Download as PDF, PPTX
Uploaded byDouglas Menelly
SinoHub Investor PPT Sep-2010
This document summarizes SinoHub's business facilitating the mobile device revolution. It has three business units: Virtual Contract Manufacturing (VCM) which manufactures and sells private label mobile phones, Electronic Component Purchasing (ECP) which purchases electronic components, and Supply Chain Management (SCM) which warehouses, imports and delivers electronic components. The document outlines the large and growing market opportunity in developing countries for mobile devices and electronic components. It provides an overview of SinoHub's financials and growth between 2006-2009 as well as guidance for continued strong growth in 2010.
SinoHub Investor PPT Sep-2010
- 1. Facilitating the MobileDevice Revolution September 2010
- 2. This presenta,on contains “forward‐looking statements” within the meaning of the “safe‐harbor” provisions of the Private Securi,es Li,ga,on Reform Act of 1995. Such statements involve known and unknown risks, uncertain,es and other factors that could cause the actual results of the company to differ materially from the results expressed or implied by such statements, including changes of an,cipated sales levels, future interna,onal, na,onal or regional economic and compe,,ve condi,ons, changes in rela,onships with customers, access to capital, difficul,es in developing and marke,ng new products and services, marke,ng exis,ng products and services, customer acceptance of exis,ng and new products and services, and other factors, including those factors described on Exhibit 99.1 to SinoHub’s Current Report on Form 8‐K filed on September 28, 2009. Any statements that are not historical 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 or phrases such as "will likely result,” “are expected to,” “will con,nue,” “is an,cipated,” “es,mated,” “intends,” “plans,” and “projec,on”) are not historical facts, may be forward‐looking statements and may involve es,mates and uncertain,es. Accordingly, although the company believes that the expecta,ons reflected in such forward‐looking statements are reasonable, there can be no assurance that such expecta,ons will prove to be correct. The company undertakes no obliga,on to update the forward‐looking informa,on contained in this presenta,on. www.sinohub.com
- 3. Virtual Electronic Supply SinoHub Contract Component Chain Business Manufacturing Purchasing Management Unit: (VCM) (ECP) (SCM) Electronic Component What Manufactures and Purchasing Purchases & sells Warehouses, (ECP) sells private-label electronic imports & delivers Function? mobile phones components electronic components Markets Southeast Asian Served? Developing Countries China China www.sinohub.com
- 4. (millions) 2009 2010 2011 North America 151 166 176 YOY 5.4% Japan 36 38 40 Western Europe 147 151 155 Developed Countries 335 356 373 China 190 205 226 1 Billion Mobile Korea 12 11 11 Phones to be sold India 151 193 233 in Developing Rest of Asia Pacific 92 92 105 Countries in 2011 La,n America E. Europe, Middle East, 127 128 138 225 266 302 Africa YOY 13% Developing Countries 797 895 1015 Source: JP Morgan www.sinohub.com
- 5. 1,200 1Billion+ 1,000 (millions) 895 797 million units 800 =1 3% CAGR 600 400 200 0 2009 2010 2011 Developed Countries Developing Countries Source: JP Morgan www.sinohub.com
- 6. Market Opportunity Business Total Addressable Unit Market S C M $1.5B E C P $8B V C M $8B* * White‐box mobile phone market China consumed US $100B of electronic components in 2009; producing US $400B of finished goods Source: Reed Electronics Research (London, UK) www.sinohub.com
- 7. • Design Housesin China upload new designs (“roadmaps”) to SinoHub’s VCM STEP 1 platform, displaying phone models planned for launch in 6 – 12 months • Customer uploads mobile phone requirements to VCM platform, SinoHub connects STEP 2 customer requirements with design house roadmaps • Customer signs contract with SinoHub to produce handsets; provides either STEP 3 (1) 20% deposit (restricted cash), & balance due pre-shipment, or (2) Letter of Credit 1 days STEP 4 • SinoHub (1) purchases design, (2) customizes design, (3) begins production 30 days STEP 5 • SinoHub collects payment, and ships to customer (point of Revenue Recognition) 3 days 45 DAYS: Purchase Order Production Payment Shipment www.sinohub.com
- 8. Two Revenue Streams Spot Sales B.O.M. Procurement Find arbitrage opportunities Customer uploads Bill of Materials Perform spot purchases ECP team seeks better pricing Deliver value to customers, If OK, customer approves supplier swap; cost savings shared generating return for SinoHub 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. Supply Chain Management (SCM) China Hong Kong At current run-rate, SinoHub processes $1BN of electronic component imports into China www.sinohub.com
