HO CHI MINH CITY INFRASTRUCTURE INVESTMENT JSC. INVESTOR - - PowerPoint PPT Presentation
HO CHI MINH CITY INFRASTRUCTURE INVESTMENT JSC. INVESTOR PRESENTATION AUGUST 2017 TOC TABLE OF CONTENTS 2 PART I: 2017 SNAPSHOT Page 3 COMPANY OVERVIEW Page 4 ORGANIZATION STRUCTURE Page 5 PERFORMANCE OVERVIEW
INVESTOR PRESENTATION
AUGUST 2017
TOC
Page 3 COMPANY OVERVIEW Page 4 ORGANIZATION STRUCTURE Page 5 PERFORMANCE OVERVIEW Page 6
Page 7 INVESTMENT PLAN Page 8 FINANCIAL PROJECTION Page 9
Page 10 CII BRIDGE & ROAD Page 11 CII LAND Page 14 CII WATER Page 17 CII CONSTRUCTION Page 19
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Hanoi Highway, HCMC
Part I
63%
Foreign
27%
Local
10%
State
VND 19,465B
17x Increase
VND 7,656B
19x Increase
280M
9x Increase
VND 11,809B
16x Increase
Achievement: The largest and most reputable listed private infrastructure development company in Vietnam
Market Recognition
VND 8,874B
Market Capital*
246M
Outstanding Shares
6.2
P/E*
VND 5,808
EPS (2017E)
Forbes: 50 Best Listed VN Companies (2015 - 2017)
70%
Foreign Ownership Limit Member of the HOSE VN30 (since 2012)
*Assuming average price of 1H2017 = 36,040 VND/share
VND 1,091B
Total Asset
VND 372B
Total Equity
30M
Issued Shares
100%
State ownership
Establishment: An SPV created by local government specifically to attract private investment in infrastructure projects
VND 700B
Total Debt
Ownership Structure
August 2017
10.2% 9.8% 8.8% 7.5% 6.8% 6.7% 50.2% Vietnam Oman Investment (VOI) HCMC Finance & Investment (HFIC) Ayala Goldman Sachs (GS) Amersham Industries PYN Elite Others
1 7
1 2 3 4 5 6 7
2 3 4 5 6
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*Source: financial figures was based
statement as of 30 Jun3 2017
Part I
Bridge & Road
Infrastructure
HOSE ticker: LGC Legal Cap: VND1,929 B Market Cap: VND4,571 B Establishment: in 2000 as a mechanical & lighting equipment company. Then CII acquired and restructured it into CII B&R in 2014 Business: Invest in bridge and road infrastructure projects for toll collection right Business model/contract: BOT & BT Major Shareholder:
Service
Toll collection & Maintenance
Status: Private Legal Cap: VND10 B Market Cap: N/A Establishment: 2001 Business: Toll collection & maintenance services / tree- care services Business model/contract: Internal service provider Major Shareholder:
Real estate
Land bank Property
Status: to-be-established Legal Cap: VND1,000B Market Cap: N/A Establishment: CII plans to acquire an already listed property company and restructure it into CII Land Business: Developing and trading commercial and residential real estate Business model/contract: BT Major Shareholder:
(CII is looking for strategic partner)
Water
Infrastructure
HOSE ticker: SII Legal Cap: VND645 B Market Cap: VND1,358 B Establishment: in 2004 as Viet Thanh construction
and restructured it into CII Water in 2013. Business: Developing,
infrastructure projects. Business model/contract: BOO Major Shareholder:
Construction
Infrastructure Property
HOSE ticker: CEE Legal Cap: VND415 B Market Cap: VND1,104 B Establishment: in 2000 as 565 construction company. Then CII acquired and restructured it into CII E&C in 2013 Business: Infrastructure and real estate construction Business model/contract: EPC Major Shareholder:
*All data is updated as of 30/06/2017
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1,200 1,400 1,600 1,850 2,150
6% 7% 7% 7.6% 7.4%
2013 2014 2015 2016 2017E Cash dividend (VND/share) Dividend yield
