INVESTOR PRESENTATION 2017 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION 2017 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation

INVESTOR PRESENTATION 2017 TO BE A REGIONAL LEADER IN STARCH & STARCH- RELATED FOOD PRODUCTS DISCLAIMERS DISCLAIMERS : THIS REPORT HAS BEEN PREPARED BY THAI WAH PUBLIC COMPANY LIMITED (TWPC) PRELIMINARILY AS A PROPOSAL FOR


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“TO BE A REGIONAL LEADER IN STARCH & STARCH-RELATED FOOD PRODUCTS”

INVESTOR PRESENTATION 2017

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Private for Investor Forum 1

DISCLAIMERS

This information is given in summary form and does not purport to be complete. Information is this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transaction, currency risk. This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to TWPC’s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements, TWPC does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside TWPC’s control. Past performance is not a reliable of future performance. This Presentation is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly to any other person or published, in whole or in part, for any purpose. No part of this presentation may be reproduced or taken or transmitted. The distribution of this presentation in other jurisdictions may be restricted by law, and persons into whose possession this presentation comes should inform themselves about, and such

  • restrictions. By accepting this presentation you agree to be bound by the foregoing restrictions.

“ DISCLAIMERS : THIS REPORT HAS BEEN PREPARED BY THAI WAH PUBLIC COMPANY LIMITED (TWPC) PRELIMINARILY AS A PROPOSAL FOR INFORMATION PURPOSES ONLY ”

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Private for Investor Forum

Business Overview

2

AGENDA

Business Highlights Industry Overview Financial Performance Appendix Going Forward & Opportunities

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Business Highlights

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BUSINESS HIGHLIGHTS IN 2017

  • Successful set up of Thai Wah

Biopower Plant / Thai Wah Shanghai / Thai Wah Vietnam / Thai Wah Cambodia

  • Successful first M&A

with TDC

  • Maintain strong operating

cash flow, improve cash position and book value

  • Volume growth across

business despite challenging raw material in Q4

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Business Overview

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Private for Investor Forum 6

SYMBOL SECTOR / INDUSTRY TWPC Agribusiness / Agro & Food Industry NAME Thai Wah Public Company Limited MARKET Stock Exchange of Thailand (SET) COMMON STOCK LISTED DATE 880,420,930 shares (Par THB 1.00) 5th October 2015 PAID-UP CAPITAL THB 880.42 million DIVIDEND POLICY Increase in absolute dividend payout

Institution

  • Thai

7.5% Institution - Foreigner 8.9%

Retail - Thai 19.8%

Retail - Foreigner 6.7%

Ho Family 40.4%

LRH 10.1%

Thai NVDR 6.7%

Shareholder structure**

** SET as of 29 Sep 2017

Free float 50%** Market Cap : around 8,584 MB**

COMPANY FACTSHEET

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Private for Investor Forum

“Double Dragon” “Double Kilin” “Phoenix” “New Grade” “Alpha Brand” “Native Starch” Starch and Related Business Food Products Business Native Starch High-Value Added Vermicelli Rice Noodle

  • Dry & fresh mung

bean vermicelli

  • Native tapioca starch

for:-

  • Glucose/Sweetener
  • Coarse Flour
  • Sago (Pearl)
  • Modified tapioca starch
  • Alpha starch

Food Industry / MSG Paper Industry Pharmaceutical Textile Industry Adhesive Industry

  • Dry & fresh rice noodles

Production Base : 5 factories in TH, 2 factories in VN & 1 factory in CBD Customer Base : ~78% Export and ~22% Domestic (TH only) Production Base : 1 factory in TH & 1 factory in VN Customer Base : ~92% Domestic and ~8% Export Capacity : 450,000 tons for Tapioca Starch and 50,000 tons for Glucose Capacity : 22,000 tons for Vermicelli and 4,000 tons for Noodles

THAI WAH BUSINESS OVERVIEW

Others

  • Bean Sheet

(Shanghai noodle)

  • Tapioca starch
  • Pearl / Sago

“Glucose” “Pearl / Sago”

