11-16-09 Cxdc Ppt Final_revised

Improve the World with Technology Investor Presentation November 2009

Safe Harbor Statement

This presentation may contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such written and oral disclosures are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this presentation are forward-looking statements, including but not limited to, the Company’s ability to raise additional capital to finance the Company’s activities; the effectiveness, profitability, and the marketability of its products; the period of time for which its current liquidity will enable the Company to fund its operations; the Company’s ability to protect its proprietary information; the Company’s ability to secure raw material supplies to support its production plans; the Company’s ability to operate its plants efficiently; general economic and business conditions; the volatility of the Company’s operating results and financial condition; the Company’s ability to execute is expansion plans; the Company’s ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company’s filings with the Securities and Exchange Commission. Although we believe our expectations expressed in such forward looking statements are reasonable, we cannot assure you that they will be realized. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the anticipated results, and therefore we refer you to a more detailed discussion of the risks and uncertainties in the Company’s filings with the Securities & Exchange Commission. The forward-looking statements contained in this presentation are made only of this date, and China XD Plastics is under no obligation to revise or update these forward-looking statements.

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Who We Are China China XD XD

ValueCreator Creatorof ofthe theSupply SupplyChain Chain Value Develops, manufactures, and distributes modified plastics, primarily for the use in the exterior and interior trim and in the functional components of more than 30 automobile models.

Oil Refineries

Plastic Resin Suppliers

Modified Plastics Manufacturers Auto Makers Plastic Auto Parts Manufacturers

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Corporate Overview ¾ Largest Chinese Manufacturer of Modified Plastics for automobile applications in China

Key Facts ƒ ƒ ƒ

ƒ

¾

Products ƒ

¾

Headquartered in Harbin, China Total usable area of 336,400 square feet Annual Production Capacity of 70,000 tons with 19 operating production lines 396 full time employees Modified Polypropylene, modified ABS, modified Nylon, alloy plastic, engineering plastics and environment friendly plastics, 137* of which are certified by auto makers

Applications and Customers ƒ

ƒ

Mainly used in automotive exterior and interior trim and functional components, as well as industrial plastic parts and components used in large-scale oil fields, mining machinery, vessel propulsion system, high-speed trains, aerospace etc. End users include China FAW, the largest auto maker in China, Brilliance Auto, Hafei Auto, and among other car manufacturers in China.

* as of September 30, 2009

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Products and Applications End Applications Product Portfolio Divided into 6 Categories

Over 90% of Products are Modified Plastics for Automobiles

• Modified Polypropylene

Interior parts and components (Such as Instrument board, glove box, etc.)

Exterior parts and components (Such as door mirror, front and rear bumpers, etc.)

• • • • •

Modified ABS Modified Nylon Plastics Alloy Environment-friendly plastics Engineering Plastics

Function components (Such as air conditioner’s shell, engine cover , etc.)

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Sample of End -Users End-Users

6

Capital Market Summary

NASDAQ Global Market

CXDC

Share Price (Previously closed on 11/13/09)

$7.04

Market Capitalization

$287.3 MM

Shares Outstanding (fully diluted)**

40.8 MM

Net Revenues (TTM)

$114.5 MM

Gross Profit (TTM)

$24.3 MM

Net Income (TTM)*

$18.4 MM

Earnings per Common Share (Fully diluted)*

$0.45

P/E (TTM)**

15.6X

Fiscal Year End

December 31

* Excluding $3.2 million non-cash stock compensation expense **Diluted Shares Outstanding (As of September 30, 3009); EPS and PE (LTM ended September 30, 2009)

