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China Aviation Oil (Singapore) Corporation Ltd

China Aviation Oil (Singapore) Corporation Ltd. Fuelling The Rapidly Growing China Aviation Industry. Presentation Outline. Section 1 Who We are. Section 2 Our Unique Business. Section 3 Proven Track Record. Section 4 Growth Strategy. Section 5 Summary. Section 6 Issue Statistics.

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China Aviation Oil (Singapore) Corporation Ltd

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  1. China Aviation Oil (Singapore) Corporation Ltd Fuelling The Rapidly Growing China Aviation Industry

  2. Presentation Outline Section 1 Who We are Section 2 Our Unique Business Section 3 Proven Track Record Section 4 Growth Strategy Section 5 Summary Section 6 Issue Statistics

  3. Section 1 Who We Are

  4. Who We Are Who We Are The Sole Jet Fuel Procurement Arm Of China’s Civil Aviation Industry

  5. Jet Fuel Procurement International Trading Pudong & HK Who We Are Business • International trading is built up on the jet fuel procurement business • Jet fuel procurement is low risk and provides steady earning growth • Planned investments will strengthen and grow our business

  6. 2000 Implemented risk manage-ment 1999 Expanded regionally and increased product portfolio 1998 Turned loss into profit 1995 Became the wholly-owned subsidiary of CAOSC 1993 Established as a joint venture in Singapore Who We Are Milestones

  7. Section 2 Our Unique Business

  8. Our UniqueBusiness CAO’s Uniqueness • Leveraging On the Growing Chinese • Aviation Industry • Sole Jet Fuel Importer • Proposed Acquisition of a Stake in • Shanghai Pudong International Airport • Aviation Fuel Supply Corporation Ltd. • --- the most profitable jet fuel operations in China

  9. 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 Our Unique Business Leveraging On the Growing Chinese Aviation Industry The Macro Picture of China’s Growth

  10. Petroleum Demand Outstrips Supply In The Long-Term 12,000 10,000 8,000 6,000 4,000 2,000 0 Production Consumption Source: Energy Information Administration, US (EIA) Our UniqueBusiness Leveraging On the Growing Chinese Aviation Industry China has been a net oil importing country since 1993

  11. Growing Jet Fuel Import Million MT Projected 16% Annual Growth Rate From 2000 & Beyond Our Unique Business Leveraging On the Growing Chinese Aviation Industry Source: Civil Aviation Administration of China

  12. Domestic Air Travel Growth Source: 1. Boeing Company 2. Lianhe Zaobao Our Unique Business Leveraging On the Growing Chinese Aviation Industry Demand Is Driven By Domestic Air Travel • 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

  13. China USA Population (billion) 1.25 (billion) 0.28 (billion) 149 18,443 Airport 949 Aircraft 219,646 72.9 (Mil MT) 4.6 (Mil MT) Jet Fuel Consumption Note: All the figures are as at the end of 1999 Source: Dept. of Transportation of USA, Energy Information Administration of USD and Civil Aviation Administration of China Our Unique Business Leveraging On the Growing Chinese Aviation Industry Solid Growth Potential

  14. Our Unique Business Sole Jet Fuel Importer Strong Backup from Parent Company (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 • CAO is currently the only wholly-owned overseas subsidiary of CAOSC

  15. No Negative Impact More Benefits - More jet fuel consumption a. Import & export cargo b. Business travel c. Switch from train to aircraft • 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 • Lift of import quota • will create more • demand for overseas • jet fuel Our Unique Business Sole Jet Fuel Importer China’s Entry Into WTO Has Positive Impact On Our Business

  16. Our Unique Business Sole Jet Fuel Importer • The small volume of current jet fuel consumption is not justified for many players, economic scale is key Parent’s Controlling Position Will Be Likely Maintained • Jet fuel is a national strategic resource, we believe that government will pay attention to the supply of jet fuel • Current jet fuel supply infrastructure is complete and systematic, breaking such a system will not create competition, but operational inefficiency • The announcement of merger of CAOSC and CASC imply the emphasis placed by government on the economic scale

  17. Our Unique Business Proposed Acquisition of Pudong Aviation Fuel Corporation • Attractive Business • Own the sole jet fuel supplying infrastructure • Low maintenance cost and repair expenses • Exclusive right in supplying jet fuel in Pudong International Airport • Great Potential • Pudong vs Chicago

  18. Section 3 Proven Track Record

  19. Increasing Profit After Tax S$’ Mil 50 40 45 40 35 30 25 20 13.5 15 8.8 6.4 10 5 0 1998 1999 2000 2001 Forecast Proven Track Record Financial Performance CAGR 84%

  20. Strong Revenue Growth (Physical Cargo) S$’ Mil 1400 1200 1000 800 600 400 200 0 1998 1999 2000 2001 Forecast Proven Track Record Financial Performance CAGR 85% 1,085 963.7 414.5 170.7

  21. Proven Track Record Financial Performance Growing Procurement and Trading Volume Million MT CAGR 66%

  22. Proven Track Record Financial Performance • No Gearing • No bad debts • Growing cash position

  23. Section 4 Growth Strategy

  24. Jet Fuel Procurement Maintain and increase profit margin Geographical Expansion USA/Europe New market and end users STRATEGY Investments Fuel facilities and end users -complementary to procurement / trading business Growth Strategy Strategies For Growth

  25. Section 6 Summary

  26. Summary Summary • China • Sole Importer • Pudong

  27. Tan Jeh Wuan, DBS Bank

  28. Summary Issue Statistics 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%

  29. Summary Use of Proceeds • 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

  30. Summary Important Dates Open : 26th Nov 2001, Monday, 12 noon Close : 4th Dec 2001, Tuesday, 12 noon Trading : 6th Dec 2001, Thursday, 9.00 a.m.

  31. Q&A

  32. China Aviation Oil (Singapore) Corporation Ltd Fuelling The Rapidly Growing China Aviation Industry

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