AMEX: RCH
FORWARD LOOKING STATEMENTS
Our discussion of the Company’s financial and operational outlook contains predictions, estimates and other forward-looking statements. Use of words like “estimate,” “projection,” “expect,” and similar expressions is intended to identify these statements. While these forward-looking statements represent our best current judgment on what the future holds, they are subject to risks and uncertainties that could cause the actual results to differ materially. By making these forward-looking statements, we undertake no obligation to update these statements for revisions or changes after the date of this presentation. In addition to the factors we will discuss later, important factors relating to our business are described in our most recent filings with the Securities and Exchange Commission.
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Snapshot AS of 11/21/2007
• • • • • • • • • • • •
AMEX Symbol: RCH Shares Outstanding: 50.8M Recent Price: 6.80 Range: 4.80 - 27.25 Avg Vol (3m): 796,587 Market Cap: 347.34M P/E (ttm): 38.64 EPS (ttm): 0.18 Profit Margin (ttm): 10.57% Revenue (ttm): 83.63M Revenue Per Share (ttm):1.683 Qtrly Rev Growth (yoy): 90.40%
• • • • • • • • • • • •
Gross Profit (ttm): 17.24M EBITDA (ttm): 16.19M Net Inc Avl to Common (ttm): 8.84M Diluted EPS (ttm): 0.18 Qtrly Earnings Growth (yoy): 105.10% Cash (mrq): 4.07M Total Cash Per Share (mrq): 0.08 Total Debt (mrq): 7.01M Total Debt/Equity (mrq): 0.19 Current Ratio (mrq): 2.61 Book Value Per Share (mrq): 0.74 Operating Cash Flow (ttm): -7.93M
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Corporate Overview
Industry Leader in high-end building envelope solutions Specialized in Building aesthetics, acoustics, structural integrity and thermodynamics.
Operates in China as “KGE”
Founded in 1992
Headquartered in Zhuhai, China
Excellent Market Coverage with Offices and Branches in Major Chinese Cities
Beijing, Guangzhou, Hong Kong, Nanjing, Qingdao, Shanghai, Shenzhen, Tianjin, Wuhan & Zhuhai
Advanced Manufacturing Facilities
Diversified Management Team
400+ full-time employees
State-of-Art Design and 3D Animations Studios
53 patents
100+ major projects across China 4
Investment Highlights
Strong financial performance with accelerating margins from overseas expansion and value added products
Excellent national reputation based on depth of experience with destination projects
Turn-key model yields cost, quality advantages
Technology leader for high-end curtain wall market
Lasting customer relationships create renewed business
Growing R&D capabilities in ecological and energy-efficient building systems and and
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Competitive Advantages
Established track record on architecturally ambitious destination projects
Leading-edge technology enhances profitability
Start-to-finish business model
World-class quality and safety standards
Efficient China cost structure
50% cost advantage over EU and U.S. competitors (management est.)
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Destination Projects The Beijing Botanical Garden Features: Double-glazed glass panes, steel structures
An automated irrigation and sprinkler system
Automatic sensor solar control system
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Destination Projects The National Grand Theater
Feature: A combination of titanium panels and low-iron glass panels
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Destination Projects
Several major projects in Middle East and S.E. Asia
National Conference Center in Hanoi, Vietnam Doha high- rise office building, Qatar 9
Customized Solutions
Solutions for landmark projects Airport, railway station; Opera theater, greenhouse, museum City statues and commercial buildings
The Inner Mongolia Airport
The Wuhan Art and Culture Centre
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Leading-edge Technology
53 patents in China Related to fixed-point glass technology
Emphasis on continuing R&D Supports high-end curtain wall and building envelope technology
96 designers and engineers
R&D JV with Tsinghua University
Results Reduced need for heat and air conditioning Automatic blind and other façade controls Sustainable buildings using clean, renewable power Reduced building materials and installation costs 11
World-Class Quality Standards
ISO 9001 – International Quality System Certification – Feb 2005
ISO 14001 - International Environmental System Certification – April 2005
ISO 18001 - International Safety System Certification – June 2005
Class A Design License of Curtain Wall Engineering in China authorized by National Ministry of Construction (NMOC)
Class
A Construction License of Structural Steel Engineering authorized by NMOC
Class A Construction License of Curtain Wall Engineering authorized by NMOC
Class A Construction License of Building Automation authorized by NMOC
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Honors and Awards
In 2006, KGE receives an award for one of the ten greatest achievements in construction technology
CAE receives the 2003 Zhantian You Award, the highest prize in civil engineering China
Ken Luo is honored at the International Assoc. of Architects
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Growth Strategy Expand domestic market share Leverage strong reputation for repeat business Increase margins through international growth
Asia-Pacific Middle East U.S. Europe
Australia, Hong Kong, Macau, Southeast Asia Qatar, Dubai
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Expand Domestic Share
More than 15 projects under construction in China
Expect to finish 20 projects in China in 2007-10
Overseas Markets include Hong Kong, Macau
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High Customer Retention
Governments: National and Municipal
Building developers: China Vanke Co., Ltd Wuhan Real Estate Group
Main contractors: China State Construction Engineering Corporation Shanghai Construction Group Beijing Urban Construction Engineering Co., Ltd.