0.9 2.0 3.9 4.5 5.2 43.6 13.6 6.0 4.9 5.1
2013 2014 2015 2016 2017E EBITDA/Interest Debt/EBITDA 86 388 625 838 1,576
768 3,353 2,959 3,245 6,399
2013 2014 2015 2016 2017E NPATMI (VND B) EPS (VND/share) 20% 30% 31% 38% 38% 80% 70% 69% 62% 62%
8,017 9,035 15,066 15,805 19,465
2013 2014 2015 2016* 2Q2017 Equity (VND B) Debts Total assets
Part I
Outst standing ing
FINANCIA FINANCIAL L DEB DEBTS S (1H20 H2017)
Total: VND 9,876B , Average cost: 8.6% p.a Breakdown:
De Dele leve veraging ing
CAPITA ITAL L STR TRUCTU TURE
1) The bond was issued in 2 tranches: First tranche of USD 40M (1Q2017) and second tranche of USD 20M (3Q2017). 2) CII currently has issued a total of 279.8M shares and had bought back 33.5M as treasury shares. These treasury shares will be used as reserve for conversion of above CB (in a sense that they will be cancelled as the bonds are converted into new shares). The average cost of treasury shares is 25,581 VND/share, meaning if the bond is converted, CII will effectively gain approx. 50%.
Co Conve vert rtibl ble Bonds ds (US (USD) D)
issued to Rhinos Asset Management (Korean) Total USD 60M Coupon 1%/year Duration 2017-2022 (5Y) Strike price VND38,500/share Convertible 35.4M shares
Ma Major r Out utst standing nding Equi Equity-linke nked De Debt
Imp mprovin ving
DEBT DEBT REP EPAYME YMENT T CAPABILIT ILITY
Gr Growin wing
PROFITS FITS & EA EARNIN INGS
Imp mprovin ving
CASH DIVIDEN DIVIDEND
By lender
9% 80% 11% Convertible bonds Bank loan Corporate Bonds
By Currency
10% 90% USD VND
By Maturity
19% 11% 50% 20% 1 year 2 year 3-5 year >5 years (*) Pro-forma: Assuming consolidation of LGC and CEE
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Thu Thiem New Urban Township 2015, HCMC
Rea Real l Es Estat tate Seg egme ment nt
VND bn
EX EXPECTED ECTED EQUITY UITY INV INVES ESTMEN ENT
► Obtaining prime land-bank at reasonable valuation by continuously investing in “infrastructure exchange for land” BT projects such as the Thu Thiem Phase 2 project. ► Fueling medium-term growth by developing residential projects in prime areas such as the Lakeview and Riverpark Projects in the Thu Thiem Area. ► Creating long-term value by developing real estate and infrastructure projects within the same area (such as the combination of the Thu Thiem projects & Elevated Road No.1)
VND bn
EX EXPECTED ECTED EQUITY UITY INV INVES ESTMEN ENT
► Securing long-term growth by developing and increasing stakes in mega projects (such as the Trung Luong – My Thuan Expressway) ► Increasing operation effectiveness by focusing on HCMC and Mekong Delta areas, where CII has already established a strong portfolio of BOT projects. ► Minimizing investment risks and quickly generating profits & cash by investing in brownfield projects with strong revenue base.
Part II
In Investmen vestment t Plan lan
Binh Trieu (Phase 2) VND 300 bn Hanoi Highway Expansion VND 520 bn Mergers and Acquisitions* VND 820 bn
In Investmen vestment t Plan lan
Thu Thiem Riverpark* VND 950 bn 152 Dien Bien Phu Complex VND 310 bn Thu Thiem BT (Phase 2)** VND 500 bn
CII II PARENT ARENT
VND bn
CAPITAL INVESTMENT FOR CII Capital Capital Plan lan
New shares issuance* VND 1,850 bn Internal cash & additional debts VND 1,550 bn
Water ater & & Constr Constructi tion Seg Segmen ment
(*) CII expects to raise VND 1,850 bn through new share issuance to existing shareholders at the 2:1 ratio (1 new share for every 2 existing shares) by year-end 2017. The price of new share will be 15,000 VND/share.
