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8-K - Highpower International, Inc. | v213646_8-k.htm |
EX-99.1 - Highpower International, Inc. | v213646_ex99-1.htm |
Corporate Presentation
March 2011
Providing Solutions for Clean Energy
Anytime and Everywhere
Safe Harbor
This presentation may contain "forward-looking statements" within the meaning of the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995 related to the
Companys future net
income, net sales, capital expenditures, gross margin, market share and EBITDA (earnings before
income taxes, depreciation and amortization) and the global demand for Li-ion battery products. Such
statements involve known
and unknown risks, uncertainties and other factors that could cause the
actual results of Highpower International (HPJ or the Company) to differ materially from the results
expressed or implied by such statements. These risks
and uncertainties include, without limitation, the
current economic downturn adversely affecting demand for the Companys products, fluctuations in
the cost of raw materials, the Company's dependence on, or inability to attract additional, major
customers for a significant portion of its net sales, the Companys ability to increase manufacturing
capabilities to satisfy orders from new customers, changes in the laws of the PRC that affect the
Company's operations, the Companys
ability to complete construction at its new manufacturing facility
on time, the Companys ability to control operating expenses and costs related to the construction of
its new manufacturing facility, the devaluation of the U.S. Dollar relative
to the Renminbi, the
Company's dependence on the growth in demand for portable electronic devices and the success of
manufacturers of the end applications that use its battery products, responsiveness to competitive
market conditions, the Companys
ability to successfully manufacture Li-ion batteries in the time frame
and amounts expected, the market acceptance of the Companys Li-ion products, and changes in
foreign, political, social, business and economic conditions that affect the Companys
production
capabilities or demand for its products. Accordingly, although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, there can be no assurance
that such expectations will prove
to be correct. The Company has no obligation to update the forward-
looking information contained in this presentation.
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Highpower at a Glance
Leading developer, manufacturer and marketer of Nickel-Metal
Hydride (Ni-MH) and Lithium-ion (Li-ion) rechargeable batteries and
related products
NASDAQ: HPJ - Founded in 2001 and became public in 2008
Global distribution and leading OEM customers
Estimated 2010 Revenues of $105 million
Headquartered in Shenzen, with world class manufacturing facilities
in Shenzen and Huizhou, Guangdong Province, China
Offices in New York and the San Francisco Bay Area
Over 2,600 employees
Manufacturing Facilities
Li-ion Manufacturing
Since 2008
9,000 square meters
NiMH Manufacturing
Since 2001
40,000 square meters
Huizhou Manufacturing
Q32011
120,000 square meters
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Global Trend Toward Greener Battery Solutions
Ni-MH and Lithium rechargeable batteries are replacing the
pollutive Lead-acid and Ni-Cd batteries
Ni-MH rechargeable batteries can be recharged 500 times,
minimizing environmental pollution caused by single use
batteries.
Single use disposable
Rechargeable
Lithium battery powered EV & Ebike
Lead-acid battery pollution
Battery Performance Comparison
Lead-acid
Ni-Cd
NiMH
Li-ion
Safety
Capacity/Density
Power Performance
Reliability
Cycle Life
Memory Effect
Raw Material Resources
Cost
Environmental Friendly
Very Good
Fair
Poor
Good
Very Poor
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Market Potential of Ni-MH & Lithium Batteries
1990
2010
2030
2050
Lithium
Lead-acid
Ni-MH
Ni-Cd
1970
Year
Highpowers specialization in rechargeable Ni-MH and
Lithium batteries positions the Company for future growth
Source: Company estimates and proprietary industry research
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Highpower is a Market Leader
HPJ has become a worldwide leader in the Ni-MH
rechargeable battery market capturing approximately 11%
share of the 2010 global Ni-MH consumer
rechargeable
battery market, up from 10% in 2009
Source: Rodman & Renshaw estimates
Source: China Industrial Association of Power Sources
*Excluding the HEV market
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Highpowers Battery Applications
Lighting
Blue Tooth
Electric
Tools
eBooks
Electronic Toys
Laptops
GPS
Solar App
Wireless Phones
Medical
Devices
Tooth
Brushes
Electric
Razors
Electric
Bikes
Electric
Mowers
Backup Power
Supply
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Ni-MH
Li-ion
2012-2018
Hybrid Electric Vehicles
Energy storage system
Military applications
Electric Vehicles
Power systems for solar and wind
projects
Next generation digital products
Military applications
2010-2012
Electric wheelchairs
Intelligent robots
E-bikes
High-level backup power
Power tools
2006-2009
Power tools
Electric toys
Handheld appliances
DVD players
Mobile phones
Bluetooth
MP3 players
Digital products
Before 2006
Wireless phones
Portable digital products
Consumer products
Emergency lighting
Our Product Evolution
Highlight
Approximately 11% of the
world market share
(excluding the HEV market)
Annual segment growth rate in
excess of 60%
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Highpowers Ni-MH Battery Revenue By Region
N. America
23%
Europe
30%
China &
H.K.
37%
S.E. Asia
6%
S. America
1%
Other: 3%
Estimated 2010 revenue of $75 million
Highpower sold over 140 million Ni-MH batteries world-wide in 2010
Approximately 30% of batteries were sold as stand-alone consumer batteries
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Highpowers Lithium Battery Revenue By Region
N. America
2%
Europe
1%
China &
H.K.
