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Corporate Presentation

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Title: Corporate Presentation


1
New China Ventures Ltd. OTCPK NCVL
  • Corporate Presentation

2
Important Disclosures
  • Safe Harbor Statement
  • The statement contains forward-looking
    statements. These statements are based on
    assumptions that management believes are
    reasonable based on currently available
    information, and include statements regarding the
    intent, belief or current expectations of the
    Company and its management. Prospective investors
    are cautioned that any such forward-looking
    statements are not guarantees of future
    performances, and are subject to a wide range of
    business risks, external factors and
    uncertainties. Actual results may differ
    materially from those indicated by such
    forward-looking statements. The Company assumes
    no obligation to update the information contained
    in this press release, whether as a result of new
    information, future events, or otherwise.

3
Company Overview
  • Acquire and Operate Clean and Wastewater
    Treatment Systems in China
  • 30-50 year Monopoly Concessions
  • Offer wide range of ancillary products and
    services
  • China Beijing (CGW) Water Technology Centre-100
    Subsidiary Company.
  • Full range of value-added Consultancy Services
    for Chinas Water Industry
  • System Design
  • Project Engineering
  • Management Consulting
  • Equipment Procurement
  • Pipeline Inspection/Maintenance
  • Serve as Foundation to Acquire Municipal Water
    Systems
  • Highly Experienced and Knowledgeable Management
    in China Water Industry

4
Financial Highlights
  • Stock Symbol NCVL
  • Recent Share Price
    0.26
  • 52-Week Range 0.25-0.60
  • Market Capitalization 8,424,000
  • Capitalization
  • Primary Shares Outstanding 32.4 MM
    shares
  • Fully Diluted 32.4 MM
    shares
  • Shares in Float 12 MM shares
  • Management Ownership 46.8
  • As of 10/01/2008

5
China Water Crisis
  • Serious Water Shortages and Wastewater Problems
  • Over 50 of Chinas Water is unfit to drink
  • 48 million people lack sufficient drinking water.
  • Has only 7 of Global Water Resources
  • Uneven Distribution of Water
  • Fast Growing Urbanization and Industrialization
  • Pollution, Low Sewage Treatment Decreases Water
    Quality

6
China Water Crisis (cont.)
Serious Water Pollution in China
7
China Water Crisis (cont.)
  • Macquarie Research Equities-
  • February 27, 2008
  • Water is one of the key issues facing China in
    the next 20 years as the sustainability of a
    secure water supply system is vital to the
    well-being of its 1.3 billion people.
    Deregulation is providing enormous investment
    opportunities.

8
China Water Crisis (cont.)
Water Quality of Rivers in China
9
Market Opportunities
  • Urbanization Industrialization Accelerating
    Future Demand
  • Industrial Product Value affected by Water
    Shortages 200 Billion
  • Chinas Water Resources per capita is 1/4 of
    global average
  • 30 million People in rural area have no access
    to Drinking Water
  • 1.3 Billion Chinese People need Clean Drinking
    Water
  • Cities with Populations 250,000 are required to
    build Water-Treatment Plants.
  • In 2002, the Chinese Government Privatized Water
    Supply and Sewage Facilities to improve Operating
    Efficiencies and to raise Capital for Expansion

10
Private Participation in Infrastructure in
China-Water and Sewage Projects
Data Source World Bank
11
The Potential Growth in China Water
Infrastructure
12
Market Opportunities (cont.)
  • Sewage treatment facilities are Desperately
    Needed.
  • Proposed Treatment Rates gt than 60 by 2010,
    according to Chinas 11th Five Year Plan.
  • Sewage Treatment Rate in Different Regions of
    China

13
Market Trends
  • Major Foreign Companies are Investing in the
    China Water Market.
  • Substantial Premiums are being Paid for the
    Acquisitions.