Water ater Segment Segment
CII will focus on managing existing portfolio, especially major projects (such as the Tan Hiep 2 and the Cu Chi Projects) just starting operation in 2017.
Co Constr tructi tion Seg Segmen ment
CII E&C will focus on constructing current CII’s project and thus does not need to raise equity at the moment.
In Investmen vestment t Ra Rati tionale ale In Investmen vestment t Ra Rati tionale ale Br Bridges idges & & Ro Road ads Seg egme ment nt
(*) CII will establish a JV with Hongkong Land to develop the Riverpark project, a luxurious residential project. (**) Under the Thu Thiem BT (Phase 2) Project, CII will construct the central lake in the Thu Thiem Area and will thus receive more land in the Thu Thiem area in return. (*) M&A includes (i) purchasing shares of brownfield projects and (ii) increasing stakes in projects that CII has not yet had major shares.
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5,900 7,200 8,200 3,500 4,300 4,900
2018 2019 2020 Adjusted EPS Adjusted EPS (fully diluted)
3,724 2,626 3,017 2,788 (3,137) (2,790) (2,767) (770)
2H2017 2018 2019 2020 Cash in Cash out
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Part II
EARNINGS
& DILUTION
Notes (i) Adjusted EPS was calculated based on adjusted NPAT and current outstanding shares of 246.2 M. (ii) Adjusted EPS (fully diluted) takes into account of the expected issuance of 123 M new shares and the conversion of USD 60M convertible bonds.
FINAN FINANCIAL CIAL TARGET ARGETS
1,459 1,761 2,019 5.85 10.39 13.24
2,018 2019 2020 Adjusted NPAT EBITDA/Interest
Notes (i) Adjusted NPAT means net consolidated profit to CII after deducting for minority interest and omitting non-cash transactions. (ii) EBITDA is calculated based on the adjusted NPAT. (iii) Average profit contribution: Land segment (67%), bridge & road and other segments (33%).
NET PROFITS
& INTEREST COVERAGE
654 490 740 2,757
CASH CASH FLO FLOWS
OF CII PA PARENT ENT
Endi Ending ng ca cash sh
Unit: VND billion Unit: VND / share Unit: VND billion
1) The projection was based only on CII’s existing portfolio excluding the water segment. 2) Upside potential includes: ► The water segment ► Pipeline projects such as the Urban Elevated Roads, Co Chien Bridge, and other brownfield projects
ASS ASSUM UMPTIO ION
CAGR (2018-2020) 18%
DILUT DILUTIO ION N EFF EFFECT ECT
1) CII expects to issue 123 M new shares to existing shareholder by Dec 2017. This is a projected figure and subject to change based on the actual of shares subscribed by shareholders. 2) Conversion of the outstanding USD 60M convertible bonds issued in 2017 will be made available by 2018. After the new share issuance to existing shareholders, the CB can be converted into approx. 43.7 M shares.
