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Investor Presentation

Investor Presentation. November 2013. Safe Harbor Statement. Forward-Looking Statements

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Investor Presentation

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  1. Investor Presentation November 2013

  2. Safe Harbor Statement Forward-Looking Statements This presentation and oral statements made in conjunction with it may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and observations and involve known and unknown risks and uncertainties or other factors not under the Company’s control, which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, the following: • our ability to successfully implement our business strategy; • the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less expensive products and services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing; • the effects of rapid technological changes and vigorous competition in the markets in which we operate; • the effects of changes in competition and the pricing environments in the countries in which we operate; • uncertainties about the future growth in electricity consumption and infrastructure; • other factors or trends affecting the industry generally and our financial condition in particular; • the effects of the higher degree of regulation in the markets in which we operate; • the effects of additional or higher taxes in the countries in which we operate; • general economic and political conditions in the countries in which we operate or other countries which have an impact on our business activities; • the monetary and interest rate policies of the countries in which we operate; • exchange rates; and • other factors listed from time-to-time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 20-F for the period ended December 31, 2012 and our subsequent reports on Form 6-K. Except as required by law, we are not under any obligation, and expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures This presentation contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Refer to the Appendix for a discussion of these numbers and a reconciliation to their nearest equivalent financial measures calculated in accordance with GAAP. Jinpan International Ltd.

  3. Company Snapshot IPO: 1998 Nasdaq: JST Founded: 1993 • Recent price $6.61 • 52-week Price Range $4.38 to $7.86 • Market capitalization $108.5 million • Common shares outstanding (fully diluted) 16.6 million • Avg daily trading volume (3 mos) 37,989 • Tangible book value per share $11.62 • Quarterly dividend $0.03 • Dividend yield (annualized) 1.9% • Insider ownership 26.4% Note: Market data as of Nov 13, 2013 market close; weighted average diluted share count as of Sep 30, 2013; balance sheet data as of Sep 30, 2013; tangible book value excludes goodwill & deferred tax assets; most recent quarterly dividend paid Sep 26, 2013; ownership as of latest filing A leading manufacturer of medium-voltage electrical control and power distribution equipment. China’s largest manufacturer of cast resin transformers, by capacity. Jinpan International Ltd.

  4. Investment Highlights #1 producer of cast resin transformers in China, by capacity Positioned for growth & margin expansion after investment period Demand driven by China’s industrialization & urbanization Supplier of choice to four blue chip OEMs; provides global reach Disciplined growth strategy funded primarily via cash flow & debt 15-year history as public company; 8-year dividend history Jinpan International Ltd.

  5. Products VPI Transformers & Reactors Switchgear Substations Cast Resin Transformers 79% of 2012 sales Used to change voltage of an electric current. Use air to cool induction coilsto dissipate heat. Voltage: max 35 KV Capacity: max 40 MVA 9% of 2012 sales Components of converters & inverters, used to change voltage & filter electricity. Voltage: max 1 KV Capacity: max 500 KVA 6% of 2012 sales Used to isolate electric equipment in the grid and de-energize equipment to allow maintenance. 6% of 2012 sales Integrated assembly of LV HV switchgear, transformer, and monitoring & control systems in an enclosed unit. Lowers the voltage of electricity drawn from the grid to levels that can be fed into general purpose transformers. Jinpan International Ltd.

  6. Products: Cast Resin Transformers • Dry-type transformers use air to cool its induction coils to dissipate heat; require less maintenance than oil-cooled transformers • Jinpan’s products comply with international codes & standards: GB, IEC, ANSI/IEEE/NEMA, CSA, JEC • Certifications: • UL (U.S.) • KEMA (Holland & U.S.) • CE (EU) • GOST-R (Russia) • Approximately half of our transformers are custom-designed Jinpan International Ltd.

  7. Markets • 88% of sales within China; OEM partnerships provide international reach • Products used in demanding industrial applications & critical infrastructure • Utility projects – power plants, electrical distribution networks • Renewable energy – wind energy, utility-scale solar energy • Industrial applications – factories, refineries, shipyards, etc. • Infrastructure – airports, rail transportation, other municipal projects • Commercial & residential – office buildings, shopping centers, high-rises • Jinpan supplies cast resin transformers & reactors for wind energy applications • Qualified supplier for two leading global wind turbine manufacturers Jinpan International Ltd.

  8. Growth Drivers China Electricity Consumption China Fixed Asset Investment • Key demand drivers: electricity consumption & infrastructure development • China’s electricity consumption est. to increase 4.2% annually through 2035 (IEA) • China’s electrical capacity is projected to increase 3.9% annually through 2035 (IEA) • China’s fixed asset investment has continued to increase at 20.1% y/y YTD July 2013 (China NBS) • China’s government continuing infrastructure investment • Specific focus on rail transportation investment Source: Compiled based on data sourced from China Electric Council releases. Year 2012 data is sourced from “2012 Electricity Industry Operations Brief” China Electricity Council on January 17, 2013. Source:”Statistical Communiqué of the People's Republic of China on the 2012 National Economic and Social Development” released by the China National Bureau of Statistics on February 22, 2012. Jinpan International Ltd.

