Investor Presentation
February 2009
2
Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of the safe-
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks, uncertainties and other factors that
could cause the actual results of the Company to differ materially from the results
expressed or implied by such statements, including changes from anticipated levels of
sales, future national or regional economic and competitive conditions, changes in
relationships with customers, access to capital, difficulties in developing and marketing new
products, marketing existing products, customer acceptance of existing and new products,
and other factors.
Accordingly, although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. The Company has no obligation to update the
forward-looking information contained in this presentation.
3
Equity Snapshot
.83x
P/S
2.0x
P/E
$0.22
EPS (Diluted – MRQ 9/30/08)
$0.80
EPS (Diluted – TTM 9/30/08)
$12 Million
Net Income (TTM– 9/30/08)
$47.5 Million
Revenues (TTM – 9/30/08)
$39.6 Million
Market Cap (2/5/08)
27.0 Million
Basic Shares Outstanding
$1.45
Price (2/9/08)
OTCBB: YGYB
Symbol
4
Investment Highlights
Yongye Biotechnology International, Inc. contracts the production of highly effective plant and animal nutrient
products using fulvic acid which are then distributed throughout the People’s Republic of China
Superior plant and animal nutrient products
Tremendous demand exists among plant and
animal farmers for products that increase
productivity
Growing scalable distribution – deeper market
penetration and wider geographic reach
Rapidly growing revenue and net income with a
pipeline of new products
Strong management team with proven ability to
scale-up the business
5
Yongye Biotechnology
Company Overview
Yongye Biotechnology International, Inc. has its headquarters in Beijing and its current contracted production
facility in Inner Mongolia.
Asia Standard Oil, Ltd., a subsidiary of Yongye Biotechnology Intl, and Inner Mongolia Yongye have
established a cooperative joint venture, Yongye Nongfeng, to manufacture, distribute and sell products.
Yongye Biotechnology
International, Inc. (Nevada)
100%
Fullmax Pacific Ltd. (BVI)
100%
Asia Standard Oil Ltd. (HK)
99.40%
Yongye Nongfeng Biotechnology
Company, Ltd. (Cooperative
Joint Venture - PRC)
0.60%
Inner Mongolia Yongye
Biotechnology Company, Ltd.
(PRC)
6
A Growing Domestic Market
China has more than 20 percent of the world’s population but only 7 percent of the world’s
arable land (FAO)
Every hectare of arable farmland in China must support 10.3 people, versus 5.1 people in
the European Union and 1.6 people in the United States (FAO)
Rapid urbanization means that food production and distribution is increasingly focused on
supplying cities
Rapid economic growth has led to pressure to use arable land for industrial purposes
Food security, quantity and quality, is a government priority
USDA studies show farmers spend 20% of annual income on fertilizer and they apply
fertilizers at 200% levels in an attempt to “double” overall yield
Increased output will come only from increased productivity
7
Fulvic Acid – A Key Nutrient
Fulvic acid is a complex, acidic, biochemical
polymer which is produced naturally by the
decomposition of plant and animal material
over a long period of time - contains many
essential nutrients for health and growth
Fulvic acid is a light weight molecule which
provides effective chelation of metal ions for
uptake into cells - increases natural strength
and ability of cells to fight off sickness and
disease
Extracted from humic acid, which is available
in Leonardite coal - China has 12% of the
world’s Leonardite coal reserves
Fulvic acid is used in many high-end
pharmaceutical, cosmetic, agricultural and
food products
Our pending patents cover the mixture of the
base formulas for the plant and animal
nutrient products - soon to be transferred to
the CJV
8
Advanced Scalable Production
Company technology allows for efficient extraction of
fulvic acid from humic acid on an industrial scale
Our proprietary extraction process leads to a high
quality fulvic acid with one of the smallest possible
average molecular weight and one of the highest
possible bio-activity coefficients
The Company uses their proprietary method to stabilize
the extract and mix it with micro-nutrients
The pending patents cover the mixture of the base
formulas for the plant and animal nutrient products on
which the manufacturing process is built
Process approved and certified by PRC Ministry of
Agriculture, National Scientific Institute and ISO
9001:2000
Over 200 employees including employees of its contract
