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Improve the World with Technology

              Investor Presentation
                   September 2009
Safe Harbor Statement


This presentation may contain forward-looking statements and management may make additional
forward-looking statements in response to your questions. Such written and oral disclosures are
made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

All statements other than statements of historical fact in this presentation are forward-looking
statements, including but not limited to, the Company’s ability to raise additional capital to finance
the Company’s activities; the effectiveness, profitability, and the marketability of its products; the
period of time for which its current liquidity will enable the Company to fund its operations; the
Company’s ability to protect its proprietary information; the Company’s ability to secure raw
material supplies to support its production plans; the Company’s ability to operate its plants
efficiently; general economic and business conditions; the volatility of the Company’s operating
results and financial condition; the Company’s ability to execute is expansion plans; the
Company’s ability to attract or retain qualified senior management personnel and research and
development staff; and other risks detailed in the Company’s filings with the Securities and
Exchange Commission. 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
China XD Plastics is under no obligation to revise or update these forward-looking statements.



                                                                                                         2
Who We Are

                                                                         China XD
                                                                          China XD
                                                                Value Creator of the Supply Chain
                                                               Value Creator of the Supply Chain

                                                               Develops, manufactures, and
                                                               distributes modified plastics, primarily
Oil Refineries
                                                               for the use in the exterior and interior
                                                               trim and in the functional components
                                                               of more than 30 automobile models.




                 Plastic Resin
                 Suppliers




                                 Modified Plastics
                                 Manufacturers

                                                                            Auto Makers


                                               Plastic Auto Parts
                                               Manufacturers




                                                                                                          3
Corporate Overview

                                    Key Facts
Largest Chinese Manufacturer of          Headquartered in Harbin, China
Modified Plastics for automobile         Total usable area of 336,400 square feet
     applications in China               Annual production capacity of 70,000 tons with 19
                                         operating production lines
                                         396 full time employees

                                    Products
                                         Modified Polypropylene, modified ABS, modified
                                         Nylon, alloy plastic, engineering plastics and
                                         environment friendly plastics, 129* of which are
                                         certified by auto makers

                                    Applications and Customers
                                         Mainly used in automotive exterior and interior
                                         trim and functional components, as well as
                                         industrial plastic parts and components used in
                                         large-scale oil fields, mining machinery, vessel
                                         propulsion system, high-speed trains, aerospace
                                         etc.
                                         End users include China FAW, the largest auto
                                         maker in China, Brilliance Auto, Hafei Auto, and
                                         among other car manufacturers in China.


                                   * as of June 2009
                                                                                             4
Products and Applications

                             End Applications
Over 90% of Products
                                                                      Product Portfolio Divided into
are Modified Plastics                                                 6 Categories
for Automobiles
                                                                      • Modified Polypropylene
                                                                      • Modified ABS
                                                                      • Modified Nylon
                                                                      • Alloy Plastics
                                                                      • Environment-friendly plastics
                                                                      • Engineering Plastics
                          Interior parts and components               • Special engineering plastics
                          (Such as Instrument board, glove
                          box, etc.)                                  (under development)




                        Exterior parts and components          Function components (Such as air
                        (Such as door mirror, front and rear   conditioner’s shell, engine cover , etc.)
                        bumpers, etc.)

                                                                                                           5
Sample of End-Users
          End-Users




                      6
Capital Market Summary



    OTC BB Symbol                                                                         CXDC
    Share Price (previously closed on 09/01/09)                                     $5.85
    Market Capitalization                                                           $231.4 MM
    Shares Outstanding (fully diluted)*                                             39.6 MM
    Net Revenues (TTM)                                                              $100.6 MM
    Gross Profit (TTM)                                                              $21.6MM
    Net Income (TTM)                                                                $15.5 MM
    Earnings per Common Share (fully diluted)                                       $0.39
    P/E (TTM)                                                                       14.9X
    Fiscal Year End                                                                 December 31




* Revenue, Gross Profit, Net income and P/E(TTM) / Shares Outstanding and EPS (As of June 30, 2009)



                                                                                                      7
Key Milestones



 19 production lines in use, annual
   capacity reached 70,000 tons
                                         7   Jan 2009


   Listed in the US Capital Market       6   Dec 2008


  Xinda Macromolecule Material
                                         5   Nov 2007
Research Institute was established


   Capacity more than tripled and        4   Jan 2006
       reached 25,000 tons


First 2 production lines were launched
  with annual capacity of 7,000 tons
                                         3   Jan 2005


Harbin Xinda Macromolecule Material
          Inc. was founded
                                         2   Sep 2004

   Harbin Xinda Nylon factory, the
  predecessor of the Company was
                                         1   Jul 1985
              founded



                                                        8
Market Opportunity
                                                 Automobiles
                                                 Automobiles



       China Automobile Production ( in million)                      China Automobile Sold (in million)

