Corporate Presentation New China Ventures Ltd.


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  • Value-added water consultancy services, such as: system design, project engineering, management consulting, equipment procurement, pipeline inspection and maintenance, and meter reading and tariff collection. Develop other non-tariff products and services to customers and other water companies, including water meter installation, offering water meter hardware, and installation services for water pipe
  • Corporate Presentation New China Ventures Ltd.

    1. 1. Corporate Presentation New China Ventures Ltd. OTCPK: NCVL
    2. 2. Important Disclosures <ul><li>Safe Harbor Statement </li></ul><ul><li>The statement contains forward-looking statements. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances, and are subject to a wide range of business risks, external factors and uncertainties. Actual results may differ materially from those indicated by such forward-looking statements. The Company assumes no obligation to update the information contained in this press release, whether as a result of new information, future events, or otherwise. </li></ul>
    3. 3. Company Overview <ul><li>Acquire and Operate Clean and Wastewater Treatment Systems in China: </li></ul><ul><ul><li>30-50 year Monopoly Concessions </li></ul></ul><ul><ul><li>Offer wide range of ancillary products and services </li></ul></ul><ul><li>China Beijing (CGW) Water Technology Centre-100% Subsidiary Company. </li></ul><ul><ul><li>Full range of value-added Consultancy Services for China’s Water Industry </li></ul></ul><ul><ul><ul><li>System Design </li></ul></ul></ul><ul><ul><ul><li>Project Engineering </li></ul></ul></ul><ul><ul><ul><li>Management Consulting </li></ul></ul></ul><ul><ul><ul><li>Equipment Procurement </li></ul></ul></ul><ul><ul><ul><li>Pipeline Inspection/Maintenance </li></ul></ul></ul><ul><ul><li>Serve as Foundation to Acquire Municipal Water Systems </li></ul></ul><ul><li>Highly Experienced and Knowledgeable Management in China Water Industry </li></ul><ul><li>Comprehensive Acquisition and Development Strategy and Capacity </li></ul><ul><ul><li>Fast-growing secondary cities and regions </li></ul></ul>
    4. 4. Financial Highlights <ul><li>Stock Symbol: NCVL </li></ul><ul><li>Recent Share Price: $0.26 </li></ul><ul><li>52-Week Range: $0.25-$0.60 </li></ul><ul><li>Market Capitalization: $8,424,000 </li></ul><ul><li>Capitalization: </li></ul><ul><li>Primary Shares Outstanding: 32.4 MM shares </li></ul><ul><li>Fully Diluted: 32.4 MM shares </li></ul><ul><li>Shares in Float: 12 MM shares </li></ul><ul><li>Management Ownership: 46.8% </li></ul><ul><li>As of 10/01/2008 </li></ul>
    5. 5. China Water Crisis <ul><li>Serious Water Shortages and Wastewater Problems </li></ul><ul><ul><li>Over 50% of China’s Water is unfit to drink </li></ul></ul><ul><ul><li>48 million people lack sufficient drinking water. </li></ul></ul><ul><ul><li>Has only 7% of Global Water Resources </li></ul></ul><ul><li>Uneven Distribution of Water </li></ul><ul><li>Fast Growing Urbanization and Industrialization </li></ul><ul><li>Pollution, Low Sewage Treatment Decreases Water Quality </li></ul>
    6. 6. China Water Crisis (cont.) Serious Water Pollution in China
    7. 7. China Water Crisis (cont.) <ul><li>Macquarie Research Equities- </li></ul><ul><ul><li>February 27, 2008 </li></ul></ul><ul><li>“ Water is one of the key issues facing China in the next 20 years as the sustainability of a secure water supply system is vital to the well-being of its 1.3 billion people. Deregulation is providing enormous investment opportunities.” </li></ul>
    8. 8. China Water Crisis (cont.) Water Quality of Rivers in China
