SITC International Holdings Company Limited October 2010

Disclaimer This document does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of SITC International Holdings Company Limited (the “Company”) in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Specifically, this document does not constitute a “prospectus” within the meaning of the U.S. Securities Act of 1933 or the Hong Kong Companies Ordinance (Chapter 32 of the Laws of Hong Kong), as amended. Any decision to purchase securities in the Company shall only be made at your own assessment of the market and the market position of the Company and at your own risk. Shareholders and investors are reminded to exercise caution when dealing in the securities of the Company. This document has been prepared by the Company solely for the reference of the shareholders and investors. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The information contained in this document should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the document. These materials do not contain all of the relevant information relating to the Company or its securities. None of the Company or any of its affiliates, advisors or representatives will be liable (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. The Company may alter, modify or otherwise change in any manner the content of this document, without obligation to notify any person of such revision or changes. Any information on the past performance of the Company is not necessarily indicative of its future performance. This document contains statements that constitute forward-looking statements that are based on current assumptions and beliefs as well as information currently available to the Company. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ significantly from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances.

Contents

1

1

Company Overview

2

Business Highlights

3

Business Strategy

4

Financial Information

1. Company Overview

Our Business We are a leading shipping logistics company in the PRC, exclusively focused on the intra-Asia market, providing integrated transportation solutions to our customers.

Freight forwarding

Ship agency Container shipping

Depot and Warehousing

1st

3rd Largest Non-StateOwned Shipping Logistics Company in the PRC

Source: Drewry. 2

Company Overview

Trucking

4th 3rd Largest Container Shipping Company in the PRC

4th Largest Container Shipping Company in the Intra-Asia Market

Our Corporate Milestones SITC has achieved a leading market position within a short period of 19 years since its establishment in 1991. 2010  Signed strategic cooperation agreement with Shanghai Port and Dinh Vu Port in Vietnam to jointly develop depot, warehousing and other logistics businesses

2009

 Became market leader along PRC-Vietnam and PRCPhilippines routes

2008  Became market leader along PRCJapan route 2007

2006

 Strategically relocated operating center from Qingdao to Shanghai

 Became largest PRC-based non-stateowned shipping logistics company

2004  Expanded into ASEAN Market 2003  Established Qingdao logistics park 1992  Purchased first vessel and started serving PRC-Japan trade lane

 Began our depot and warehousing services 1991  SITC Corp was established to operate freight forwarding business 3

Company Overview

2. Business Highlights

Business Highlights

4

1

Exclusively Focused on the Fast Growing Intra-Asia Market

2

Integrated “One-Stop” Logistics Services

3

Distinctive High Frequency, High Density Service Model

4

Stable and Experienced Management Team

Business Highlights

1

Intra-Asia Market: Largest and Fastest Growing

The intra-Asia market(1) is the largest, fastest growing and most resilient trade market in the world. Intra-Asia: The Largest Trade Market 2009 Container Shipping Volume (Million TEU)

Intra-Asia: Fastest Growing, Most Resilient Market Intra-Asia: Fast Growing, Economically Active Market 2006 – 2008 CAGR Container Shipping Volume Growth (%) 25.1%

17.4%

6.0%

Intra-Asia

58.0%

2009 World Container Trade: 134.0 million TEU

(1)

Far East Europe

13.0%

5.5%

World container trade

2.7%

Intra-Asia

Transpacific

Far East - Europe

Transatlantic

1.5%

Core East- Transatlantic Transpacific (2) West

9.9%

(9.0%)

(11.1%)

(12.4%)

(13.3%) (19.0%)

Intra-Asia

Far East Europe

World container trade

Source: Drewry. Note: (1) Includes Northeast Asia and Southeast Asia Market; refers to trade within China, Japan, Korea, Taiwan, Hong Kong and ASEAN countries. (2) Core East-West trade refers to the Transpacific, Far East – Europe, and Transatlantic trade routes. Business Highlights

2.5%

2008 – 2009 Container Shipping Volume Growth (%)

(5.2%)

5

3.0%

Intra-Asia: Most Resilient to Economic Fluctuations 8.9%

Other

5.6%

Core East- Transpacific Transatlantic West

1

Our Leading Position in the Intra-Asia Market

The Northeast Asia Market is mature and has stable growth while the Southeast Asia Market is fast growing and emerging. We have a leading position in the Northeast Asia Market. Since 2004, we entered into the Southeast Asia Market and have achieved strong growth.

