“TO BE A REGIONAL LEADER IN STARCH & STARCH-RELATED FOOD PRODUCTS”
INVESTOR PRESENTATION 2018
INVESTOR PRESENTATION 2018 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation
INVESTOR PRESENTATION 2018 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
“TO BE A REGIONAL LEADER IN STARCH & STARCH-RELATED FOOD PRODUCTS”
INVESTOR PRESENTATION 2018
Private for Investor Forum 1
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
“ 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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Company Overview
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Business Highlights Starch Business & Food Business Financial Performance Appendix Going Forward & Opportunities
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“Food Business”, +5% YoY, Rice noodle +28% YoY
Wah Bio Power Plant at Udonthani
trading at Thai Wah Cambodia & Vermicelli Noodle at Thai Wah Vietnam
Supply in 2018
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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
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**
** Data as of 31 Jan 2019
Free float 46%** Market Cap : around 7,043 MB**
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“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
bean vermicelli
for:-
Food Industry / MSG Paper Industry Pharmaceutical Textile Industry Adhesive Industry
Production Base : 6 factories in TH, 2 factories in VN & 1 factory in CBD Customer Base : ~80% Export and ~20% Domestic (TH only) Production Base : 1 factory in TH & 1 factory in VN Customer Base : ~92% Domestic and ~8% Export Capacity : 456,000 tons for Native Starch and 50,000 tons for Glucose Capacity : 22,000 tons for Vermicelli and 4,000 tons for Noodles
Others
(Shanghai noodle)
“Glucose” “Pearl / Sago”
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Country
2010 2011 2012 2013 2014 2015 2016 2017 2018 *2019
Thai
22.006 21.912 26.601 30.228 30.022 32.358 30.558 30.936 27.875 29.975
Vietnam
8.596 9.875 9.746 9.757 10.210 10.453 10.578 10.653 8.000 9.000
Cambodia
4.249 8.214 7.614 7.541 7.933 11.943 13.222 13.387 9.100 11.000
Laos
0.500 0.362 1.061 1.254 1.630 2.382 2.410 1.558 2.300 N/A
Total
35.351 40.363 45.022 48.780 49.795 57.136 56.768 56.534 47.275
Source : ASEAN Food Security Information System (AFSIS) Note : *2018 & 2019 was forecast data from TTTA
Unit : Million Tons Recovery from the bottom in 2018
Raw material recovery from the bottom in 2018
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315 320 329 328 328 328 328 328 338 365 408 425 445 473 524 548 553 520 485 488 496 504 476 455 280 320 360 400 440 480 520 560 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2017
10
Year 2015 2016 2017 2018 AVG FOB / tons 421 350 345
497
Source : The Thai Tapioca Trade Association
USD/Ton
2015 2016 2018
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Source : The Thai Tapioca Trade Association
Baht/Kg.
In Q4,2018, raw material costs decreased less than ASP decreased & Thai Baht appreciated
2 4 6 8 10 12 14 16 Mar/16 Jun/16 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Dec/18 Selling price (Month-1) Selling price (Month) Raw Material Spread is likely to “Stable”
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Source : The Thai Tapioca Trade Association Note Tapioca Starch is including Native & Modified Starch
1.99 2.50 2.43 2.68 3.08 3.34 3.96 3.83 4.22 4.14 3.97
0% 5% 10% 15% 20% 25% 30% 35% 40%
1 1 2 2 3 3 4 4 5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Unit : M. Tons
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Source : The Company and The Thai Tapioca Trade Association Note : Data was by Volume
Taiwan, 9% Other, 11% Malaysia, 8% Indonesia, 12%
China, 52%
USA, 4% Japan, 4%
Tapioca Starch in the world
7.2% in 2018
CHINA TAIWAN
Tapioca Starch in the world
19.9% in 2018
7% of
Total Native Starch Export in 2018
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Established new subsidiary
food products
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Cambodia Opportunities Tapioca plantation and productivity improvement Investments in Tapioca given strong availability of roots Strong border links with Thailand and Vietnam Laos Opportunities Tapioca plantation and productivity improvement Tapioca chips, starch, export Vietnam Opportunities Enhancement of sweetener business Pho, Bun, Noodle, Rice Flour business Pioneer to introduce Fresh vermicelli products to the market Established new subsidiary
Company Limited
chip production and trading business
Source : The Company
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NEW AREA THAILAND MAESOD EXISTING THAILAND
with Farmer Networks
in Potential Areas NEW AREA CAMBODIA/LAOS
for Cambodia/Laos
Source : The Company
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Source : The Company
The acquisition of assets from Maesot Starch & Maesot Biogas
Diversify supply sources of raw materials Increase production capacity Supporting customer needs worldwide Factory in Tak province, close to
Myanmar border
Total Tapioca plantation area 45,000-50,000 rai (200,000- 250,000 Tons a year) CAP. 200 tons/Day, with power plant 1.0 MW located Farmers in Maesot do big scale of farming
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Cassava Roots Station
Sustainable Raw Material Get Fresh Root at Source Convenient in Cash Card Payment Create a Good Relationship with Farmers
Source : The Company
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1
Udonthani
1 Q1’18 Waste Water 2
Kalasin
1 Mid 2019 Waste Water + Pulp 3
Nakhon Ratchasima
1 2021 Waste Water + Pulp 4
Udonthani
2 2021 Pulp 5
Kalasin
2 2021 Pulp Phase COD Materials
Source : The Company
Cost savings
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Fresh Vermicelli Bean Sheet Fresh Rice Noodle Dry Rice Noodle
Noodle Kit Dry Vermicelli New Grade Sago / Pearl
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High product quality No chemical preservatives & gluten-free contents Product & Food Hygiene certification processes
Source : The Company
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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
growth YoY for 2018
Chiang Mai
Nationwide Distribution Coverage Strong growth in main cities i.e. chieng Mai, Chonburi, etc. Targeting double-digit growth with 10% Contributions for 2018
Source : The Company
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Visibility & Demonstration Overview
2018 Performance
Strategies
Where can find us ?