                            Production                                                  Sold

12.0
                                                 11.4    35%   14.0                                   12.4    40%
                                        9.4              30%   12.0                                           35%
10.0                     8.5                                                    8.9            9.6            30%
 8.0        7.3                                          25%   10.0                                   29.2%
                                                                8.0
                                                                        7.3                                   25%
                                                 21.3%   20%
 6.0       23.3%                                                                                              20%
                        16.4%
                                                         15%    6.0    23.3%    21.9%
 4.0                                                                                                          15%
                                       10.6%             10%    4.0
                                                                                               7.9%           10%
 2.0                                                     5%     2.0                                           5%
 0.0                                                     0%     0.0                                           0%
           2006         2007           2008      2009E                  2006    2007           2008   2009E




       Key Drivers:


       •    Rising income and growing affluence of middle class in China
       •    Growing Consumption of automobiles in China
       •    Economic Policy stimulating the consumption of automobiles in China

Source: National Bureau of Statistics of China

                                                                                                                    9
Market Opportunity
                                                Modified Plastics for Automobiles
                                                Modified Plastics for Automobiles


         China Automotive Plastics Demand                                                   Domestic vs. Imports



                   Volumes ("000 metric tons)
1,600                                                     1,414       40%
1,400                    31%                        33%               35%             2004                     2009 E
1,200                                1,060                            30%
           23%          955
1,000
          730
                                                                      25%
                                                                                (0.7mm tons)                 (1.4mm tons)
 800                                                                  20%
 600                                                                  15%
 400                                          11%                     10%
                                                                                                                          35%
 200                                                                  5%
  -                                                                   0%
                                                                                           31%
          2006          2007         2008                 2009E




                        Sales ($ billion)                                   69%                        65%
                                                           46%
 $3.50                                                                50%
                                      44%                     $2.86
 $3.00                                                                40%
           29%           35%
 $2.50                                $1.96                                                               Domestic      Imported
 $2.00                                                                30%
                         $1.36
 $1.50     $1.01                                                      20%
 $1.00
                                                                      10%
 $0.50
  $-                                                                  0%
           2006          2007          2008               2009E




Source: National Bureau of Statistics of China, “Chinese markets for Automotive Plastics” from
        Research and Markets, and China XD’s estimate
                                                                                                                            10
Cash For Clunkers
                                                 vs. Cars Go Villages



                  Cash For Clunkers                                Cars Go Villages




     •   Borrowing from future sales?                  •   Creating a new market for automobiles,
                                                           most buyers are first time and potentially
                                                           repeating buyers
     •   Has ended on Aug. 24, 2009                    •   Will last until the end of this year
     •   Enough for 650,000 to 850,000 cars*           •   Enough for 1-1.7MM cars**
*: Based on $3,500 or $4,500 rebate per car
**: Based on RMB 3,000 or 5,000 rebate per car                                                          11
Competitive Advantages

                                        Strong Competitive Position

            •Customized
             products                 • Geographic Advantage
                                          Adjacent to China’s largest automobile
                                          center
                                          The northern region of the PRC is a
                                          relatively low cost resource center
                                          University-educated local workforce
                                          available
•High                     •Large
 barrier    Attractive     customer   • Strong Government Support

 of entry      ROI         base           Extended tax benefits: 15% tax rate
                                          through 2011
                                          Superior credit profile at local banks over
                                          years

                                      • Leading National R&D Center
                                          Proprietary formulas developed by our
                                          own research institute
            •Lower cost               • Excellent Customized Service
             production                   Long history of excellent customized
                                          service to auto OEMs in China




                                                                                    12
Manufacturing Process




Measuring and       Plasticizing and       Cooling and      Homogenizing
  Blending             Extrusion             Cutting        and Packing




                State-of-the-Art Manufacturing Facilities




                                                                           13
Technology Innovation


Panel of Consultants: Top Scientists and Experts in Modified Plastics
                        Wu, Zhongwen: Chief Scientist, Jilin University
                        Zheng, Kai: Secretary General, China's Plastics Engineering Industry Association
                        Huang, Yudong: Harbin Industrial University
                        Li, Bin: Eastern Forest Industry University
                        Xing, Yuqing: Harbin Industrial University
                        Jiang, Zhenhua: Jilin University

Talents at The Research Institution

                        66 researchers with average working experiences over ten years in modified plastics
                        research and development
                        90% with PhD. Master or bachelor degrees




 Industry Leading Modified Plastic Research Institute
Industry Leading Modified Plastic Research Institute

                                                The most advanced auto-specific polymer research institution
                                                in China
                                                Has 102 sets of state of the art equipments in macromolecule
                                                industry



                                                                                                               14
Strategic Location


                                                                                                   Daqing

     Currently, the                                                                                     Harbin
company is focusing
mainly on coverage of the                                                                            Changchun
Northeast China
                                                                                     Shenyang

                                                                        Beijing
      By 2013, the
company plans to cover                                                                  Tianjing

North China markets and
becomes one of the major                                                                      Qingdao

suppliers in this region
                                                                                                        Nanjing

                                                                                                    Shanghai
                                                                           Wuhan
       By 2015, the                                         Chongqing

company plans to cover                                    Chengdu                                     Zhejiang

East China markets and
becomes one of the major                                                                       Fuzhou
suppliers in this region
                                                                         Guangzhou


                                                                             Shenzhen



    ● Represents the main targeted market in Northeast China
    ● Represents the main targeted market in North China
    ● Represents the main targeted market in East China

