Title: Corporate Presentation
1 New China Ventures Ltd. OTCPK NCVL
2Important 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. -
3Company 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
4Financial 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
5China 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
6China Water Crisis (cont.)
Serious Water Pollution in China
7China 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.
8China Water Crisis (cont.)
Water Quality of Rivers in China
9Market 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
12Market 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
13Market 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
15NCVLs 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
16Water 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
17Xinyu 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).
18Xingyu 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
19Xinyu 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
20Xingyu 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
21Xinyu 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.
22Xinyu 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.
23Companys 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
24Strategic 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
26Investment 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
27NCVL- 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