Northeast Asia Market (1)

Our Container Shipping Volume

(Thousand TEU)

(Thousand TEU) 

8,239 8,057 7,743

Connects the PRC and Japan, the second and third largest economies in the world, respectively

7,730 7,519

1,187

1,080

2006

2007

2008

2009

2010E 995

Southeast Asia Market (1) (Thousand TEU)



Growth driven by strong economic growth in Southeast Asia countries, especially Thailand and Vietnam

845

17,349 16,543

14,134

2007

These countries have fast growing industrial sectors with high import demand for raw materials



Lower tariffs from China – ASEAN Free Trade Agreement in January 2010 to further boost trade between PRC and ASEAN countries

15,806

15,760

2006



2008

2009

2010E

2007

Source: Drewry. (1) The Northeast Asia Market refers to trade solely between the PRC, Japan and China while the Southeast Asia Market refers to trade within intra-Asia that involves Taiwan, Hong Kong or ASEAN countries 6 Business Highlights

2008

2009

9M 2010

2

Integrated “One-Stop” Logistics Services

Our integrated “one-stop” services provide high quality and convenient supply chain solutions for our customers.

Freight Manufacturer Forwarding

Land Depot and Transportation Warehousing

Customs Clearance

Shipping

Ship Agency

Retailer

Our sea freight logistics and land-based logistics business are closely interconnected and are equally important profit drivers for our business.

Our ability to provide one-stop shop services is crucial to maintaining our long-term customer relationships.

Our presence along the logistics value chain allows us to provide high quality and consistent service.

7

Business Highlights

2

Extensive Logistics Service Network

Our integrated “one-stop” services cover 7 countries and 37 major ports and cities. Our Integrated Logistics Service Network Our Freight Forwarding Network  Extensive freight forwarding services network  Covers 22 major cities in China, Japan and Korea Qinhuangdao Tianjin Tanggu Yantai Qingdao Lianyungang Nanjing Wuhan Suzhou

Our Shipping Agency Network

Dalian Weihai Shidao

Incheon Seoul Osaka Pyeongtaek Kobe Busan

Tokyo

Shaoxing Shanghai

 Our shipping agency business helps to source volumes for our freight forwarding business, and is highly complementary to our freight forwarding network

Ningbo Yiwu Dongguan Guangzhou Hanoi

Foshan Haiphong

Bangkok

Wenzhou

Xiamen Shenzhen Zhuhai Hong Kong

Manila

Laem Chabang Ho Chi Minh City

Freight forwarding

Shipping agency Freight forwarding and shipping agency

Note: As of June 30, 2010. 8

Business Highlights

 Covers 27 major ports in the PRC, Japan, Hong Kong, Korea, Vietnam, Thailand and Philippines

2

Highly Efficient Integrated Logistics Park Business Model

We enhance customer loyalty through win-win partnerships to provide depot and warehousing services with our domestic and international blue chip customers. JV Partner

Location

JV Description

Qingdao

Depot and warehousing services

Qingdao

Warehousing and valueadded (e.g. goods inspection) services

Description  Joint ventures with international and PRC-based blue-chip companies  Include Maersk, Tsingdao Beer, Singamas, Itochu, and Hanjin  Approximately 480,000m2 of depot and 47,000m2 of warehousing space  Real-time monitoring of warehousing operations and inventory management systems

Qingdao

Qingdao

Qingdao

Depot and warehousing services

Refrigerated warehousing services

Depot and warehousing services

Qingdao Logistics Park  Our Qingdao Logistics Park was awarded the PRC Logistics Award for Best Solution Design from the China Communications and Transport Association

 Formed joint ventures with blue chip customers to provide tailored logistics services, enhancing customer loyalty  Warehouses equipped with computer systems that enable real-time operations management and allow customers to make service inquiries online  Proximity to port, major expressway and train station

Shanghai

Note: As of June 30, 2010. 9

Business Highlights

Depot and warehousing services

 Facilitates interaction between parties involved in the supply chain

3

Unique High Frequency, High Density Service Model

We operate a high frequency and high density service model. Our Container Shipping Network