14
Veolia Water Invest in China
  • Veolia Water Signs its 21st Contract in China
  • A 30 year concession with the Lanzhou Water
    Supply Co.
  • Estimated Investment of 1.6 billion Euros.
  • Veolia Operates in
  • 19 of 34 Provinces
  • Different Municipalities, Autonomous Areas and
    Special Administrative Regions
  • Serving the water needs of over 21 Million
    Inhabitants in China.

Source Veolia Water, January 22, 2007
15
NCVLs Approach
  • Two Profitable Operating Divisions
  • Water Equity Division
  • Participate in various Build-Own-Operate
    arrangements
  • Usually retain a 30 year water tariff concession
    right
  • Develop High-Margin Non-Tariff Products and
    Services
  • Construct Water Infrastructure Projects
  • Invest at a small premium to Asset Values-10 to
    15
  • Water Consultancy Division
  • Beijing CGW Water Technology Centre (CGW)
  • Provides steady stream of revenue
  • Offer high-margin value-added water consultancy
    services
  • Expertly measures operating metrics of municipal
    water systems.
  • Owns Proprietary Database of target Potential
    Acquisitions
  • Identify New Opportunities in Major Chinese Water
    Projects

16
Water Equity Division
  • Signed MOI to acquire a 20 in Xinyu City Water
    Supply Ltd
  • Center of rapidly growing Xinyu County industrial
    area, Jiangxi Province. Xinyu City has a
    population of 1,100,000
  • Water Production capacity 79 Million tons/year
  • Increase to 133 Million tons/year (68) upon
    completion of current expansion work
  • Business includes
  • Tap water production supply
  • Sale of water equipment
  • Water supply engineering
  • Water supply pipelines
  • Facilities installation

17
Xinyu City Waterworks

  • Privatized in 2006.
  • 2008 Revenues of 55 Mil. USD an increase of
    360
  • 2008 Profits of 21 Mil. USD, an increase of
    185
  • Water price increases of 17 per yr. over last 5
    years.
  • Acquisition Cost based on P/E of 6 (ROI 16 2/3
    per year).

18
Xingyu CityWater Quality Improvements
  • Xinyu City water quality is ranked as Class 1 in
    the Country.
  • Low cost of water purification, Greater
    profitability
  • Treatment of wastewater reduces pollution.
  • Sufficient water sources to meet city expansion
    plans
  • 30 year monopoly operations with renewal or
    buyout

19
Xinyu City Waterworks Ltd.
  • Xinyu City population to double in next 5 to 7
    years.
  • Water infrastructure projects can earn 35 to 45
    profits margins, (Est. 60 to 70 of revenues)
  • New government policy of 1 water meter per
    household.
  • Water meter installations earns 70 profit
    margins.
  • Commercial water rates higher than residential
    rates by a factor of 3 to 10 times

20
Xingyu CityWater Offices and Operations
  • Strategic water offices located throughout Xinyu
    City
  • Water tariffs other govt fees collected at
    water offices
  • Potential for prepaid debit cards with new water
    meters
  • Substantial real estate development potential
  • Revenues collection of 99.37
  • Water permit required prior to any property
    development

21
Xinyu City Waterworks Ltd. Highlight Summary
  • New China is acquiring a 20 interest in a 30
    year monopoly operating concession.
  • Xinyu City, is a rapidly growing city due to the
    urbanization as people are seeking new jobs
    created in the mid-tier cities in China.
  • 2008 revenues of 55 Million USD an increase of
    360 over 2007 revenues of 12 Million USD.
  • 2008 net profits of 20.8 Million USD an
    increase of 185 over 2007 profits of 7.3
    Million USD.
  • In 2009, water production capacity is expected to
    increase to 133 million tons/yr. from 79 million
    tons/yr.
  • Xinyu City is expected to double its population
    size in the next 5 to 7 years thereby
    significantly increasing the demand for water
    usage.

