08 15-2012%20 ctfo-presentation
- 1. August 2012 NASDAQ Global Market: CTFO www.chinatransinfo.com
- 2. Safe Harbor Statement The market and industry information contained in this document has not been independently verified. No representation or warranty, whether express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. Neither the Company nor any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act, and Section 21E of Exchange Act. Any statements about the Company's expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that cannot be predicted, quantified or controlled and that could cause actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements, including but not limited to fluctuations in customer demand, management of rapid growth, intensity of competition from other providers of the Company's products and services, general economic conditions, geopolitical events, regulatory changes, and other information detailed in the "Risk Factors" section of the Company's Annual Report on Form 10−K for the year ended December 31, 2010 and the Company's subsequent SEC filings, Further, any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. The information contained in this presentation does not constitute an offer of any securities nor does it contain an invitation to subscribe for, purchase or sell any securities. No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (the "SEC") or an exemption from such registration. 2
- 3. COMPANY AND BUSINESS OVERVIEW CTFO – A Leading Player in China’s Intelligent Transportation System (ITS) Market 3
- 4. Key Investment Highlights 。 Large and growing market opportunities in the intelligent transportation systems (“ITS”) market in China 。 First-mover advantage and leader in the ITS market in China 。 First-mover and well positioned in the large and growing commercial vehicle location-based services (“LBS”) market 。 Leading developer of ITS and LBS application solutions with award- winning technology 。 Nationally recognized brand name with solid track record 。 Experienced management team dedicated to the ITS/LBS industry 。 Strong financial position and profitability 4
- 5. Corporate Overview A pioneer of Intelligent Transportation Systems in China, founded by 3 graduates from Peking University in 2000 A top brand name in the ITS industry, headquartered in Beijing with over 30 branches, subsidiaries and affiliates throughout China Listed on the NASDAQ since July 2008 946 employees, including over 560 in R&D Awarded 2011 Deloitte Technology Fast 50 China and 2011 Forbes Asia 200 Best Under A Billion Key Financials Revenue ($ millions) Net Income (1) ($ millions) 2008-2012E CAGR 55.1% 2008-2012E CAGR 5.5% 16.8 167.0 170.0 15.5 15.1 13.6 14.0 14.0 122.7 11.3 13.0 11.1 63.7 73.4 60.3 5.8 6.4 5.3 4.8 29.4 2008 2009 2010 2011 2012E 1H 2011 1H 2012 2008 2009 2010 2011 2012E 1H 2011 1H 2012 (1) Non-GAAP results add back share-based compensation expense and GAAP Non-GAAP 5 amortization of intangibles obtained from acquisitions
- 6. Our Major Affiliates China TransInfo Technology Corp. (CTFO) China TransInfo Technology Group Co., Ltd. 100% 66.02% 1 51.56% Beijing PKU Chinafront Beijing UNISITS Beijing Transwiseway High Technology Technology Co., Ltd Information Technology Co., Ltd. (UNISITS) Co., Ltd. Specializes in urban ITS Specializes in highway ITS -engineering Specializes in commercial vehicle electronics and machinery (E&M) systems controlling platforms and LBS 100% 51% Shanghai Yootu Beijing Zhangcheng Information Technology Science and Technology Co., Ltd. Co., Ltd. (Palmcity) The leading real time traffic data Specializes in consumer traffic information provider in China products & services 1. Pursuant to certain Equity Transfer Agreements and the exercise of the option, China TransInfo Technology Group Co., Ltd. owns an aggregate of 66.02% equity interest in UNISITS. 6
- 7. Our Business Portfolio Public Sector Commercial Consumer Urban Transportation Systems Highway Transportation Systems Location-based Services Project-based Revenue Recurring Revenue Revenue Contributor Under Development 7