  9. Growth Drivers: Wind Energy • Sales of transformers & reactors for wind turbines; primarily international installations • Qualified supplier to two leading wind turbine manufacturers (2006 and 2Q2013) • Annual capacity growth est. 14.4% in 2014, 12.6% in 2015, 10.2% in 2016 (GWEC) • Global wind capacity growth +6.2% to +8.9% through 2035(policy-dependent, IEA) • Offshore wind power expected to contribute the majority of growth in long-term Source: “Global Wind Energy Statistics”, Global Wind Energy Council (Feb 2013) Jinpan International Ltd.

  10. Growth Strategy Increase manufacturing output & productivity Enrich product offering Expand international OEM business Capture new market opportunities in China Jinpan International Ltd.

  11. Expanded Capacity & Capabilities • Current capacity makes Jinpan China’s largest manufacturer of cast resin transformers • Disciplined expansion focused on establishing scale and improving productivity • $121 million total investment since 1999, funded by cash flow, $32M debt, $18M equity • Guilin facility began production in Mar 2013; gradually increase output over several years • Carlstadt, New Jersey facility supports limited assembly, product testing, after sales service Haikou Wuhan Shanghai Guilin 1993 production start Cast resin transformers, conventional switch-gear, substations 6 million KVA 2008 production start Cast resin transformers 5 million KVA capacity 2009 production start VPI transformers, reactors, gas-insulated switchgear 20,000 units capacity 2013 production start Standard cast resin transformers 6 million KVA capacity* *expandable to 12 million KVA Jinpan International Ltd.

  12. R&D Investment • Research and development is a core component of our growth strategy • More than 170 engineers & technicians (2012 Data) • Historically have invested approximately 5% of sales in R&D • Utilize CAD tools & proprietary software for modeling & design • New product development • Diversify product offering to drive consistent growth • Offer more comprehensive power distribution solutions to customers • Explore new product categories & expand reach into new markets • Productivity improvements • Enhance product design to reduce manufacturing costs • Run SAP ERP system, integrating inventory controls, cost controls, management information into a single platform • Automated production, streamlined processes, & new transformer design expected to reduce production cost for standard transformers by 5-10% Jinpan International Ltd.

  13. International Growth via OEM Partners • Leverage the marketing reach of large OEMs to expand internationally • Qualified with four international OEMs • In 2Q13, qualified with a leading Europe-based wind turbine producer • Pursuing qualification with two additional international OEMs • Jinpan is 1 of 2 UL-certified cast resin transformer manufacturers worldwide • International sales have historically been for wind power, but now diversifying Jinpan International Ltd.

  14. Capturing China’s Market Opportunities • Sells into a wide range of industries and infrastructure projects, both public and private • Leverage engineering & manufacturing capabilities to drive sales of customized transformers for demanding industrial and renewable energy applications • Leverage increased scale and efficient manufacturing to increase sales of standard distribution transformers & expand market share • Extensive sales network with 38 sales and services offices throughout China Jinpan International Ltd.

  15. Financial Performance Jinpan International Ltd.

  16. Summary Income Statement • Maintained healthy profitability during several years of market volatility • Particularly challenging market environment in 2012 & 1Q13 • 2012 & 1Q13 results reflect low capacity utilization at the newly completed Guilin facility & gaps in shipping of wind power products to OEM customer due to the customer platform upgrade. • Shifting from investment phase into growth phase; well-positioned for success Jinpan International Ltd.

  17. Recent Quarter Results • 2Q13 results demonstrate return to sales growth and margin recovery • Resumed volume shipments to our largest international OEM customer • Qualified with Europe-based wind turbine manufacturer; brings total OEMs to four • Pricing environment in Chinese market stabilized, benefitting margins • Backlog expected to recover in 4Q13 Jinpan International Ltd.

  18. 2013 Guidance • 2013 guidance calls for revenue growth of 4-5% and earnings growth of 14-17% • 2H business is typically seasonally strong • International sales expected to increase as shipments resume to largest customer • Anticipate slight operating margin improvement from 1H13 levels • Q4 operating cash flow typically seasonally strong Jinpan International Ltd.

  19. Summary Balance Sheet • Simple capital structure • Growth funded with internal cash flow & debt • Completed one post-IPO follow on $25 million equity raise in 2006; proceeds for Wuhan facility, expansion of Haikou facility, and buyout of minority shareholders • Focused on improving working capital management and generating cash flow Jinpan International Ltd.

  20. Consistent Dividend History • Jinpan has paid a dividend since 2005 • Currently paying quarterly dividend of $0.03 per share • As of market close on November 13, 2013, reflects a 1.8% yield • 2012 included special dividend of $0.04 per share, in addition to regular dividend Jinpan International Ltd.

  21. Investment Highlights #1 producer of cast resin transformers in China, by capacity Positioned for growth & margin expansion after investment period Demand driven by China’s industrialization & urbanization Supplier of choice to four blue chip OEMs; provides global reach Disciplined growth strategy funded primarily via cash flow & debt 15-year history as public company; 8-year dividend history Jinpan International Ltd.

  22. Jinpan International Ltd.Nasdaq: JSTCompany Contact:Mark Du, Chief Financial Officer(201) 460-8778Investor Relations Contact:Mark Tobin, Tobin Tao & Company(949) 870-9778jinpan@tobintao.com Jinpan International Ltd.

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