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(NASDAQ Symbol “JST”) April 2010 Jinpan International Limited

Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Page 1: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

(NASDAQ Symbol “JST”)

April 2010

Jinpan International Limited

Page 2: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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DisclaimerForward-Looking StatementsThis presentation and oral statements made in conjunction with it may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things the information concerning our possible or assumed future results of operations, businessstrategies, financing plans, competitive position, potential growth opportunities and the effects of future regulation and competition.These statements are only our current expectations. They are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements involve risks, uncertainties and assumptions. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Actual results may differ materially from those expressed in these forward-looking statements due to a number of uncertainties and risks, in the documents incorporated by reference into the prospectus supplement and in the accompanying prospectus and other unforeseen risks, including:

our ability to successfully implement our business strategy; uncertainties about the future growth in electricity consumption and infrastructure development in the markets in which we

operate; inability to attract and retain qualified management and personnel; increases in the costs of our raw materials; the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less

expensive products and services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing;

the effects of rapid technological changes and vigorous competition in the markets in which we operate; changes in competition and the pricing environments in the countries in which we operate; the failure to keep pace with technological changes in our industry; potential product liability claims; the effects of the higher degree of regulation in the markets in which we operate; general economic and political conditions in the countries in which we operate or other countries which have an impact on our

business activities or investments; inability to successfully adapt our internal controls over financial reporting to changes in circumstance; the monetary and interest rate policies of the countries in which we operate; and exchange rates.

You should not rely on any forward-looking statements. We undertake no obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise, after we distribute this presentation, except as otherwiserequired by law.

Use of Non-GAAP Financial MeasuresThis presentation contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and ExchangeCommission. Refer to the Appendix for a discussion of these numbers and a reconciliation to their nearest equivalent financial measurescalculated in accordance with GAAP.

Page 3: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Management Presenters

Albert ShengVice President of Investor Relations

Jinpan International (USA) Ltd.

Michael Yan (严林清)General Manager

Jinpan Electric Group (Shanghai) Co. Ltd.

Page 4: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

Company Overview

Page 5: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Company Highlights Designs, manufactures, sells electrical equipment for power distribution. One of China’s leading producers of cast resin transformers.

Solid Performance Record

Three state of the art manufacturing facilities in China (Haikou, Wuhan and Shanghai).

Listed by Forbes Asia as among the best 200 companies under US$ 1 billion for three years in a row (2007, 2008, and 2009).

Well positioned to capitalize on strong economic and infrastructure growth in China and alternative energy growth worldwide.

$3.5 $4.5

$7.5

$16.4

$19.8

$29.0

$3.3

$0

$5

$10

$15

$20

$25

$30

2003 2004 2005 2006 2007 2008 2009

Net Sales

$33.5$42.3

$53.6

$82.3

$119.6

$154.0 $159.0

$0

$30

$60

$90

$120

$150

$180

2003 2004 2005 2006 2007 2008 2009

Net Income

($Millions)

Page 6: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Company MilestonesYear Milestone 1993 Jinpan’s predecessor entity founded as Haikou Jinpan

1997 Company established as a JV between Haikou Jinpan and Jinpan International

ISO 9001 Certification

1998 IPO – Listed on AMEX

2000 ISO 14001 Certification

2002 Top ranked transformer company by China National Standards Bureau

2004 Selected as Best New Supplier by leading OEM customer

2006 Successfully raised $25.7 million of capital through PIPE for new facility

2007 Achieved UL Listing

Began construction of new facility in Wuhan, China

2008 Successfully developed transformers for future generation wind towers

Completion of the Wuhan facility (June)

Announcement of new facility near Shanghai (August)

Switched listing from AMEX to Nasdaq (September)

2009 Completion of the Phase I of the Shanghai Facility (September)

Page 7: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

Products

Page 8: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Current Product LinesConventional Power Distribution Solutions

Cast Resin Transformers Integrated Assemblies

Standard Customized Switch-gears

Unit Substations

Alternative Energy Distribution Solutions

Cast Resin Transformers

(Wind)

Reactors (Wind)

Page 9: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Cast Resin Transformers Description:

Transformer change the voltage of electricity, through induction, to facilitate its transmission and distribution.

Electrical induction produces heat. Transformers are differentiated by the medium used to cool the induction coils.

Cast Resin Transformer is a type of transformer designed to use air to cool inductor coils. Invented in Germany in the 1960s and became widely used in the 1980s.

Key Application:

Electrical power distribution for both conventional and wind energy applications.

Jinpan offers a range of medium voltage cast resin power transformers

Transforming Capacity: 500KVA to 20,000KVA

Primarily used to lower high voltage electricity to usable levels.

Can also be used to raise voltage for transmission (e.g. wind power applications)

Page 10: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Advantages of Cast Resin Transformers

Jinpan’s Cast Resin Transformers Oil-Filled Transformers

Underwriters Laboratories (“UL”) Listed

Highest Reliability

Lower Cost of Ownership

Safe and Fire Resistant

Environmentally Friendly

Sophisticated Technology

Jinpan’s cast resin transformers primarily compete with oil-filled transformers

Page 11: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

1010

Other Product Offerings Switchgears Unit Substations Reactors

Description

Enables operators to switch system equipment in and out of networks

Mini power generation station comprised of switchgears, transformers, power meters and a power factor compensation device

Helps balance line voltages generated from wind towers. Reactors are installed in the hub of the wind tower.