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Targeting double-digit growth with more than 10% contributions for 2019
growth YoY for 2018
Expansion more “Volume” especially in EU and USA / Exploring “New Customers” especially in CLMV & China
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MT Stores Wet Markets
Food Operators
Our Distribution
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669 493 197 10.9% 7.9% 2.7%
100 200 300 400 500 600 700 800 900 1,000
2016 2017 2018 NP Margin
Revenue from Sales EBITDA Gross Profit Net Profit (After MI)
6,163 6,265 7,248
5,000 5,500 6,000 6,500 7,000 7,500
2016 2017 2018 1,009 716 557
200 400 600 800 1,000 1,200
2016 2017 2018 1,563 1,383 1,185 25.4% 22.1% 16.3%
500 1,000 1,500 2,000
2016 2017 2018 GP Margin
Source : The Company
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Export 62% Local 38% China & Asia 83% Europe 7% US & Canada 5% Middle East & Others 3% Thailand 74% Vietnam 14% China 12% Native, 44% HVA*, 36% Food, 20%
27 *HVA products – Glucose, Coarse flour, Pearl, Alpha starch
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
7,248 MB 7,248 MB 5,418 MB
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1,000 1,500 Cash & Financial investment, 1,261 Financial Debt, 233
Unit : MB
Non-CA 3,884 CA, 3,188 0% 20% 40% 60% 80% 100% Equity, 5,866 Non-CL, 412 CL 794
BV = 6.66 BAHT/share
Unit : MB
599 671 655 204 400 800 2015 2016 2017 2018
2016 – 0.30 BAHT/share 2017 – 0.32 BAHT/share, dividend payment on 25 May 2018 2018 – 0.32 BAHT/share, which will propose to the Shareholders’ meeting
232 264 282 282
0% 5% 10% 15% 20% 25% 30% 35% 40%
200 220 240 260 280 2015 2016 2017 2018
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 ) = 0.04 Source : The Company
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20%
CAPEX 2019E
40%
Annual Maintainance / Efficiency Improvement Energy Saving Project TWCBD Capacity Expansion Total ~1,000 MB
40%
CAPACITY EXPANSION GREENFIELD PROJECT M&A
(Pearl / Coarse Flour / High Grade Starch / Rice flour)
Phase II
Products focus on Thailand & CLMV
PROJECT 2019E - 2020E
Source : The Company
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Source : The Company
consistency and strong financial discipline. Strengthen Regional capabilities across ASEAN and China.
and Sustainability towards 10B Revenue and 1B EBIT in medium term
increasing mix of HVA products and improving returns on capital to shareholders
~2B Baht investment through Greenfield and M&A
Contact: ir@thaiwah.com
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5,000 9,000 13,000 17,000
Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 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 Mar-18 May-18 Jul-18 Sep-18 Nov-18
Starch Price Starch Export Price THB/Ton
Source : The Thai Tapioca Trade Association Note: Used FX Rate as a period-average (BOT)
Start to recovery since Sep 2017
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0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 100 200 300 400 500 600
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18
Starch Export Price Root Price USD/Ton
Source : The Thai Tapioca Trade Association
China stop to subsidy Corn that drag tapioca price drop Government guarantee price to farmer at price at 1.7 Baht/Kg The ‘Mealy bug’ disease spread out in Thailand & neighborhood Corn starch price also increase The ‘Srilanka Mosaic virus’ disease spread
& low productivity of cassava root
Baht/Kg.
Government intervene root price 2.5 Baht/Kg for this crop
Move in the same trend
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6 7 8 9 10 11 12 13
4-Jul-16 25-Jul-16 11-Aug-16 31-Aug-16 19-Sep-16 6-Oct-16 26-Oct-16 14-Nov-16 1-Dec-16 22-Dec-16 12-Jan-17 31-Jan-17 20-Feb-17 9-Mar-17 28-Mar-17 19-Apr-17 9-May-17 29-May-17 15-Jun-17 4-Jul-17 24-Jul-17 11-Aug-17 31-Aug-17 19-Sep-17 6-Oct-17 30-Oct-17 16-Nov-17 6-Dec-17 26-Dec-17 16-Jan-18 2-Feb-18 21-Feb-18 13-Mar-18 30-Mar-18 23-Apr-18 11-May-18 31-May-18 19-Jun-18 6-Jul-18 25-Jul-18 16-Aug-18 4-Sep-18 21-Sep-18 10-Oct-18 31-Oct-18 18-Oct-18 7-Nov-18 26-Nov-18 17-Dec-18
Stock Price THB
Source : SET
XD on 8 May 2018 0.32 Baht / Share The lowest price on 12 Oct 2016 @ 7.25