SECTOR: INDUSTRIALSSECTOR: INDUSTRIALSCOMPANY: BELDEN, INC.COMPANY: BELDEN, INC.

SR. ANALYSTS: HELENE SAJERJR. ANALYSTS: MALCOLM ANGUS, RAYMOND CHEN, TYRONE CHEUNG, SHIRIN KRALL, DEREK LOREN, JOHN SAAD, XIAO YANG

Investment Recommendation Investment Recommendation

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Company Belden, Inc.

Recommendation BUY

Current Price $36.70

1yr Target Price $46.17

% Upside 25.8%

The Communications Equipment IndustryThe Communications Equipment Industry

Consists of small cap companies who manufacture copper and fiber optic cable, networking, and connectivity products. Customers include OEM’s and Distributors, and their products are used in Industrial automation, transportation, infrastructure, consumer electronics, and enterprises.

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Industry SnapshotIndustry Snapshot

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$6.1 billion in industry revenue in 2010$6.1 billion in industry revenue in 2010

Ticker Company Name Market Cap ($M) Revenue ($M) Sales Growth EPS ($)

BDC Belden, Inc. 1700 4800 14% 2.32

BGC General Cable Corp. 2200 1600 11% 1.33

PLPC Preformed Line Products Co. 362 314 22% 5.31

CompanyCompany Definition Definition• Belden manufactures cable, networking, and connectivity solutions for

a variety of markets including enterprise, industrial, and broadband

• Belden offers thousands of wire and cable products such as multi-conductor, paired, coaxial, flat and optical fiber cables, plus portable cordage, molded cable assemblies, hook-up and lead wire

• Product offerings also includes a complete selection of data network connectivity products and structured cabling systems and services, enclosures and racks, surface raceway systems, and cable management accessories

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BeldenBelden, , IncInc..

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CAGR 5.3%CAGR 5.3%

Revenue Breakdown:Revenue Breakdown:by Segment & Productby Segment & Product

Supply ChainSupply Chain

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Products and ApplicationsProducts and Applications

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Trend: Developing Infrastructure in AsiaTrend: Developing Infrastructure in Asia

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• Currently 23% of families have internet access in China• China Telecom plans to increase number of optical fiber broadband

from 30 million to 100 million in five years• China plans to invest $300 billion over 5 years in infrastructure, 80%

will be in broadband• Indian government plans to spend 150 billion rupees ($3.3 Billion)

on infrastructure over the next few years

Belden Acquired LTK Wiring Based in Hong

Kong

Belden Acquired LTK Wiring Based in Hong

Kong

Belden in Emerging MarketsBelden in Emerging Markets

• 25% of Belden’s portfolio benefits from E.M• Rev from Brazil, India, China have 6-10%

growth rates over 2010• On 4 April 2011 Belden Acquired Poliron

Cabos Electricos Especiais Ltda in Brazil for $30 mil.

• "This acquisition allows us to be a legitimate player in one of the more attractive emerging markets”

Belden in Asia PacificBelden in Asia Pacific• 16% growth Year over Year, 6% of this is organic

growth• Asia has grown from 5% of Belden’s business to

21%, and is expected to increase another 1% by 2013

• The Networking Segment in Asia has grown 34% organically in 2010

• In 2007 Belden Acquires Hirschmann Automation And Control with three manufacturing joint ventures in China

Belden In Asia PacificBelden In Asia Pacific

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Trend / Opportunities: Raw Materials CostsTrend / Opportunities: Raw Materials Costs

• The cost of copper, BDC’s principal raw material grew by 129% in 2010• Copper demand expected to increase by 6.4%• China to increase copper imports by 17%

• Belden has historically shown its ability to pass on rising costs of raw materials to their consumers

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Trend: Fiber OpticsTrend: Fiber Optics

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Belden: Signal TransmissionBelden: Signal Transmission

• Positioned as the technology leader in signal transmission, with the capability of solving customers’ end-to-end requirements for high-bandwidth solutions

• Broad casting: 25% growth last quarter Coax Connectivity Solutions acquisition

• Brand most trusted and used for all Olympics and major sporting events

Belden: Increasing Market Share Belden: Increasing Market Share through Acquisitionsthrough Acquisitions

• Feb 2007: Acquired Hong Kong Based LTK Wiring for $195 million (revenue of $220 Million)

• March 2007: Acquired Hirschmann Automation and control for $260 Million

• April 2007: Acquired Lumberg Automation Components in Germany for $75 million

• June 2008: Acquired Trapeze Networks for 133 million, and sold Trapeze in 2010 for a $20 million profit

• November 2010: Acquired GarretCom for $52 million and Tomas & Betts for $78 Million

• April 2011: Acquired Poliron Cabos Electricos Especiais in Brazil for $30 million, and expects the acquisition to break even in 2011

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Financials & Stock PerformanceFinancials & Stock Performance

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Company M. Cap ($m)

Revenue ($m)

Sales Growth

EBITDA ($m)

EPS ($) Inventory Turnover

Belden Inc. 1700 4800 14% 200 2.32 7.1x

Belden, Inc.

Total Debt ($m) 551

Debt / Equity 0.86x

Current Ratio 2.4x

Quick Ratio 1.8x

ValuationValuationYear 2011-e 2012-e 2013-e 2014-e 2015-e

FCF ($MM) $ 191.48 $ 236.31 $ 280.45 $ 298.71 $ 313.65

WACC 10.84%

Growth Rate 2%

DCF EV $ 2,369.58

1yr Target Price $ 51.01

DCF – 50% Comps – TEV/EBITDA 30%P/S 20%

TEV/EBITDA 9.5x

1yr Target Price $ 40.49

1yr Target Price$46.17+25.8%

P/S 1.1x

1yr Target Price $42.58

Risks & SensitivitiesRisks & Sensitivities

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Company AnalysisCompany Analysis Increasing market share through two new acquisitions

in 2010 and one in April 2011 Increasing revenue by developing manufacturing

facilities abroad, focusing on growth in Asia segment and emerging markets

Managing the cost of raw materials as copper prices reach all time highs

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Investment Recommendation

Company Belden, Inc.

Recommendation BUY

Current Price $36.70

1yr Target Price $46.17

% Upside 25.8%

Questions?Questions?

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Backup SlidesBackup Slides

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Time SeriesTime Series

1 Yr Revenue Growth vs. P/S

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