Applications Electrical network configurations

Construction and upgrading of city power networks

Wind power

Page 12: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

Markets and Growth Drivers

Page 13: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Markets: Revenue by End Market

2009 Revenue by End Market Full year 2009 Revenue: US$ 159 Million

Jinpan’s products are used in a wide range of applications. End markets include -

Industrial (40 %)

• Factories, oil refineries, ship building facilities

Utilities and Infrastructure ( 50 %)

• Utilities: power plants, wind farms, and electrical distribution networks

• Infrastructure: airports, train/subway stations, and other municipal projects

Commercial and Residential ( 10 %)

• Office buildings, shopping malls, high rise apartments

Utilities and Infrastructure

Industrial

Residential and

Commercial

10%

40%

50%

Page 14: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Markets: Revenue by Product / Region

2009 Revenue by Product Transformers (81.8%) Reactors (8.5%) Switchgears (5.5%) Unit Substations (4.2%)

2009 Revenue by Product

Reactors

Unit Substations

Switchgears

Transformers

Revenue by Region China (86.0 %) International (14.0 %)

2009 RevenueChina vs. International

International

China

14%

86%81.8%

4.5%5.5%

8.5%

Page 15: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Markets: Revenue by Application

Custom

Standard

2009 RevenueConventional vs. Wind Energy

Applications

Wind

Coventional

2009 Revenue Standard VS. Customize

Transformers(Exclude Wind Energy Applications)

45%

55%82%

18%

Page 16: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Growth Driver: Electricity Consumption and Fixed Asset Investment

Jinpan manufactures equipment for the distribution of electrical power. Demand for our products is driven by demand for electricity.

2009 Electricity Consumption: 3.643 Trillion KWH.*

Consumption by Industry: 3.185 Trillion KWH (5.14% over 2008)*

Consumption by Consumers: 0.457 Trillion KWH (11.87% over 2008)*

Sales of electrical equipment is also driven by infrastructure development.

China’s investment in fixed assets 2009: RMB 22,486 Billion (30.1% over 2008) **

• Secondary Industry: RMB 8,227.7 Billion (26.8% over 2008)**

• Real Estate Development: RMB 3,623.2 Billion (16.1% over 2008)**

Electricity Consumption In China*

1.82.1

2.4

2.8

3.2

3.63.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2003 2004 2005 2006 2007 2008 2009

Trillion kWh

* Based on data published by the China Electricity Council.

** Data from the National Bureau of Statistics of China. See “Statistical Communiqué of the People’s Republic of China on 2009 National Economic and Social Development.” (February 25, 2010)

Page 17: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Growth Driver: Wind Energy Wind is one of the fastest growing sources of alternative energy, because the

technology is clean, reliable and easy to install.

The Global Wind Energy Council announced that the world’s wind power capacity grew by 31% in 2009, adding 37.5 GW to bring total installations to 157.9GW.

Source: Global Wind Energy Council New Release March 2, 2010

Page 18: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Source: Global Wind Energy Council New Release March 2, 2010

Page 19: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Growth Driver: Wind Energy The main markets driving significant growth continue to be Asia, North

America, and Europe, each of which installed more than 10GW of new wind capacity in 2009.

China was the largest market for wind energy equipment in 2009. China added 13 GW of new capacity, nearly doubling its wind generation capacity from 12.1 GW in 2008 to 25.1 GW at the end of 2009.

Source: Global Wind Energy Council New Release March 2, 2010

Page 20: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

19Source: Global Wind Energy Council New Release March 2, 2010

Page 21: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Jinpan currently produce:

Reactors for use in 1.5MW and 2.5MW wind towers; and

Transformers for 2.5MW wind towers.

Executing a two pronged strategy on alternative energy:

Expand OEM customer base for existing products.

Work with OEM customers to develop new wind energy products for their wind power packages.

Growth Driver: Wind Energy

Page 22: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Growth Driver: International Market International Market Strategy

Supply the international market through OEMs.

Leverage the marketing reach of large international OEMs and our expertise in manufacturing power distribution equipment to expand our presence in international markets.

North America

We continue to benefit from the successful UL listing of our cast resin transformers in 2007.

Currently, Jinpan is one of two manufacturers of UL certified cast resin transformers in the world.

Europe

Europe has become our top market for wind energy products.