CASH PLAN
15% 13% 72% New share issuance New borrowing Internal cash 36% 23% 41% Investment needs Dividend payment Debt repayment
Cas ash in in Cas ash
ut
Construction on Saigon 2 Bridge, HCMC
HCM City Area:
CAPEX: VND 1,050B Ownership: CII B&R (100%)
CAPEX: VND 1,259B Ownership: CII B&R (90%), CII (10%)
HCM City area
CAPEX: VND 5,900B Ownership: CII B&R (51%), CII (49%)
CAPEX: VND 2,118B Ownership: CII B&R (100%)
HCM City area
(BOT & BT combined project) CAPEX: VND 20,800B
APX
VND 1,929B
Legal Capital
VND 4,571B
Market Capital
(June 2017)
193M
Outstanding Shares
(June 2017)
12.03%
ROE
12M Trailing (1H2017)
4.14%
ROA
1.9x
D/E
(1H2017)
VND 8,935B
Total Assets
(1H2017)
Forbes Asia: One of Asia’s 200 Best Under A Billion
6 projects
Operating VND 5,766B Total CAPEX VND 19,914B Total CAPEX VND 26,190B Total CAPEX
4 projects
Being developed
4 projects
Pipeline
Key economic regions:
Location: Binh Duong (Satellite City) CAPEX: VND 700B Ownership: CII B&R (100%)
Location: Mekong Delta (Ben Tre) CAPEX: VND 476B Ownership: CII B&R (51%)
Location: Central VN (Ninh Thuan) CAPEX: VND 2,281B Ownership: CII B&R (100%)
Key economic regions:
Mekong Delta (Tien Giang) CAPEX:VND 10,000B Ownership: CII B&R (10% current, 60% by 2019)
Mekong Delta (Ben Tre) CAPEX: VND 1,758B Ownership: CII B&R (51%)
Key economic regions:
Mekong Delta (Can Tho, Phung Hiep) CAPEX: VND 1,900B
Mekong Delta (Ben Tre, Tra Vinh) CAPEX: VND 790B
Central Vietnam (Khanh Hoa) CAPEX: VND 2,700B
VND 5,860B
Total Debt
(1H2017)
11
APX
1 2
HO CHI MINH CITY & IMPORTANT SATELLITE AREA
1
3 Invested area
Binh Trieu Phase 2
4 lanes 2.9km long Status: pre- investment Located at the North of HCMC, the project is
entrance that leads to other important satellite areas.
Rach Chiec Bridge
10 lanes 735m long Status: Operating The project is located at the North-East entrance of HCMC, one of the most congested areas in Vietnam
Hanoi Highway Expansion
16 lanes 15.7km long Status: Under construction The project expands the existing Hanoi Highway to cater for the increasing traffic flow in/out of HCMC
Saigon 2 Bridge
5 lanes 987m long Status: Operating The project, parallel to the existing Saigon Bridge, helps ease traffic jam/ congestion at the North-East entrance.
Urban Elevated Road No.1
4 lanes, 2 levels 10 km long Status: pipeline The project connects the current CBD to
areas of HCMC (incl. the Tan Son Nhat airport)
DT 741
6 lanes 40km long Status: Operating The project is located in Binh Duong Province (an important economic hub with a number of large industrial parks) 6 lanes 37 km long Status: Operating The project expands the NH1A going through Ninh Thuan province, and connects to the Phan Rang Phase 1 project.
Rach Mieu Phase 1
4 lanes 2.9 km long Status: Operating The project builds the arterial bridge that connects HCMC and the Ben Tre Province.
Rach Mieu Phase 2
6 lanes 22.4km long Status: Under construction The project expands the NH60 that connects Rach Mieu bridge (Rach Mieu Phase 1), Ham Luong Bridge, and Co Chien Bridge in Ben Tre province
Trung Luong
Expressway
4 lanes 55.6km long Status: Under construction The project is part
Tho expressway project, the only expressway connects HCMC and the Mekong Delta Area
Phan Rang Phase 1
6 lanes 8.4 km long Status: Operating The project expands the existing bypass of Phan Rang – Thap Cham city (in Ninh Thuan province).