                                                                                                                  15
Focused Growth Strategy


                  Geographic Expansion Targeting Major                                                   Strategic Rationale
                   Automotive Manufacturing Regions




                The Northeast base to achieve sales
                output of 100,000 tones by 2010.
                                                                                    Daqing          Achieve economy of scale
                                                                                          Harbin
 100,000 tons
                                                                                                    Sustain investment in research
                                                                                        Changchun
                The North China base to achieve sales output
                                                                            Shenyang
                                                                                                    and development to ensure the
                of 100,000 tons by 2011, together adding the
                total production up to 200,000 tons.              Beijing                           leading edge technology and
200,000 tons
                                                                             Tianjing               develop more number of high
                                                                                 Qingdao
                                                                                                    value-added products
                 The East China base to achieve sales
                 output of 100,000 tons by 2013, with the
                 total production up to 300,000 tons.                                     Nanjing   Increase market share through
300,000 tons                                          Chongqing     Wuhan
                                                                                    Shanghai        geographic expansion of sales
                                                 Chengdu                                Zhejiang    network and selected
                                                                                  Fuzhou            acquisition
                                                                  Guangzhou


                                                                     Shenzhen




                                                                                                                               16
Financial Highlights


   Revenues ($ Millions)                     Gross Profit ($ Millions)                           Net Income ($ Millions)


                                         %
                                      74




                                                                                           %




                                                                                                                                        %
                                                                                        51




                                                                                                                                     25
                                   ≈
                 $75.8                                                                                          $13.7




                                                                                    ≈




                                                                                                                                 ≈
                                  h
                                                                   $17.3
                                  t
                               ow




                                                                                   h




                                                                                                                                h
                                                                                    t




                                                                                                                                 t
                                                                                 ow




                                                                                                                              ow
                            Gr




                                                                              Gr




                                                                                                                           Gr
                                  $58.3
                            Y
                         Yo




                                                                              Y




                                                                                                                           Y
                                                                                   $12.4




                                                                           Yo




                                                                                                                        Yo
        8%                                                                                                                      $9.0
      13




                                                                                                        0%
     ≈                                                  9%
                                                       14




                                                                                                      15
   R                                                                                                                    $7.2




                                                                                                  ≈
  G      $34.2                                     R
 A                       $33.5                    G                         $8.2




                                                                                                 GR
C                                             A
                                             C                                                           $5.3




                                                                                               CA
                                                            $6.3

  $13.4                                                                                         $2.2
                                             $2.8



   2006   2007   2008    1H2008   1H2009
                                             2006           2007   2008    1H2008 1H2009        2006     2007   2008    1H2008 1H2009




                                                                                                                                       17
Financial Highlights
                                Revenue and Margin Performance
                                Revenue and Margin Performance


$35.0                                                                                                    30.0%

                                25.1%            25.8%
$30.0
                22.7%                                                        21.8%                       25.0%
                                                                                                 20.9%
$25.0                      22.9%
                                         21.0%               17.1%                                       20.0%

$20.0       19.7%
                                                                                 16.6%           16.6%   15.0%
$15.0                                                            12.3%
                                                                                                         10.0%
$10.0

                                                                                                         5.0%
 $5.0                                                                    $26.4           $31.9
        $10.4           $23.1            $22.3           $20.0

 $0.0                                                                                                    0.0%
           1Q08           2Q08              3Q08            4Q08            1Q09            2Q09


                  Revenue                   Gross Margin             Operating Margin


                                                                                                                 18
Financial Highlights
                                               Second Quarter 2009
                                               Second Quarter 2009


      • Revenue was $31.9 million, 38.2% increase from the Q2 2008
      • Gross profit was $6.7 million, 15.1% increase from the Q2 2008
      • Gross profit margin was 20.9%, compared to 25.1% in the Q2 2008
      • EBITDA was $6.2 million, 12.5% increase from the Q2 2008
      • Net income was $5.0 million, while non-GAAP net income excluding the non-cash charge was $5.4
         million, 6.5% increase from the Q2 2008
      • Diluted earnings per share was $0.13 and non-GAAP diluted earnings per share was $0.14, up
         22.7% and 35.9%, respectively, from the Q1 2009


                                       Three Months Ended                      Six Months Ended
$ in millions                                          Change                                 Change
                                      Q2       Q2       vs.Q2               H1        H1      vs.H1
                                     2009          2008      2008          2009        2008           2008
Revenue                              $31.9          $23.1     38.2 %       $58.3       $33.5          74.2 %
Gross Margin                        20.9 %         25.1 %     -4.2 %      21.3 %      24.3 %          -3.0 %
Op Income (Loss)                      $5.3           $5.3    -$0.2 %        $9.7        $7.3          31.7 %
Depreciation & Amortization           $0.5           $0.2     89.5 %        $0.9        $0.4         120.6 %
Net Income                            $5.0           $5.1      -2.0 %       $9.0        $7.2          25.3 %




                                                                                                               19
Financial Highlights
                                     Financial Ratios
                                     Financial Ratios




Significant Ratios 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2
Selling Expenses     0.2%     0.1%       0.9%   0.4%    0.2%    0.2%

