- Filing of certain prospectuses and communications in connection with business combination transactions (425)
2010年9月13日 - 7:13PM
Edgar (US Regulatory)
Filing under Rule 425 under
the Securities Act of 1933
Filing by: Qiao Xing Universal Resources, Inc.
Subject Company: Qiao Xing Mobile Communication Co., Ltd
SEC File No. of Qiao Xing Mobile Communication Co., Ltd: 001-33430
Qiao Xing Universal Resources, Inc. (NASDAQ: XING)
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2
Disclaimers
Filing under Rule 425 under
the Securities Act of 1933
Filing by: Qiao Xing Universal Resources, Inc.
Subject Company: Qiao Xing Mobile Communication Co., Ltd
SEC File No. of Qiao Xing Mobile Communication Co., Ltd: 001-33430
Our comments today may contain forward-looking statements and management may make additional forward-looking statements in
response to your questions. Forward-looking statements include all statements other than statements of historical facts, such as
statements regarding anticipated mining production capacity and volumes, unit net costs of mining production, mining sales
volumes, ore grades, molybdenum and other commodity prices, demand for molybdenum, lead, zinc and other resources, mine
development and capital expenditures, mine production and development plans, anticipated acquisitions, the privatization of QXMC,
the spin off of QMXC's mobile phone business, availability of power, water, labor and equipment, environmental liabilities and
expenditures, litigation liabilities and expenses, estimates of proven and probable reserves and other mineralized material, political,
economic and social conditions in the areas of the Company's operations and exploration efforts and results.
Although we believe our expectations expressed in such forward looking statements are reasonable, we cannot assure you that
they will be realized. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from the anticipated results, and therefore we refer you to a more detailed discussion of the risks
and uncertainties in the Company's filings with the Securities & Exchange Commission.
The forward-looking statements contained in this presentation are made only of this date, and XING is under no obligation to revise
or update these forward-looking statements.
This presentation is issued for information purposes only and does not constitute an offer to sell or the solicitation of an offer to
subscribe for or buy any security, nor is it a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale,
issuance or transfer of the securities referred to in this press release in any jurisdiction in contravention of applicable law.
Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved
of the Proposed Offer or securities to be issued in connection therewith, or passed upon the adequacy or accuracy of this press
release, or the merits or fairness of the Proposed Offer. Any representation to the contrary is a criminal offense.
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NASDAQ Listed: XING
Share Price (09/03/2010) $1.70
52 Week Range $1.36-$2.87
Market Cap $156.6 Million
Shares Outstanding (06/30/2010): 92.1 Million
Average Volume (3 Months) 162,642
Net Cash (June 2010): $538.2 Million
Book Value (June 2010): $485.5 Million
P/B: 0.3 x
Equity Snapshot
3
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Legacy: Telecom Business
4
Indoor phone and low-end
mobile phone
Sold in November 2009 to
Dragon Fu Investment Limited
Molybdenum
The Company's molybdenum business
started commercial operation in the second
half of 2009.
Bigger Molybdenum Mine
Plan to acquire a molybdenum mine with
the capacity of milling 15,000 tons of ore
per day from local government in Chifeng
Company Overview
Now and Future: Resources Business
Lead-zinc
Plan to enter the lead-zinc business through
the acquisition of Balinzuo Banner Xinyuan
Mining Co., Ltd. in Inner Mongolia
Other resources opportunities
XING continues to evaluate opportunities to
make resources related acquisitions to
accelerate its growth
Higher-end mobile phone
Proposed to acquire all outstanding
shares of Qiao Xing Mobile
Communication Co., Ltd (NYSE:QXM,
or "QXMC") not currently owned by
the Company, which, if completed, will
result in QXMC becoming a privately
held company.
If this transaction is completed, the
Company plans reorganize QXMC,
spin off its mobile phone business, and
allocate its assets to the resources
industry.