manufacturer
9
Product Differentiation
Plant Nutrient
Targets the seed
Crossbreeding, hybridization and genetic
modification techniques
Limited by soil condition
Limited by farming practices
Targets the plant - best via Foliar (direct) application
& known to correct micronutrient deficiencies
Immediate effect on plant- within 8 hrs
Increases Uptake of Soil Nutrients
Adds own Macro & Micro Nutrients
Very effective in China’s harsh soil conditions
Targets the soil
Slow uptake of nutrients – over days
Poor use damages the soil
Poor soil condition weakens plants ability to uptake
nutrients by 20% - 30%
Organic fertilizer has slow uptake (time released)
Biotechnology
Yongye Products
Fertilizer
10
Shengmingsu for Plants
Nutrient-rich liquid made up of a highly
concentrated fulvic acid base along with other key
nutrients
Supplements the absorption of fertilizer and soil
minerals
Produces reliable, predictable quality and quantity
results
Enhances plant’s natural resistance against
disease and pests
Increases the quantity of yields and improves the
appearance and nutritional value of yields
Increases water and nutrient holding capacity –
especially in adverse soil and weather conditions
11
Great Results for Farmers
Helps increase yields 10% to 35%
Shortens harvest time by 15 to 20
days
Stronger and larger leaves and roots
extends the life cycle from 20 to 30
days
Enhances a crop’s taste, nutritional
value and appearance
Cost effective - internal studies show
returns of 10 RMB for every 1 RMB
spent on Yongye products
Carrot
Increases yield by up to 26.5%
Celery
Increases yield by up to 26.3%
Cucumbers
Increases yield by up to 21.7%, higher by 3
cm, and earlier to market by 11 days
Grapes
Increases weight of individual grape 0.4g,
18.2%, increases sugar content 37.5%
Potatoes
Increases yield to 17.3%, thicker leaves
and blooms 7 to 10 days earlier
Watermelon
Increases yield by up to 16.9%, increases
sugar content 0.8%-1.8%.
Wheat
Increases yield up to 10.7%
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Fulvic acid for animals
Maximizes digestion for better
health
Provides natural antibiotic to
prevent disease
Products
Nutrients mixed into animal feed
Tested and approved for rollout
Cows
Increased milk production and
quality
Reduces mastitis in dairy cows
For every 1RMB spent on Yongye
Products, the farmer receives
10RMB return from increased
market sales
Shengmingsu for Animals
13
Extensive Network of Stores
775 branded stores at the end of the third
quarter, September 30, 2008, up from 200 at
the end of 2007
Q4 2008 added 350 stores to branded
store trial process
Unique distribution model:
Separation of logistics and financing
from technical support and marketing
Independent, branded stores
responsible for inventory, collection and
sales
The Company provides centralized marketing
support to its distributors and stores
The Company provides direct technical
support and services to farmers
The Company works closely with private and
governmental entities to promote products
and gain brand recognition
14
Expanded Marketing and Distribution
Geographic expansion of sales
Grew from selling plant products
in four provinces to selling plant
products in 10 provinces and
animal products in 4 provinces
Staged sales development process
Demonstrations, trials and
educational programs create
brand awareness and sales follow
Brand recognition based on over 5
years of field testing, certification,
demonstration, promotion and sales
success
15
Roll in a Large Fertilizer Industry
China uses an estimated 1/3 of the
world’s fertilizer production, over 50
million tons of traditional nitrogen
fertilizer
Pressure to increase productivity has led
to overuse of traditional fertilizers, and
fertilizers used alone lose 30% to 70% of
their effectiveness by overusing soil,
leading to a need to replenish soil
Yongye plant products replenish
nutrients needed for growth and work in
conjunction with traditional fertilizers
Yongye plant nutrients compliment rather
than compete against fertilizer sales
The technology required for fulvic acid
extraction is expensive and creates a
high barrier of entry for competitors
Fertilizers with Fulvic Acid
164 Products
Combination of
nitrogen,
phosphorus
and potassium
16 Products
Combination of
mineral ions
1 Product
5
Products
Yongye’s high quality fulvic acid plant nutrient
products have the most complete combination
of nutritional elements available in the market
1 Product
With most
Minerals
Yongye
16
Our Competitive Landscape
China Market
The overall fertilizer market is estimated to be a $50B industry in China – estimated to grow
about 30% a year from 2005 to 2009.
