Investor Presentation
1Q19
“TO BE A REGIONAL LEADER IN STARCH & STARCH-RELATED FOOD PRODUCTS”
Investor Presentation 1Q19 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation
Investor Presentation 1Q19 TO BE A REGIONAL LEADER IN STARCH & STARCH- RELATED FOOD PRODUCTS 0 DIS ISCLAIMERS 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”
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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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BUSINESS HIGHLIGHTS COMPANY OVERVIEW STARCH & FOOD BUSINESS FINANCIAL PERFORMANCE
GOING FORWARD & OPPORTUNITIES
APPENDIX
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Sale Growth Native Starch Volume (Thailand & China)
Acquisition of assets from Maesot Starch & Maesot Biogas
1,000 MB Bond Issue with TRIS RATING BBB+
Acquisition of additional shares in TDC
Net Profit Growth (After NCI)
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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
Other 44.8%
Ho Family 40.4%
LRH 10.1%
Thai NVDR 4.7%
Shareholder structure**
** Data as of 31 Mar 2019
Free float 45%** Market Cap : around 7,176 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 : ~88% Export and ~12% Domestic (TH only) Production Base : 1 factory in TH & 1 factory in VN Customer Base : ~93% Domestic and ~7% Export Capacity : 465,000 tons for Native Starch and 50,000 tons for Glucose Capacity : 23,000 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 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 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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Native Starch Modified Starch Pearl Chip
1.74 1.89 2.24 2.45 3.01 2.92 3.28 3.13 2.94 0.99
1 1 2 2 3 3 42010 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 Unit : M. Tons 0.69 0.79 0.85 0.90 0.95 0.91 0.95 1.01 1.03 0.27
1 1 1 1 1 2 2 22010 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 Unit : M. Tons 25.0 30.9 23.5 27.0 28.1 29.7 35.4 31.8 36.3 10.4
10 20 30 40 50 60 70 80 90 1002010 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 Unit : ‘000 Tons 4.20 3.69 4.77 5.93 6.93 7.42 6.40 6.63 4.05 1.01
1 2 3 4 5 6 7 8 92010 2011 2012 2013 2014 2015 2016 2017 2018 1Q19
Unit : M. Tons 0.82 0.26 8.3 1.81
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Solution Provider Premium Food Grade
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China Market Taiwan Market Total Starch Export from Thailand to China Total Starch Export from Thailand to Taiwan
1,387 1,756 1,526 1,766 1,813 1,763 547
200 400 600 800 1000 1200 1400 1600 1800 20002013 2014 2015 2016 2017 2018 1Q19 Unit : ‘000 Tons 445
TWPC 7%
Source : The Company
547
Unit : ‘000 Tons
TWPC 18% 76
Unit : ‘000 Tons 314 333 305 321 342 281 76
100 200 300 400 500 600 700 8002013 2014 2015 2016 2017 2018 1Q19 Unit : ‘000 Tons 81
1st Largest Importer from TH 2nd Largest Importer from TH
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445 473 524 548 553 520 485 488 496 504 476 455 453 453 460 460 460 460 460 280 320 360 400 440 480 520 560 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2017
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Year 2016 2017 2018 2019 AVG FOB / tons 350 345 497
455
Source : The Thai Tapioca Trade Association
USD/Ton
2016 2018
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Source : The Thai Tapioca Trade Association
Baht/Kg.
Price movement & Spread is likely to “Stable”
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 Mar/19 Selling price (Month-1) Selling price (Month) Raw Material 1Q19 Margin
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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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THAI WAH SHANGHAI MAESOT THAI WAH VIETNAM TDC THAI WAH CAMBODIA
Source : The Company
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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 1Q19
Chiang Mai
Nationwide Distribution Coverage Strong growth in main cities i.e. Chiang Mai, Chonburi, etc. Targeting double-digit growth with 10% Contributions for 2019
Source : The Company
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Visibility & Demonstration Overview
1Q19 Performance
Strategies
Where can find us ?
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Targeting double-digit growth with more than 10% contributions for 2019 Expansion more “Volume” especially in EU and USA / Exploring “New Customers” especially in CLMV & China
TWPC have expanded its businesses beyond Thailand being sold all over ASEAN and exported to more than 29 countries around the world.