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Entered the resources industry through
acquisition of China Luxuriance Jade, a
molybdenum mining company
5
First Chinese private company to list
on NASDAQ: XING
Apr 2009
Nov 2007
Feb 2003
1999
Divested indoor phone and low-end
mobile phone business
Nov 2009
QXMC listed on NYSE
May 2007
Announced plan to enter the resources
industry
Acquired 65% equity in CEC Telecom
Co., Ltd. via its subsidiary QXMC
Corporate History
Qiao Xing Universal Resources
Qiao Xing Mobile
Communication
(NYSE: QXM or
"QXMC")
China Luxuriance
Jade Company
Goal: a Pure Resources Player
100%
61.1%
Plan to acquire interest in copper-tin
mine, expands into Southwest China
Jan 2010
Huizhou Taiherui Information Technology Co., Ltd.
Guangxi Hongyuan
Mining Co., Ltd.
Chifeng Zhongtai
Mining Co., Ltd.
Chifeng Haozhou Mine
100%
100%
100%
Plan to acquire interest in lead-zinc mine
in Balinzuo Banner, Inner Mongolia
May 2010
100%
Propose to privatize QXMC
Sep 2010
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China is committed to making significant investments in infrastructure that
are expected to drive demand for strategically important resources,
including molybdenum, lead, zinc and copper
The global economy is recovering and growth in industrial production is
supporting demand for commodities generally
Resources is a Stable
Industry with Attractive
Opportunities in China
Relatively large scale, high grade reserves and good mining conditions
Molybdenum assets - Revenue of $20.9M and net profit of $6.7M in first half
of 2010; expected to grow eventually to contribute net profit of $24M+ in
FY2011
High-Quality Resources
Assets Provide
Immediate Catalyst for
Growth
Qiao Xing Universal has been a public company on Nasdaq for over 10 years
Management has a track record of execution in the mining industry
Experienced
Management Team
Net cash in excess of $538 million as of June 30 2010, equivalent to $5.80
per share
Trading below net cash, and at deep discount to book (0.3 x book)
Close comparables trade at book value
Solid Financial Condition
and Attractive Valuation
Investment Highlights
Acquisition of more resource businesses is on the management's agenda
More reserves may be found the unexplored molybdenum mine area
Focused Growth
Strategy
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Our Resources Assets
7
Chifeng Haozhou Mine
Molybdenum
Acquire controlling
stake in another big
Molybdenum mine
Guangxi Yinping Mine
Copper-tin
Company Headquarters
Chifeng Xinyuan Mine
Lead-zinc
Acquire 51% shares in
a big Copper Mine from
local government
---- represents assets the Company plans to acquire, but does not currently own.
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Source: IMOA,CIBC World Markets and Company Reports.
Breakdown of Demand for Molybdenum
Molybdenum Characteristics and Demand Drivers
Molybdenum Opportunity
8
Unique physical characteristics include high melting
temperature, and high strength to weight ratio:
Adding Molybdenum to steel improves strength,
heat resistance, corrosion resistance
Used in catalysts, it lowers sulphur levels of fuel
Unique physical qualities drives demand from steel,
atomic energy, oil and gas, petrochemical and
refining sectors, all of which have strong long term
outlook in China and abroad
Long-term global demand growth remain robust at 4-
5%, with China demand growth above average
New Molybdenum supply pipeline is constrained due
to recent credit crisis
Cash-producing assets are well positioned to
capitalize on growing demand
Significant opportunity for growth driven by rapid growth of the Chinese economy and increased
spending on infrastructure projects in China
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Source: Metals Bulletin, RBC Capital Markets (estimates as of August 2010)
Molybdenum Opportunity
9
Molybdenum price remaining strong
throughout market correction
The molybdenum market is expected to see demand outstripping supply in 2010 and 2011,
driving prices back to pre-crisis levels of US$25/lb in 2010 and 2011
World stainless steel demand forecast
Unit: KMT
Unit: US$/lb
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10
Owns license to explore a mine covering 53.9 km2 ,
where 32.3 km2 have proven reserves of 30,985 tons
of Molybdenum; the remaining 21.6 km remain
unexplored, but management believes may contain
additional reserves of copper-molybdenum and other
metals.
Mine is located approximately 745 km northeast of
Beijing, with well-developed highway and railway
systems as well as established power lines, water
supply & recycling system
Existing production facility has capacity to produce
3,900 tons of molybdenum concentrate per annum
Molybdenum Assets
Molybdenum Processing Plant in Chifeng - Inner Mongolia
Management expects the Molybdenum plant to
generate net profit of US$24 million in fiscal year of
2011, at current prices and exchange rate.