G&A Expenses         2.2%     0.9%       2.9%   3.2%    4.0%    3.5%

R&D Expenses         0.7%     1.09%      1.1%   1.1%    1.1%    0.7%

Current Ratio         1.0      1.1       1.2     1.1     1.3     1.4

Inventory Turnover    1.3      2.3       1.7     2.1     1.5     1.7
Days Sales
                     28.0      70.0      67.0   50.6    20.0    27.4
Outstanding
Return on Assets     6.6%     9.9%       7.1%   3.5%    6.9%    7.7%

Return on Equity     17.4%    29.2%     19.4%   9.3%    14.3%   14.9%




                                                                        20
Financial Highlights
                                      Balance Sheet
                                      Balance Sheet



                                              June. 30,     Dec. 31,
($ '000 )
                                                2009         2008

  Cash and cash equivalents                         1,467        3,869
  Accounts receivable                               9,732       11,235

  Inventory                                        14,874       12,439

  Total Current Assets                             44,883       44,755
  Property, plant and equipment, net               19,124       19,333

Total Assets                                       64,677       64,714

  Accounts payable                                     17          113
  Short Term Debt                                  20,203       20,520
  Total Liabilities                                31,196       40,653
  Total Shareholders' Equity                       33,481       24,061

Total Liabilities and Shareholders’ Equity         64,677       64,714




                                                                         21
Management


Jie Han, Chairman and Chief Executive Officer – Mr. Han founded Harbin Xinda Nylon Factory in 1985 and co-
founded Xinda in 2004. With 25 years of industry experience, Mr. Han is an expert in the modified plastic industry. He
currently serves as executive director of China Plastic Processing Industry Association, as an outstanding entrepreneur
at the industry of modified plastics, and as director of the Heilongjiang Industry Commerce Association. In addition, Mr.
Han serves as a deputy to the Harbin Municipal People’s Congress.

Taylor Zhang - Chief Financial Officer – Mr. Zhang is a native of Harbin and has over seven years of experience in
finance and operation in a broad range of industries. Prior joining China XD, Mr. Zhang served as CFO of Advanced
Battery Technologies, Inc (Nasdaq: ABAT). From 2007 to 2008, he served as Executive Vice President of Finance in
China Natural Gas (Nasdaq: CHNG). From 2005 to 2007, Mr. Zhang worked as a research analyst in New York Private
Equity . He holds a MBA from University of Florida.

Qingwei Ma, Chief Operating Officer – Appointed as Chief Operating Officer in 2008, Mr. Ma had been serving the
company and was General Manager of Xinda Macromolecule from 2004 to 2008, during which Mr. Ma led the
successful establishment of sales network, building a comprehensive system ensuring effective and efficient purchase,
production, marketing and other functions. Prior to joining Xinda, Mr. Ma worked for Harbin Xinda Nylon Factory, the
Company’s predecessor, for 6 years. Mr. Ma has 12 years of experience in the modified plastics industry.

Junjie Ma, Chief Technology Officer – Mr. Ma has over 12 years of experience in the modified plastic industry. He
successfully established the research institute and helped the Company to gain 122 certifications from Chinese auto
makers, the largest number of certifications among Chinese companies. He has organized and formed a top class
science advisory team and maintains close collaboration relationship with Chinese macromolecule well-known science
R&D institutes and universities. As a result, Mr. Ma is effectively taking full advantage of state-of-the-art R&D devices
and top technique talents to keep the institute’s leading position in China.


                                                                                                                            22
Independent Directors

Lawrence W. Leighton – Chairman of Audit Committee
Mr. Leighton has had an extensive 40 year international investment banking career. Mr. Leighton received his BSE
degree in engineering from Princeton University and an MBA degree from Harvard Business School. His previous
positions includes Co-Head of the Corporate Finance Department at Clark, Dodge & Co. , Limited Partner of Bear
Stern, Managing Director of JPMorgan Chase Bank and CEO of the U.S. investment bank of Credit Agricole, the major
French Bank.

Cosimo J. Patti – Chairman of Compensation Committee
Mr. Patti’s previous positions include roles as Senior Director of Strategy Management, Director of Business Strategy,
and Senior Vice President of Lehman Brothers. He is an Arbitrator of SEC and National Association of Securities. Mr.
Patti has been an Independent Director of American Oriental Bioengineering Inc. (NYSE: AOB) since
2004.

Linyuan Zhai – Chairman of Nomination Committee
Mr. Zhai worked for China FAW Group Corporation for 37 years with abundant experience in terms of technology,
production, and business management. He is a Senior Expert in the auto industry. Mr. Zhai served as general
manager of automobile manufacturing , successfully led Four Ring Company, a subsidiary of FAW group, to go
public in China. He is one of the pioneers and outstanding contributors of FAW group’s success.

Yong Jin - Independent Director
Jin, a professor at Tsinghua University and academician of the Chinese Academy of Engineering, is an executive
member of Chemical Industry and Engineering Society of China and Chinese society of particuology, vice chairman of
China Institute of Ecological Economy, director of Industrial Ecology Economy and Technology Committee, Council
Convenor of the Chemical discipline in the State Council Academic Degrees Committee, professional advisers for
Beijing Municipal Government, Lectureship Award recipient in fluidization by American Institute of Chemical
Engineers (AIChE), the world's leading organization for chemical engineering professionals, with more than 40,000
members from 93 countries, consultant for the Germany magazine " Chemical engineering & technology ". Jin has
published and presented more than 350 papers in important journals and conferences domestically and
internationally, 138 of which were included in Science. Jin also has more than 30 patent applications.