7

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Native, 39% HVA*, 28% Food, 33% Native, 30% HVA*, 35% Food, 35% Native, 47% HVA*, 26% Food, 27%

8 *HVA products – Glucose, Coarse flour, Pearl, Alpha starch

BALANCE PORTFOLIO

Thai Wah Business Breakdown by GP

Source : The Company

2016 2017 2020E

2018 – 2019

HVA Capacity Expansion to enhance margins and improve ROIC

2020 Target

70% Food & HVA

contribution

to TWPC Group GP BALANCE PORTFOLIO

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Starch Pearl Modified Starch Industrial BIO Application Animal Feed Paper Carton Fabric Sweetener Pharmaceutical Carton Cosmeti c Beverage Sauces Glue & Adhesive Instant Meal Syrup & Dessert MSG Metal Industry Biodegradable Products Thai Dessert Cassava Root

STARCH APPLICATION

9

PREMIUM FOOD GRADE

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Volume Contribution 2017 HVA Growing Volume Contribution 2016 – 2018E

Native Starch 72% HVA 28%

Synergies Distribution Channels Brand Leverage Product Line Extension Penetration Support Function / R&D 2016 2017 2018E

26% 28% 38%

Strategies Increase Utilization Gear Up to HVA / Niche Market Improve Margin Expand Customer Base

STARCH BUSINESS AFTER 1ST M&A

+8 – 10%

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OUR FOOD PRODUCT

11

Fresh Vermicelli Bean Sheet Fresh Rice Noodle Dry Rice Noodle

FOODS

Noodle Kit Dry Vermicelli New Grade Sago / Pearl High product quality No chemical preservatives & gluten-free contents Product & Food Hygiene certification processes

1 2 3

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FOOD DISTRIBUTION AND GO-TO MARKET STRATEGY

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Phitsanulok Udon Thani Roi Et Chonburi Bangkok Banglan Surat Thani Korat

Key long term driver Leveraging a Technology - Enabled platform to build through Thailand and ASEAN

GPS-handheld

44%

growth YoY for 2017

Chiang Mai

 Nationwide Distribution Coverage  First Hub at Chiang Mai in Q2’17

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FOOD EXPORT OPPORTUNITY

13

Mainly Food Export to EU, USA, and CLMV

8%

Contributions for 2017

Expansion more “Volume” especially in CLMV / Exploring more on “New Products” especially in EU and USA

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Industry Overview

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358 360 368 378 386 380 363 339 315 315 318 323 315 320 329 328 328 328 328 328

338

365 408 425

445 280 320 360 400 440 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2017

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NATIVE STARCH EXPORT PRICE MARKET

Year 2015 2016 2017 2018 AVG FOB / tons 421 350 345

445

Source : The Thai Tapioca Trade Association

USD/Ton

2015 2016

Lower GP margin in Q4 given by Compression of ASP & Higher raw material costs

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NATIVE STARCH MARGIN GAP

Source : The Thai Tapioca Trade Association

Baht/Kg. Lower GP margin in Q4 given by Compression of ASP & Higher raw material costs 2 4 6 8 10 12 14 Jan/16 Mar/16 May/16 Jul/16 Sep/16 Nov/16 Jan/17 Mar/17 May/17 Jul/17 Sep/17 Nov/17 Jan/18 Selling price (Month-1) Selling price (Month) Raw Material Lower GP margin in Q4

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TWPC

+ 10%

%Growth YoY + 10% + 3%

Tapioca Export Industry

  • 4%

2016 2017

%Growth YoY 3,275,985 3,133,778

  • 4%

39,981 35,059

  • 12%

Volume

(‘000 Ton)

Value

(MB)

Source : Company and Thai Customs Department

TAPIOCA STARCH EXPORTED FROM THAILAND 2017

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MARKET OPPORTUNITIES

Source : The Company and The Thai Tapioca Trade Association Note : Data was by Volume

