INVESTOR PRESENTATION 3Q18 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation

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INVESTOR PRESENTATION 3Q18 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation

INVESTOR PRESENTATION 3Q18 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 3Q18

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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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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 9M18

  • Strong Revenue Growth for

“Food Business”, +7% YoY, Rice noodle +36% 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 9M18

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Private for Investor Forum 5

COMMITTED TO EXCELLENCE: OUR 2018 ACHIEVEMENT

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Business Overview

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Private for Investor Forum 7

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 30 Sep 2018

Free float 46%** Market Cap : around 7,440 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 : 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 : ~91% Domestic and ~9% 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”

8

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Starch Business

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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

10

PREMIUM FOOD GRADE

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Private for Investor Forum 11

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 25.000 29.000

Vietnam

8.596 9.875 9.746 9.757 10.210 10.453 10.578 10.653 8.000 N/A

Cambodia

4.249 8.214 7.614 7.541 7.933 11.943 13.222 13.387 9.100 N/A

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 44.400

Source : ASEAN Food Security Information System (AFSIS) Note : *2018 & 2019 was forecast data from TTTA

Unit : Million Tons The Lowest in seven year

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315 320 329 328 328 328 328 328 338 365 408 425 445 473 524 548 553 520 485 488 496 504 470 470

280 320 360 400 440 480 520 560 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2017

12

NATIVE STARCH EXPORT PRICE MARKET

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

504

Source : The Thai Tapioca Trade Association

USD/Ton

2015 2016 2018

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Private for Investor Forum 13

NATIVE STARCH MARGIN GAP

Source : The Thai Tapioca Trade Association

Baht/Kg. Raw material costs decreased less than ASP decreased & Thai Baht appreciated in Sep 18 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 Selling price (Month-1) Selling price (Month) Raw Material Spread is likely to “Stable”

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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 2.84

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 9M18

Unit : M. Tons

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FROM FARM TO SHELF

To be globally competitive and innovative

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ASIA’S FOOD SITUATION

In 2050, there will be 9.7 billion people in the world, more than

50% in Asia

Smallholder farmers produce

30% to 80%

  • f global

food supply Consumer patterns change from buying staple commodities towards

HVA & Quality Food

clean, gluten free, non GMO carbohydrates Long term trend of Growing Food Demand in ASEAN ASEAN’s urbanization will

X2 to 163

million households by 2030 (from 2015)

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Private for Investor Forum 16

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, 13%

China, 51%

USA, 4% Japan, 4%

  • The largest importer of

Tapioca Starch in the world

  • Thai Wah market share was

6.5% in 9M18

CHINA TAIWAN

  • The 3rd largest importer of

Tapioca Starch in the world

  • Thai Wah market share was

18.7% in 9M18

7% of

Total Native Starch Export in 9M18

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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

17

Myanmar Opportunities Pioneer new small holder farm model (2X Yield in 2015) Tapioca plantation & Chips Expansion into consumer foods, noodles, sauces, sweetener to tap

  • n growing middle-class

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 Will be market leader in 2018, 3X Growth in 2015 for Vermicelli and Noodles Established new subsidiary

  • TWPC Investment (Cambodia)

Company Limited

  • January 24, 2017
  • Manufacturing and distributing of

starch products

  • 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 18

CASSAVA ROOTS SOURCING STRATEGIES

NEW AREA THAILAND

  • Lease / 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

Source : The Company

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Private for Investor Forum 19

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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Food Business

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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

22

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

34%

growth YoY for 9M18

Chiang Mai

 Nationwide Distribution Coverage  Strong Growth for Chiang Mai / BKK / Chonburi / Korat / Roi Et / Banglen / Surat Thani  Targeting double-digit growth with 10% Contributions for 2018

  • Increase more SKUs
  • Expand more customer base

Source : The Company

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MARKETING ACTIVITIES – Q4’18

23

รอรูปอัพเดทคะ

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MODERN TRADE CHANNEL

24

Visibility & Demonstration Overview

9M18 Performance

  • 36% growth YoY

Strategies

  • Enhance Visibility / Activate online
  • Expand new Customer / Channel
  • Increase more SKUs
  • Targeting double-digit growth in 2018

Where can find us ?

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FOOD EXPORT OPPORTUNITY

25

Targeting double-digit growth with 9 – 10% contributions for 2018

48%

growth YoY for 9M18

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

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FOOD EXPORT NEW POTENTIAL AREAS IN 2018

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USA

  • Increasing volume

from existing customers

  • Economic Recovery
  • OEM & New SKUs

CHINA

  • Chinese behavior

shift to “Thai Food grade”

  • Offer higher quality

& consistency CLMV VIETNAM

  • Offer higher quality

& consistency LAOS

  • Existed in wet

market CAMBODIA

  • Existed in all

supermarket EUROPE

  • Increasing volume

from existing customers

  • Economic Recovery
  • OEM & New SKUs

Source : The Company

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Financial Performance

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Private for Investor Forum

669 493 109 8 348 110

100 200 300 400 500 600 700 800 900

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

2016 2017 9M18 Q3'17 Q3'18

10.9% 7.9% 7.4% 0.5% 8.0% 2.2%

  • 2.0%

3.0% 8.0% 13.0% 18.0% 23.0% 28.0%

  • 15.0%
  • 10.0%
  • 5.0%
0.0% 5.0% 10.0%

NP Margin

1,563 1,383 337 241 1,067 816

500 1,000 1,500 2,000 500 1,000 1,500 2,000

2016 2017 9M18 Q3'17 Q3'18

25.4% 22.1% 22.8% 14.0% 24.6% 16.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