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MT Stores Wet Markets
Food Operators
Our Distribution
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23 Source : The Company
Local music marketing sponsorship during Apr – May 2019 ThaiFex during 28 May – 1 June 2019
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493 197 55 90 7.9% 2.7% 3.0% 4.8%
2017 2018 1Q18 1Q19 NP Margin
Revenue from Sales EBITDA Gross Profit Net Profit (After NCI)
6,265 7,248 1,823 1,869 2017 2018 1Q18 1Q19 716 557 139 225 2017 2018 1Q18 1Q19 1,383 1,185 323 382 22.1% 16.3% 17.7% 20.4% 2017 2018 1Q18 1Q19 GP Margin
Source : The Company
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THB 30% USA 42% VND 13% CNY 15% Thailand 72% Vietnam 13% China 15% Native, 50% HVA*, 31% Food, 19%
26 *HVA products – Glucose, Coarse flour, Pearl, Alpha starch
Consolidated Sales Sales Breakdown by Business
Note : Thai Wah International Trade (Shanghai) started operation in Q3’16 Source : The Company
1,869 MB 1,869 MB 1,869 MB
Sales Breakdown by Base Operation Sales Breakdown by Currency
5,525 6,163 6,265 7,248 1,869
0% 5% 10% 15% 20% 25% 30% 35% 40%
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,0002015 2016 2017 2018 1Q19
Unit : MB
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1,000 1,500 Cash & Financial investment, 741 Financial Debt, 837
Unit : MB
Non-CA 4,558 CA, 3,255 0% 20% 40% 60% 80% 100% Equity, 5,988 Non-CL, 427 CL 1,398
BV = 6.8 BAHT/share
Unit : MB
671 655 204
400 800 2016 2017 2018 1Q19
2016 – 0.30 BAHT/share 2017 – 0.32 BAHT/share, 2018 – 0.32 BAHT/share, dividend payment on 24 May 2019
232 264 282 282
0% 5% 10% 15% 20% 25% 30% 35% 40%
200 220 240 260 280 300 2015 2016 2017 2018
Strong Cash with Low D/E Ratio Balance sheet Composition Operating Cash flow Increase in absolute dividend payout
Unit : MB Unit : MB D/E (Debt - Interest bearing ) = 0.14 Source : The Company
1Q19
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20%
CAPEX 2019E – 2020E (Exclude M&A)
20%
Annual Maintainance / Efficiency Improvement Energy Saving Project Capacity Expansion & Cam
60%
CAPACITY EXPANSION GREENFIELD PROJECT M&A
Flour / High Grade Starch / Rice flour / Cassava 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
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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
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Operate TWBP, TWVN and TVCBD
Source : The Company
assets from Maesot Starch & Maesot Biogas
1947 1950s – 1960s 1963 1970s – 1980s 1985 1990s – 2000s 2001 – 2007 2015 – 2017 2018 2019
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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 Jan-19 Mar-19
Starch Price Starch Export Price THB/Ton
Source : The Thai Tapioca Trade Association Note: Used FX Rate as a period-average (BOT)
Peak at 553 USD/ton
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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 Mar-19
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 27-Jul-16 18-Aug-16 8-Sep-16 29-Sep-16 20-Oct-16 11-Nov-16 2-Dec-16 27-Dec-16 19-Jan-17 9-Feb-17 3-Mar-17 24-Mar-17 19-Apr-17 12-May-17 2-Jun-17 23-Jun-17 17-Jul-17 8-Aug-17 30-Aug-17 20-Sep-17 11-Oct-17 6-Nov-17 27-Nov-17 20-Dec-17 12-Jan-18 2-Feb-18 23-Feb-18 19-Mar-18 10-Apr-18 4-May-18 25-May-18 18-Jun-18 9-Jul-18 1-Aug-18 23-Aug-18 13-Sep-18 4-Oct-18 29-Oct-18 18-Oct-18 9-Nov-18 30-Nov-18 25-Dec-18 17-Jan-19 7-Feb-19 1-Mar-19 22-Mar-19 17-Apr-19
Stock Price THB
Source : SET
XD on 8 May 2018 0.32 Baht / Share The lowest price on 12 Oct 2016 @ 7.25 XD on 27 Apr 2017 0.21 Baht / Share XD on 25 Aug 2016 0.09 Baht / Share