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Key Milestones

Listed on the Nasdaq Global Market

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Nov 2009

19 production lines in use, annual capacity reached 70,000 tons

6

Jan 2009

Xinda Macromolecule Material Research Institute was established

5

Nov 2007

Capacity more than tripled and reached 25,000 tons

4

Jan 2006

First 2 production lines were launched with annual capacity of 7,000 tons

3

Jan 2005

Harbin Xinda Macromolecule Material Inc. was founded

2

Sep 2004

1

Jul 1985

Harbin Xinda Nylon factory, the predecessor of the Company was founded

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Market Opportunity

Automobiles Automobiles

China Automobile Production ( in million)

China Automobile Sold (in million) Sold 12.4

14.0 12.0 10.0 8.0

7.3

6.0

23.3%

8.9

9.6 29.2%

21.9%

4.0 2.0

7.9%

0.0

2006

2007

2008

40% 35% 30% 25% 20% 15% 10% 5% 0%

2009E

Key Drivers:

•

Rising income and growing affluence of middle class in China

•

Growing Consumption of automobiles in China

•

Economic Policy stimulating the consumption of automobiles in China

Source: National Bureau of Statistics of China

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Market Opportunity

Modified Modified Plastics Plastics for for Automobiles Automobiles

China Automotive Plastics Demand

Domestic vs. Imports

Volumes ("000 metric tons) 1,600

1,414

1,400

31%

1,200 1,000 800

23%

955

40%

2009 E

(0.7mm tons)

(1.4mm tons)

30% 25%

730

20% 15%

600 11%

400

10%

35%

5%

200

0%

-

2006

2007

2008

69% 46%

44% 29%

$1.01

35%

31%

2009E

Sales ($ billion) $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $-

2004

35%

33%

1,060

$2.86

65%

50% 40%

$1.96

30%

$1.36

Domestic

Imported

20% 10% 0%

2006

2007

2008

2009E

Source: National Bureau of Statistics of China, “Chinese markets for Automotive Plastics” from Research and Markets, and China XD’s estimate

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Cash For Clunkers vs. Cars Go Villages

Cars Go Villages

Cash For Clunkers

•

Borrowing from future sales?

•

Creating a new market for automobiles, most buyers are first time and potentially repeating buyers

•

Has ended on Aug. 24, 2009

•

Will last until the end of this year

•

Enough for 650,000 to 850,000 cars*

•

Enough for 1-1.7MM cars**

*: Based on $3,500 or $4,500 rebate per car **: Based on RMB 3,000 or 5,000 rebate per car

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Competitive Advantages Strong Competitive Position

•Customized products

• Geographic Advantage 9 Adjacent to China’s largest automobile center 9 The northern region of the PRC is a relatively low cost resource center

•High barrier of entry

Attractive ROI

•Large customer base

9 University-educated local workforce available • Strong Government Support 9 Extended tax benefits: 15% tax rate through 2011 9 Superior credit profile at local banks over years

• Leading National R&D Center

•Lower cost production

9 Proprietary formulas developed by our own research create a high barrier of entry

• Excellent Customized Service 9 Long history of excellent customized service to auto OEMs in China

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Manufacturing Process

Measuring and Blending

Plasticizing and Extrusion

Cooling and Cutting

Homogenizing and Packing

State of the Art Manufacturing Facilities

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Technology Innovation

Panel of Consultants: Top Scientists and Experts in Modified Plastics ¾ ¾ ¾ ¾ ¾ ¾

Wu, Zhongwen: Chief Scientist, Jilin University. Zheng, Kai: Secretary General, China's Plastics Engineering Industry Association. Li, Bin: Eastern Forest Industry University. Xing, Yuqing: Harbin Industrial University Xuan Zhang:Changchun Technology University Jiang, Zhenhua: Jilin University

Talents at The Research Institution ¾ ¾

66 researchers with average working experiences over ten years in modified plastics research and development 90% with PhD. Master or bachelor degrees

IndustryLeading LeadingModified ModifiedPlastic PlasticResearch ResearchInstitute Institute Industry ¾ ¾

The most advanced auto-specific polymer research institution in China, Nearly 80 sets of state of the art equipments in macromolecule industry.