    9. 9. Market Opportunities <ul><li>Urbanization + Industrialization = Accelerating Future Demand </li></ul><ul><li>Industrial Product Value affected by Water Shortages: $200+ Billion </li></ul><ul><li>China’s Water Resources per capita is 1/4 of global average </li></ul><ul><li>30+ million People in rural area have no access to Drinking Water </li></ul><ul><li>1.3 Billion Chinese People need Clean Drinking Water </li></ul><ul><li>Cities with Populations 250,000+ are required to build Water-Treatment Plants. </li></ul><ul><li>In 2002, the Chinese Government Privatized Water Supply and Sewage Facilities to improve Operating Efficiencies and to raise Capital for Expansion </li></ul>
    10. 10. Private Participation in Infrastructure in China-Water and Sewage Projects Data Source: World Bank
    11. 11. The Potential Growth in China Water Infrastructure
    12. 12. Market Opportunities (cont.) <ul><li>Sewage treatment facilities are Desperately Needed. </li></ul><ul><li>Proposed Treatment Rates > than 60% by 2010, according to China’s 11th Five Year Plan. </li></ul><ul><li>Sewage Treatment Rate in Different Regions of China </li></ul>
    13. 13. Market Trends <ul><li>Major Foreign Companies are Investing in the China Water Market. </li></ul><ul><ul><li>Substantial Premiums are being Paid for the Acquisitions. </li></ul></ul>
    14. 14. Veolia Water Invest in China <ul><li>Veolia Water Signs its 21st Contract in China </li></ul><ul><ul><li>A 30 year concession with the Lanzhou Water Supply Co. </li></ul></ul><ul><ul><li>Estimated Investment of 1.6 billion Euros. </li></ul></ul><ul><li>Veolia Operates in: </li></ul><ul><ul><li>19 of 34 Provinces </li></ul></ul><ul><ul><li>Different Municipalities, Autonomous Areas and Special Administrative Regions </li></ul></ul><ul><ul><li>Serving the water needs of over 21 Million Inhabitants in China. </li></ul></ul>Source: Veolia Water, January 22, 2007
    15. 15. NCVL’s Approach <ul><li>Two Profitable Operating Divisions: </li></ul><ul><li>Water Equity Division </li></ul><ul><ul><li>Participate in various Build-Own-Operate arrangements </li></ul></ul><ul><ul><ul><li>Usually retain a 30 year water tariff concession right </li></ul></ul></ul><ul><ul><li>Develop High-Margin Non-Tariff Products and Services </li></ul></ul><ul><ul><li>Construct Water Infrastructure Projects </li></ul></ul><ul><ul><li>Invest at a small premium to Asset Values-10% to 15% </li></ul></ul><ul><li>Water Consultancy Division </li></ul><ul><ul><li>Beijing CGW Water Technology Centre (CGW) </li></ul></ul><ul><ul><ul><li>Provides steady stream of revenue </li></ul></ul></ul><ul><ul><ul><li>Offer high-margin value-added water consultancy services </li></ul></ul></ul><ul><ul><ul><li>Expertly measures operating metrics of municipal water systems. </li></ul></ul></ul><ul><ul><ul><li>Owns Proprietary Database of target Potential Acquisitions </li></ul></ul></ul><ul><ul><ul><li>Identify New Opportunities in Major Chinese Water Projects </li></ul></ul></ul>
    16. 16. Water Equity Division <ul><li>Signed MOI to acquire a 20% in Xinyu City Water Supply Ltd </li></ul><ul><li>Center of rapidly growing Xinyu County industrial area, Jiangxi Province. Xinyu City has a population of 1,100,000 </li></ul><ul><li>Water Production capacity : 79 Million tons/year </li></ul><ul><ul><li>Increase to 133 Million tons/year (68%) upon completion of current expansion work </li></ul></ul><ul><li>Business includes </li></ul><ul><ul><li>Tap water production & supply </li></ul></ul><ul><ul><li>Sale of water equipment </li></ul></ul><ul><ul><li>Water supply engineering </li></ul></ul><ul><ul><li>Water supply pipelines </li></ul></ul><ul><ul><li>Facilities installation </li></ul></ul>