Taiwan, 10% Other, 11% Malaysia, 9% Indonesia, 11%

China, 51%

USA, 3% Japan, 5%

  • The largest importer of

Tapioca Starch in the world

  • Thai Wah market share

was 9% in 2017

CHINA TAIWAN

  • The 3rd largest importer of

Tapioca Starch in the world

  • Thai Wah market share

was 17% in 2017

9% of

Total Native Starch Export in 2017

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Financial Performance

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GP Margin

Q4’17 vs. Q3’17 16.5% vs. 22.8%

Sales growth

Q4’17 +30% QoQ

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FINANCIAL HIGHLIGHTS IN Q4’17

NP growth

Q4’17 +33% QoQ

EBITDA

Q4’17 +10% QoQ

145 224 317 1,921 109 204 337 1,476

NP (after MI) EBITDA Gross profit Sales

Q4’17 QoQ

Q3'17 Q4'17

Source : The Company

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PERFORMANCE IN 2017

435 669 493 7.9% 10.9% 7.9%

  • 50.0%
  • 40.0%
  • 30.0%
  • 20.0%
  • 10.0%
0.0% 10.0%

100 200 300 400 500 600 700 800 900 1,000

2015 2016 2017 NP Margin

Revenue from Sales EBITDA Gross Profit Net Profit (After MI)

5,525 6,163 6,265

5,000 5,200 5,400 5,600 5,800 6,000 6,200 6,400

2015 2016 2017 716 1,009 716

200 400 600 800 1,000 1,200

2015 2016 2017 1,184 1,563 1,383 21.4% 25.4% 22.1%

  • 50.0%
  • 40.0%
  • 30.0%
  • 20.0%
  • 10.0%
0.0% 10.0% 20.0% 30.0%

500 1,000 1,500 2,000

2015 2016 2017 GP Margin

Source : The Company

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Export 56% Local 44% China & Asia 88% Europe 5% US & Canada 5% Middle East & Others 3% Thailand 75% Vietnam 19% China 6% Native, 50% HVA*, 28% Food, 22%

22 *HVA products – Glucose, Coarse flour, Pearl, Alpha starch

SALES BREAKDOWN 2017

Thai Wah Group Sales Breakdown

Sales Breakdown by Base Operation

Thailand Sales Breakdown

Export Breakdown

Note : Thai Wah International Trade (Shanghai) started operation in Q3’16

Sales Breakdown by Business Thailand Sales Breakdown by Geographic

Source : The Company

6,240 MB 6,240 MB 4,561 MB 2,563 MB

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  • 500

1,000 1,500 2,000 2,500 Cash & Financial investment, 1,851 Financial Debt, 201

Unit : MB

Non-CA 3,968 CA, 3,148 0% 20% 40% 60% 80% 100% Equity, 5,906 Non-CL, 402 CL 808

BV = 6.71 BAHT/share (+11% YoY)

Unit : MB

485 599 671 655 200 400 600 800 2014 2015 2016 2017

2016 – 0.30 BAHT/share 2017 – 0.32 BAHT/share, which will propose to the Shareholders’ meeting

232 238 264 282

0% 5% 10% 15% 20% 25% 30% 35% 40%

200 220 240 260 280 2014 2015 2016 2017

STRONG CASH POSITION 2017

Strong Cash with Debt-free position Balance sheet Composition Operating Cash flow Increase in absolute dividend payout

Unit : MB Unit : MB D/E (Debt - Interest bearing ) = 0.03 Source : The Company

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Going Forward

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INVESTING 2-3B FOR GROWTH IN NEXT 3 YEARS

20%

CAPEX 2018E

40%

Annual Maintainance / Efficiency Improvement TWBP 2 plants TWCBD Capacity Expansion Total ~1,000 MB

40%

CAPACITY EXPANSION GREENFIELD PROJECT M&A

  • HVA Products in Thailand

(Pearl / Coarse Flour / High Grade Starch)

  • Thai Wah Starch in Cambodia

Phase II

  • Biopower plant (2 plants)
  • Starch & Starch-Related Food

Products focus on Thailand & CLMV

PROJECT 2018E - 2020E

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KEY BUSINESS DRIVERS IN 2018