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Strategic Location

Daqing

Currently, the company is focusing mainly on coverage of the Northeast China

Harbin Changchun Shenyang Beijing

By 2013, the company plans to cover North China markets and to become one of the major suppliers in this region By 2015, the company plans to cover East China markets and to become one of the major suppliers in this region

Tianjing

Qingdao Nanjing

Chongqing

Wuhan

Shanghai Zhejiang

Chengdu

Fuzhou Guangzhou

Shenzhen

● Represents the main targeted market in Northeast China ● Represents the main targeted market in North China ● Represents the main targeted market in East China

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Focused Growth Strategy Geographic Expansion Targeting Major Automotive Manufacturing Regions

The Northeast base to achieve sales output of 100,000 tones by 2010.

Strategic Rationale

Daqing Harbin

100,000 tons

The North China base to achieve sales output of 100,000 tons by 2011, together adding the total production up to 200,000 tons.

Achieve economy of scale

¾

Sustain investment in research and development to ensure the leading edge technology and develop more number of high value-added products

¾

Increase market share through geographic expansion of sales network and selected acquisition

Changchun Shenyang Beijing Tianjing

200,000 tons

Qingdao

The East China base to achieve sales output of 100,000 tons by 2013, with the total production up to 300,000 tons. 300,000 tons

¾

Chongqing

Nanjing Wuhan

Shanghai Zhejiang

Chengdu

Fuzhou Guangzhou Shenzhen

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Financial Highlights

$55.8 A C

G

R

9% 4 1

%

41 .3 ≈ th ro w G

*

$20.8

$17.3

≈

$75.8

≈

CA GR

R G A C

8% 3 1 ≈

Yo

Y

Y Yo

h

.7%

15 0%

h Gr ow t

$94.5

t ow r G

49

Yo Y

69 .3

Gross Profit ($ Millions)

≈

Revenues ($ Millions)

%

Net Income ($ Millions)

$13.9

$34.2

$6.3 $13.4

2006

$2.8

2007

2008

9Mon 2008

9Mon 2009

2006

2007

2008

9Mon

9Mon

2008

2009

* Net income for 9Mon 2009 is adjusted by excluding non-cash stock compensation of $3,191,430

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Financial Highlights

Revenue Revenue and and Margin Margin Performance Performance

* Operating margins for 2Q2009 and 3Q2009 are adjusted by excluding non-cash stock compensation of $434,093 and $2,757,337, respectively

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Financial Highlights Third Third Quarter Quarter 2009 2009

• Revenue was $36.2 million, 62.1% increase from the Q3 2008 • Gross profit was $8.4 million, 45.9% increase from the Q3 2008 • Gross profit margin was 23.3%, compared to 25.8% in the Q3 2008 • EBITDA was $7.6 million, 57.1% increase from the Q3 2008 • Net income was $4.0 million, while non-GAAP net income excluding the non-cash charges of $2.7 was $6.7 million, 58.2% increase from the Q3 2008 • Diluted earnings per share was $0.10 and non-GAAP diluted earnings per share was $0.17, up from diluted earnings per share of $0.13 for the Q2 2009

$ in millions

Revenue Gross Margin Op Income (Loss) Depreciation & Amortization EBITDA Net Income (Loss)

Third Quarter ended 2009

2008

$36.2 23.3% $4.3 $0.6 $7.6 $4.0

$22.3 25.8% $4.7 $0.3 $4.9 $4.2

YoY Changes 62.1% -7.7% 100.8% 57.1% -6.8%

First 9 Months ended 2009

2008

$94.5 22.1% $14.0 $1.5 $18.7 $13.0

$55.8 24.9% $12.0 $0.7 $12.6 $11.4

YoY Changes 69.3% 16.3% 112.6% 47.9% 13.4%

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Financial Highlights Financial Financial Ratios Ratios

Significant Ratios 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 Selling Expenses