Phan Rang Phase 2
MEKONG DELTA REGION
2
CENTRAL REGION
3
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716 752 951 1,420 3,175 3,380 3,549 4,063 4,334 4,938 5,591 5,963 6,271 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
APX 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
1 2 3 4 5 6 7 8 9
CAGR
(2017-2027)
Traffic growth
5% p.a Concession Period
Growth on toll revenue
2019-2032 2019-2032 2009-2022 2017-2033 2013-2024 2009-2034 2019-2032 2018-2029 2013-2017
Total project revenue 2017-2027
45,100
VND B
Total project net profits 2017-2027
11,700
VND B
Underlying growth factors Tariff Increase
5% p.a
Tariff increases by either 18%/3 years or 25%/5 years (depends
New projects
11% p.a
Major projects are under construction and will start toll collection by 2019
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APX
Current portfolio / land bank
DIAMOND RIVERSIDE APARTMENT
to-be-established
CII Land is expected to be established in 2017. Currently, CII Group has 3 real estate projects, among which Thu Thiem project is the main development focus for the next 5 years. 152 DIEN BIEN PHU
THU THIEM NEW URBAN TOWNSHIP
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APX Zone 1 & 2
Developable 63 ha Financial, cultural center, service apartments & commercial projects
Zone 7 Zone 8
Developable 27.8 ha Urban resort & marina complex Developable 17.9 ha Aquatic & recreational parks
Zone 3 & 4 Zone 5 & 6
Developable 42.4 ha Low-rise residential area & commercial – cultural mixed use Developable 64.8 ha Low-rise residential area & high-tech civilian and medical utilities
MASTERPLAN
Total Land 657 ha Developable 215.9 ha Total GFA / NFA 9.8M / 5.1M sqm Thu Thiem Masterplan Thu Thiem’s development (2016) Thu Thiem 3D perspective (1/2000 Masterplan design) CII’s current land bank in Thu Thiem
The Masterplan - “Pudong” of Ho Chi Minh city CII’s infrastructure investment in Thu Thiem
Operating
Under construction
(operational by 2018) Planning stage (operational by 2020)
5B
USD Current approved investment in Thu Thiem NUA
05
Connection with the CBD & other important districts
Given the robust economic growth of HCM city in recent years, the government has a strategy to expand the city eastward with Thu Thiem New Urban Township being the heart of the expansion. Thu Thiem, without proper infrastructure connection, was previously an isolated peninsula with little development. However, according to the masterplan, Thu Thiem will become the new center of finance, commerce, high-class services, providing all that the current CBD lacks. Land bank location Zone 1,3,&4 (river view and lake view) Developable GFA/NFA 403,000 / 299,068 sqm Land Status Fully compensated and ready to be developed
9.6
hecta
Total Acquired / Exchanged Land Area
120M
USD
Estimated CAPEX for infrastructure investment
Investment Scheme:
Build-Transfer (BT) - CII constructs bridge & road infrastructure in Zone 3&4, which then can be exchanged for lands in Thu Thiem (on which CII can develop residential projects.)
Highlighted Projects
Eco Smart City (Zone 2a)
Toshiba, Mitsubishi JV.
Empire City (Zone 2b)
Power (Gaw Capital)
Thu Thiem Bridge 1
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APX
Lakeview 1
100% Presold, Delivery by 3Q2017 Units 105 Floors 4 Basement 1 Site area (sqm) 14,060 GFA 18,000 NFA 14,800
DEVELOPING PROJECTS
Lakeview 2
2017-2018
River Park
2018-2020 Note: These project designs are preliminary and subject to change
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APX
8 projects
Operating
3 projects
Being developed
2 projects
Pipeline
HCM City Area
Ownership: SII (7.3%)
Ownership: SII (49%)
Ownership: SII (85%)
Ownership: SII (51%)
Key economic regions:
Distribution Network
Location: Mekong Delta Ownership: SII (100%)
Location: Highland area Ownership: SII (55%)
Location: Highland Area Ownership: SII (51%)
Location: Highland area Ownership: SII (90%)
HCM City Area
Network**
Ownership: SII (51%)
Key economic regions:
Location: Mekong Delta Ownership: SII (77%)
Location: Highland area Ownership: SII (51%)
HCM City Area
Key economic regions:
Location: Highland area Note: (*) Saigon – Pleiku and Tan Hiep 2 has just started operating in 2016 (**) Cu Chi project is invested in 2 phases. Phase 1 is operating while Phase 2 is being constructed (fully operational by 2018)
VND 645B
Legal Capital
VND 1,358B
Market Capital
(June 2017)
64.5M
Outstanding Shares
(June 2017)
1.4x
D/E
(1H2017)
VND 3,443B
Total Assets
(1H2017)
VND 1,979B
Total Debt
(1H2017) A member of CII Group
VND 1,464B
Total equity
(1H2017)
17
APX
HO CHI MINH CITY
1
Cu Chi, Phase 2
Distribution Servicing 30,000 households Status: Under construction Distributing clean water for Cu Chi District and surrounding areas.