                                                                                                                         23
Investment Highlights


1   Tremendous Market Demand
       – Driven by Large and High Growth Addressable Automobile Market in China


2   High Barriers to Entry
       – Due to Strict Certification Requirements by Automotive Manufacturers


3   Industry Leading R&D Center
       – State of the Art Equipment and Experienced Research Team


4   Largest Number of Certification
       – Largest Product Portfolio Certified by Leading Auto Makers in China


5   Proven Operating Model
       – Rapidly Growing, Sustainable and Profitable Business


6   Seasoned Management Team
       – With Extensive Professional Knowledge and Years of Experience of Serving Auto OEMs


7   Well Defined Growth Strategy
       – Balanced Organic Growth and Expansion through Acquisition



                                                                                              24
Contact Information


China XD Plastics Company Ltd.      Investor Relations Firm:
Mr. Taylor Zhang, CFO               CCG Investor Relations Inc.
Phone: +1-212-747-1118 (New York)   Mr. Crocker Coulson, President
Mr. Allan Lao, IR Director          +1-646-213-1915
Phone: +86-451-84346600 (China)     crocker.coulson@ccgir.com
Email: cxdc@chinaxd.net             Mr. Ed Job, CFA
Website: www.chinaxd.net            Phone: +1-646-213-1914 (New York)
                                    ed.job@ccgir.com


SEC Attorney                        Auditors
Crone Rozynko LLP                   Bagell, Josephs, Levine & Company, LLC
101 Montgomery Street, Suite 1950   406 Lippincott Drive Suite J
San Francisco, CA94104              Marlton, NJ 08053
Phone: (415)955-8900                Phone: (856) 346-2828
Fax: (415)955-8910                  Fax: (856) 396-0022
Email: mcrone@cronerozynko.com      Email: info@bjlcpas.com




