Simplifying the Shipping Process

Transcription

1 Simplifying the Shipping Process Investor Presentation (NASDAQ: SINO) v October 2008

2 Safe Harbor In this presentation, we make estimates and forward-looking statements that are the current beliefs and opinions of certain members of Sino-Global management. These statements are indicated by such terms as plans to, preliminary, goal, will, believe, targeting, expect, anticipate, intend and likely. They may include statements regarding future revenues or expenses, earnings and operations, as well as statements regarding demand for the company s services and the company s ability to achieve its targets, goals and initiatives. We can give no assurance regarding the achievement of these forward-looking statements, as they are only estimates, and the actual outcomes may be significantly different. Additionally, we expect that these forward-looking statements will change in the normal course of our business, and management specifically disclaims any obligation to update forward-looking statements that we may make in today s presentation. Please refer to the sections captioned Forward Looking Statements and Risk Factors in Sino-Global s Form 10-KSB, September 29, 2008.

3 Who We Are We are a leading, non-state-owned provider of high-quality shipping services registered in the United States in 2001 and operating primarily in China.

4 Company Overview History Registered in the United States in 2001 IPO on NASDAQ Capital Market in May 2008 Business A leading, non-state-owned shipping agency Operating in the United States, Mainland China, Hong Kong and Australia Providing high-quality shipping agency services surrounding the entire shipping process, into, within, and away from China s ports ISO9000 and UKAS certified in recognition of the quality of our services Key Financial Data Location For the years ended June 30, 2007 June 30, 2008 Revenues $10.09 million $15.1 mil Net income $1.04 million $0.1 mil Head Office in New York, U.S.A. Operational headquarters in Beijing, China Subsidiaries in Perth, Australia and Hong Kong, China Local branches in six of China s 76 ports and contractual arrangements in all those where we do not have branch offices

5 Our Services Intelligence and Analysis Conduct analysis surrounding prospective shipments, including timely weather reports and port information that help clients realize efficient and economical shipping solutions Leverage our extensive network and strong market position to negotiate competitive rates with local ports for husbanding, unloading, and loading our clients vessels Audit port bills for unreasonable charges that violate regulatory guidelines, helping our clients remain competitive On-the-ground Execution and Support Handle paperwork to avoid duplicative layers of administration Coordinate with port authorities to manage customs processes as well as oversee and settle cargo claims Provide strategic recommendations for complementary services such as trucking and warehousing Work with vessels of all sizes and types and accommodate diverse shipping requirements

6 Port Services Network Operational headquarters Port Branches Beijing Qinhuangdao Tianjin Qingdao Offices in six Chinese ports: Fangchenggang, Ningbo, Qingdao, Qinhuangdao, Tianjin and Zhoushan Contractual arrangements in other 70 ports in Mainland China Fangchenggang Zhoushan Ningbo Hong Kong Subsidiaries in Perth, Australia and Hong Kong, China Able to offer a consistently high level of service under the Sino-Global brand in all Mainland Chinese ports, as well as Hong Kong and Western Australia

7 Australia China Service Subsidiary in Perth, Western Australia Contractual arrangement with leading Australian agency bringing greater number of ships serviced in China Service Western Australia s busiest ports including Dampier, Hedland and Walcott Enhance service to existing clients, especially those operating in the steel industry Attract new business opportunities 145 million tons (36%) of the 400 million tons of iron ore imported into China in 2007 originated in Western Australia* *Source: China Customs

8 Our Strengths Ability to offer a consistent level of service in each of Mainland China s 76 commercial ports as well as Hong Kong and Western Australia Quality of services provided to customers Strength of information management system Strength of personnel and administration Reputation for reliability and responsiveness to customer requests Low-cost expansion strategy Ideally positioned between two large, state-owned competitors and over 1,400 small agencies with limited reach and funding Positive relationships with third parties in local ports ISO9001 and UKAS certified to recognize the quality and efficiency of our services

9 Our Opportunity Early mover advantage Favorable macro environment Highly fragmented market Room for significant consolidation

10 Industry History 1953: PRC nationalizes all foreign shipping interests and forms a state-owned shipping agency with 100% market share. 1985: PRC reforms industry and introduces a second state-owned shipping agency. 1990: PRC adopts the International Ship Agency Management and Stipulation which allows state-owned companies to compete in the shipping agency industry. 2001: Sino-Global founded under the name Sino-Global Shipping Consulting Ltd. with subsequent name change to Sino-Global Shipping Agency, Ltd. 2002: Further reforms allow private entities and joint ventures between Chinese and foreign entities to compete in the shipping agency industry & 2003: The Chinese and American Marine Transportation Agreement (2003) and the New Round Chinese and European Union Marine Transportation Agreement (2002) are signed, allowing shipping transportation enterprises that are wholly owned by American and European Union businesses, respectively, to provide shipping agency service for their parent companies. 2008: Sino-Global lists on NASDAQ Capital Market under ticker: SINO.