Capacity Expansion -Tons Molybdenum concentrate
Cash Cost @ $4.36 per pound of molybdenum metal
1930
3900
4340
100
200
300
400
500
600
2009
2010E
2011E
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Loading &
Hauling
Crushing &
Grinding
Floating
Filtering
Market
1
2
3
4
5
Molybdenum - Production Process
Moly Ore
Moly Concentrate
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XING is Engaged in the Production of
Molybdenum Concentrate
Roaster
Molybdenum Oxide
Smelter
Ferromolybdenum
Pure
Molybdenum Oxide
Molybdates and
other chemicals
Molybdenum
metal
Steel and steel
alloying
Catalysts
Chemical
Carbon steel
Molybdenum
metal and alloys
Scrap
End users
Molybdenum - Industry Focus and
Customers
Customer
Direct sale to producers
No distribution channel
required
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Source: LME, BofA Global Metal Weekly (estimates as of August 2010)
Lead Demand Drivers
Zinc Demand Drivers
Lead-zinc Opportunity
13
Zinc demand has been weak since 2007, driven by an
underperforming steel industry.
The worst is over for steel as galvanized steel producers
have been ramping up production.
Limited Zinc concentrate supply may constrain refined zinc
production, helping to support prices in 2011.
Lead demand has held up better than consumption of
other metals during the recession.
Global vehicle production is set to pick up on the stimulus
schemes implemented in various countries, which should
support demand for lead.
Lead mine supply is not abundant, so prices should
respond to improved demand backdrop.
Breakdown of Demand for Lead
Breakdown of Demand for Zinc
Lead prices forecasted to rise to $2,300/t in 2010 and $2,650/t in 2011
Zinc prices forecasted to rise to $2,325/t in 2010 and $2,750/t in 2011
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Mine
Lead-zinc Mine in Balinzuo Banner - Inner Mongolia
Owns mining license of the mine covering 3.3233 km2
The reserves of lead-zinc metal and copper metal, which are subject to verification, are
estimated to be 825,000 tons and 109,000 tons, respectively
Average grade at 7.60% for lead-zinc and 1.01% for copper
Current production capacity at processing 500 tons of ores per day
The Company intends to engage Runge Asia Limited to help verify the reserves and facilitate
the acquisition
Final products are lead-zinc concentrate and copper concentrate being supplied to smelters in
Chifeng and surrounding areas in China
Well-developed infrastructure, including water and power supplies as well as transportation;
all relevant permits for normal business operation; an experienced technical and management
team with years of mining expertise
The Company entered into a letter of intent to acquire the Balinzuo Banner mine in May 2010
Lead-zinc Assets
Acquisition expected to be closed in Q4 2010
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Experienced
management
With years of mining
expertise
Utility Supply
stable and low cost
supply of water &
electricity
Mine Development
Fast & well planned
development with
reliable construction
Cost Advantage
high grade ore
provides low unit
cost
Good Location
well-established
infrastructure
enables ease of
transportation
Potential Reserves
Upside from
additional reserves in
unexplored area
Low Cost Producer
with Attractive ROI
even at Currently
Depressed Moly
Prices
Competitive Position
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Telecom Assets
Qiao Xing Mobile Communication Co., Ltd.
Domestic manufacturer of mobile
handsets
Operates its business primarily
through CEC Telecom Co., Ltd., its
96.6%-owned subsidiary
Has faced a tough competitive
environment and shrinking revenue
But in stable financial condition
Ongoing Step
XING currently owns 61.1% shares
in QXMC.