- 8. China’s ITS Industry – Large Public Demand, Large Private User Base and a Fragmented Marketplace The ITS Industry China ITS – Public Spending Breakdown (%) • Government Entities • Equipment Suppliers • Transportation Authorities PKU Chinafront • Software Developers • Highway Companies subsidiary Urban Rail • System Integrators Transit, 17.5% • Platform Operators Urban Transportation GPS ITS Management Navigation ITS Builders Others, System, 5.4% Providers System, 25.2% 10.8% & Service ITS Providers Industry Urban Public Chain Transportation, Highway E&M System , 19.3% 21.8% ITS Users Palmcity PKU subsidiary • Transportation Authorities Chinafront • Automobile Manufacturers subsidiary UNISITS • Taxi Companies/Bus Companies • Logistics Companies subsidiary • Other enterprise clients Source: Forward Intelligence ITS Industry Research Team, 2010 • Individual users A fragmented market: Over 2,000 companies in China’s ITS industries Over 500 companies in monitoring product manufacturing and sales Over 200 companies in highway toll collection and related product manufacturing 8
- 9. The ITS Leader Delivering the System Solutions for Transportation Management Product Line 1 – Public Sector Market (Project-based Revenue) Providing ITS products and solutions focusing on highway and urban system integration from the UNISITS AND PKU Chinafront subsidiaries Intelligent Traffic Highway Toll Collection Management Platform System Transportation Hub Highway Communication System Urban Highway System Metro Transit Passenger ITS Highway Monitoring Information System System Geographic Information Energy Saving Lighting System Control ... ... ... 9
- 10. Large and Growing Public Demand in ITS Implementation & Maintenance (UNISITS, PKU Chinafront) Public ITS Spending 2010-2013E Long-Term Public Demand for ITS ($ in Billions) China has a strong mandate to extensively CAGR = 25% 8.8 deploy Intelligent Transportation System (ITS) 7.0 so as to improve transportation management 5.8 4.5 Approximately 1-2% of highway investment in China is related to IT solutions, as compared to 7-10% in developed countries 2010 2011 2012E 2013E Source: CCW Research, 2010 Expected vast, robust and long-term government spending in various ITS Spending sectors through at least 2020, with annual Breakdown Highway spending be over $6 billion in the next three ITS years Other ITS 32% 27% Massive deployment of ITS has created a Urban ITS large long-term ITS service and maintenance 41% market, as well as a tremendous market in various ITS related LBS Over 200 mid-size cities will install transportation monitoring facilities in the next 5 years Source: Communication World Week, 2010 China’s fast-expanding highways and massive investment in ITS technology services and upgrades present tremendous growth opportunities 10
- 11. The ITS Leader Delivering the ITS +LBS Solutions for Commercial Vehicles – Safety and Fleet Efficiency Product Line 2 – Commercial Market (Recurring Revenue) MoT authorizes Beijing Transwiseway to perform national Monitoring / Control services for an addressable market of 11+ million commercial vehicles. National Commercial Vehicles Monitoring CTFO as designer and operator and Controlling Center (CVMC) • Monitoring and Controlling Ministry of Transport (MoT) commercial vehicles for MoT CTFO as designer, operator, and owner National Commercial Vehicles • Providing Location based services Service Platform (LBS): Value added services, GPS CTFO (Beijing Transwiseway) application • Opportunities to monetize from vehicle memberships All commercial vehicles – commercial passenger buses and trucks (11M+) 11
- 12. Strong Outlook for Commercial Demand in ITS+LBS - Safety and Fleet Efficiency (China TransWiseway) Number of Commercial Vehicles in China Commercial Vehicles in China (millions) (millions) 2005-2010 CAGR 9.1% Passenger Vehicles, 0.83 10.87 11.33 9.3 8.02 8.5 7.33 2005 2006 2007 2008 2009 2010 Trucks, 10.5 Source: 2011 National Bureau of Statistics of China With 80% of serious car accidents caused by commercial vehicles and 37% of commercial vehicles running unloaded due to the lack of logistical LBS solutions, commercial vehicle management services are required to improve transportation safety and efficiency 12
- 13. The ITS Leader Defining the Emerging Market for Next-Generation ITS Applications Next Generation Applications – Consumer Market (Recurring Revenue) Developing next generation ITS+LBS solutions to drivers and pedestrians through in-car terminals and/or smart phones by Palmcity AND Yootu Accessed to real-time traffic data and applications Key partnerships: China Mobile Baidu Dongfeng Yulon Motor Xiamen King Long Motor Telematics with dynamic routing based on real-time traffic data, partnering with NISSAN Smart phone ITS and LBS applications 13