China has about 1.81B Mu of arable land – all cash and row crops benefit from the use of
Yongye’s “Shengmingsu”
China purchased 63% more agricultural materials in 2007 than 2006 - the market is growing
rapidly
Yongye’s Market: Ten Provinces
Yongye grew about 265% in 2008 and expects to grow and additional 50% in 2009
Our product is applied to about 2% of all arable land and we have about 37% market share
Plant nutrient products are applied to about 6% of all arable land
Competitors in Our Provinces
Company/Product
Inner
Mongolia
Gansu
Hebei
Hubei
Xinjiang
Others
Ai Duo Shou
x
Changsha Gaosheng
x
China Agritech
x
x
x
x
China Green
x
x
Henan Luo Xiao Wang
x
x
x
Qing Niu Hei Ye Fei
x
Qiqihar Fuer
x
Shan'xi Weinan Hongxing
x
Shi Quan Da Bu
x
Tian Feng Su
x
17
Growth Strategy
Acquired predecessor’s 2,000 TPA equipment in October 2008 and completed
construction on a new 8,000 TPA processing facility in October 2008, which
increased the production to 10,000 tonnes per annum.
Have employed strategic television and print advertising to support sales throughout
2008 - infomercial campaign launched on local channels to educate farmers and to
help them alter usage patterns
Developing customized and enhanced plant products targeting specific crops with
the intent to increase yields and market position
Increasing our line of animal product offerings to capture wide open market –
revenue from these products should have the effect of reducing the seasonal sales
swings in slower quarters
We will build our revenue base via increased sales coverage in current provinces
and increase market penetration via increased support staff coverage.
18
Management Team
Wu Zishen: Chairman and CEO
Director and Chairman of large SOE conglomerates and started 13 companies
Managed approximately $1.4 billion of investments in state planed economy
Sun Taoran: Co-Founder & Director
Built approximately $27.8 million media business and guru of PDA marketing in China
Zhao Qiang: VP Sales and Marketing & Director
Led marketing for several large companies and awarded Top Ten in Marketing in China,
written up in EMBA case at Fudan University
Larry Gilmore: VP Corporate Strategy, Principal Financial Officer
Consulted and led strategic corporate initiatives for Fortune 500 companies in USA such
as Deloitte & Touché, Alcatel, Nokia and HP. Raised foreign PE for companies in China.
Gao Jing: Chief Scientist
Renowned professor with 40 years of research, development and industry experience
19
Financials
20
Rapid Revenue Growth
21
Solid Gross Profit and Margins
22
Growing Net Income
23
Income Statement
The predecessor
Inner Mongolia
Yongye
Yongye
Biotechnology
International, Inc.
and Subsidiaries
The predecessor
Inner Mongolia
Yongye
Yongye
Biotechnology
International, Inc.