    17. 17. <ul><li>Privatized in 2006. </li></ul><ul><li>2008 Revenues of $55 Mil. USD an increase of 360% </li></ul><ul><li>2008 Profits of $21 Mil. USD, an increase of 185% </li></ul><ul><li>Water price increases of 17% per yr. over last 5 years. </li></ul><ul><li>Acquisition Cost based on P/E of 6 (ROI: 16 2/3% per year). </li></ul>Xinyu City Waterworks
    18. 18. Xingyu City Water Quality Improvements <ul><li>Xinyu City water quality is ranked as Class 1 in the Country. </li></ul><ul><li>Low cost of water purification, Greater profitability </li></ul><ul><li>Treatment of wastewater reduces pollution. </li></ul><ul><li>Sufficient water sources to meet city expansion plans </li></ul><ul><li>30 year monopoly operations with renewal or buyout </li></ul>
    19. 19. Xinyu City Waterworks Ltd. <ul><li>Xinyu City population to double in next 5 to 7 years. </li></ul><ul><li>Water infrastructure projects can earn 35% to 45% profits margins, (Est. 60% to 70% of revenues) </li></ul><ul><li>New government policy of 1 water meter per household. </li></ul><ul><li>Water meter installations earns 70% profit margins. </li></ul><ul><li>Commercial water rates higher than residential rates by a factor of 3 to 10 times </li></ul>
    20. 20. Xingyu City Water Offices and Operations <ul><li>Strategic water offices located throughout Xinyu City </li></ul><ul><li>Water tariffs & other gov’t fees collected at water offices </li></ul><ul><li>Potential for prepaid debit cards with new water meters </li></ul><ul><li>Substantial real estate development potential </li></ul><ul><li>Revenues collection of 99.37% </li></ul><ul><li>Water permit required prior to any property development </li></ul>
    21. 21. Xinyu City Waterworks Ltd . Highlight Summary <ul><li>New China is acquiring a 20% interest in a 30 year monopoly operating concession. </li></ul><ul><li>Xinyu City, is a rapidly growing city due to the urbanization as people are seeking new jobs created in the mid-tier cities in China. </li></ul><ul><li>2008 revenues of $55 Million USD; an increase of 360% over 2007 revenues of $12 Million USD. </li></ul><ul><li>2008 net profits of $20.8 Million USD; an increase of 185% over 2007 profits of $7.3 Million USD. </li></ul><ul><li>In 2009, water production capacity is expected to increase to 133 million tons/yr. from 79 million tons/yr. </li></ul><ul><li>Xinyu City is expected to double its population size in the next 5 to 7 years thereby significantly increasing the demand for water usage. </li></ul>
    22. 22. Xinyu City Waterworks Ltd . Highlight Summary <ul><li>Over the last 5 years, water tariff prices have increased an average of 17% per year in China. </li></ul><ul><li>A network of water offices in Xinyu City where revenues are collected directly from both residential and commercial users. </li></ul><ul><li>Profits are earned on expanding the existing water distribution network owned by the joint venture. </li></ul>
    23. 23. Company‘s Growth Strategies <ul><li>Build portfolio of water facility assets through series of Acquisitions, Mergers and/or Joint Ventures. </li></ul><ul><li>Leverage Assets to Increase Return on Investments. </li></ul><ul><li>Bring in highly Experienced Management and Operations Staff to implement aggressive growth strategies and maximize efficiency. </li></ul><ul><li>Acquisitions within similar or nearby regions can lead to Synergies in the following areas: </li></ul><ul><ul><li>Maintenance and management costs </li></ul></ul><ul><ul><li>Lower operating costs and capital expenditures </li></ul></ul><ul><ul><li>Increase ability to negotiate tariffs increases with local governments </li></ul></ul><ul><li>Leverage CGW’s technical expertise and wealth of experience to win larger contracts </li></ul><ul><li>Deliver High Value-added, Efficient and Profitable Water Solutions </li></ul><ul><li>Increase Revenues and Operating Margins by offering array of High-Margin Products and Services- water meter installation, tariff collection systems </li></ul>