22
Xinyu City Waterworks Ltd.Highlight Summary
  • Over the last 5 years, water tariff prices have
    increased an average of 17 per year in China.
  • A network of water offices in Xinyu City where
    revenues are collected directly from both
    residential and commercial users.
  • Profits are earned on expanding the existing
    water distribution network owned by the joint
    venture.

23
Companys Growth Strategies
  • Build portfolio of water facility assets through
    series of Acquisitions, Mergers and/or Joint
    Ventures.
  • Leverage Assets to Increase Return on
    Investments.
  • Bring in highly Experienced Management and
    Operations Staff to implement aggressive growth
    strategies and maximize efficiency.
  • Acquisitions within similar or nearby regions can
    lead to Synergies in the following areas
  • Maintenance and management costs
  • Lower operating costs and capital expenditures
  • Increase ability to negotiate tariffs increases
    with local governments
  • Leverage CGWs technical expertise and wealth of
    experience to win larger contracts
  • Deliver High Value-added, Efficient and
    Profitable Water Solutions
  • Increase Revenues and Operating Margins by
    offering array of High-Margin Products and
    Services- water meter installation, tariff
    collection systems

24
Strategic Objectives
25
Management Board of Directors
  • Mr. Yuan Shu Pu President / Board Member
  • 20 years management experience in water-related
    business
  • Director of the Construction Material Laboratory
    of the Civil Engineering Department
  • Served as a Supervision Engineer in Zhejiang
    Province Hydraulic and Hydropower Engineering
    construction Supervision Company since 2000
  • Mr. Yao Zhen Xian CFO / Board Member
  • 30 years experience in Water Conservation and
    Irrigation technology in China
  • Former Commander-in-Chief, Three Gorges Reservoir
    Basin Drip Irrigation Construction
  • Former Assistant Chief Engineer, China Irrigation
    Drainage Technology Development
  • Ms. Liu Gui Mei Independent Director
  • 25 years experience in water-related businesses
  • The Dean of Water Conservancy Faculty of North
    China University of Water Conservancy and
    Electric Power
  • Mr. Tang Chin-Wan Consultant
  • 10 years experience in Water and Environmental
    Related Businesses
  • USA Ph D. / M.Sc. in Industrial and Systems
    Engineering
  • B.Sc. in Mechanical Engineering

26
Investment Highlights
  • Water Shortages and Clean Water are Key
    Constraints to Economic and Social Development in
    China.
  • China must depend on Professional Consultancy
    Companies to provide technical expertise to help
    solve Critical Water and Environmental Problems
  • NCVLs strategy is to be a Leading Water Company
    as the Chinese Government drives to sell and
    modernize water assets
  • Aggressively pursue portfolio of water assets and
    ancillary products / services by MA and/or joint
    ventures
  • Highly visible revenue and income streams via
    30-50 year monopoly water concessions and
    offering value-added products and services
  • Return on Investment projected at 30-40
    annually from Water Tariffs and Higher-Margin
    Complementary Products and Services
  • Revenues expected to exceed 75 million by 2010
  • Five Potential Targeted Acquisitions in China

27
NCVL- Significant Opportunities
  • Proven Business Model
  • 30-50 year Monopoly Water Concessions.
  • Selectively acquire Ownership in Water Systems,
    partnering with local governments.
  • Target Secondary Chinese Cities and Regions.
  • Increase in Water Tariffs higher-margin
    consulting, complementary products and services,
    will drive revenues and margins.
  • Effective water management and solutions will
    allow China to address its substantial water
    crisis.
  • Large, Under-Served Market
  • Chinas per capita water resources is only 1/4 of
    global average
  • 400 of 668 cities face tremendous water
    shortages
  • Pollution and low sewage treatment has
    dramatically decrease water quality
  • Proven Management Team
  • Former officials in the Chinese Ministry of Water
    with vast experience in water projects
  • Chinese and international expertise in water
    management and government relations

28
  • Thank You!
  • For Further Information
  • http//www.china-waterworks.com
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