                                                                             25

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China XD Plastics

  • 1. Improve the World with Technology Investor Presentation September 2009
  • 2. Safe Harbor Statement This presentation may contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such written and oral disclosures are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this presentation are forward-looking statements, including but not limited to, the Company’s ability to raise additional capital to finance the Company’s activities; the effectiveness, profitability, and the marketability of its products; the period of time for which its current liquidity will enable the Company to fund its operations; the Company’s ability to protect its proprietary information; the Company’s ability to secure raw material supplies to support its production plans; the Company’s ability to operate its plants efficiently; general economic and business conditions; the volatility of the Company’s operating results and financial condition; the Company’s ability to execute is expansion plans; the Company’s ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company’s filings with the Securities and Exchange Commission. 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 China XD Plastics is under no obligation to revise or update these forward-looking statements. 2
  • 3. Who We Are China XD China XD Value Creator of the Supply Chain Value Creator of the Supply Chain Develops, manufactures, and distributes modified plastics, primarily Oil Refineries for the use in the exterior and interior trim and in the functional components of more than 30 automobile models. Plastic Resin Suppliers Modified Plastics Manufacturers Auto Makers Plastic Auto Parts Manufacturers 3
  • 4. Corporate Overview Key Facts Largest Chinese Manufacturer of Headquartered in Harbin, China Modified Plastics for automobile Total usable area of 336,400 square feet applications in China Annual production capacity of 70,000 tons with 19 operating production lines 396 full time employees Products Modified Polypropylene, modified ABS, modified Nylon, alloy plastic, engineering plastics and environment friendly plastics, 129* of which are certified by auto makers Applications and Customers Mainly used in automotive exterior and interior trim and functional components, as well as industrial plastic parts and components used in large-scale oil fields, mining machinery, vessel propulsion system, high-speed trains, aerospace etc. End users include China FAW, the largest auto maker in China, Brilliance Auto, Hafei Auto, and among other car manufacturers in China. * as of June 2009 4
  • 5. Products and Applications End Applications Over 90% of Products Product Portfolio Divided into are Modified Plastics 6 Categories for Automobiles • Modified Polypropylene • Modified ABS • Modified Nylon • Alloy Plastics • Environment-friendly plastics • Engineering Plastics Interior parts and components • Special engineering plastics (Such as Instrument board, glove box, etc.) (under development) Exterior parts and components Function components (Such as air (Such as door mirror, front and rear conditioner’s shell, engine cover , etc.) bumpers, etc.) 5
  • 6. Sample of End-Users End-Users 6
  • 7. Capital Market Summary OTC BB Symbol CXDC Share Price (previously closed on 09/01/09) $5.85 Market Capitalization $231.4 MM Shares Outstanding (fully diluted)* 39.6 MM Net Revenues (TTM) $100.6 MM Gross Profit (TTM) $21.6MM Net Income (TTM) $15.5 MM Earnings per Common Share (fully diluted) $0.39 P/E (TTM) 14.9X Fiscal Year End December 31 * Revenue, Gross Profit, Net income and P/E(TTM) / Shares Outstanding and EPS (As of June 30, 2009) 7
  • 8. Key Milestones 19 production lines in use, annual capacity reached 70,000 tons 7 Jan 2009 Listed in the US Capital Market 6 Dec 2008 Xinda Macromolecule Material 5 Nov 2007 Research Institute was established Capacity more than tripled and 4 Jan 2006 reached 25,000 tons First 2 production lines were launched with annual capacity of 7,000 tons 3 Jan 2005 Harbin Xinda Macromolecule Material Inc. was founded 2 Sep 2004 Harbin Xinda Nylon factory, the predecessor of the Company was 1 Jul 1985 founded 8
  • 9. Market Opportunity Automobiles Automobiles China Automobile Production ( in million) China Automobile Sold (in million) Production Sold 12.0 11.4 35% 14.0 12.4 40% 9.4 30% 12.0 35% 10.0 8.5 8.9 9.6 30% 8.0 7.3 25% 10.0 29.2% 8.0 7.3 25% 21.3% 20% 6.0 23.3% 20% 16.4% 15% 6.0 23.3% 21.9% 4.0 15% 10.6% 10% 4.0 7.9% 10% 2.0 5% 2.0 5% 0.0 0% 0.0 0% 2006 2007 2008 2009E 2006 2007 2008 2009E Key Drivers: • Rising income and growing affluence of middle class in China • Growing Consumption of automobiles in China • Economic Policy stimulating the consumption of automobiles in China Source: National Bureau of Statistics of China 9
  • 10. Market Opportunity Modified Plastics for Automobiles Modified Plastics for Automobiles China Automotive Plastics Demand Domestic vs. Imports Volumes ("000 metric tons) 1,600 1,414 40% 1,400 31% 33% 35% 2004 2009 E 1,200 1,060 30% 23% 955 1,000 730 25% (0.7mm tons) (1.4mm tons) 800 20% 600 15% 400 11% 10% 35% 200 5% - 0% 31% 2006 2007 2008 2009E Sales ($ billion) 69% 65% 46% $3.50 50% 44% $2.86 $3.00 40% 29% 35% $2.50 $1.96 Domestic Imported $2.00 30% $1.36 $1.50 $1.01 20% $1.00 10% $0.50 $- 0% 2006 2007 2008 2009E Source: National Bureau of Statistics of China, “Chinese markets for Automotive Plastics” from Research and Markets, and China XD’s estimate 10
  • 11. Cash For Clunkers vs. Cars Go Villages Cash For Clunkers Cars Go Villages • Borrowing from future sales? • Creating a new market for automobiles, most buyers are first time and potentially repeating buyers • Has ended on Aug. 24, 2009 • Will last until the end of this year • Enough for 650,000 to 850,000 cars* • Enough for 1-1.7MM cars** *: Based on $3,500 or $4,500 rebate per car **: Based on RMB 3,000 or 5,000 rebate per car 11