BOO Thu Duc
Production Max Capacity: 300MLD Status: Operating Producing and wholesaling clean water to SAWACO, the SOE company that provides clean water for HCMC. Service Area: Districts 2,7,9, Thu Duc, and Nha Be.
Tan Hiep 2
Production
300MLD Status: Recently operating Producing and wholesaling clean water to SAWACO, the SOE company that provides clean water for HCMC. Service Area: Western region of HCMC.
Enviro
Service Technologies Solutions Status: Operating Providing water equipment for water projects of SII and
Cu Chi, Phase 1
Distribution Servicing 35,000 households Status: Operating Distributing clean water for Cu Chi District and surrounding areas.
Asia Water
Service Non revenue Water (NRW) Status Operating Providing NRW service to reduce water losses both (physical and apparent) during distribution. Service Area: District Thu Duc, Nha Be, and Can Gio of HCMC.
MEKONG DELTA
2
HIGHLAND
3
Production Max Capacity: 30MLD Status: Operating Producing and distributing clean water for Da Lat city and Lac Duong town. Production Max Capacity: 30MLD Status: Operating Producing and distributing clean water for Gia Lai Province and its surrounding areas.
Can Tho 2
Production Max Capacity: 50MLD Status: Under Construction Producing and wholesaling clean water to distribution company that provides clean water for Can Tho
Can Tho 1
Production & Distribution Max Capacity: 85MLD Status: Operating Producing and distributing clean water for Can Tho city and its surrounding areas.
An Khe
Production & Distribution Max Capacity: 9.5MLD Status: Being Upgraded Producing and distributing clean water for An Khe town of Gia Lai Province
Gia Lai
Production & Distribution Servicing 14,000 households Status: Recently Acquired Distributing clean water for Gia Lai Province and surrounding areas.
Lam Dong Saigon Dankia
Production& Distribution Servicing 175,000 households. Status: Pipeline Producing and distributing water for the Lam Dong Province and surrounding areas.
Saigon Pleiku
1 2 3
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Including projects:
2020)
TOTAL CONSTRUCTION VALUE
8,665B
CURRENT FOCUS
APX
VND 415B
Legal Capital
0.49
Asset turnover
12M Trailing (1H2017)
2.47x
D/E
(1H2017)
VND 1,843B
Total Assets
(1H2017)
VND 1,312B
Total Debt
(1H2017)
A member of CII Group
19.91%
ROE
12M Trailing (1H2017)
CAPABILITY PROFILE
Main Business
Infrastructure (bridges, roads, water infra) Construction materials trading Property, civil construction
Business Model
The company provides construction services and earns a net profit margin of at least 6%
Number of past major projects: 12 Past construction value: VND2,182B
HIGHLIGHTED PAST PROJECTS
DEVELOPMENT FOCUS & STRATEGY
SAIGON 2 BRIDGE (HCMC) NINH THUAN 2 (NATIONAL HIGHWAY 1)
DEVELOPMENT STRATEGY
5 year horizon
projects with CAPEX of over VND 10,000B
apartment projects in Thu Thiem Area)
THU THIEM INFRASTRUCTURE THU THIEM - LAKEVIEW 1 HANOI HIGHWAY EXPANSION TRUNG LUONG – MY THUAN
5.74%
ROA
12M Trailing (1H2017)
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HO CHI MINH CITY INFRASTRUCTURE INVESTMENT JOINT STOCK COMPANY
Address: 50 Ton That Dam, Nguyen Thai Binh Ward, District 1, Ho Chi Minh City Tel: (+84 8) 3914 1904, (+84 8) 3914 1905 Fax: (+84 8) 3914 1910 Email: info@cii.com.vn Website: www.cii.com.vn
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