94%
S.E. Asia
3%
Estimated 2010 revenue of $17 million
Highpower sold over 12.5 million Li-ion & Li-polymer batteries world-wide in 2010
The vast majority of these batteries are integrated in the end products produced
in China that are exported elsewhere throughout the world
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World Class Manufacturing Capabilities
23days
19days
Manual
Production
Semi-automated
Production
Automated
Production
1,000 units/Day
Days
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Our Awards and Certifications
2010 Guangdong Province Clean
Production Award
ISO 9001 & 14001 Compliant
UL Authentication and CE
Attestation
Numerous awards received
symbolize our quality of
management and commitment to
excellence
ISO 9001
ISO 14001
UL Certification
CE Certification
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Manufacturing Process
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Our Commitment to R&D
20 patents received, 31 patents pending
Primary
Materials
Research
Partners:
1.
Central South University
2.
Harbin Institute of Technology
3.
ChangSha Research Institute of
Mining and Metallurgy
Battery
Materials
Research
Partners:
1.
Senior Professor of materials
science from Canada
2.
Research Center of Japanese
Santoku
3.
XiaMen Tungsten hydrogen
storage alloy Division
4.
Inner Mongolia Rare Earth;
5.
ChangSha Research Institute of
Mining and Metallurgy
6.
Freudenberg Diaphragm Division
Battery
Systems
Research
Partners:
1.
U.S. OVONIC Company
2.
Senior U.S. battery industry
consultant
3.
M&G Senior Advisor (Japan)
4.
China Industry Association
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Product Strategies
Material
Processing
(Ni/Co)
End
Products
Raw
Materials
Battery
Materials
Cell,
Packs, &
Systems
Value
Chain
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Sales Strategies
Build a Global Sales Platform
Europe, N. America, and Asia Pacific
Industry Focus
Growing industries, such as mobile
internet devices, smart phones
Emerging Industries, such as Ebikes,
energy storage systems, electric cars
Develop more Diversified World-
class Customers
Focus on major brands
Sales Staffing Levels
Sales: 65
Marketing: 8
S&M Support: 39
Planned 2011 New Intl
Sales Offices & Staff
USA (1-2)
Germany (1-2)
Hong Kong (3-4)
Strategic Relationships
Key Strategic Suppliers
Key Financial Partners
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Our Competitive Advantages
Excellent customer relationships
Lower cost and better quality
High quality product performance
Continual investment in R&D
Strong relationship with the Chinese government
Vast experience with international business partners
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Our Management Team
Name & Title
Years of
Experiences
Past Experiences
George Pan
Chairman and CEO
>20
Shenzhen Highpower
HuangPu Aluminum Co.
Guangzhou Aluminum Products Co.
Wen Liang Li
VP, CTO and Director
>21
Zhuhai Taiyi Battery Co., Ltd.
Council of China Industrial Association of Power
Source
Henry Sun
CFO
>15
Finance, accounting, and IR management positions
at Zoomlion Machinery Company, Yasheng Group,
Sohu.com, Merrill Lynch, Cepheid
Michael Wang
VP of Sales & Marketing
>17
Sales & marketing management positions at Vale
Inco, Beijing Zhongke Sanhuan Hi-Tech Co., Ltd.
Bin Ran
VP of Strategy & Human
Resource
>18
Senior management positions with CBHansun,
Flink Group, GP Battery
Wen Wei Ma
VP of Manufacturing
>17
Shenzhen Highpower
Wen Jia Xiao
VP of Quality Control
>8
Shenzhen Highpower
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Revenue Growth and Margins
USD Millions
Our gross margins can be impacted by rapid changes in commodity prices
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Note: 2010 estimates based on Company guidance announced on March 4, 2011
Strong Balance Sheet
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($ in millions)
9/30/2010
Cash and Cash Equivalents and Restricted Cash
$13.0
Total Current Assets
$54.1
Total Assets
$71.4
Total Debt*
$21.7
Total Current Liabilities
$45.4
Stockholders Equity
$25.9
*Available unused bank credit facilities = $13.3 million
Drivers for Growth
Near Term
Continue to build our global sales platform
Increase our portfolio of products that sell into high
growth and emerging industries
Improved operating efficiencies
Long Term
Capitalize on the increasing global demand for clean
energy products and solutions
Continued R&D investments
Integrate our upstream and downstream businesses
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HPJ Stock Snapshot
Nasdaq: HPJ
Recent Stock Price: $3.40
52-week Range: $2.99 - $6.70
Market Cap: $46.6 million
3-month Daily Average Trading Volume: 68,000
Fully Diluted Shares Outstanding: 13.7 million
Insider Ownership: 54%
Estimated FY 2010 Revenue: $104.5 - $105.0 million
Estimated FY 2010 Net Income: $5.9 - $6.1 million
P/E Ratio: 7.8x
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Our Investment Thesis
Seasoned industry leadership
Large and growing market for rechargeable batteries
Competitive advantages in battery production quality,
consistency and reliability
Strong market share of Ni-MH global rechargeable
battery market
Complementary entry into attractive Li-ion battery market
Leading OEM customers
Green enterprise enabler of new technologies in
renewable energy
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