  • 10.0%
  • 5.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

GP Margin

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PERFORMANCE IN 9M18

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

6,163 6,265 1,476 1,722 4,344 5,100

1,000 2,000 3,000 4,000 5,000 6,000 7,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2016 2017 9M18 Q3'17 Q3'18

1,009 716 204 81 624 354

200 400 600 800 1,000 1,200 200 400 600 800 1,000 1,200

2016 2017 9M18 Q3'17 Q3'18

Source : The Company

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Export 55% Local 45% China & Asia 83% Europe 7% US & Canada 5% Middle East & Others 3% Thailand 74% Vietnam 15% China 11% Native, 43% HVA*, 36% Food, 21%

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

SALES BREAKDOWN 9M18

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

5,100 MB 5,100 MB 3,785 MB

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Private for Investor Forum 30

  • 500

1,000 1,500 Cash & Financial investment, 1,397 Financial Debt, 266

Unit : MB

Non-CA 3,727 CA, 3,148 0% 20% 40% 60% 80% 100% Equity, 5,741 Non-CL, 410 CL 724

BV = 6.52 BAHT/share

Unit : MB

599 671 655 143 400 800 2015 2016 2017 9M18

2016 – 0.30 BAHT/share 2017 – 0.32 BAHT/share, dividend payment on 25 May 2018

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 9M18

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 ) = 0.05 Source : The Company

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Going Forward

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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 2018E - 2020E

Source : The Company

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SUSTAINABLE GROWTH 2019 - 2020

Source : The Company

5 - 10% 10 - 20% FOCUS Native

  • China Direct
  • TH Direct
  • CRM Improvement

SCALE HVA

  • Organic
  • Modified / CF / Pearl
  • NPD

INNOVATE Food – TH

  • MT Channel
  • Van Sales Channel
  • New format / NPD

PENETRATE Food – High Growth

  • Rice Noodle
  • Export
  • Thai Wah Vietnam

DOUBLE High-Single Digit Growth 1 2 3 4

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Private for Investor Forum 34

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 2 years with ~2B Baht investment
  • Embracing technology of our value chain to a long term competitive advantage

Source : The Company

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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

TWS resumed trading on the SET in 2013

  • Shareholders’ meeting of the

two company approved the business combination between TWS and TWFP, by amalgamation process in Oct’15

  • Operate Thai Wah International

Trade (Shanghai) in Q3’16

  • Successfully increased 33.33%

shares of TDC in Oct 2017, currently hold 66.67% shares 1947 1950s – 1960s 1970s – 1980s 1985 2018 1963 1963 1990s – 2000s 2001-2007

HISTORICAL OF THAI WAH GROUP

37

2015 - 2017

2018 Operate TWBP, TWVN and TVCBD

Source : The Company

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TAPIOCA STARCH EXPORTED FROM THAILAND

Source : Thai Customs Department

TAPIOCA STARCH EXPORTED FROM THAILAND Country

  • Sep. 1 - 30, 18
  • Sep. 1 - 30, 17
  • Jan. 1 - Sep. 30, 18
  • Jan. 1 - Sep. 30, 17

Native Modified Native Modified Native Modified Native Modified Bangladesh 661 993 3,454 686 14,156 7,350 20,844 5,785 China 143,709 18,907 110,213 20,598 1,070,106 157,519 1,082,554 148,563 India 39 3,032 297 3,224 295 23,806 7,610 29,172 Indonesia 43,619 7,415 18,428 8,091 268,808 74,693 309,361 70,894 Japan 3,863 30,492 12,050 37,482 83,883 250,454 111,808 255,878 Malaysia 18,684 2,379 16,929 2,707 171,101 21,242 215,512 20,138 Netherlands 481 426 974 380 11,678 5,574 11,604 6,346 Philippines 6,061 1,357 7,316 1,514 61,275 11,951 53,614 10,914

  • S. Korea

1,046 7,861 4,085 6,017 7,613 51,946 14,598 43,923 Singapore 3,968 89 5,191 130 39,973 3,164 45,471 1,436 Taiwan 21,323 2,272 28,367 2,606 184,243 21,642 232,074 26,039 U.S.A. 4,899 1,586 5,648 4,982 76,919 32,951 64,850 35,538 Vietnam 1,278 1,703 132 1,899 6,608 17,250 3,123 14,593 Other 8,212 12,084 13,487 7,380 83,673 80,540 124,571 76,518 Total Quantity 257,841 90,597 226,570 97,695 2,080,333 760,083 2,297,594 745,737 Value 3,932 2,170 2,423 1,896 31,307 17,753 25,308 15,464 Quantity: Metric Tons Value: Million Baht

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Private for Investor Forum 39

STARCH PRICE (DOMESTIC VS EXPORT)

5,000 9,000 13,000 17,000 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 40

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

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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STOCK PRICE

6 7 8 9 10 11 12 13

4-Jul-16 22-Jul-16 9-Aug-16 26-Aug-16 13-Sep-16 29-Sep-16 17-Oct-16 3-Nov-16 21-Nov-16 8-Dec-16 27-Dec-16 16-Jan-17 1-Feb-17 20-Feb-17 8-Mar-17 24-Mar-17 12-Apr-17 3-May-17 22-May-17 7-Jun-17 23-Jun-17 12-Jul-17 31-Jul-17 17-Aug-17 4-Sep-17 20-Sep-17 6-Oct-17 27-Oct-17 14-Nov-17 30-Nov-17 20-Dec-17 9-Jan-18 25-Jan-18 12-Feb-18 28-Feb-18 19-Mar-18 4-Apr-18 25-Apr-18 14-May-18 31-May-18 18-Jun-18 4-Jul-18 20-Jul-18 9-Aug-18 28-Aug-18 13-Sep-18 1-Oct-18 18-Oct-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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