“TO BE A REGIONAL LEADER IN STARCH & STARCH-RELATED FOOD PRODUCTS”
INVESTOR PRESENTATION 3Q18
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
“TO BE A REGIONAL LEADER IN STARCH & STARCH-RELATED FOOD PRODUCTS”
INVESTOR PRESENTATION 3Q18
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”, +7% YoY, Rice noodle +36% YoY
Wah Bio Power Plant at Udonthani
trading at Thai Wah Cambodia & Vermicelli Noodle at Thai Wah Vietnam
Supply in 9M18
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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 30 Sep 2018
Free float 46%** Market Cap : around 7,440 MB**
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
bean vermicelli
for:-
Food Industry / MSG Paper Industry Pharmaceutical Textile Industry Adhesive Industry
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
Others
(Shanghai noodle)
“Glucose” “Pearl / Sago”
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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
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PREMIUM FOOD GRADE
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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 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
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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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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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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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To be globally competitive and innovative
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In 2050, there will be 9.7 billion people in the world, more than
Smallholder farmers produce
food supply Consumer patterns change from buying staple commodities towards
clean, gluten free, non GMO carbohydrates Long term trend of Growing Food Demand in ASEAN ASEAN’s urbanization will
million households by 2030 (from 2015)
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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, 13%
China, 51%
USA, 4% Japan, 4%
Tapioca Starch in the world
6.5% in 9M18
CHINA TAIWAN
Tapioca Starch in the world
18.7% in 9M18
7% of
Total Native Starch Export in 9M18
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Established new subsidiary
food products
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Myanmar Opportunities Pioneer new small holder farm model (2X Yield in 2015) Tapioca plantation & Chips Expansion into consumer foods, noodles, sauces, sweetener to tap
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
Company Limited
starch products
Source : The Company
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NEW AREA THAILAND
Model EXISTING THAILAND
with Farmer Networks
in Potential Areas NEW AREA CAMBODIA/LAOS
for Cambodia/Laos
Source : The Company
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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
Private for Investor Forum
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 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
Source : The Company
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Visibility & Demonstration Overview
9M18 Performance
Strategies
Where can find us ?
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Targeting double-digit growth with 9 – 10% contributions for 2018
growth YoY for 9M18
Expansion more “Volume” especially in EU and USA / Exploring “New Customers” especially in CLMV & China
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USA
from existing customers
CHINA
shift to “Thai Food grade”
& consistency CLMV VIETNAM
& consistency LAOS
market CAMBODIA
supermarket EUROPE
from existing customers
Source : The Company
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 1,0002016 2017 9M18 Q3'17 Q3'18
10.9% 7.9% 7.4% 0.5% 8.0% 2.2%
3.0% 8.0% 13.0% 18.0% 23.0% 28.0%
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%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
GP Margin
28
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
Private for Investor Forum
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
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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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 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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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 2018E - 2020E
Source : The Company
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Source : The Company
5 - 10% 10 - 20% FOCUS Native
SCALE HVA
INNOVATE Food – TH
PENETRATE Food – High Growth
DOUBLE High-Single Digit Growth 1 2 3 4
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and improving returns on capital to shareholders
Source : The Company
Contact: ir@thaiwah.com
Private for Investor Forum
TWS to go under rehabilitation process
business to drive export volume and enter into Vietnam market
vermicelli in Double Dragon, Double Kilin brands
production line Founding of Thai Wah in Rangoon, subsequently moved to Bangkok
Ore Mining
tapioca starch in Chonburi Province
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
1985 TWS listed
TWS resumed trading on the SET in 2013
two company approved the business combination between TWS and TWFP, by amalgamation process in Oct’15
Trade (Shanghai) in Q3’16
shares of TDC in Oct 2017, currently hold 66.67% shares 1947 1950s – 1960s 1970s – 1980s 1985 2018 1963 1963 1990s – 2000s 2001-2007
37
2015 - 2017
2018 Operate TWBP, TWVN and TVCBD
Source : The Company
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Source : Thai Customs Department
TAPIOCA STARCH EXPORTED FROM THAILAND Country
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
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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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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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
& 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 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