11 Industry Growth The shipping industry in China is expanding rapidly in line with the growing Chinese economy Volume of Freight Handled in Coastal Ports * Total Value of Imports & Exports * MILLIONS OF TONNES 1.6 CAGR = 20.7% US$ TRILLION 0.62 CAGR = 29.8% *Source: China Statistical Yearbook 2007

12 Our Strategy Attract, motivate and retain top talent Expand internationally through contractual arrangements with leading local agencies Establish local branches in additional ports in China Increase our market share through acquisition of smaller competitors in a highly fragmented market React quickly to opportunities to offer new services to our clients Maintain working relationships with third parties in port cities Increase profile of United States operations

13 Organic Growth Opportunity Industry opened to private competition in 2003, before which two state-owned shipping agencies held a duopoly More than 1,400 small agencies now compete as well Our advantage: With approximately 1% market share in 2006, we believe we are ideally positioned to begin consolidating the small agencies while competing with the two large, state-owned competitors on quality of service

14 Acquisition Opportunities A highly fragmented industry and strong cash position creates opportunity to acquire peers and expand our market share. We make acquisitions with the following goals: Acquire top talent and experience Expand our operations in China s 76 ports Obtain local knowledge and contacts Expand and differentiate our service offering

15 Our Clients Two of our key clients are: Beijing Shou Rong Forwarding Service Co., Ltd, an affiliate of Capital Steel, providing services for all iron ore shipments into China. Jardine Shipping Agencies (Hong Kong) Ltd, a shipping service provider and key representative of BHP Billiton Iron Ore Pty Ltd, one of the world s largest iron ore providers based in Australia We provide shipping agency services to clients from eight different countries Australia, Greece, Hong Kong, Italy, Norway, South Korea, Switzerland, Thailand and the United States of America

16 Iron Ore Imports MILLION MT 112 Chinese Iron Ore Imports * CAGR = 27.9% China is currently the world s largest consumer of Iron Ore * *Source: China Customs Iron ore shipments provide the majority of Sino- Global s revenue Iron ore is a key resource supplied to China by sea Strong future demand means strong revenue growth for Sino- Global

17 Strong Top Line Growth Revenue Net Income US$ MILLIONS % CAGR US$ THOUSANDS 530 1, * 2007* 2008* 2006* 2007* 2008* *Full year numbers are from July 1 until June net income includes costs associated with becoming a public company and currency exchange rate losses

18 Full Year 2008 Earnings Results (in US Dollar) Financial Year Ended June Y/Y (%) Total Sales 15,087,238 10,090,879 8,924, % 13.1% Income from Operations Net Income 174, ,694 1,260,918 1,040, , , % -87.1% 104.7% 96.4% EPS % 100% Cash and Cash Equivalents 9,603, , ,026 1,725.44% 47.8% Total Assets 12,387,814 3,752,561 1,805, % 107.8% Total Current Liabilities Non-controlling Interest 2,386, ,001 1,788, ,610 1,257,348 (66,362) 33.4% -15.8% 42.3% n/a Net Assets 9,702,440 1,655, , % 169.3%

19 Contact Information For more information on Sino-Global, please contact: In the United States: Ms. Manxi Liu Ogilvy Financial, New York Tel: In China: Ms. Flora Tian Ogilvy Financial, Beijing Tel:

20 Appendix: Management Team Mr. Cao, Lei Director and CEO Mr. Zhang, Mingwei Director and CFO Mr. Dong, Xun Yi COO Mr. Huang, Zhi Kang Vice President Founded Sino-China in 2001 Prior to founding Sino-Global, Mr. Cao was a chief representative of Wagenborg-Lagenduk Scheepvaart BV, Holland, director of Penavico- Beijing shipping agency, and a seaman for COSCO-Hong Kong Received an EMBA degree in 2008 from Shanghai Jiao Tong University Director and CFO since 2007 Former partner in Baker Tilly China, and a lecturer at Monash University in Australia Received a Bachelor s and Master s degrees in accounting from Tianjin University of Finance and Economics, and an additional Master s degree in Commerce from the University of Newcastle A Certified Management Accountant in Australia Served as chief operating officer since September 2008 Worked for 22 years with Penavico Yantai, a branch of Cosco Logistics filling various roles including deputy general manager Worked at No. 2 Company of Yantai Port from 1981 to 1986 Received a Diploma from Yantai Water-Transport Technology School Served as vice president since 2002 Prior to becoming VP, served in various roles with Sinoagent Received a Bachelor s degree from Guangxi University in 1999