Investor Presentation 1Q19 TO BE A REGIONAL LEADER IN STARCH & - - PowerPoint PPT Presentation

investor presentation
SMART_READER_LITE
LIVE PREVIEW

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


slide-1
SLIDE 1

Investor Presentation

1Q19

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

slide-2
SLIDE 2

Private for Investor Forum 1

DIS ISCLAIMERS

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 ”

slide-3
SLIDE 3

Private for Investor Forum 2

AGENDA

I II II III III IV

BUSINESS HIGHLIGHTS COMPANY OVERVIEW STARCH & FOOD BUSINESS FINANCIAL PERFORMANCE

V

GOING FORWARD & OPPORTUNITIES

VI

APPENDIX

slide-4
SLIDE 4

Business Highlight

slide-5
SLIDE 5

Private for Investor Forum 4

BUSINESS HIG IGHLIGHTS IN IN 1Q19

Sale Growth Native Starch Volume (Thailand & China)

+6% YoY

Acquisition of assets from Maesot Starch & Maesot Biogas

1st

1,000 MB Bond Issue with TRIS RATING BBB+

+33%

Acquisition of additional shares in TDC

+200 T/D +64% YoY

Net Profit Growth (After NCI)

+3% YoY

slide-6
SLIDE 6

Business Overview

slide-7
SLIDE 7

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

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**

COMPANY FACTSHEET

slide-8
SLIDE 8

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 : ~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

THAI WAH BUSINESS OVERVIEW

Others

  • Bean Sheet

(Shanghai noodle)

  • Tapioca starch
  • Pearl / Sago

“Glucose” “Pearl / Sago”

7

slide-9
SLIDE 9

Starch Business

slide-10
SLIDE 10

Private for Investor Forum 9

TAPIOCA PRODUCTION OUTLOOK

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

slide-11
SLIDE 11

Private for Investor Forum 10 Source : Thai Tapioca Starch Association

GROWTH IN IN EXPORT OF THAI TAPIOCA IN INDUSTRY

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 4

2010 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 2

2010 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 90 100

2010 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 9

2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q19

Unit : M. Tons 0.82 0.26 8.3 1.81

slide-12
SLIDE 12

Private for Investor Forum

STARCH APPLICATION

11

Solution Provider  Premium Food Grade

slide-13
SLIDE 13

Private for Investor Forum 12

MARKET POSITION 1Q19

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 2000

2013 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

100 200 300 400 500 600 700 800

2013 2014 2015 2016 2017 2018 1Q19 Unit : ‘000 Tons 81

1st Largest Importer from TH 2nd Largest Importer from TH

slide-14
SLIDE 14

Private for Investor Forum

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

13

NATIVE STARCH EXPORT PRICE MARKET

Year 2016 2017 2018 2019 AVG FOB / tons 350 345 497

455

Source : The Thai Tapioca Trade Association

USD/Ton

2016 2018

slide-15
SLIDE 15

Private for Investor Forum 14

NATIVE STARCH MARGIN GAP

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

slide-16
SLIDE 16

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

15

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

slide-17
SLIDE 17

Private for Investor Forum 16

THAI WAH SHANGHAI MAESOT THAI WAH VIETNAM TDC THAI WAH CAMBODIA

CASSAVA ROOTS SOURCING STRATEGIES

Source : The Company

slide-18
SLIDE 18

Food Business

slide-19
SLIDE 19

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

18

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

1 2 3

Source : The Company

slide-20
SLIDE 20

Private for Investor Forum

FOOD DIS ISTRIBUTION AND MARKET STRATEGY

19

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

13%

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

  • Increase more SKUs
  • Expand more customer base

Source : The Company

slide-21
SLIDE 21

Private for Investor Forum

MODERN TRADE CHANNEL

20

Visibility & Demonstration Overview

1Q19 Performance

  • 29% growth YoY

Strategies

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

Where can find us ?

slide-22
SLIDE 22

Private for Investor Forum

FOOD EXPORT OPPORTUNITY

21

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.

slide-23
SLIDE 23

Private for Investor Forum

THAI WAH VIE IETNAM

22

MT Stores Wet Markets

600 120

Food Operators

500

Our Distribution

slide-24
SLIDE 24

Private for Investor Forum

MARKETING ACTIVITIES

23 Source : The Company

Local music marketing sponsorship during Apr – May 2019 ThaiFex during 28 May – 1 June 2019

slide-25
SLIDE 25

Financial Performance

slide-26
SLIDE 26

Private for Investor Forum 25

493 197 55 90 7.9% 2.7% 3.0% 4.8%

  • 50.0%
  • 40.0%
  • 30.0%
  • 20.0%
  • 10.0%
0.0% 10.0%

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

PERFORMANCE IN IN 1Q19

slide-27
SLIDE 27

Private for Investor Forum

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

SALES BREAKDOWN 1Q19

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 8,000

2015 2016 2017 2018 1Q19

Unit : MB

slide-28
SLIDE 28

Private for Investor Forum 27

  • 500

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

  • 309
  • 400

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 POSITION 1Q19

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

slide-29
SLIDE 29

Going Forward

slide-30
SLIDE 30

Private for Investor Forum 29

IN INVESTING 2B FOR GROWTH IN IN NEXT 2 YEARS

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

  • HVA Products (Pearl / Coarse

Flour / High Grade Starch / Rice flour / Cassava 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

slide-31
SLIDE 31

Private for Investor Forum 30

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
slide-32
SLIDE 32

Q&A

slide-33
SLIDE 33

Appendix

slide-34
SLIDE 34

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

HIS ISTORICAL OF THAI WAH GROUP

33

Operate TWBP, TWVN and TVCBD

Source : The Company

  • Acquisition of

assets from Maesot Starch & Maesot Biogas

  • 100% TDC Owned

1947 1950s – 1960s 1963 1970s – 1980s 1985 1990s – 2000s 2001 – 2007 2015 – 2017 2018 2019

slide-35
SLIDE 35

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 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

  • n May 19
slide-36
SLIDE 36

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 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

  • 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

slide-37
SLIDE 37

Private for Investor Forum 36

STOCK PRICE

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

slide-38
SLIDE 38