  • 12. Competitive Advantages Strong Competitive Position •Customized products • Geographic Advantage Adjacent to China’s largest automobile center The northern region of the PRC is a relatively low cost resource center University-educated local workforce available •High •Large barrier Attractive customer • Strong Government Support of entry ROI base Extended tax benefits: 15% tax rate through 2011 Superior credit profile at local banks over years • Leading National R&D Center Proprietary formulas developed by our own research institute •Lower cost • Excellent Customized Service production Long history of excellent customized service to auto OEMs in China 12
  • 13. Manufacturing Process Measuring and Plasticizing and Cooling and Homogenizing Blending Extrusion Cutting and Packing State-of-the-Art Manufacturing Facilities 13
  • 14. Technology Innovation Panel of Consultants: Top Scientists and Experts in Modified Plastics Wu, Zhongwen: Chief Scientist, Jilin University Zheng, Kai: Secretary General, China's Plastics Engineering Industry Association Huang, Yudong: Harbin Industrial University Li, Bin: Eastern Forest Industry University Xing, Yuqing: Harbin Industrial University Jiang, Zhenhua: Jilin University Talents at The Research Institution 66 researchers with average working experiences over ten years in modified plastics research and development 90% with PhD. Master or bachelor degrees Industry Leading Modified Plastic Research Institute Industry Leading Modified Plastic Research Institute The most advanced auto-specific polymer research institution in China Has 102 sets of state of the art equipments in macromolecule industry 14
  • 15. Strategic Location Daqing Currently, the Harbin company is focusing mainly on coverage of the Changchun Northeast China Shenyang Beijing By 2013, the company plans to cover Tianjing North China markets and becomes one of the major Qingdao suppliers in this region Nanjing Shanghai Wuhan By 2015, the Chongqing company plans to cover Chengdu Zhejiang East China markets and becomes one of the major Fuzhou suppliers in this region Guangzhou Shenzhen ● Represents the main targeted market in Northeast China ● Represents the main targeted market in North China ● Represents the main targeted market in East China 15
  • 16. Focused Growth Strategy Geographic Expansion Targeting Major Strategic Rationale Automotive Manufacturing Regions The Northeast base to achieve sales output of 100,000 tones by 2010. Daqing Achieve economy of scale Harbin 100,000 tons Sustain investment in research Changchun The North China base to achieve sales output Shenyang and development to ensure the of 100,000 tons by 2011, together adding the total production up to 200,000 tons. Beijing leading edge technology and 200,000 tons Tianjing develop more number of high Qingdao value-added products The East China base to achieve sales output of 100,000 tons by 2013, with the total production up to 300,000 tons. Nanjing Increase market share through 300,000 tons Chongqing Wuhan Shanghai geographic expansion of sales Chengdu Zhejiang network and selected Fuzhou acquisition Guangzhou Shenzhen 16
  • 17. Financial Highlights Revenues ($ Millions) Gross Profit ($ Millions) Net Income ($ Millions) % 74 % % 51 25 ≈ $75.8 $13.7 ≈ ≈ h $17.3 t ow h h t t ow ow Gr Gr Gr $58.3 Y Yo Y Y $12.4 Yo Yo 8% $9.0 13 0% ≈ 9% 14 15 R $7.2 ≈ G $34.2 R A $33.5 G $8.2 GR C A C $5.3 CA $6.3 $13.4 $2.2 $2.8 2006 2007 2008 1H2008 1H2009 2006 2007 2008 1H2008 1H2009 2006 2007 2008 1H2008 1H2009 17
  • 18. Financial Highlights Revenue and Margin Performance Revenue and Margin Performance $35.0 30.0% 25.1% 25.8% $30.0 22.7% 21.8% 25.0% 20.9% $25.0 22.9% 21.0% 17.1% 20.0% $20.0 19.7% 16.6% 16.6% 15.0% $15.0 12.3% 10.0% $10.0 5.0% $5.0 $26.4 $31.9 $10.4 $23.1 $22.3 $20.0 $0.0 0.0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Revenue Gross Margin Operating Margin 18
  • 19. Financial Highlights Second Quarter 2009 Second Quarter 2009 • Revenue was $31.9 million, 38.2% increase from the Q2 2008 • Gross profit was $6.7 million, 15.1% increase from the Q2 2008 • Gross profit margin was 20.9%, compared to 25.1% in the Q2 2008 • EBITDA was $6.2 million, 12.5% increase from the Q2 2008 • Net income was $5.0 million, while non-GAAP net income excluding the non-cash charge was $5.4 million, 6.5% increase from the Q2 2008 • Diluted earnings per share was $0.13 and non-GAAP diluted earnings per share was $0.14, up 22.7% and 35.9%, respectively, from the Q1 2009 Three Months Ended Six Months Ended $ in millions Change Change Q2 Q2 vs.Q2 H1 H1 vs.H1 2009 2008 2008 2009 2008 2008 Revenue $31.9 $23.1 38.2 % $58.3 $33.5 74.2 % Gross Margin 20.9 % 25.1 % -4.2 % 21.3 % 24.3 % -3.0 % Op Income (Loss) $5.3 $5.3 -$0.2 % $9.7 $7.3 31.7 % Depreciation & Amortization $0.5 $0.2 89.5 % $0.9 $0.4 120.6 % Net Income $5.0 $5.1 -2.0 % $9.0 $7.2 25.3 % 19
  • 20. Financial Highlights Financial Ratios Financial Ratios Significant Ratios 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 Selling Expenses 0.2% 0.1% 0.9% 0.4% 0.2% 0.2% G&A Expenses 2.2% 0.9% 2.9% 3.2% 4.0% 3.5% R&D Expenses 0.7% 1.09% 1.1% 1.1% 1.1% 0.7% Current Ratio 1.0 1.1 1.2 1.1 1.3 1.4 Inventory Turnover 1.3 2.3 1.7 2.1 1.5 1.7 Days Sales 28.0 70.0 67.0 50.6 20.0 27.4 Outstanding Return on Assets 6.6% 9.9% 7.1% 3.5% 6.9% 7.7% Return on Equity 17.4% 29.2% 19.4% 9.3% 14.3% 14.9% 20
  • 21. Financial Highlights Balance Sheet Balance Sheet June. 30, Dec. 31, ($ '000 ) 2009 2008 Cash and cash equivalents 1,467 3,869 Accounts receivable 9,732 11,235 Inventory 14,874 12,439 Total Current Assets 44,883 44,755 Property, plant and equipment, net 19,124 19,333 Total Assets 64,677 64,714 Accounts payable 17 113 Short Term Debt 20,203 20,520 Total Liabilities 31,196 40,653 Total Shareholders' Equity 33,481 24,061 Total Liabilities and Shareholders’ Equity 64,677 64,714 21
