Highpower International (NASDAQ: HPJ) Investor Presentation June 2017

 
 

Safe Harbor This presentation may contain "forward - looking statements" within the meaning of the “safe - harbor” provisions of the Private Securities Litigation Reform Act of 1995 , including statements regarding the Company’s expected production and sales . Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Highpower International (“HPJ” or the “Company”) to differ materially from the results expressed or implied by such statements . These risks and uncertainties include, without limitation, economic downturn adversely affecting demand for the Company’s products, fluctuations in the cost of raw materials, the Company's dependence on, or inability to attract additional, major customers for a significant portion of its net sales, the Company’s ability to increase manufacturing capabilities to satisfy orders from new customers, changes in the laws of the PRC that affect the Company's operations, the devaluation of the U . S . Dollar relative to the Renminbi, the Company's dependence on the growth in demand for portable electronic devices and the success of manufacturers of the end applications that use its battery products, the Company’s ability to expand sales in the EV and Solar ESS markets, responsiveness to competitive market conditions, the Company’s ability to successfully manufacture Li - ion batteries in the time frame and amounts expected, the market acceptance of the Company’s Li - ion products, and changes in foreign, political, social, business and economic conditions that affect the Company’s production capabilities or demand for its products . For a discussion of these and other risks and uncertainties see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's public filings with the SEC . A lthough 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 . 2

 
 

5.1% 17.9% 46.7% 29.8% » Highpower International, Inc. Incorporated in Delaware, USA Operations and production in China Customers around the world Highpower At A Glance » Unique Business Chain Stock Price: $4.80 (as of 06/08/2017) Market Cap: $73.4 million Shares Outstanding: 15.3 million (as of 3/31/2017) » Nasdaq: HPJ 3

 
 

Growing Clean Energy Industry Market & Customer Position Strong Financial Results » Tremendous market demand for clean energy solutions » Booming EV market demand for power solutions » R&D investment and patents » Global partnership opportunities » Strategic market layout » Target Fortune 500 and Top 10 in each segment » Revenue*: increased by 43.9% year over year to $41.9 million in 2017 Q1 » Net income*: increased to $2.5 million in 2017 Q1 from net loss of $0.3 million in 2016 Q1 Investor Highlights 4 Technology

 
 

Corporate Structure (Share Holding) Springpower Technology (Shenzhen) Co., Ltd. Icon Energy System (Shenzhen) Co., Ltd. Shenzhen Highpower Technology Co., Ltd. Huizhou Highpower Technology Co., Ltd Ganzhou Highpower Technology Co., Ltd Hong Kong Highpower Technology Co., Ltd. Highpower International, Inc. Corporate Structure 5 100% 100% 100% 100% 69.97% 30.03% 70.00%

 
 

Production Facilities Small Lithium - ion Battery Facility Springpower • No. 1 small battery company in China • Flexible manufacturing • Focus on small batteries for Bluetooth, wearable devices Ni - MH Battery Facility • No.2 in the world by size (16% market share ) • 18 million pcs/month Lithium - ion Battery Facility HZHP • Automated production line • Target high - end and large scale orders • Focus on power battery for EV, notebooks, and smart phones • Potential sales of up to $400 million annually Highpower’s “ Giga Factory ” 6

 
 

7 Battery Solution and Energy Storage Facility • Battery Management System (BMS) • Total battery solution • Portable power station and stationary energy storage Used Battery Recycling Facility • Used battery recycling • Pollution free processing • Battery stagger utilization Production Facilities Continued

 
 

Experienced Management Team (1) Name & Title Years of Experience Past Experience George Pan Chairman and CEO >23 Highpower International HuangPu Aluminum Co. Guangzhou Aluminum Products Co. Sunny Pan CFO >20 Finance controller for Philips Luminaire Manufacturing Co. LTD. General Manager ACCA and CICPA certified Leo Liao President of Research Institute >20 General Manager of Shenzhen Highpower Technology Co. Ltd. Chief Engineer, R & D manager of Shenzhen Highpower Technology Co. Ltd Zhongqiu Yang COO, Lithium Battery >35 GM of Pinxin Power Co., CTO of Shanghai XinYu Power Co. 8

