Forward Looking Statement This corporate presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by the use of words such as believes, expects, may, will, intends, plans, estimates, or anticipates or other comparable terminology as well as future or conditional verbs such as will, should, would, or could. 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 international, national or regional economic and competitive conditions, changes in relationships with customers, access to capital, difficulties in developing and marketing new products and services, marketing existing products and services, customer acceptance of existing and new products and services and the risks and uncertainties described in the Company s most recent annual report on Form 10-K and the Company s quarterly reports on Form 10-Q. 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 or reuse the forward-looking information contained in this presentation. All forward-looking statements are qualified in their entirety by this cautionary statement. 2
2014 Year-end Financial and Operating Highlights Kingold Sales Volume of Gold Products Processed 60.1 metric tons [one metric ton = 35,274 ounces] of 24-karat gold products, an increase of 17.6% compared to the 51.1 metric tons Company At-A-Glance Ticker NASDAQ: KGJI Shares Outstanding 66.0 million Stock Price $1.07 (as of 3/30/2015) Market Cap $70.6 million Industry Gold / Consumer Products Headquarters Wuhan City, China Employees Approx. 550 (full-time) Fiscal Year End Dec. 31 2014 EPS $0.72 Book value $3.91 3
2014 Year-end Financial Highlights Metric Tons of Gold Processed Three Months Ended: December 31, 2014 December 31, 2013 Volume % of Total Volume % of Total Branded* 5.7 43.2% 8.3 58.0% Customized** 7.5 56.8% 6.0 42.0% Total 13.2 100% 14.3 100% Year Ended: December 31, 2014 December 31, 2013 Volume % of Total Volume % of Total Branded* 28.8 47.9% 28.6 56.0% Customized** 31.3 52.1% 22.5 44.0% Total 60.1 100% 51.1 100% Net sales was $1.1 billion, compared to $1.2 billion Lower net sales results from decreasing price of gold and increasing sales of customized products. Net income of $47.3 million, or $0.72 per diluted share Jewelry products are sold to approximately 300 major customers covering 25 provinces in China. Investment gold products are resold to thousands of retail branches through its 7 partner banks in 8 regions and provinces. Kingold Jewelry Cultural Industry Park expects to be completed in Dec 2015. Kingold expects The Jewelry Park to become a driving force for its sales and marketing efforts in China * Branded Production: The Company acquires gold from the Shanghai Gold Exchange to produce branded products. ** Customized Production: Clients who purchase customized products supply gold to the Company for processing. 4
Development of Kingold Jewelry Cultural Industry Park The construction of Kingold Jewelry Cultural Industry Park is located at No. 12 Han Huang Road, Jiang'An District, Wuhan, a premier district on the north shore of the Yangtze River. The Company expects a grand opening by December 2015. Rendering of Kingold Jewelry Cultural Industry Park RECENT UPDATES January 8, 2015: Completion of framework on the property Next phase of construction focused on both exterior and interior decoration and design. January 21, 2015: Formally received two separate "Certificates of Presale of Commercial Properties" from Wuhan Housing Security and Management Bureau, which cover five commercial buildings, totaling approximately 123,600 square meters (approx. 1,330,000 square feet). 5
Development of Kingold Jewelry Cultural Industry Park Construction progress as of January 23, 2015 6
Gold Price Fluctuation World Gold Council 2014 Gold Price Chart From World Gold Council Interactive Chart According to the World Gold Council: Consumer demand for gold in China for full year 2014 was 813.6 tons; a decrease of 37% from 1,311.7 tons in full year 2013. The consumer demand for gold in China for year 2014 has been impacted: Decline in gold price Recovery of China s equity market 7