STARCH BUSINESS FOOD BUSINESS

  • Invest up to 2 B Baht by 2020
  • Improve ROIC from mid to high teens
  • SG&A control to improve 1 - 1.5 % YoY
  • Build to be #1 Market Leader in all product segments

THAI WAH

  • 1st Plant in Cambodia opening
  • 1st Biogas Power Plant operating
  • Raw material management to enhance margins
  • Supply Chain Management / Smart Farming Model
  • Lead in Operational Efficiency
  • 1st Plant in Vietnam opening
  • Broaden Portfolio by launching new product SKUs
  • Operational Efficiency
  • Leverage use of Technology Platform
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TWBP FUTURE PLAN

1

Udonthani

1 Q1’18 Waste Water 2

Kalasin

1 2019 Waste Water + Pulp 3

Nakhon Ratchasima

1 2019 Waste Water + Pulp 4

Udonthani

2 2020 Pulp 5

Kalasin

2 2020 Pulp Phase COD Materials

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CASSAVA ROOTS SOURCING STRATEGIES

NEW AREA THAILAND

  • OEM Model

EXISTING THAILAND

  • Guarantee Price

with Farmer Networks

  • Strategic Sourcing

in Potential Areas NEW AREA CAMBODIA/LAOS

  • Organic Cassava
  • Contact Farming

for Cambodia/Laos

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GOING FORWARD

  • To be A leading Small Cap in ASEAN, recognized for consistency and strong financial discipline
  • Core long term strategy to pursue High-single digit Growth and Sustainability
  • Consistently improve YoY on company operating margins, increasing mix of HVA products

and improving returns on capital to shareholders

  • Aggressive regional growth expansion, over the next 3 years with 2-3B Baht investment
  • Embracing technology of our value chain to a long term competitive advantage
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Q&A

Contact: ir@thaiwah.com

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APPENDIX

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Private for Investor Forum

TWS to go under rehabilitation process

  • Expansion of the starch

business to drive export volume and enter into Vietnam market

  • Market leadership of

vermicelli in Double Dragon, Double Kilin brands

  • Automated vermicelli

production line Founding of Thai Wah in Rangoon, subsequently moved to Bangkok

  • Leader in Thailand in Tungsten and Tin

Ore Mining

  • 1952, started to produce and export

tapioca starch in Chonburi Province

  • 1953, started to produce mung bean

vermicelli in Bangkok “Thai Wah No.1” first tapioca business and export out, leader and pioneer in Thailand Expansion of starch mill business in Thailand Move to Banglane District and create Thailand’s single largest vermicelli factory 1989 TWFP listed

  • n the SET

1985 TWS listed

  • n the SET

2013 TWS resumed trading on the SET Shareholders’ meeting of the two company approved the business combination between TWS and TWFP, by amalgamation process 1947 1950s – 1960s 1970s – 1980s 1985 2017 1963 1963 1990s – 2000s 2001-2007

HISTORICAL OF THAI WAH GROUP

32

2015

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STOCK PRICE

6 7 8 9 10 11 12

7/4/59 7/14/59 7/28/59 8/9/59 8/22/59 9/1/59 9/13/59 9/23/59 10/5/59 10/17/59 10/28/59 11/9/59 11/21/59 12/1/59 12/15/59 12/27/59 1/10/60 1/20/60 2/1/60 2/14/60 2/24/60 3/8/60 3/20/60 3/30/60 4/12/60 4/26/60 5/9/60 5/22/60 6/1/60 6/13/17 6/23/17 7/5/17 7/18/17 7/31/17 8/10/17 8/23/17 9/4/17 9/14/17 9/26/17 10/6/60 10/19/60 11/2/60 11/14/60 11/23/60 12/7/17 12/20/17 1/3/18 1/15/18 1/25/18

Stock Price THB

Source : SET

The highest price on 30 Mar 2017 @ 11.70 The lowest price on 12 Oct 2016 @ 7.25

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