- 10. Design Free to Increased Flexibility Customers Houses Reduced Time Component Product Open Access Manufacturers Distributors to Market Lower Cost Transparent Electronic Component Finished Goods Suppliers Manufacturers Customers are in charge of their business with SinoHub SCM 85% of the components consumed in Chinese electronics manufacturing are imported into China (Source: China Customs) www.sinohub.com
- 11. Component Suppliers & Product Design Product Manufacturers Manufacturers Houses Distributors Our customers in China work with China Mobile, Huawei, Samsung . . . www.sinohub.com
- 12. ● Founded 2005, mobile phone R&D firm ● 5 new phone designs per month ● 30 ‐ 40 designs in produc,on at any ,me ● Annual Revenue $250MM HuaQin started using SinoHub SCM in March 2009: “SinoHub SCM helped cut our production • Inventory management cycle time by 33% . . . • Import / Export we regard SinoHub as • Just-in-Time delivery Results a vital tool for • Movement of electronic parts efficiency and Between Projects profitability.” Mr. Jiang Qinlin Director of Purchasing www.sinohub.com
- 13. China Beijing Regional Office & Support Center Beijing Shanghai Regional Service Center Warehouse (5,300 sq. ft.) Shanghai Shenzhen 1) Headquarters (Nanshan) 2) VCM Factory (Baoan) Shenzhen 3) Customs Office (Futian) Hong Kong Warehouse 4) VCM Sales Office (Futian) (80k sq. ft.) Hong Kong Capacity: $200MM monthly throughput www.sinohub.com
- 14. Strong push for mobile phone sales in Indonesia, VCM: Deepen India, Vietnam, & Malaysia Southeast Asian Market Penetration VCM Sales team launched in 2010 VCM Factory 500+ employees Factory now producing PCBA motherboards in‐house Convert more SCM customers into ECP / VCM customers Up-Sell & Cross-Sell Increase number of products per VCM customer Enhance SCM service offering Grow Customer Base Deploy ECP and VCM Internet‐based plaiorms (planned for 2010) www.sinohub.com
- 15. Revenue Net Income $140 $128.4 $14 $12.4 Millions Millions $120 $12 $100 $10 $8.5 $79.5 $80 $8 $60 $6 $40 $4 $3.5 $29.0 $19.1 $20 $2 $1.2 $0 $0 2006 2007 2008 2009 2006 2007 2008 2009 2010 Guidance of 40% Growth to $180MM Founded: NYSE Amex: Headquarters: 2000 SIHI Shenzhen, China www.sinohub.com
- 16. (Audited, USD millions,except EPS) 2007 2008 2009 Revenue $28.8 $79.5 $128.4 Gross profit $6.7 $16.2 $22.4 Net income $3.5 $8.5 $12.4 Earnings per share – diluted $0.22 $0.40 $0.48 Number of shares (millions) – diluted 15.9 21.5 25.7 YOY Growth Revenue 51% 176% 61% Gross profit 65% 143% 38% Net income 192% 142% 46% www.sinohub.com
- 17. Q2 Q2 (Audited, USD millions, except EPS) YOY 2010* 2009 Revenue $43.9 $31.4 40 % Gross profit $7.6 $5.7 33 % Net income $2.9 $3.2 9.4 % Earnings per share (fully diluted) $0.10 $0.13 Number of shares (millions) (diluted) 28.78 25.16 * 2010 figures unaudited www.sinohub.com
- 18. (USD, millions) June 30, 2010* Assets: Cash & Cash Equivalents $9.4 Working Capital $48.5 Total Assets $78.2 Liabilities & Shareholders’ Equity Total Debt, including current portion $18.1 Total Liabilities $25.2 Total Shareholders’ Equity $53 Total Liabilities & Shareholders’ Equity $78.2 * Unaudited www.sinohub.com
- 19. Henry T. Cochran – CEO and Chairman of the Board 30+ years founding and managing companies Former CEO and president – Content Integrity & Advanced Visual Systems Former VP – Sybase Strong MIS background Lei Xia – President 15 years in electronic industry in China Significant senior management experience in the Chinese electronics industry First sales manager of Arrow Electronics’ Shanghai office Founded RGL Beijing (high‐end distributor and solu,on provider) and NEFAB China (manufacturer and packaging solu,on provider) Willa Li – CFO Years of experience working with Chinese banks Significant knowledge of electronic components industry Prior CFO of Shenzhen Excellence Investment Development Co. where he raised RMB 120 million Prior CFO of Hong Kong B&D Engine Company www.sinohub.com
- 20. Audit BOARD OF DIRECTORS Committee EXECUTIVE Harry Cochran – Chairman of the Board and CEO Lei Xia – President Will Wang Graylin – CEO, ROAM Data ‐ Extensive operaBonal and entrepreneurial skills in mobile phone industry Charles Kimball – Consultant INDEPENDENT ‐ Significant Wall Street and financial management experience as 30‐year veteran of JP Morgan Dr. Richard King – Former All American Electronics Analyst and Investment Banker; Science Advisory Board, NYU ‐ Extensive experience in financial markets as an electronics analyst and investment banker, advanced economic studies Daniel Lui – CEO, Porcheers Consultants ‐ CFO of U.S. listed Chinese company, significant experience with internal controls, MBA * Afshin Yazdian – EVP & General Counsel, iPayment ‐ SEC reporBng knowledge, strong M&A experience * Chairman, Audit Committee www.sinohub.com
- 21.
- 22. COMPANY: Susan Liu Douglas Menelly SinoHub, Inc. SinoHub, Inc. Phone: +86 150 1377‐2683 Phone: +86 139 2524‐5053 Email: susan.liu@sinohub.com Email: dmenelly@sinohub.com INVESTOR RELATIONS: Ted Haberfield HC Interna,onal, Inc. Phone: +1 (760) 755‐2716 Email: thaberfield@hcinterna,onal.net www.hcinterna,onal.net Facilitating the Mobile Device Revolution www.sinohub.com