0.1%

0.9%

0.4%

0.2%

0.2%

0.3%

G&A Expenses

0.9%

2.9%

3.2%

4.0%

3.5%

10.0%

R&D Expenses

1.09%

1.1%

1.1%

1.1%

0.7%

1.0%

Current Ratio

1.1

1.2

1.1

1.3

1.4

1.9

Inventory Turnover

2.3

1.7

2.1

1.5

1.7

1.8

Days Sales Outstanding

70.0

67.0

50.6

20.0

27.4

29.8

Return on Assets

9.9%

7.1%

3.5%

6.9%

7.7%

6.3%

Return on Equity

29.2%

19.4%

9.3%

14.3%

14.9%

9.8%

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Financial Highlights Balance Balance Sheet Sheet

Sept. 30, 2009

Dec. 31, 2008

5,065

3,869

Accounts receivable

11,977

11,235

Inventory

15,277

12,439

Total Current Assets

43,282

44,755

Property, plant and equipment, net

19,676

19,333

63,202

64,714

627

113

Short Term Debt

20,216

20,520

Total Liabilities

23,026

40,653

40,176

24,061

63,202

64,714

($ '000 ) Cash and cash equivalents

Total Assets Accounts payable

Total Shareholders' Equity Total Liabilities and Shareholders’ Equity

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Management Jie Han, Chairman and Chief Executive Officer – Mr. Han founded Harbin Xinda Nylon Factory in 1985 and cofounded Xinda in 2004. With 25 years of industry experience, Mr. Han is an expert in the modified plastic industry. He currently serves as executive director of China Plastic Processing Industry Association, as an outstanding entrepreneur at the industry of modified plastics, and as director of the Heilongjiang Industry Commerce Association. In addition, Mr. Han serves as a deputy to the Harbin Municipal People’s Congress. Taylor Zhang - Chief Financial Officer – Mr. Zhang is a native of Harbin and has over seven years of experience in finance and operation in a broad range of industries. Prior joining China XD, Mr. Zhang served as CFO of Advanced Battery Technologies, Inc (Nasdaq: ABAT). From 2007 to 2008, he served as Executive Vice President of Finance in China Natural Gas (Nasdaq: CHNG). From 2005 to 2007, Mr. Zhang worked as a research analyst in New York Private Equity . He holds a MBA from University of Florida. Qingwei Ma, Chief Operating Officer – Appointed as Chief Operating Officer in 2008, Mr. Ma had been serving the company and was General Manager of Xinda Macromolecule from 2004 to 2008, during which Mr. Ma led the successful establishment of sales network, building a comprehensive system ensuring effective and efficient purchase, production, marketing and other functions. Prior to joining Xinda, Mr. Ma worked for Harbin Xinda Nylon Factory, the Company’s predecessor, for 6 years. Mr. Ma has 12 years of experience in the modified plastics industry. Junjie Ma, Chief Technology Officer – Mr. Ma has over 12 years of experience in the modified plastic industry. He successfully established the research institute and helped the Company to gain 122 certifications from Chinese auto makers, the largest number of certifications among Chinese companies. He has organized and formed a top class science advisory team and maintains close collaboration relationship with Chinese macromolecule well-known science R&D institutes and universities. As a result, Mr. Ma is effectively taking full advantage of state-of-the-art R&D devices and top technique talents to keep the institute’s leading position in China.