  • 22. Management Jie Han, Chairman and Chief Executive Officer – Mr. Han founded Harbin Xinda Nylon Factory in 1985 and co- founded Xinda in 2004. With 25 years of industry experience, Mr. Han is an expert in the modified plastic industry. He currently serves as executive director of China Plastic Processing Industry Association, as an outstanding entrepreneur at the industry of modified plastics, and as director of the Heilongjiang Industry Commerce Association. In addition, Mr. Han serves as a deputy to the Harbin Municipal People’s Congress. Taylor Zhang - Chief Financial Officer – Mr. Zhang is a native of Harbin and has over seven years of experience in finance and operation in a broad range of industries. Prior joining China XD, Mr. Zhang served as CFO of Advanced Battery Technologies, Inc (Nasdaq: ABAT). From 2007 to 2008, he served as Executive Vice President of Finance in China Natural Gas (Nasdaq: CHNG). From 2005 to 2007, Mr. Zhang worked as a research analyst in New York Private Equity . He holds a MBA from University of Florida. Qingwei Ma, Chief Operating Officer – Appointed as Chief Operating Officer in 2008, Mr. Ma had been serving the company and was General Manager of Xinda Macromolecule from 2004 to 2008, during which Mr. Ma led the successful establishment of sales network, building a comprehensive system ensuring effective and efficient purchase, production, marketing and other functions. Prior to joining Xinda, Mr. Ma worked for Harbin Xinda Nylon Factory, the Company’s predecessor, for 6 years. Mr. Ma has 12 years of experience in the modified plastics industry. Junjie Ma, Chief Technology Officer – Mr. Ma has over 12 years of experience in the modified plastic industry. He successfully established the research institute and helped the Company to gain 122 certifications from Chinese auto makers, the largest number of certifications among Chinese companies. He has organized and formed a top class science advisory team and maintains close collaboration relationship with Chinese macromolecule well-known science R&D institutes and universities. As a result, Mr. Ma is effectively taking full advantage of state-of-the-art R&D devices and top technique talents to keep the institute’s leading position in China. 22
  • 23. Independent Directors Lawrence W. Leighton – Chairman of Audit Committee Mr. Leighton has had an extensive 40 year international investment banking career. Mr. Leighton received his BSE degree in engineering from Princeton University and an MBA degree from Harvard Business School. His previous positions includes Co-Head of the Corporate Finance Department at Clark, Dodge & Co. , Limited Partner of Bear Stern, Managing Director of JPMorgan Chase Bank and CEO of the U.S. investment bank of Credit Agricole, the major French Bank. Cosimo J. Patti – Chairman of Compensation Committee Mr. Patti’s previous positions include roles as Senior Director of Strategy Management, Director of Business Strategy, and Senior Vice President of Lehman Brothers. He is an Arbitrator of SEC and National Association of Securities. Mr. Patti has been an Independent Director of American Oriental Bioengineering Inc. (NYSE: AOB) since 2004. Linyuan Zhai – Chairman of Nomination Committee Mr. Zhai worked for China FAW Group Corporation for 37 years with abundant experience in terms of technology, production, and business management. He is a Senior Expert in the auto industry. Mr. Zhai served as general manager of automobile manufacturing , successfully led Four Ring Company, a subsidiary of FAW group, to go public in China. He is one of the pioneers and outstanding contributors of FAW group’s success. Yong Jin - Independent Director Jin, a professor at Tsinghua University and academician of the Chinese Academy of Engineering, is an executive member of Chemical Industry and Engineering Society of China and Chinese society of particuology, vice chairman of China Institute of Ecological Economy, director of Industrial Ecology Economy and Technology Committee, Council Convenor of the Chemical discipline in the State Council Academic Degrees Committee, professional advisers for Beijing Municipal Government, Lectureship Award recipient in fluidization by American Institute of Chemical Engineers (AIChE), the world's leading organization for chemical engineering professionals, with more than 40,000 members from 93 countries, consultant for the Germany magazine " Chemical engineering & technology ". Jin has published and presented more than 350 papers in important journals and conferences domestically and internationally, 138 of which were included in Science. Jin also has more than 30 patent applications. 23
  • 24. Investment Highlights 1 Tremendous Market Demand – Driven by Large and High Growth Addressable Automobile Market in China 2 High Barriers to Entry – Due to Strict Certification Requirements by Automotive Manufacturers 3 Industry Leading R&D Center – State of the Art Equipment and Experienced Research Team 4 Largest Number of Certification – Largest Product Portfolio Certified by Leading Auto Makers in China 5 Proven Operating Model – Rapidly Growing, Sustainable and Profitable Business 6 Seasoned Management Team – With Extensive Professional Knowledge and Years of Experience of Serving Auto OEMs 7 Well Defined Growth Strategy – Balanced Organic Growth and Expansion through Acquisition 24
  • 25. Contact Information China XD Plastics Company Ltd. Investor Relations Firm: Mr. Taylor Zhang, CFO CCG Investor Relations Inc. Phone: +1-212-747-1118 (New York) Mr. Crocker Coulson, President Mr. Allan Lao, IR Director +1-646-213-1915 Phone: +86-451-84346600 (China) crocker.coulson@ccgir.com Email: cxdc@chinaxd.net Mr. Ed Job, CFA Website: www.chinaxd.net Phone: +1-646-213-1914 (New York) ed.job@ccgir.com SEC Attorney Auditors Crone Rozynko LLP Bagell, Josephs, Levine & Company, LLC 101 Montgomery Street, Suite 1950 406 Lippincott Drive Suite J San Francisco, CA94104 Marlton, NJ 08053 Phone: (415)955-8900 Phone: (856) 346-2828 Fax: (415)955-8910 Fax: (856) 396-0022 Email: mcrone@cronerozynko.com Email: info@bjlcpas.com 25