Has proposed to issue 1.9 shares of
XING common stock plus US$ 0.80
in cash per share to shareholders of
QXMC other than XING
Telecom Assets
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Completed sale
of indoor phone
and lower-end
mobile phone
business in Nov
2009
Propose to
privatize QXMC
and spin off
mobile phone
business to focus
on resources
strategy
Changed
name to Qiao
Xing
Universal
Resources,
Inc. in late
Dec 2009
Plan to enter
into other
resources,
including lead,
zinc, and copper
in 2010
Plan to expand
existing moly
processing
capacity in 2010
and 2011 to
540,000 tons per
year
Plan to expand
moly business by
boosting capacity
and acquiring
interests in
additional moly
mines
Pure Resources Player
Resources-focused Growth Strategy
Become a big
pure resources
player in China,
and seek dual
listing on HKSE,
where resources
companies get
higher valuation
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Seasoned Management Team with International Management Experience and Solid Industry Expertise
18
10 years of corporate finance background
Former head of Finance, Tiens Biotech Group, Inc. (AMEX:TBV)
Registered member of ACT, ACCA of UK and CPA of China
20+ years of experiences in the mining industry
Vice President of Mining Operations and Director of Investments at Shanghai Fosun High Technology (Group)
Co., Ltd., a Chinese conglomerate with a mining division spanning iron ore, steel, coking coal and gold
Vice General Manager at Shanghai Gangtai Mining Co., Ltd. and Vice General Manager at Zijin International
(Beijing) Mining Co., Ltd., a subsidiary of Zijin Mining Group Co., Ltd. , which are dually listed on HKSE and
the Shanghai Stock Exchange
Holds a degree in Mining Geology from Shenyang Gold College and a Master's degree in Political Economics
from Nanjing Institute of Politics of the People's Liberation Army.
20 years of management and entrepreneurial experience
Majority shareholder of Real Gold Mining Ltd., which was listed in Hong Kong in Feb 2009
Executive Commissioner of the China National Association of Industry and Commerce and Senior Analyst of
the China National Condition and Development Research Center
Management
Mr. Zhimin Guo, Executive Director
Mr. Aijun JIANG, Chief Financial Officer
Mr. Ruilin WU, Chairman & CEO
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19
Peer Valuation
Ticker Company Name Recent Price 3 Market Cap (MM) P/B (MRQ) P/S (TTM) P/E (TTM)
XING Qiao Xing Universal Resources 1.58 157 0.3 0.9 N/A
3993.HK1 China Molybdenum 4.61 19,695 1.8 5.2 27.7
601958.SH 1 Jinduicheng Molybdenum 15.43 49,786 3.8 8.3 62.7
TC Thompson Creek 9.69 1,480 1.2 2.6 28.0
600497.SH 1 Chihong Zinc & Germanium 19.00 19,148 4.7 4.4 43.7
CHNR China Natural Resources 9.95 1,633 4.8 15.8 NEG
VDNRF 2 Vedanta 31.25 5,353 1.9 1.1 14.7
XSRAF 2 Xstrata 17.15 32,388 1.4 1.9 20.9
SCCO Southern Copper 32.19 27,361 7.2 5.8 20.0
FCX FCX 78.55 36,953 3.5 2.2 10.2
Peer Group Average 3.4 5.3 28.5
All numbers are in US dollars, except that
1 - price and market cap in Chinese yuan and 2- price and market cap in British pound
3. Prices as of September 3, 2010, other than XING, which is as of September 8, 2010
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Molybdenum Results
In US$ Million * Q2 2010 Q1 2010 2009
Production1 929.7 620.3 1,929.6
Cash cost 2 9,554 9,670 10,259
Capex 3.1 1.9 16.6
Net Sales 12.4 8.5 28.4
Gross Profit 5.9 3.9 14.7
Net Income 4.1 2.6 9.4
Note:
* All numbers are in US$ millions except that production is in tons and cash cost is per ton.
1. Production (in tons) refers to molybdenum concentrate.
2. Cash cost (per ton) refers to average cash cost of sales per ton of molybdenum metal. The Company
produces molybdenum concentrate and does not engage in smelting operations, so the cash cost does not
include the cost of smelting.