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Independent Directors Lawrence W. Leighton – Chairman of Audit Committee Mr. Leighton has had an extensive 40 year international investment banking career. Mr. Leighton received his BSE degree in engineering from Princeton University and an MBA degree from Harvard Business School. His previous positions includes Co-Head of the Corporate Finance Department at Clark, Dodge & Co. , Limited Partner of Bear Stern, Managing Director of JPMorgan Chase Bank and CEO of the U.S. investment bank of Credit Agricole, the major French Bank. Cosimo J. Patti – Chairman of Compensation Committee Mr. Patti’s previous positions include roles as Senior Director of Strategy Management, Director of Business Strategy, and Senior Vice President of Lehman Brothers. He is an Arbitrator of SEC and National Association of Securities. Mr. Patti has been an Independent Director of NYSE and Nasdaq listed companies. Linyuan Zhai – Chairman of Nomination Committee Mr. Zhai worked for China FAW Group Corporation for 37 years with abundant experience in terms of technology, production, and business management. He is a Senior Expert in the auto industry. Mr. Zhai served as general manager of automobile manufacturing , successfully led Four Ring Company, a subsidiary of FAW group, to go public in China. He is one of the pioneers and outstanding contributors of FAW group’s success. Yong Jin - Independent Director Jin, a professor at Tsinghua University and academician of the Chinese Academy of Engineering, is an executive member of Chemical Industry and Engineering Society of China and Chinese society of particuology, vice chairman of China Institute of Ecological Economy, director of Industrial Ecology Economy and Technology Committee, Council Convenor of the Chemical discipline in the State Council Academic Degrees Committee, professional advisers for Beijing Municipal Government, Lectureship Award recipient in fluidization by American Institute of Chemical Engineers (AIChE), the world's leading organization for chemical engineering professionals, with more than 40,000 members from 93 countries, consultant for the Germany magazine " Chemical engineering & technology ". Jin has published and presented more than 350 papers in important journals and conferences domestically and internationally, 138 of which were included in Science. Jin also has more than 30 patent applications.

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Investment Highlights

1

Tremendous Market Demand – Driven by Large and High Growth Addressable Automobile Market in China

2

High Barriers to Entry – Due to Strict Certification Requirements by Automotive Manufacturers

3

Industry Leading R&D Center – State of the Art Equipment and Experienced Research Team

4

Largest Number of Certification – Largest Product Portfolio Certified by Leading Auto Makers in China

5

Proven Operating Model – Rapidly Growing, Sustainable and Profitable Business

6

Seasoned Management Team – With Extensive Professional Knowledge and Years of Experience of Serving Auto OEMs

7

Well Defined Growth Strategy – Balanced Organic Growth and Expansion through Acquisition

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Contact Information China XD Plastics Company Ltd.

Investor Relations Firm:

Mr. Taylor Zhang, CFO Phone: +1-212-747-1118 (New York) Mr. Allan Lao, IR Director Phone: +86-451-84346600 (China) Email: [email protected] Website: www.chinaxd.net

CCG Investor Relations Inc. Mr. Crocker Coulson, President +1-646-213-1915 [email protected] Mr. Ed Job, CFA Phone: +1-646-213-1914 (New York) [email protected]

SEC Attorney

Auditors

Crone Rozynko LLP 101 Montgomery Street, Suite 1950 San Francisco, CA94104 Phone: (415)955-8900 Fax: (415)955-8910 Email: [email protected]

Moore Stephens Hong Kong 905 Silvercord Tower 2, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong. Tel: +852-2375-3180, Fax: +852-2375-3828 web: www.ms.com.hk A member firm of Moore Stephens International Limited

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Appendix: Non-GAAP Reconciliation

Three Months Ended September 30, 2009 Net Income (MM)

Basic EPS

Diluted EPS

Adjusted Net Income - Non GAAP

$6.7

$0.17

$0.17

Non-Cash Stock-based compensation (1)

$2,7

$0.07

$0.07

Net Income - GAAP

$4.0

$0.10

$0.10

Nine Months Ended September 30, 2009 Net Income (MM)

Basic EPS

Diluted EPS

Adjusted Net Income - Non GAAP

$16.2

$0.68

$0.41

Non-Cash Stock-based compensation (1)

$3.2

$0.14

$0.08

Net Income - GAAP

$13.0

$0.54

$0.33

(1) The adjustment to Non-GAAP is related to non-cash stock compensation

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