- 14. Compelling Outlook for Consumer Demand in ITS Services (Palmcity, Yootu) China’s Dynamic Traffic Information Service Market (RMB in 10K） Number of Private Vehicles in China (millions) 1998-2011 CAGR 39.4% 78.7 65.4 China Telematics Service Market（2008-2013E） 52.2 ($ in millions） 41.7 In-dash Market C-PND Market GPS Smart Phones Market 28.8 600.0 23.3 500.0 18.5 12.214.8 400.0 7.7 9.7 4.0 5.3 6.3 300.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 200.0 100.0 Source: 2011 National Bureau of Statistics of China 0.0 2008 2009 2010 2011E 2012E 2013E Source: Forward Consulting Unprecedented transportation challenges arising from the increase in the number of vehicles necessitate ITS solutions to improve transportation efficiency 14
- 15. Leading Developer in ITS and LBS Solutions with Award-Winning Technology A Leading Developer of Commercial Vehicle Sophisticated Technology in ITS Controlling and ITS+LBS Platform • A pioneer in developing technology of Geographic • A developer of the Monitoring and Controlling Information System (“GIS”) Platform and the Information and Services Platform • Sophisticated Technologies used by National Commercial Vehicle Management Passenger flow detection and analysis Services Electronic Toll Collection • Nationally leading technology in Telematics Highway electronics & machinery system Service Provider (“TSP”) platform • A Pioneer in developing Real-time Traffic Information products and services Substantial Awards Received • Participated in the establishment of National Technology Standard: • Honored with nine achievement awards, including 1) Commercial Vehicles Control and the National Transportation Planning System and Monitoring Platform Technology Digital City Program award; 2) Commercial Vehicles Terminal Technology • Granted 126 software copyrights and 11 patents 3) Commercial Vehicles Information Transmission Technology Our award-winning technology ensures our leading position in in the ITS and LBS markets and provide customers with unique product/service experiences 15
- 16. Nationally Recognized R&D Ability Teamed with Top-Tier Universities Research Partnerships Internal R&D Capabilities with Top-Tier Universities Around 60% of the Company‟s employees are researchers with extensive experience in the GIS and transportation information industry Long history of excellence in R&D; two of our founders, our CEO Xia, and VP Zhibin Lai obtained their Ph.D. degrees from the Remote Sensing and GIS Institute at Peking University Strategic Partnerships Major operating units have ties to China‟s top research universities (UNISITS with Tsinghua University) 16
- 17. A Strong Brand Name Backed by a Solid Track Record Top Ten Clients in 2011 „2011 Sales % of Total Rank Name Description ($000) Sales 1 Hebei Expressway Administration Bureau Local governmental highway construction $16,804 10.06% department 2 Zhejiang Huangqunan Highway Co., Ltd. State-owned highway construction company 15,280 9.15% 3 Hubei Chutian Ebei Expressway Co., Ltd. State-owned highway construction company 6,880 4.12% 4 Guizhou Expressway Construction & Development State-owned highway construction company 5,420 3.25% Corporation 5 Shanxi Xinfu Expressway Construction Administrative Local governmental highway construction 5,414 3.24% Bureau company 6 Shandong Expressway – Tsingtao Highway Co., Ltd. State-owned highway construction company 4,661 2.79% 7 Shenzhen Highway Transportation Service Center City-level governmental department 3,707 2.22% 8 Sichuan Guangnan Expressway LLC State-owned highway construction company 3,431 2.05% 9 Xinjiang Communications Construction Administrative Local governmental highway construction 3,335 2.00% Bureau company 10 Heilongjiang Qitai Highway Construction Bureau Local governmental highway construction 3,216 1.93% company Total 68,148 40.80% Our long-term working relationship with the country’s transportation regulators provides us with the reputation and credibility that we leverage in marketing to potential clients 17
- 18. Successfully Staged Growth Strategy Leading provider of information products and Urban ITS solutions in the urban ITS segment Expand into the highway ITS business by leveraging Highway ITS the acquisition of UNISITS to significantly increase market share Enhance organic growth through expanding product lines in value-added ITS, real time traffic service ITS+LBS platforms, and commercial vehicle ITS+LBS Strengthen strategic leadership position in the evolving ITS marketplace through active innovations Innovative ITS of new ITS applications to secure solid future growth 18
