China Aviation Oil (Singapore) Corporation Ltd

China Aviation Oil (Singapore) Corporation Ltd 1

China Aviation Oil (Singapore) Corporation Ltd

Fuelling The Rapidly Growing China Aviation Industry


Presentation Outline

Section 1 Who We are

Section 3 Proven Track Record

Section 4 Growth Strategy

Section 2 Our Unique Business

Section 5 Summary

Section 6 Issue Statistics


Who We Are

Section 1


Who We Are

The Sole Jet Fuel Procurement Arm Of

China’s Civil Aviation Industry

Who We Are


Business

International Trading

Jet Fuel Procurement

Pudong & HK

Jet fuel procurement is low risk and provides steady earning growth

International trading is built up on the jet fuel procurement business

Planned investments will strengthen and grow our business

Who We Are


Milestones

1993

Established as a joint venture in Singapore

1995

Became the wholly-owned subsidiary of CAOSC

1998

Turned loss into profit

1999

Expanded regionally and increased product portfolio

2000

Implemented risk manage-ment

Who We Are


Our Unique BusinessSection 2


CAO’s Uniqueness

Leveraging On the Growing Chinese Aviation Industry

Sole Jet Fuel Importer

Our Unique Business

Proposed Acquisition of a Stake in Shanghai Pudong International Airport Aviation Fuel Supply Corporation Ltd. --- the most profitable jet fuel operations in China



Our Unique Business

GDP will grow at 7% and above, probably exceeds 10% in some years- Far East Economic Summit

Foreign Reserve will exceed USD 200 bn, Chinese people’s deposit will exceed USD 400 bn in the year of 2002- Lianhe Zaobao

China will overtake Japan and Germany as the second largest trading country by 2012 and will be the largest trading country by 2016- Lianhe Zaobao

China is expected to be the same economic entity as the USA by 2020- World Bank

The Macro Picture of China’s Growth



Our Unique Business

China has been a net oil importing country since 1993

Petroleum Demand Outstrips Supply In The Long-Term

0

2,000

4,000

6,000

8,000

10,000

12,000

Production Consumption

Source: Energy Information Administration, US (EIA)



Our Unique Business

Source: Civil Aviation Administration of China

0.0251.5

16

1991 2000 2016

Million MT

Growing Jet Fuel Import

Projected 16% Annual

Growth Rate From 2000 &

Beyond


Our Unique Business

Short haul consumes more jet fuel per km

Independent of world trends

New order for 30 Boeing a/c Oct 2001

Expected 500 a/c in the next 5-7years

Demand Is Driven By Domestic Air Travel


1985 1990 1995 2000 2005 2010 2015 2020

Source: 1. Boeing Company

2. Lianhe Zaobao

Domestic Air Travel Growth



Our Unique Business

Solid Growth Potential

Population (billion)

Jet Fuel Consumption

Airport

Aircraft

18,443

0.28 (billion)

USA China

219,646

72.9 (Mil MT)

949

149

4.6 (Mil MT)

1.25 (billion)

Source: Dept. of Transportation of USA, Energy Information Administration of USD and Civil Aviation Administration of China

Note: All the figures are as at the end of 1999



Our Unique Business

CAO is currently the only wholly-owned overseas subsidiary of CAOSC

CAOSC committed not to set up another company

to compete with CAO

Chairman and other non-executive Directors of CAO are key executives of CAOSC

Strong Backup from Parent Company (CAOSC)


No Negative Impact More Benefits

China’s Entry Into WTO Has Positive Impact On Our Business

- Indonesia is a WTO

member earlier than

China, its jet fuel

supply is controlled by

its national oil company

- High entry barriers

to potential jet fuel

suppliers to access to

infrastructure

- Proven track record as

a niche player will be

able to withstand

foreign competition

- More jet fuel

consumption

a. Import & export

cargo

b. Business travel

c. Switch from

train to aircraft

- Lift of import quota

will create more

demand for overseas

jet fuel


Our Unique Business



Our Unique Business

The announcement of merger of CAOSC and CASC

imply the emphasis placed by government on the

economic scale

The small volume of current jet fuel consumption

is not justified for many players, economic scale

is key

Jet fuel is a national strategic resource, we

believe that government will pay attention to the

supply of jet fuel

Parent’s Controlling Position Will Be Likely Maintained

Current jet fuel supply infrastructure is complete

and systematic, breaking such a system will not

create competition, but operational inefficiency


Proposed Acquisition of Pudong Aviation Fuel Corporation

Our Unique Business

Exclusive right in supplying jet fuel in

Pudong International Airport

Own the sole jet fuel supplying infrastructure

Low maintenance cost and repair expenses

Pudong vs Chicago

Attractive Business

Great Potential


Proven Track RecordSection 3


Financial Performance

Proven Track Record

40

6.48.8

13.5

0

5

10

15

20

25

30

35

40

45

50

1998 1999 2000 2001 Forecast

S$’ Mil

Increasing Profit After Tax

CAGR 84%



Proven Track Record

1998 1999 2000 2001 Forecast

1,085

170.7

414.5

963.7

0

200

400

600

800

1000

1200

1400

Strong Revenue Growth (Physical Cargo)

S$’ Mil

CAGR 85%



Proven Track Record

1.3

3.2

3.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1998 1999 2000

Growing Procurement and Trading Volume

Million MT

CAGR 66%



Proven Track Record

• No Gearing

• No bad debts

• Growing cash position


Growth Strategy

Section 4


Strategies For Growth

Growth Strategy

InvestmentsFuel facilities and end users -complementary to procurement / trading business

Jet Fuel Procurement Maintain and increase profit margin

STRATEGY

Geographical Expansion

USA/Europe

New market and end users


SummarySection 6


Summary

Summary

China

Sole Importer

Pudong


Tan Jeh Wuan, DBS Bank


Issue Statistics

Summary

Issue size : 144 million New Shares

- 10 mln public offer shares

- 134 mln placement shares

Issue price : S$0.56 per share

Gross Proceeds : S$80.64 mln

Historical PER : 18.1

Forecast PER : 6.2

Gross Dividend Yield : 5.0%


Use of Proceeds

Summary

Net Proceeds of approximately S$76.6 million:

S$57.0 million for future expansion through joint ventures and/or strategic investments in China and Hong Kong;

S$15.5 million to acquire companies and/or set up subsidiaries in USA and Europe within the next two years; and

S$4.1 million for working capital


Important Dates

Summary

Open : 26th Nov 2001, Monday, 12 noon

Close : 4th Dec 2001, Tuesday, 12 noon

Trading : 6th Dec 2001, Thursday, 9.00 a.m.


Q&A


China Aviation Oil (Singapore) Corporation Ltd

Fuelling The Rapidly Growing China Aviation Industry

China Aviation Oil (Singapore) Corporation Ltd

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Transcript of China Aviation Oil (Singapore) Corporation Ltd