1、written consent of PricewaterhouseCoopers. 5 Draft only Part I: Executive SummaryPart I: Executive Summary STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 6 Draft only Executive summary STK is pl
2、anning to expand its business and capture a share of the specialty vehicles market in China through entering into a JV arrangement with one of the state owned manufacturers - BHDTP. To achieve this objective, STK realizes that it must have an adequate understanding and assessment of the Chinese spec
3、ialty vehicles market. Consequently, STK has engaged PwCs market research division to conduct a market study on the Chinese market for the BCT, CMT, ODT and ADT products. Using this information, our knowledge of China and our financial expertise we have reviewed projections prepared by STK and the T
4、arget. The following report provides the key results of our research findings. STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 7 Draft only Executive summary While we have made all efforts to ens
5、ure the analysis and information contained in this report can be relied upon and that views expressed are supported by primary or secondary information, absolute accuracy and completeness cannot be guaranteed because of Chinas significant market complexities, uncertainties, small sample size, and li
6、mitation in research scope. Limitation on reliance of statements made throughout this report STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 8 Draft only Executive summary 20032004200520062007 BC
7、T Total market3,7604,0104,2704,5704,900 28m vehicle market6909001,1701,5402,040 STKs estimates of JVs market size 38200427549587 Percentage market share1%5%10%12%12% CMT Total market6,1307,0308,1409,48011,080 12m vehicle market1,0701,5002,1303,0504,430 STKs estimates of JVs market size 613528141,137
8、1,330 Percentage market share1%5%10%12%12% ODT Total market295 305315325335 STKs estimates of JVs market size 110130120120120 Percentage market share37%43%38%37%36% ADT Total market385445520610720 STKs estimates of JVs market size 022104201238 Percentage market share0%5%20%33%33% Market Potential ST
9、KSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 9 Draft only Executive summary Competition Competition Description BCTCMTODTADT Nearly 20-25 players in the market Xingma was the monopoly in the mar
10、ket in the past three years Nearly 20-25 players in the market Xingma, Huajian ,Haino and Tangzhuan were the 4 key players in the past three years Only two local players-BHDTP and NHL and some import products Only imported products in the market Volvo is the current leader in the market XCMG and NHL
11、 are potential local players Key Competitors Xingma Xingma Huajian Haino Tangzhuan NHL Foreign manufacturers Foreign manufacturers STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 10 Draft only Ex
12、ecutive summary Customers Assessment Key buying factors Satisfaction assessment BCTCMTODTADT The most important buying factors are price, quality and after-sales service The most important buying factors are price, quality and after-sales services According to interviews, more attention is placed on
13、 price and after- sales service Quality and services are the two factors considered most important Satisfaction for Xingma (key competitor) is relatively high Satisfaction for Xingma is highest amongst competitors Satisfaction level for Huajian is average Customers are dissatisfied with Hainos price
14、 Customers are mostly satisfied with NHLs quality Customers are satisfied with BHDTPs pricing and after-sales services Currently, customers are mostly dissatisfied with the prices of the imported ADT STKSTK This report is confidential and cannot be provided to or shared with any third party without
15、the prior written consent of PricewaterhouseCoopers. 11 Draft only Executive summary Key Market Drivers Urbanization Major projects Regulations and other drivers Grand Western Development Five key market drivers were identified for the specialty vehicles. All five market drivers are expected to have
16、 an impact on the BCT and CMT markets, while only the latter three drivers will have an impact on the ODT and ADT markets Important events lIncrease the proportion of bulk cement lActively develop pre-mixed concrete lLimit overload of vehicles lFuel taxes lOlympic games l2010 expo in Shanghai lAirpo
17、rt construction lYangtze River Three Gorges Project lWater Transport from South to North Project lGas Supply from West to East Project lRevamping of Qingzang Highway Project lQingzang Railway Project lHydraulic engineering construction lTransportation construction lUrban infrastructure construction
18、lUrban transportation construction lRoad construction lRailway construction lReal estate STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 12 Draft only Part II : Market potentialPart II : Market p
19、otential STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 13 Draft only JVs market size 2003 - 2007 BCT: Derivation and key assumptions 2.1 Analysis of market potential over the next 5 years Refer
20、enceReference PagesPages 14-15 16-17 18 36-39 BCT Total BCT market size estimates 2003 - 2007 Key factors affecting JVs market share if the market growth is not strictly limited by the government regulations, the total cement volume could reach about 720 million tons and bulk percentage will be arou
21、nd 40% in 2005* Key assumptionsKey assumptions Total market size will mainly comprise the newly added vehicles and replacement vehicles Replacement cycle is about 5 years Average capacity of current BCT is around 20 tons Based on the interviews with customers, average trips / day of the vehicles are
22、 2.5 times JVs market share and size are STKs own estimates Internal(brand, sales strategy etc) and external (competition, regulation etc) factors are the main factors to influence the JV market share The growth of cements and bulk percentage in China 2000-2007 * Based on the interviews with China C
23、ements Association and China Bulk Cements Development Association STKSTK This report is confidential and cannot be provided to or shared with any third party without the prior written consent of PricewaterhouseCoopers. 14 Draft only BCT: Cements and bulk cements development Scenario 1: government pl
24、ans* BCT * According to the “10th 5-year plans on cements” and “the plans on the bulk cements development” * CAGR for “compounded annual growth rate” * According the interviews with State Economic The CAGR of total sales between 1996 and 2002 was only 2.3%; The CAGR of NHL sales between 1996 and 200
25、1 was 18%; From 1999 the sales of BHDTP have fallen by more than 50%, we understand that this was due to the newly imposed cash on delivery requirement; Most of the import products are appointed to be purchased specially by the customers in the projects and the sales of imported products have recovered gradually from its low in 1997; * Total estimated 2002 sales are based on: NHL estimates BHDTP estimates Imported products are estimated according to the CAGR between 1999-2001 * ODT refers to products which are 20T and above. Source:Interviews with customers, competitors etc. China Aut