and Subsidiaries
Year Ended
December 31,
Year Ended
December 31,
9 Months Ended
September 30,
9 Months Ended
September 30,
3 Months Ended
September 30,
3 Months Ended
September 30,
2006
2007
2007
2008
2007
2008
Sales
3,722,640
$
13,137,406
$
10,752,855
$
45,189,579
$
2,625,137
$
18,202,940
$
Cost of Goods Sold
2,710,840
7,274,710
5,368,480
21,697,964
1,021,719
9,278,944
Gross Profit
1,011,800
5,862,696
5,384,375
23,491,615
1,603,418
8,923,996
Gross Margin
27.2%
44.6%
50.1%
52.0%
61.1%
49.0%
Operating / Selling, General and Admin
484,796
925,996
581,963
8,703,321
355,784
3,893,719
Income from Operations
527,004
4,936,700
4,802,412
14,788,294
1,247,634
5,030,277
Operating Margin
14.2%
37.6%
44.7%
32.7%
47.5%
27.6%
Other Income (Expense)
Interest Income (Expense)
(76,819)
(212,239)
1,291
66,563
65,785
Other Income (Expense)
(2,446)
(365,907)
(279,468)
(726,927)
(81,827)
(340,087)
Total Other Income (Expense)
(79,265)
(578,146)
(278,177)
(660,364)
(81,827)
(274,302)
Income Before Provision for Income Taxes
447,739
4,358,554
4,524,235
14,127,930
1,165,807
4,755,975
Provision for Income Taxes
-
-
-
822,302
-
227,537
Net Income Before Minority Interest
447,739
4,358,554
4,524,235
13,305,628
1,165,807
4,528,438
Provision for Minority Interest
1,092,426
57,421
Net Income
447,739
4,358,554
4,524,235
12,213,202
1,165,807
4,471,017
Net Margin
12.0%
33.2%
42.1%
27.0%
44.4%
24.6%
Other Comprehensive Income
Foreign Currency Translation Adjustment
250,911
723,298
344,228
419,970
170,033
5,199
Comprehensive Income
698,650
$
5,081,852
$
4,868,463
$
12,633,172
$
1,335,840
$
4,476,216
$
Net Income per Share
Basic
0.40
$
0.75
$
0.10
$
0.22
$ ��
Diluted
0.40
$
0.72
$
0.10
$
0.20
$
1
24
Balance Sheet Highlights
The predecessor Inner
Mongolia Yongye
Yongye Biotechnology
International, Inc.
and Subsidiaries
December 31, 2007
September 30, 2008
Current Assets
12,863,821
32,063,039
Property and Equipment, Net
2,486,487
3,386,463
Intangible Assets, Net
3,665,584
114,817
Long-Term Investments
4,115,764
0
Total Assets
23,131,656
$
35,564,319
$
Current Liabilities
10,208,031
3,650,270
Long Term Liabilities
12,153
204,962
Minority Interest
1,192,426
Total Liabilities
10,220,184
$
5,047,658
$
Stockholders' Equity
Capital Stock: 26,760,258 shares authorized and
issued par value $.001 as of September 30,
2008
26,760
Capital contribution
7,260,000
Additional Paid-in Capital
17,887,832
Retained earnings
4,024,111
10,918,386
Statutary reserve
480,629
1,263,713
Accumulated other comprehensive income
1,146,732
419,970
Total Stockholders' Equity
12,911,472
$
30,516,661
$
Total Liabilities and Stockholders' Equity
23,131,656
$
35,564,319
$
25
Investment Highlights
Superior plant and animal nutrient products
Tremendous demand exists among plant
and animal farmers for products that
increase productivity
Growing scalable distribution – geographic
expansion and greater market penetration
Rapidly growing revenue and net income
with a pipeline of new products
Strong management team with proven
ability to scale-up the business
26
Contacts
Yong Ye Biotechnology Co.
Suite 608, Xueyuan International Tower
No. 1 Zhichun Road
Haidian District, Beijing, China
Phone: 86.10.8231.8626
Fax: 86.10.8231.1797
Loeb & Loeb, LLP
Company Counsel
345 Park Avenue
New York, NY 10154
Phone: 212.407.4000
Fax: 212.407.4990
MSPC
Certified Public Accountants
and Advisors, P.C.
Independent Auditors
546 Fifth Avenue
New York NY 10036-5000
Phone: 212 682 1234 ext. 3586
Fax: 212 687 8846
CCG Investor Relations
Mr. Crocker Coulson, President
Phone: 646.213.1915
E-mail: crocker.coulson@ccgir.com
http://www.ccgir.com/
27
Thank You