2.3

6.0

19.6

23.7

0.0

5.0

10.0

15.0

20.0

25.0

2006 2007 2008 2009

Millions (USD)

International Sales

Page 23: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Facilities, Sales/Marketing, and People

Page 24: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Advanced Manufacturing Facilities Haikou Wuhan Shanghai

Year Operational 1993 2008 Phase I (Completed September 2009)

Size (m2) 44,446 19,920 >35,000

Owned / Leased 40% Owned / 60% Leased

100% Owned 100% Owned

Products Lines Transformers (customized and wind)

Standard Transformers Reactors, Switchgears, new wind energy products (under development)

Transformer Manufacturing Capacity

Transformer: Approx. 7M KVA

Transformer: Approx. 3M KVA

Page 25: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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State of the Art Manufacturing Technology

Foil Winding

Epoxy Mixing

Core Assembly

Page 26: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Geared for the development and manufacture of high margin wind energy products and integrated assemblies.

Phase I Construction: Renovation of existing buildings and installation of equipment for the manufacture of VPI reactors and transformers. Completed Sep 2009.

Phase II Construction: New buildings and equipment for the manufacture of new wind energy product and switchgear products. Estimated to be completed Q4 2010.

Ongoing Capacity Expansions at the Shanghai Facility

Page 27: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Sales and Marketing

Direct sales network consisting 35 regional sales offices located in major cities with 59 direct sales employees.

International sales office in the U.S.

Diversified customer base Largest customer

approximately 19% of total sales

No other customer accounts for more than 10% of total sales

Jinpan’s extensive sales network is a significant barrier to entry for foreign and domestic competitors seeking to enter the China market.

Haikou Facility

Shanghai Facility

Wuhan Facility

Page 28: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Experienced, Entrepreneurial Management Team

Name Age Position

Li Zhiyuan 55 Chairman of the Board of Directors, President, and Chief Executive Officer

Ling Xiangsheng 58 Vice Chairman of the Board of Directors and Vice President

Jing Yuqing 47 Corporate Secretary and President of U.S. Division

Richard Wolff, Jr. 54 Vice President of Business Development

Mark Du 49 Chief Financial Officer

Jinpan’s founders were the first to develop cast resin transformers in China

Current management team has built Jinpan into the leading transformer manufacturer in China

Staff of more than 169 engineers and technicians. Continued commitment from senior management, owning approximately

30% of outstanding equity

Page 29: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Compelling Growth Strategy Continue to focus on China’s growing electrical infrastructure

market

Invest in new, state-of-the-art facilities to increase manufacturing capacity and efficiency

Promote and develop high margin products, particularly in wind energy

Leverage our relations with OEMs and UL certification to expand our global reach.

Page 30: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

Financial Performance

Page 31: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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$4.5 $5.1$7.2

$10.5

$35.6

$24.8

$20.9

$0

$5

$10

$15

$20

$25

$30

$35

$40

2003 2004 2005 2006 2007 2008 2009

$3.3$4.5

$7.4

$16.4

$19.8

$29.0

$3.5

$0

$5

$10

$15

$20

$25

$30

2003 2004 2005 2006 2007 2008 2009

$33.5$42.3

$53.6

$82.3

$119.6

$154.0 $159.0

$0

$30

$60

$90

$120

$150

$180

2003 2004 2005 2006 2007 2008 2009

Financial Performance

Net Income & Margins

($Millions)

$14.4 $14.7 $17.2$22.9

$48.9

$67.2

$41.6

$0

$10

$20

$30

$40

$50

$60

$70

$80

2003 2004 2005 2006 2007 2008 2009

Gross Profit & MarginsNet Sales

EBITDA & Margins

(1)

(1)

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Financial Overview($Millions, except per share data) FYE December 31

2005 2006 2007 2008 2009

Net Sales 53.6 82.3 119.6 154 158.9

% Growth 26.9% 53.5% 45.4% 28.8% 3%

Gross Profit 17.2 22.9 41.6 48.9 67.2

% Margin 32.0% 27.8% 34.8% 31.7% 42.3%

EBITDA 7.2 10.5 20.9 24.8 35.6

% Margin 13.3% 12.8% 17.4% 16.1% 22.4%

EBIT 6.4 9.7 19.6 23.1 32.0

% Margin 11.9% 11.8% 16.4% 15.0% 20.1%

Net Income 4.5 7.4 16.4 19.8 28.9

% Margin 8.5% 9.0% 13.7% 12.9% 18.2%

Diluted Earnings per share 0.68 1.1 2.03 2.43 3.56

Page 33: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

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Financial OverviewBalance Sheet ($ M) Statement of cash flow

31-Dec-09 31-Dec-09

Current assets 135.00 Net Cash Provided by operating

activities 28.00

Other assets 47.00 Net cash used in investing activities (8.00)

Total assets 182.00 Net cash used by financing activities (11.00)

Net increase in Cash 9.00

Current liabilities 44.50

L/T Liability 1.60

Equity 135.90

Total liabilities & equity 182.00

Page 34: Jinpan International Limited - JST: Cast Resin Transformersjstusa.net/images/pdf/Jinpan_NDR_April_2010.pdf · (NASDAQ Symbol “JST”) April 2010. Jinpan International Limited. 1

Thank You

Albert ShengVice President of Investor RelationsJinpan International (USA) Ltd.390 Veterans Blvd.Carlstadt, NJ 07072T: 201 460 8778 (x135)F: 201 460 8775 E: [email protected]