 
 

Experienced Management Team (2) Name & Title Years of Experience Past Experience Bryan Bai Vice President of sales >30 Vice President of Beijing Unic Technologies Inc., Vice President of Tianjin GGB, Deputy General Manager of Baotou Santoku Battery Materials Co. Ltd, Sales Department Manager of Baogang Rare Earth Hi - Tech Co. Ltd . Andy Ai HR Director >13 HR Manager and Human Resource Business Partner in Huawei. Yuanmei Ma Investor Relation Director >20 Executive Partner of Shangdong Runwo Investment Asset Management Company, LLC, Chief Financial Officer of Baosheng Steel Inc. Chief Financial Officer of Yihe Pharmaceutical Co. Ltd. Chief Financial Officer of Zhongpin Inc. 9

 
 

Lighting Blue Tooth Electric Tools Tablets&NB Toys Portable Solar Energy Storage Cordless Phones Medical Devices Personal Care Electric Mowers Handheld Devices Wearable Products Smart Phones Stable Market Consumer/ Household/ Industrial Exploding Market Mobile/ Portable/ Wearable EV Growing Market Vacuum Cleaners Electric Buses Mobile Payment Electric Wheelchair Stationary Solar Energy Storage Solar ESS Strategic Market Electric Race Car Market Positioning 10

 
 

Global Market Demand for Lithium - ion Battery 11 Source: Industrial Economics & Knowledge Center (IEK)

 
 

12 Strong Customer Base

 
 

>6% of revenues invested in R&D 174 patents granted >200 engineers in primary materials, battery materials, and battery systems research Certifications in Quality, Safety, Technical, Environmental, Regional , and Social Responsibility UL Approval MH 21283 --- NiMH (90% of models approved) MH 46844 --- Li - ion / Li - polymer (60% of models approved) Commitment to Technology 12

 
 

Five Year Overview of Financial Results $112.6 $132.8 $147.1 $146.2 $173.9 100.0 120.0 140.0 160.0 180.0 200.0 2012 2013 2014 2015 2016 Annual Revenues $1.7 $1.5 $2.8 $3.9 $6.1 1.5% 1.1% 1.9% 2.6% 3.5% 0.0% 1.0% 2.0% 3.0% 4.0% 0.0 2.0 4.0 6.0 8.0 2012 2013 2014 2015 2016 Net Income Attributable to the Company Net Income Net Margin » CAGR of revenue in the past 5 years is 11.5%. » CAGR of net income in the past 5 years is 37.6%. » Strong net margin expansion In USD million 14

 
 

Robust Growth of Lithium Business $16.8 $22.1 $17.0 $22.8 $15.3 $23.7 $34.5 $38.6 $27.5 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Lithium Revenues by Quarter $32.1 $38.6 $37.6 $37.9 $29.1 $36.7 $54.1 $53.9 $41.9 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 Total Revenues by Quarter In USD million $38.0 $57.9 $68.4 $78.6 $112.1 20.0 40.0 60.0 80.0 100.0 120.0 2012 2013 2014 2015 2016 Lithium Revenues by Year » Strong Growth of Lithium Business over the past 5 years » Big acceleration of Lithium Business growth in 3Q16 Tripled sales in 5 years 15

 
 

Highpower’s Future Prospects x Accelerate revenue growth given the increased demand for lithium - ion batteries x Maintain a competitive margin while growing topline x Continue to maximize the efficiency of existing production capacity x Reinvest capital to support future growth 16

 
 

Advisors Investor Relations: ICR, Inc. 19/F, Cheung Kong Center, 2 Queen’s Road Central, Central, Hong Kong 646 - 931 - 0303 Legal Counsel: Manatt , Phelps & Phillips, LLP 11355 W. Olympic Blvd . Los Angeles, CA 90064 310 - 312 - 4252 Auditor Marcum Bernstein & Pinchuk 750 Third Avenue, 11th Floor New York, NY 10017 212 - 485 - 5500 Transfer Agent Corporate Stock Transfer 3200 Cherry Creek South Drive Denver, CO 80209 303 - 282 - 4800 17