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Equity Snap Shot

mercer
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Equity Snap Shot

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  1. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth in this presentation that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand, increased competition, changes in the scope or timing of the Company’s projects, slowdown in the demand for glucose series products and starch products, uncompetitive levels of research and development, failure to obtain regulatory approvals, and other information detailed from time to time in the Company’s filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements contained in this presentation are made only as of this date, and the Company is under no obligation to revise or update these forward-looking statements. 2

  2. Equity Snap Shot • Ticker: SGTI • Price (11/19/2007): $3.50 • Market Cap: $69.0mil • Revenues (ttm): $58.8 mil • Net Income (ttm): $7.8 mil • Diluted shares outstanding as of 09/30/2007: 19.7 mil • Earnings Per Share (ttm): $0.64 • P/E (ttm): 5.5x 3

  3. Company Overview • Market leader of pharmaceutical grade glucose in China • The most importantmanufacturer and supplier of Dextrose Monohydrate transfusion solutions in China • Background • Established and acquired state-owned enterprise in 1999 • Became an indirect wholly-owned subsidiary of West Coast Car Co. in 2007 • Current name since June 2007 • Headquartered in East Windsor, NJ, with major operating subsidiary in Weifang, Shandong Province, China • Total of 766 employees 4

  4. Investment Highlights • Rapid revenue growth and strong profitability • Positioning itself to be the leading pharmaceutical grade glucosesupplier • Located near raw material supplies in Shandong, largest corn producing province in China; Convenient to ship products to Beijing, Shanghai, Seoul and Tokyo • Vertical integration of raw materials manufacturing facility enhances production capacity and product quality • Development of high value-added industrial-use products • Growth opportunities from domestic and overseas markets 5

  5. Principal Products Food, Beverage and Processing Industries Products • Syrup • Industrial glucose • Starch • Dextrin • Sodium Gluconate • Maltose • Maltitol Pharmaceutical and medicinal materials • Dextrose Monohydrate Series • Starch, Dextrin, • Multivitamin glucose • Glucose base solution • Pharmaceutical grade starch • Avermectins (Ointment, refinement) 6

  6. Revenue Mix 7

  7. Growth Strategy • Higher living standards make glucose affordable in China, thusstimulate glucose consumption • Vertically integrate the new cornstarch plant to assure adequate supply of quality raw materials • Upgrade existing glucose manufacturing plant capacity and construct a new domestic high-quality glucose production complex to satisfy fast growing domestic and overseas markets • Consolidate domestic market before ambitiously targeting overseas customers • Develop new higher-margin, industrial grade products and downstream products • Build brand loyalty by leveraging sales and marketing 8

  8. Benefits of New Factory About New Cornstarch Plant • New, modern equipment with improved technology • Maximum annual production capacity of 240,000 tons • Capacity can be easily expanded to 300,000 tons when necessary • Located near corn production areas • Next to Shengtai’s existing glucose production plant and the new complex Benefits • Low-cost, stable supply of high-quality raw materials for glucose production • Stable raw material supply enables existing glucose production plant to operate at 100% capacity • Reduced transportation costs of raw materials • Quality assurance of raw materials • Improved revenues by selling excess cornstarch produced 9

  9. Existing Glucose Production Facilities Existing Glucose Production Facilities • Before October 2006, the annual production capacity was 60,000 tons • Whatever we produced was insufficient to meet the strong market demand • From October 2006 to May 2008, we have been upgrading their capacities to more than 90,000 tons 10

  10. New Glucose Production Complex New Glucose Production Complex • Expected annual capacity of 150,000 tons of pharmaceutical glucose and value-added glucose products • Commenced construction in early July 2007 and anticipate that construction will be completed in the first half of 2008 • State-of-the-art machinery and technology • Strictest quality control standards • Most competent employees 11

  11. Production Process Convert Cornstarch Emulsion Add in Glucoamylase Filter Discolor Ion exchange Inspissation Crystallization and separation Glucose Clean and Dry 12

