
0%
(For the 6 months
ended 30 Jun)
8.50%
4.13%
3.01%
2.41%
5%
0
(For the year
ended 31 Dec)
20%
15%
6,577
7.74%
9.16%
6.33%
0.00%
Middle East Asia Australia Europe American Others
NortheastNorthern Eastern Western Southern
Chart 3: Newly-awarded projects sorted by end consumers
45%
40%
35%
42.2%
Residential
5%
Public buildings
25%
IT
6.60%
Office building by
function
25%
19.9%
20%
15%
9.4%
2.5% 3.0%
Office
Building
Hotel
Tourism
1.9%
Business
District
Governmental
Institution
Logistic
Culture
0%
0.5%
6.2%
Industrial
Complex
5%
4.4% 4.7%
Medical
5.4%
Statium
10%
House &
Home
Petrifaction 0.84%
Commercial Real
Estate70%
30%
House &
Home
(RMB¥ mn)
30%
8,000
Finance
32.29%
2.89%
Motor
Electricity 0.82%
7.17%
Media
3.43%
Others
45.96%
20
Financial Stats
South Australian Institute of Health and Medical
Financial Abstracts
1H2012
(RMB¥ mn)
Turnover
1H2011
Change
(For the 6 months ended 30 Jun)
5,213.5
4,802.0
8.6%
18.8%
23.8%
(5.0%)
402.7
647.9
(37.8%)
262.4
416.6
(37.0%)
4.2
8.9
(52.8%)
(1,122.2)
(204.9)
447.7%
Debt/Equity ratio (%)
45.9%
45.8%
0.1%
Liquidity ratio (times)
1.55
1.38
4.54%
Gross profit margin (%)
EBITDA
Profit attributable to equity
shareholders of the Company
Basic and diluted earnings per
share (RMB cents)
Net cash used in operating
activities
22
Turnovers
Turnover
Turnover breakdown by region
Others1.61%
16,000
USA 0.11%
Asia 1.97%
14,000
Australia
12,000
11.60%
10,797
(RMB¥ mn)
10,000
Europe
4.73%Middle
9,261
East
14.23%
33.5%
8,000
6,000
7,062
Overseas
35.5%
5,911
35.5%
4,802
33.2%
4,000
66.5%
34.3%
66.8%
61.4%
2008
2009
Turnover of 1H2011: RMB 4,802 mn
5,214
36.6%
China
Other 0.55%
USA 1.39%
64.5%
2,000
65.7%
63.4%
1H2011
1H2012
Asia
8.55%
Australia
0
2010
(for the year ended 31 Dec)
China
65.74%
2011
(For the 6 months ended 30 Jun)
8.43%
Europe
7.39%
Middle
East
10.50%
China
63.40%
Turnover of 1H2012 : RMB 5,214 mn
23
Profit Margin
Chart 1: Gross profit and
图1:毛利润及毛利率
Gross margin
3,000
50%
(RMB¥ mn)
2,500
2,306
40%
2,074
2,000
30%
1,657
1,143
1,500
1,148
1,000
23.5%
982
22.4%
21.4%
19.4%
20%
23.8%
18.8%
10%
500
0
0%
2008
2009
2010
2011
Gross profit
1H2011
Gross margin
(for the year ended 31 Dec)
(for the 6 months ended 30 Jun)
Chart 3: Net Profit and Net Profit Margin
Chart 2: EBITDA and EBITDA margin
1,500
50%
1,195
1H2012
1,000
806
1,205
1,000
30%
648
551
500
661
943
13.4%
12.9%
9.3%
11.2%
13.5%
403
7.7%
0
20%
10%
0%
2008
2009
EBITDA
2010
(for the year ended 31 Dec)
2011
1H2011 1H2012
EBITDA margin
(for the 6 months ended 30 Jun)
(RMB¥ mn))
(RMB¥ mn)
40%
20%
850
600
328
200
9.4%
8.7%
7.9%
422
8.8%
249
10%
5.5%
200 8
200 9
201 0
201 1
4.8%
1H201 1 1H201 2
-200
Net profit
0%
Net profit mar gin (excl. n on-controllin g in terest)
(for the year ended 31 Dec)
(for the 6 months ended 30 Jun)
24
Cost of Sales & Operating Expenses
Chart 2: Operating expenses
(as % of revenue) continue to decrease steadily
Chart 1: Stable cost of sales
100%
90%
1.6%
3.2%
2.9%
2.9%
3.0%
4.5%
1.3%
3.3%
2.9%
2.8%
2.7%
5.1%
Others
Taxation
R&D
Wages
Transportation
On-site
80%
6.0%
7.0%
Processing
15%
Selling Expenses
Administrative Expenses
11.6%
12%
11.4%
11.6%
10.9%
11.8%
11.3%
70%
23.0%
60%
Installation
25.0%
9%
50%
9.0%
8.7%
40%
9.6%
9.5%
9.1%
2.1%
2.1%
2.2%
2.2%
2010
2011
1H2011
1H2012
8.8%
6%
Raw material
30%
52.9%
49.9%
20%
3%
10%
0%
2.6%
2.7%
2008
2009
0%
1H2011
1H2012
(for the year ended 31 Dec)
(for the year ended 31 Dec)
(for the 6 months ended 30 Jun)
25
Operating Turnover Days
Chart 1: Inventory and trade receivables
turnover days
Chart 2: Account payables turnover days
160
149
150
200
140
180
126
130
120
160
110
140
100
183
(day)
(day)
132
2007
2008
101
101
2009
2010
80
70
60
80
87
60
97
90
120
100
97
56
50
60
40
30
40
20
20
32
32
29
33
38
10
0
0
2008
2009
Inventory turnover
days
2010
2011
1H2012
Net contract work
receivables turnover days
(For the year ended 31 Dec)
(For the year ended 31 Dec)
2011
1H2012
(For the 6 months ended 30 Jun)
(For the 6 months ended 30 Jun)
Due to the influences of economies and tight credit policy, turnover days has slightly increased
26
Competitors Comparison
BBVA Bank, Mexico
Leading R&D Capabilities
One of the world’s strongest R&D teams, with 600+ R&D
professionals
Possesses 187 proprietary patented technologies in 2012 1H;
Newly applied for the registration of 388 patents; (included
patents on 2011 for 2012); 548 patents have obtained the
certificate.
Global R&D network with 4 regional R&D teams located in China,
Switzerland, Australia, and Japan, respectively
No.1 in Terms of R&D Investment (1H2011)
5.0%
123.9
(Rmb mn)
120
100
123.9
80
3.0%
60
2.0%
40
150
4.0%
2.3%
26.0
19.7
1.0%
20
1.0%
0
0.0%
106.9
(Rmb mn)
140
R&D Investment Continues to Grow
100
50
0.6%
0
R&D Expenditure
% of Total Revenue
1H2011
Source: Company Announcement, by the end of 2012, converted into RMB refer to the
exchange rate in September 2012
1H2012
28
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