    24. 24. Strategic Objectives
    25. 25. Management & Board of Directors <ul><li>Mr. Yuan Shu Pu – President / Board Member </li></ul><ul><ul><li>20+ years management experience in water-related business </li></ul></ul><ul><ul><li>Director of the Construction Material Laboratory of the Civil Engineering Department </li></ul></ul><ul><ul><li>Served as a Supervision Engineer in Zhejiang Province Hydraulic and Hydropower Engineering construction Supervision Company since 2000 </li></ul></ul><ul><li>Mr. Yao Zhen Xian – CFO / Board Member </li></ul><ul><ul><li>30+ years experience in Water Conservation and Irrigation technology in China </li></ul></ul><ul><ul><li>Former Commander-in-Chief, Three Gorges Reservoir Basin Drip Irrigation Construction </li></ul></ul><ul><ul><li>Former Assistant Chief Engineer, China Irrigation & Drainage Technology Development </li></ul></ul><ul><li>Ms. Liu Gui Mei – Independent Director </li></ul><ul><ul><li>25+ years experience in water-related businesses </li></ul></ul><ul><ul><li>The Dean of Water Conservancy Faculty of North China University of Water Conservancy and Electric Power </li></ul></ul><ul><li>Mr. Tang Chin-Wan – Consultant </li></ul><ul><ul><li>10 years experience in Water and Environmental Related Businesses </li></ul></ul><ul><ul><li>USA Ph D. / M.Sc. in Industrial and Systems Engineering </li></ul></ul><ul><ul><li>B.Sc. in Mechanical Engineering </li></ul></ul>
    26. 26. Investment Highlights <ul><li>Water Shortages and Clean Water are Key Constraints to Economic and Social Development in China. </li></ul><ul><li>China must depend on Professional Consultancy Companies to provide technical expertise to help solve Critical Water and Environmental Problems </li></ul><ul><li>NCVL’s strategy is to be a Leading Water Company as the Chinese Government drives to sell and modernize water assets </li></ul><ul><li>Aggressively pursue portfolio of water assets and ancillary products / services by M&A and/or joint ventures </li></ul><ul><li>Highly visible revenue and income streams via 30-50 year monopoly water concessions and offering value-added products and services </li></ul><ul><li>Return on Investment projected at 30%-40% annually from Water Tariffs and Higher-Margin Complementary Products and Services </li></ul><ul><li>Revenues expected to exceed $75 million by 2010 </li></ul><ul><li>Five Potential Targeted Acquisitions in China </li></ul>
    27. 27. NCVL- Significant Opportunities <ul><li>Proven Business Model </li></ul><ul><ul><li>30-50 year Monopoly Water Concessions. </li></ul></ul><ul><ul><li>Selectively acquire Ownership in Water Systems, partnering with local governments. </li></ul></ul><ul><ul><li>Target Secondary Chinese Cities and Regions. </li></ul></ul><ul><ul><li>Increase in Water Tariffs + higher-margin consulting, complementary products and services, will drive revenues and margins. </li></ul></ul><ul><ul><li>Effective water management and solutions will allow China to address its substantial water crisis. </li></ul></ul><ul><li>Large, Under-Served Market </li></ul><ul><ul><li>China’s per capita water resources is only 1/4 of global average </li></ul></ul><ul><ul><li>400+ of 668 cities face tremendous water shortages </li></ul></ul><ul><ul><li>Pollution and low sewage treatment has dramatically decrease water quality </li></ul></ul><ul><li>Proven Management Team </li></ul><ul><ul><li>Former officials in the Chinese Ministry of Water with vast experience in water projects </li></ul></ul><ul><ul><li>Chinese and international expertise in water management and government relations </li></ul></ul>
    28. 28. <ul><li>Thank You! </li></ul><ul><li>For Further Information: </li></ul><ul><li> </li></ul>