  12. Quality Control • Production facilities fully certified for GMP, ISO9002 and HACCP international quality standards • Three-Tier quality control system • Workshop team • Production team • Management accountability • Pollution- and contamination-free production environment • Stringent hygiene controlled warehouse • Output conforming to pharmaceutical glucose product specifications is maintained at 100% 13

  13. Distribution Channel and Target Market • Representative officesin 7 provinces, with business in 27 provinces • Export to over 60 countries Domestic Market • Target Customers • Pharmaceutical companies • Medical supply companies • Medical supply exporters • Food and beverage companies Shandong Suzhou Wuhan Chengdu HangZhou Nanchang Guilin Nanning Shantou Guangzhou Representative Office Chinese Operation Headquarters 14

  14. Customer Base • Key Factors to reinforce customer loyalty: • High quality, pharmaceutical grade products • Certified product reliability • On-time deliveries • New and improved medicinal products and packaging • Excellent service and support • Strong referrals 15

  15. Growth Opportunity in China • About 300,000 medical service providers • Increasing population drives over 15% annual growth on Chinese pharmaceutical market • Strong demand for higher quality drugs and medical equipment • China will become world’s 5th largest pharmaceutical market, valued at $75 billion by 2010 Source: National Bureau of Statistics of China 16

  16. Experienced Management Team • Qingtai Liu– President, CEO Formerly head of Science and Technology of Changle Power Factory, Bachelor of Electrical Engineering Degree from Shandong Technical University • Yizhao Zhang – CFO Held senior positions in Chinawe Asset Management Corporation (CHWE) and China Natural Resources Incorporation (CHNR), received Bachelors degree in Economics from Fudan University, Shanghaiand MBA from State University of New York at Buffalo. CPA of Delaware and member of AICPA • Chris W. Wang – Independent Director, Chairman of Audit Committee Served as Chief Financial Officer of Fushi International, Inc., Executive VP of Redwood Capital, Inc., obtained MBA in Finance and Corporate Accounting from Simon Business School of University of Rochester 17

  17. Financial Highlights Shengtai Pharmaceutical, Inc. 18

  18. Strong Revenue Growth 4 year CAGR 26.8% Note: 1Q 2007, 1Q 2008 unaudited financial statements 19

  19. Increasing Gross Margin 4 year CAGR 36.5% Note: 1Q 2007, 1Q 2008 unaudited financial statements 20

  20. Strong Net Income Growth 4 year CAGR 95.7% Note: 1Q 2007, 1Q 2008 unaudited financial statements 21

  21. Earnings Per Share (Diluted) Note: 1Q 2007, 1Q 2008 unaudited financial statements. 22

  22. Balance Sheet Highlights September 30, 2007 unaudited financial statement 23

  23. Attractive Valuation All data are extracted from Reuters.com HKD 7.8/USD is foreign exchange applied for price adjustment on 2008.HK and 0809.HK 24

  24. Investment Summary Market leader and preferred supplier of pharmaceutical grade glucose in China Vertically integrated cornstarch plant enables stable, high-quality and low cost material supply. Glucose capacity expansion by upgrading and building production facilities to meet strong demand Target domestic and overseas opportunities Develop new, higher-margin, industrial-use products Solid financial performance Experienced management team with track record of success 25

  25. Outlook Optimistic about our outlook Confident in achieving “make-good” numbers Existing Risks: Inability to complete the new glucose complex as previously scheduled Increasing interest rates in China Uncontrollable commodities prices Sudden appreciation of Chinese currency versus foreign currencies 26

  26. Contact Shengtai Pharmaceutical, Inc. Philips Zhang, CFO Changda Road East, Development District,Changle County,Shandong Province Tel: +86-536-629-5728 shengtaicfo@hotmail.com CCG Elite Investor Relations Inc. Crocker Coulson, President 1325 Avenue of the Americas, Suite 2800 New York, NY 10019 Tel: 1 (646) 213-1915 Crocker.coulson@ccgir.com 27

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