Note: As of June 30, 2010. 10

Business Highlights



High Density – One of the highest density networks in intra-Asia – Covers 8 countries and regions, 36 major ports, 48 trade lanes – Highest density in Northeast Asia Market – Wide range of shipping options for customers



High Frequency – One of the highest service frequencies in intra-Asia – 242 port calls per week – Highest service frequency in Northeast Asia Market – Higher flexibility in scheduling for customers

3

Advantage of Our Network Driven Model

In contrast to many long-haul carriers and feeder service providers that use the hub-spoke shipping model, our model seeks to optimize efficiency and profitability through our high-frequency, high-density short-haul service network Model

Network Driven Model

Hub-Spoke Model

Players

 SITC

 Other container shipping companies

Illustrative Diagram

Pyeongtaek Shanghai Tokyo

Hong Kong (Hub)

New York (Hub)

Hong Kong

Haiphong

Manila

Bangkok

Feeder lines connect various points within network to the hub

Ho Chi Ming

Objective

 Maximize overall vessel load factors

 Fill large vessel on the long-haul route using small feeder vessels

Resilience

 Adapt shipping routes to achieve optimal overall load factors

 Profitability may be affected due to inability to fill large vessels during industry downturn

Routes

 Uses a combination of point-to-point, continuous loop and network services  Able to flexibly combine different service formats within network

 Relatively linear routes that call at major ports

Source: Drewry. 11

Business Highlights

3

Single-Typed, Flexible Fleet Drives Our Network Driven Model

Our single-typed fleet provides us with higher flexibility and lower vessel costs, and is fundamental to our network driven model. 36 of 42 Vessels are 1,000 TEU Type

14%

1,000 TEU type



1,000 TEU type vessel best suits our business model in terms of space utilization, operating efficiency and speed



Uniformed fleet provides higher flexibility in allocating vessels along different routes



Lower operating cost from lower port charges and lower maintenance cost as a result of fleet standardization



Young fleet with average age of 5.7 years. Younger vessels are more efficient, technologically advanced and have lower maintenance cost



Able to flexibly adjust fleet size to respond to changing demand, with large proportion of chartered vessels on one year charters



Self owned vessels purchased at relatively low cost, providing long term cost advantage

Other 86%

15 Out of 42 Vessels Are Self Owned

36%

Self owned Chartered

Note: As of June 30, 2010. 12

Business Highlights

64%

4

Stable and Experienced Management Team

Our stable and experienced management team has been critical to our success. Board of Directors

 80% of senior management team has been with us for over 10 years, with average shipping industry experience of about 20 years  Chairman and CEO each have over 30 and 20 years of experience in the shipping logistics industry. Both were awarded “Outstanding Person in the Shipping and Logistics Industry over the 60 Years since 1949” by China Communications and Transportation Association  Independent directors have diverse and international business and finance experience

Management Team

–

Tsui Yung Kwok: 17 years of finance and accounting experience; previously served on the board of several Hong Kong listed entities

–

Yeung Kwok On: Expert in organizational management and human resource management; advisor for several universities including Harvard University

–

Dr. Lo Wing Yan, William: PhD from Cambridge University; strong international experience in a wide range of business; adjunct professor at several Hong Kong universities; and independent director for several listed companies

–

Dr. Ngai Wai Fung: Expert in corporate governance; served as company secretary for China Unicom, ICBC Asia, and other well-known listed companies; and is currently an independent director of several listed companies

 Management has excellent industry and management acumen, strong grasp of the industry cycle and strong ability to identify and mitigate potential risks

13

Business Highlights

4

Management Team Has Strong Grasp of Industry Cycle

Our management team has strong grasp of the industry cycle, purchasing a majority of our vessels at relatively low prices, giving us a long term cost advantage 1,000 – 1,100 TEU New-Build Prices (US$ million)

Purchased 2 ships in 1998

Purchased 2 ships in 2001

Purchased 3 ships in 2003

Purchased 4 ships in 2004

Purchased 1 ship in 2007

Purchased 3 ships in 2009

1,574 TEU

1,694 TEU

2,493 TEU

3,628 TEU

938 TEU

3,048 TEU

40% drop

30

25

20

15

10 1998

1999

Source: Clarksons, Company. 14

Business Highlights

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

3. Business Strategy

Business Strategy Our long term objective is to be a world-class integrated logistics service provider. 1