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International Expansion
Contract bid win rate: International: 45% China: 60%
FY 2006 Revenues
FY 2009E Revenues
12%
40% 60%
88%
PRC
Overseas
PRC
Overseas 17
Sales Growth 2005 - 2008 $ millions
143.7
160 140 120
CAGR = 42.2% 95.9
100
64.0
80 60
50.0
40 20 0
2005A
2006A
2007E
2008E
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Revenue Distribution
70% from public sector; 30% from private sector 90% Fixed-price contracts Majority of values are revised higher Realize profit when costs are controlled 10% Cost-plus-fee contracts Reimbursed for allowable costs
FY 2006 Revenues $19,210
`
$44,822 Government
Commercial
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Profit Growth 2005 - 2008 $ millions 25
25.9 CAGR = 63.7% 15.1
20 10.0
15 10
5.9
5 0 2005A
2006*
2007E
2008E
*Pro-forma net income adds back one-time, non-cash charge stemming from reverse merger in 2006 20
Income Statement
04-05% Change
FY *2006
05-06% Change
Q1 2006
Q1 2007
49,978
73.4%
64,032
28.1%
12,719
14,430
Net Income
5,910
67.5%
6,150
4.1%
1,470
1,696
EPS
$ 0.14
$ 0.03
$ 0.03
($ in thousands) Net Sales
Pro Forma Net Income Pro Forma EPS
FY *2005
$ 0.14 **10,000 **$0.20
69. 2% 42.9%
*For Fiscal Years Ended December 31 ** Pro-forma net income and EPS adds back a one-time, non- cash charge stemming from reverse merger in 2006
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Investment Summary
Strong financial performance with accelerating margins from overseas expansion Excellent national reputation based on depth of experience with destination projects Start-to-finish model yields cost, quality advantages Technology leader for high-end curtain wall market Lasting customer relationships create renewed business
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Balance Sheet December 31 ($ in thousands, except ratio and order backlog)
March 31
2005
2006
2007
506
2,116
2,568
Current assets
21,712
43,821
59,527
Order backlog*
26.2M
10.0M
19.6M
Total assets
22,320
44,861
60,428
Current liabilities
14,016
21,784
35,453
Total liabilities
14,016
24,349
38,188
8,305
20,513
22,240
Cash and cash equivalents
Stockholder’s equity
*Backlog refers to the value of signed contracts signed that have not entered the construction phase
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Contact Information
Ken Yi, Luo 105 Baishi Road Jiuzhou West Avenue Zhuhai 519070 People’s Republic of China +86-756-8538908 www.caebuilding.com
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Start-to-Finish Model Design
Tendering
Provide alternate solutions to add value and reduce cost
Involved with architect from the beginning
Research & Engineering
Fabrication
Installation
Close process management provides cost and quality control
Highly skilled and experienced field works & project management staff
Quality control during fabrication
Maintenance after installation
Collaborate with academics to bring advanced technologies to market
Inspections during installation
CAE 拥有： 1. 建筑设计能力 2. 建筑细部的深化设计能力 3. 建材加工及厂家订制能力 4. 多种建筑专利技术 5. 建筑安装动画制作能力 6. 国内外建筑工程管理施工能力
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增长模式 自营工程： 1. 扩大钢结构工程加工制造、施工； 2. 扩大特殊工程接单能力，如中小城市； 3. 完善专业及配套设施。
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区域性并购： 主要在上海、北京及重庆各并购一个同级及相同经营理念的企 业，尽快做强各关键大城市，同时分散企业资质风险。 估计每家企业（连生产厂） 3000 万美元营业额， 200 万美 元盈利，约 1000 万美元现值。 每个并购后可增加至 5000 万美元营业额， 600 万美元盈利。
收购使用资金 3000 万美元，投入生产 2000 万美元，共投入资 金 5000 万美元，增加营业额 15000 万 / 年，盈利 1800 万美元 / 年。 30
专利技术生产 投入 2000 万美元研发、生产及流动资金，开发已有专利产品， 包括： 1. 钛金属板建筑用材 2. 特殊清水混凝土板材的流水线加工技术（利用现有合作厂的蒸汽、 污水处理生产线及喷涂线技术） 3. 生产玻璃花园产品 4. 生产节能透气窗产品 5. 生产太阳能遮阳帘产品 6. 其他专利技术不能委外加工产品 31
海外工程
创造另外一个中国制造模式 以往的中国制作模式：
外国人设计 特殊部件
价格低，无自主知识产权 受控于外方，盈利极少 中国赚人力资源的钱
分拆零件
进口
中国生产组装 贴牌
外国销
售 32
CAE 工程特点：
CAE 的中国制造模式
—— 非一般廉价中国制造 1. 利用中国大量的工程经验以 及十多年来外国建筑师在中国的 工程科技成果
CAE 在中国有大量的工程设 计、制造、施工经验和教训， 有大量的与国外设计师 合作的经验和教训
2. 利用中国的廉价高级技术管 理人员 3. 利用自主设计的中国制造 4. 利用中国的技术劳动力 33
资金需求 2007
单位：
2008
2009
US$
营业额
利润
资金需求
营业额
利润
资金需求
营业额
利润
资金需求
CAE 工程
90
14
10
130
20
10
180
28
10
50
8
30
100
12
50
15
50
8
30
80
14
10
5
20
5
30
50
15
10
20
250
41
100
430
69
70
国内（并购 ） 国外（并购 ） 产品生产
5
95
1
15
以上资金包括融资、借贷
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