INVESTOR PRESENTATION 2018 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation

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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


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

INVESTOR PRESENTATION 2018

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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

Company Overview

2

AGENDA

Business Highlights Starch Business & Food Business Financial Performance Appendix Going Forward & Opportunities

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Business Highlight

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Private for Investor Forum 4

BUSINESS HIGHLIGHTS IN 2018

  • Strong Revenue Growth for

“Food Business”, +5% YoY, Rice noodle +28% YoY

  • Commenced 1st Thai

Wah Bio Power Plant at Udonthani

  • Commenced Tapioca Chip

trading at Thai Wah Cambodia & Vermicelli Noodle at Thai Wah Vietnam

  • Challenging Raw Material

Supply in 2018

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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**

** Data as of 31 Jan 2019

Free float 46%** Market Cap : around 7,043 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
  • Modified tapioca starch
  • Coarse Flour
  • Sago (Pearl)
  • Alpha starch

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

  • Dry & fresh rice noodles

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

THAI WAH BUSINESS OVERVIEW

Others

  • Bean Sheet

(Shanghai noodle)

  • Tapioca starch
  • Pearl / Sago

“Glucose” “Pearl / Sago”

7

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Starch Business

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Private for Investor Forum 9

TAPIOCA PRODUCTION

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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Private for Investor Forum

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

NATIVE STARCH EXPORT PRICE MARKET

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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Private for Investor Forum 11

NATIVE STARCH MARGIN GAP

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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Private for Investor Forum 12

GROWTH IN EXPORT OF THAI TAPIOCA STARCH

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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Private for Investor Forum 13

THAI WAH MARKET SHARE

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%

  • The largest importer of

Tapioca Starch in the world

  • Thai Wah market share was

7.2% in 2018

CHINA TAIWAN

  • The 3rd largest importer of

Tapioca Starch in the world

  • Thai Wah market share was

19.9% in 2018

7% of

Total Native Starch Export in 2018

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Private for Investor Forum

Established new subsidiary

  • Thai Wah Vietnam Company Limited
  • February 7, 2017
  • Manufacturing and distributing of

food products

  • VND 22,462 million (Baht 35 million)
  • 100% Holding

14

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

  • TWPC Investment (Cambodia)

Company Limited

  • January 24, 2017
  • Manufacturing and distributing of

chip production and trading business

  • KHR 4,000 million (Baht 35 million)
  • 100% Holding

DEVELOP A FOOTPRINT ACROSS ASEAN

Source : The Company

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Private for Investor Forum 15

CASSAVA ROOTS SOURCING STRATEGIES

NEW AREA THAILAND MAESOD EXISTING THAILAND

  • Guarantee Price

with Farmer Networks

  • Strategic Sourcing

in Potential Areas NEW AREA CAMBODIA/LAOS

  • Organic Cassava
  • Contact Farming

for Cambodia/Laos

Source : The Company

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Private for Investor Forum 16

INTEGRATION & IMPLEMENTATION OF MSS M&A

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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Private for Investor Forum 17

CASSAVA ROOT STATIONS

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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Private for Investor Forum 18

TWBP FUTURE PLAN

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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Food Business

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Private for Investor Forum

Fresh Vermicelli Bean Sheet Fresh Rice Noodle Dry Rice Noodle

FOODS

Noodle Kit Dry Vermicelli New Grade Sago / Pearl

OUR FOOD PRODUCT

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High product quality No chemical preservatives & gluten-free contents Product & Food Hygiene certification processes

1 2 3

Source : The Company

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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

31%

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

  • Increase more SKUs
  • Expand more customer base

Source : The Company

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Private for Investor Forum

MODERN TRADE CHANNEL

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Visibility & Demonstration Overview

2018 Performance

  • 37% growth YoY

Strategies

  • Enhance Visibility / Activate online
  • Expand new Customer / Channel
  • Increase more SKUs
  • Targeting double-digit growth in 2019

Where can find us ?

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FOOD EXPORT OPPORTUNITY

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Targeting double-digit growth with more than 10% contributions for 2019

26%

growth YoY for 2018

Expansion more “Volume” especially in EU and USA / Exploring “New Customers” especially in CLMV & China

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Private for Investor Forum

THAI WAH VIETNAM

24

MT Stores Wet Markets

600 120

Food Operators

500

Our Distribution

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Financial Performance

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Private for Investor Forum 26

PERFORMANCE IN 2018

669 493 197 10.9% 7.9% 2.7%

  • 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

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%

  • 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

2016 2017 2018 GP Margin

Source : The Company

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Private for Investor Forum

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

SALES BREAKDOWN 2018

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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Private for Investor Forum 28

  • 500

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 POSITION 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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Going Forward

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Private for Investor Forum 30

INVESTING 2B FOR GROWTH IN NEXT 2 YEARS

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

  • HVA Products in Thailand

(Pearl / Coarse Flour / High Grade Starch / Rice flour)

  • Food in Vietnam
  • Thai Wah Starch in Cambodia

Phase II

  • Biogas Power Plant (2 plants)
  • Solar Roof Project
  • Starch & Starch-Related Food

Products focus on Thailand & CLMV

PROJECT 2019E - 2020E

Source : The Company

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Private for Investor Forum 31

GOING FORWARD

Source : The Company

  • To be A leading Small Cap in ASEAN, recognized for

consistency and strong financial discipline. Strengthen Regional capabilities across ASEAN and China.

  • Core long term strategy to pursue High-single digit Growth

and Sustainability towards 10B Revenue and 1B EBIT in medium term

  • Consistently improve YoY on company operating margins,

increasing mix of HVA products and improving returns on capital to shareholders

  • Aggressive growth expansion, over the next 2 years with

~2B Baht investment through Greenfield and M&A

  • Embracing technology and develop new strategic platform
  • f 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 34

STARCH PRICE (DOMESTIC VS EXPORT)

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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Private for Investor Forum 35

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

  • ut in VN & Cambodia

& low productivity of cassava root

Baht/Kg.

Government intervene root price 2.5 Baht/Kg for this crop

ROOT PRICE AND STARCH EXPORT PRICE

Move in the same trend

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Private for Investor Forum 36

STOCK PRICE

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

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