Strengthen and Expand Our Intra-Asia Service Network, and Replicate Our Integrated Services Model Throughout Our Network  Northeast Asia Market: Solidify our leading position and create additional headroom for growth. Expand into South China and Northeast Asia countries trade  Southeast Asia Market: Capture growth opportunities through route and network expansion  Acquire new sites to build warehousing and other logistics facilities near ports  Replicate integrated services model throughout intra-Asia network, beginning with Ningbo, Shanghai and Vietnam.

2

Expand Fleet and Optimize Composition  Take advantage of attractive new build prices to expand our fleet and further solidify our long term cost advantage  Expand self-owned fleet by 15 to 25 vessels by 2013

15

3

Seek Opportunities for Complementary Acquisitions and Partnerships

4

Enhance Information Technology Systems

Business Strategy

4. Financial Information

Financial Snapshot

Revenue (US$ million)

Gross Profit and Gross Profit Margin Sea Freight Logistics

(US$ million)

Land-Based Logistics

771.9 694.2 576.4

Sea Freight Logistics

14.6%

14.1%

Land-Based Logistics

16.1%

274.9 264.0

222.7

15.4% 301.3

10.3%

6.0%

4.9%

124.7

70.0

47.7

100.4

497.0 353.7

2007

2008

430.1

2009

346.1

9M 2010

Net Income and Net Income Margin (US$ million)

Profit from continuing operations

Share based compensation

4.6%

5.3%

35.4

37.1 4.6

56.2

40.7

31.8 24.4

59.6

43.8 26.2

77.0

2007

2008

2009

9M 2010

Return on Equity and Return on Assets Margin 13.7%

6.0%

(%)

Return on equity

Return on assets

85.1%

42.6% 34.3

13.6%

16

Financial Information

2008

2009

41.1% 32.6%

88.6

32.5 2007

15.3%

647.4

9M 2010

2007

11.3%

2008

10.2%

2009

14.8%

1H 2010

Sea Freight Logistics Revenue and Profitability Container Shipping Volume and Freight Rate Container Shipping Volume (Thousand TEU)

Average Freight Rate (US$/TEU)

Sea Freight Logistics Revenue(1) (US$ million)

600 1,080

580.1

1,187

845

995

846

534.1

408.1

500

499.7 373.0

400 300 2007

2008

2009

9M 2009

9M 2010

2007 2008 2009

9M 9M 2009 2010

Cost of Sales Breakdown



Time-charter fees Vessel crew expenses Vessel depreciation and maintenance

 

   

Container handling costs Container rental and depreciation Slot swap expenses Other container handling and equipment related costs

9M 2010

Margin

77.0 59.6

24.4 Fuel Port charges

Financial Information

9M 2009

15.4%

58.4%

(1) Revenue before inter-segment elimination. 17

2009

(US$ million)

11.7%

29.9%

2008

Gross Profit and Margin

9M 2010 Cost of Sales Breakdown (%)  

2007

Equipment and cargo transportation Voyage Vessel

10.3%

6.0% 2007

2008

26.2 4.9%

1.1% 4.0

2009

9M 2009

9M 2010

Land-Based Logistics Revenue and Profitability

Land-Based Logistics Revenue(1)

Gross Profit and Margin

(US$ million)

(US$ million)

48.3%

311.6 278.8 24.2

22.4 271.6

38.2%

36.7%

14.1%

14.6%

16.1%

12.0%

12.5%

13.8%

18.4

225.7 18.2

45.5%

19.6% 15.3% 17.1% 13.2%

195.5

47.7

17.6

43.8

40.7

289.2 254.6

43.0%

253.2

31.8

8.9

8.9

38.3

9.7

8.0

7.0

207.5 177.9

31.8

34.9

2008

2009

24.8

2007

2008

2009

9M 2010

Freight forwarding and shipping agency (1) Revenue before intersegment elimination. 18

Financial Information

9M 2010

2007

Warehousing and others

Overall

38.0 30.3

9M 2009

9M 2010