- 19. Experienced Management Team Dedicated to the ITS Industry Industry/ Name Title Background CTFO Experience Founded Beijing PKU Chinafront High Chairman, CEO & 10+ years Technology Co., Ltd in 2000 Shudong Xia Co-founder 10+ years PhD in Remote Sensing from Peking University Executive VP of Formerly VP of First City Investment Inc. of 10+ years Danxia Huang Operations and Hong Kong and CEO of an internet company 5+ years Director MBA from Murdoch University of Australia Held financial executive positions in several companies including Fortune 500 company 15+ years Interpublic Group Asia Pacific Roger Zhang CFO Joined CTFO in Jan. 2011 MBA from J. Mack Robinson School of Business, Georgia State University; U.S. CPA, internal control & SOX 404 expert Held senior GIS positions at Fangda Century 15+ years Group (Beijing) and GEOBasic Zhibin Lai VP & Co-founder 10+ years PhD in Remote Sensing from GIS Institute at Peking University VP of R&D & 15+ years Professor in Remote Sensing and Geography Zhiping Zhang Co-founder 10+ years Information Institute at Peking University GM of Beijing PKU Chinafront High Technology VP & GM of 15+ years Co., Ltd since Jun. 2010 and GM of UNISITS Shan Qu UNISITS 2+ year since Nov. 2002 MBA from Tsinghua University 19
- 20. Independent Directors Industry / Name Title Background CTFO Experience General Partner at $4b+ SAIF 15+ years of experience in Partners, one of top China-focused Brandon Ho-Ping Independent capital market including 10 private equity funds Lin Director years in China private equity 3+ years Former VP of Investment Banking with Credit Suisse / DLJ New York Senior Partner of Trien Rosenberg Rosenberg Weinberg Ciullo & Fazzari, Independent 40+ years in accounting and LLP, a certified public accounting and Jay Trien Director, Chair of finance business consulting firm Audit Committee 3+ years Expertise in tax planning and strategies for financing growth of high- tech companies Independent 40+ years in the electronics Former Chairman of the Board of Intel Director, Chair of Dan Liu and information sectors; (China) and former Senior Advisor to Compensation 3 + years Motorola (China) Committee Independent 20+ years in IT, including 9 Deputy Chief Technology Officer of the Director, Chair of Zhongsu Chen years at Wall Street firms; Shanghai Stock Exchange from 2001 Nominating 3+ years to 2005 Committee Independent 10+ years of experience in Executive Director of Investment Director investment banking services Banking with Guotai Junan Securities, Xingming Zhang for transportation industry; one of the largest investment banking 20 2+ years and securities companies in China
- 21. FINANCIAL OVERVIEW 21
- 22. Robust Top-Line and Bottom-Line Growth Revenue Net Income (1) ($ million) ($ million) 2008-2012E CAGR 55.1% 2008-2012E CAGR 5.5% 167.0 170.0 16.8 15.5 15.1 122.7 13.6 14.0 14.0 11.3 13.0 11.1 73.4 63.7 60.3 6.4 5.8 5.3 4.8 29.4 2008 2009 2010 2011 2012E 1H 2011 1H 2012 2008 2009 2010 2011 2012E 1H 2011 1H 2012 GAAP Non-GAAP (1) Non-GAAP results add back share-based compensation expense and amortization of intangibles obtained from acquisitions 22
- 23. Strong Financial Position Key Balance Sheet Items (US$ in thousands) Jun 30, 2012 Dec 31, 2011 Cash and Equivalents $26,934 $45,033 Account Receivables, Net 45,673 36,902 Cost and Estimated Earnings in Excess of 58,945 42,918 Billings on Uncompleted Contracts Total Current Assets 176,896 158,898 Total Assets 231,797 211,507 Accounts Payable 43,692 29,010 Short-Term Debt: Notes Payable 7,434 7,791 Total Current Liabilities 73,025 61,606 Other Long-Term Liabilities 27 - Total Shareholders‟ Equity 158,745 149,902 Total Liabilities and Shareholders’ Equity 231,797 211,507 23
- 24. Stock at a Glance Listed on NASDAQ Global Market CTFO Price (August 14, 2012) $5.56 Shares Outstanding 25.3 m Market Capitalization $140.5 m Revenue (ttm) $154.0 m Net Income (ttm) (GAAP) $13.0 m EPS (ttm) (GAAP) $0.51 Net Income (ttm) (Non-GAAP) * $14.0 m EPS (ttm) (Non-GAAP) * $0.55 * Non-GAAP results add back share-based compensation expense and amortization of intangibles obtained from acquisitions 24
- 25. Contact Information Company Contacts: Investor Relations Contacts: China TransInfo Technology Corp. CCG Investor Relations 9th Floor, Vision Building 330 Madison Ave. No.39 Xueyuan Lu, Suite 910 Haidian District, Beijing 100191, New York, NY 10017 P.R. China Mr. John Harmon, CFA, Account Manager Ms. Fan Zhou Email: john.harmon@ccgir.com IR Director Phone: +86 10 8573 1014 Phone: +86 10 5169 1657 Email: ir@ctfo.com Mr. Crocker Coulson, President Website: www.chinatransinfo.com Email: crocker.coulson@ccgir.com Phone: +1 (646) 213-1915 Independent Auditor BDO China Li Xin Da Hua CPAs Co., Ltd. Legal Counsel Pillsbury Winthrop Shaw Pittman LLP 25