Net Sales and Gross Profit / Margin USD In Millions $1,200.0 Net Sales $1,189.9 $1,107.6 USD In Millions $80.0 Gross Profit $76.3 $1,000.0 $800.0 $70.0 $60.0 $50.0 $47.0 GM 6.9% $600.0 $400.0 $200.0 $0.0 $317.6 $209.3 Q4 2013 Q4 2014 2013 YE 2014 YE $40.0 $30.0 $20.0 $10.0 $0.0 $14.2 $13.9 GM 4.5% GM 6.7% GM 3.9% Q4 2013 Q4 2014 2013 YE 2014 YE Net sales were $209.3 million for the quarter ended December 31, 2014, compared to $317.6 million in the prior year period. Net sales for the year ended December 31, 2014 were $1.1 billion, compared to $1.2 billion in the prior year. Gross margin was 6.7% during the quarter, compared with 4.5% reported during the fourth quarter of 2013. The Company s gross margin for the fiscal year 2014 was 6.9%, up from 3.9% in the prior year period. The substantial increase was due to the fact that the Company purchased large quantities of gold inventory at year end 2013 and beginning of 2014 at low market prices, which made the first half production at a cost much lower than normal. Gold prices increased from $1,204.5 per ounce on December 31, 2013 to as high as $1,385.0 per ounce on March 14, 2014 before decreasing to $1,216.5 on September 30, 2014. The gross margin in the future periods is not likely to be this high and may well return to the level of past periods. 8
Operating and Net Income Operating Income Net Income USD In Millions USD In Millions $70.0 $60.0 $65.6 $50.0 $45.0 $40.0 $47.3 $50.0 $40.0 $30.0 $40.5 $35.0 $30.0 $25.0 $20.0 $28.3 $20.0 $10.0 $12.1 $10.5 $15.0 $10.0 $5.0 $7.9 $7.7 $0.0 Q4 2013 Q4 2014 2013 YE 2014 YE $0.0 Q4 2013 Q4 2014 2013 YE 2014 YE Operating income was $10.5 million for the fourth quarter of 2014, compared to $12.1 million in the prior year period. Operating margin was 5.0% for the period. Operating income was $65.6 million in 2014, compared to $40.5 million in the prior year. Operating margin was 5.9%. Net income was $7.7 million for the fourth quarter of 2014, compared to $7.9 million the prior year period. FY 2014 net income was $65.6 million, compared to $28.3 million in 2013. EPS for the quarter ended December 31, 2014 was $0.12 based on 66.1 million diluted shares outstanding, compared to $0.12 based on 65.6 million diluted shares outstanding in the prior year. EPS for FY 2014 was $0.72 based on 66.0 million diluted shares outstanding, compared to $0.44 based on 63.9 million diluted shares outstanding. 9
Select Balance Sheet Data (In USD 000s) At December 31, 2014 (Audited) At December 31, 2013 (Audited) Cash and cash equivalents, excluding restricted cash $1,332 $2,285 Accounts receivable $503 $532 Inventories (Gold) $212,396 $174,434 Total Current Assets $233,584 $257,023 Total Assets $311,754 $301,096 Short-term Loans / Bank Notes $16,271 $49,573 Total Current Liabilities $49,843 $57,191 Total Liabilities $53,515 $86,196 Total Equity $258,239 $214,901 Total Liabilities and Equity $311,754 $301,096 Book value per diluted share of $3.91 at December 31, 2014 compared to S3.31 at December 31, 2013 10
Growth Outlook for 2015 / Key Goals Based on the Company s existing resources and capacity, Kingold believes tons of gold processed will be between 70 to 80 tons during FY 2015. This guidance is based solely on current projected, organic growth. To increase its production capacity and marketing abilities through both exciting channels and the planned Jewelry Park. Kingold s Nine -Dragon Goblet Further promote and improve its brand recognition and enlarge its customer base in China in both jewelry and investment gold business. Further expanding its international presence with an initial focus on the Middle East market. 11
Kingold Jewelry, Inc. Bin Liu, CFO China Tel: +86-27-6569-4977 US Tel: 847-660-3498 Email: bl@kingoldjewelry.com binliu888@gmail.com www.kingoldjewelry.com The Equity Group Inc. USA: Adam Prior, Senior Vice President Tel: (212) 836-9606 aprior@equityny.com China: Katherine Yao, Associate Tel: +86 010 6587 643 kyao@equityny.com