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Summary Income Statement
In US$'000 For the six months ended June 30 For the six months ended June 30 For the year ended December 31 For the year ended December 31
2010 2009 2009 2008
Net sales 68,695 168,519 267,628 380,352
Cost of goods sold (57,297) (135,945) (216.078) (251,964)
Gross profit 11,399 32,574 51,550 128,388
Operating expenses (15,324) (39,640) (41,891) (84,675)^
Income from operations (3,926) (7,066) 9,659 43,713
Net non-operating income (loss) 17,256 (17,150) (32,903) (18,530)
Income before income tax 13,330 (24,216) (23,244) 25,183
Provision for income tax (2,649) (5,197) (6,437) (24,066)
Net income (loss) to common stock 14,835 (26,947) (38,075) (20,049)
Basic earnings (loss) per share 0.17 (0.53) (0.61) (0.65)
Diluted earnings (loss) per share - - (0.61) (0.86)
Note: The Company's Consolidated Net Profit figure should include fair value changes of its Liability-classified embedded derivatives
related to the Convertible Notes issued. The Company usually engages third party to do the valuation for first-half financial statements and
annual report.
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Summary Balance Sheet
In US$'000 June 30 December 31
2010 2009
Cash and cash equivalents 538,159 543,445
Total current assets 675,535 700,662
Total assets 841,673 865,912
Total current liabilities 156,049 202,436
Long-term liabilities -
Total liabilities 189,146 250,918
Total equity 652,527 614,994
Total liabilities and stockholders' equity 841,673 865,912
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Summary of Corporate Strategy
* Simplify Corporate Structure
* Resources-focused Growth
* Increase Corporate Value
If the privatization of QXMC succeeds, XING will get more financial
resources to speed up our steps and become a big pure resources player
in China quickly;
If minority shareholders of QXM reject XING's offer, XING still has more
than US$90 million free cash on hand. XING will continue its acquisition on
our resources targets with an adjusted approach.
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Leveraged to Significant Growth Opportunity Driven by Infrastructure Investment in China
Cash Producing High-Quality Resources Assets Provide Immediate Catalyst for Growth
Solid Competitive Position as Low Cost Producer
Experienced Management Team
Solid Financial Position
Attractive Valuation - Trading Below Cash on Hand
Investment Summary
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Company
Rick Xiao, VP
Qiao Xing Universal Resources, Inc.
Tel: +86-752-2820268
Email: rick@qiaoxing.com
www.cosun-xing.com
Investor Relations
Ed Job, Account Manager
CCG Investor Relations
Tel: +1-646-213-1914
Email: ed.job@ccgir.com
www.ccgirasia.com
Independent Auditor
Crowe Horwath LLP
Contact
US Securities Counsel
Andrew N. Bernstein, P.C.
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Additional Information and
Where to Find It
Qiao Xing Universal Resources, Inc. plans to file a Schedule 13E-3 with the United States Securities and
Exchange Commission (the "SEC") in connection with its proposed offer to acquire all of the outstanding
shares of QXMC that it does not currently own (the "Proposed Offer"). The Schedule 13E-3 will contain
additional information regarding the Proposed Offer, including, without limitation, information regarding
the special meeting of shareholders of Qiao Xing Mobile Communication Co., Ltd that will be called to
consider the Proposed Offer. The Schedule 13E-3 will contain important information about Qiao Xing
Universal Resources, Inc., Qiao Xing Mobile Communication Co., Ltd, the Proposed Offer and related
matters. Investors and shareholders should read the Schedule 13E-3 and the other documents filed with
the SEC in connection with the Proposed Offer carefully before they make any decision with respect to
the Proposed Offer. A copy of the Scheme of Arrangement with respect to the Proposed Offer will be an
exhibit to the Schedule 13E-3. The Proposed Offer is expected to be exempt from the registration
requirements of the United States Securities Act of 1933 Act by virtue of the exemption provided by
Section 3(a)(10); however, it is possible that the offer may change forms such that the exemption provided
by Section 3(a)(10) may no longer be available. In such a case Qiao Xing Universal Resources, Inc. may
file a Form F-4 with respect to the Proposed Offer.
The Schedule 13E-3 and all other documents filed with the SEC in connection with the Proposed Offer will
be available when filed free of charge at the SEC's web site at www.sec.gov. Additionally, the Schedule
13E-3 and all other documents filed with the SEC in connection with the Proposed Offer will be made
available to investors or shareholders free of charge by calling or writing to:
Company Contact: Rick Xiao, Vice President
Qiao Xing Universal Resources
Phone: +86-752-282-0268
Email: rick@qiaoxing.com
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