STA STA 2Q 2Q19 19 An Analyst lyst Pre Presentation entation - - PowerPoint PPT Presentation

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STA STA 2Q 2Q19 19 An Analyst lyst Pre Presentation entation - - PowerPoint PPT Presentation

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STA STA 2Q 2Q19 19 An Analyst lyst Pre Presentation entation 1 CO CONTENTS TENTS 1. . Financi ancial al Pe Perfor formanc mance 2. ST STA A Bus usiness iness Highlights hlights 3. Na Natural ural Rub ubber ber Market

slide-1
SLIDE 1

1

STA STA

2Q 2Q19 19 An Analyst lyst Pre Presentation entation

slide-2
SLIDE 2

CO CONTENTS TENTS

  • 2. ST

STA A Bus usiness iness Highlights hlights 1. . Financi ancial al Pe Perfor formanc mance

  • 3. Na

Natural ural Rub ubber ber Market rket Si Situation uation

2

slide-3
SLIDE 3

3

FIN INANCIAL ANCIAL PER ERFORMAN FORMANCE

1

slide-4
SLIDE 4

100 120 140 160 180 200 220 Jan-18 Fe Feb- b-18 Ma Mar-18 Apr Apr-18 Ma May-18 Jun-18 Jul-18 Au Aug-18 Se Sep-18 Oct- t-18 Nov Nov-18 Dec Dec-18 Jan-19 Fe Feb- b-19 Ma Mar-19 Apr Apr-19 Ma May-19 Jun-19 Jul-19 Au Aug-19 RSS RSS TSR SR 40 40 50 50 60 60 70 70 80 80 90 90 100 Jan-18 Fe Feb- b-18 Ma Mar-18 Apr Apr-18 Ma May-18 Jun-18 Jul-18 Au Aug-18 Se Sep-18 Oct- t-18 Nov Nov-18 Dec Dec-18 Jan-19 Fe Feb- b-19 Ma Mar-19 Apr Apr-19 Ma May-19 Jun-19 Jul-19 Au Aug-19

SICOM OM Pric ice

(US cent : Kg.)

  • Avg. = 146.5 (+1.9%)

SICOM COM – Oil il Pri rices ces

4

Crude Oil l Prices

(USD D : Bbl. l.)

  • Avg. = 140.0 (-4.4%)
  • Avg. = 67.3 (+9.1%)
  • Avg. = 75.0 (+11.5%)

ABBREVIAT ATIONS RSS : Ribbed smoked sheet LTX: Concentrated Latex TSR : Technically specified rubber, which includes STR and SIR

  • Avg. = 132.9 (-5.7%)
  • Avg. = 75.8 (+1.1%)

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

  • Avg. = 126.7 (-4.6%)
  • Avg. = 68.1 (-10.1%)
  • Avg. = 139.4 (+10.0%)
  • Avg. = 63.9 (-6.1%)
  • Avg. = 151.3 (+8.6%)
  • Avg. = 69.0 (+7.9%)
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SLIDE 5

3.6 .6 3.7 .7 3.8 .8 3.9 .9 4.0 .0 4.1 .1 4.2 .2 4.3 .3 29 29 30 30 31 31 32 32 33 33 34 34 Jan-18 Fe Feb- b-18 Ma Mar-18 Ap Apr-18 18 Ma May-18 Jun-18 Jul-18 Au Aug-18 Sep Sep-18 18 Oct- t-18 Nov Nov-18 Dec Dec-18 Jan-19 Fe Feb- b-19 Ma Mar-19 Ap Apr-19 19 Ma May-19 Jun-19 Jul-19 Au Aug-19 USD/T USD/THB USD/MYR USD/MYR

40 40 80 80 120 120 160 160 200 200 240 240

Jan-18 Fe Feb- b-18 Ma Mar-18 Apr Apr-18 Ma May-18 Jun-18 Jul-18 Au Aug-18 Se Sep-18 Oct- t-18 Nov Nov-18 Dec Dec-18 Jan-19 Fe Feb- b-19 Ma Mar-19 Apr Apr-19 Ma May-19 Jun-19 Jul-19 Au Aug-19 BD BD-SEA SEA BD BD-China AC ACN LT LTX

La Latex ex – Butadiene diene – Acry rylonitri lonitrile le - Fore rex

5

Currency ncy

ABBREVIATIONS LTX: Concentrated Latex BD: Butadiene ACN: Acrylonitrile SEA: South East Asia

LTX & BD & A ACN

Price (US cent : Kg.)

  • Avg. = 159.7 (+15.4%)

113.8 (-3.4%) 193.0 (+7.5%)

  • Avg. = 159.0 (+18.6%)

102.3 (-13.3%) 212.8 (+18.5%)

  • Avg. = 31.39 (-4.3%)
  • Avg. = 31.72 (+1.1%)
  • Avg. = 31.81 (+3.4%)
  • Avg. = 32.64 (+2.6%)
  • Avg. = 109.8 (-30.9%)

99.2 (-3.0%) 179.8 (-15.5%)

  • Avg. = 31.44 (-3.7%)
  • Avg. = 107.5 (-2.1%)

112.7 (+14.7%) 152.5 (-15.2%)

  • Avg. = 138.3 (+24.7%)

117.7 (+6.1%) 179.5 (-0.6%)

  • Avg. = 31.45 (+0.02%)
  • Avg. = 103.3 (-4.0%)

128.4 (+14.0%) 214.0 (+40.3%)

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

slide-6
SLIDE 6

6

Fin inancial ancial Hi High ghlight light

*Adjusting for (reversal) allowance of inventory and realized gains /(losses) from hedging activities

(Unit : THB million) 2Q19 2Q18 %YoY 1Q19

[Restated]

%QoQ FY18

Revenue 15,151.1 19,754.8

  • 23.3%

14,870.7

1.9%

73,492.8 Sales volume (tons) 260,783 353,773

  • 26.3%

285,334

  • 8.6%

1,336,649

  • Avg. selling price (Baht per ton)

47,000 47,593

  • 1.2%

41,404

13.5%

45,907 Gross profit 1,453.1 2,260.6

  • 35.7%

1,052.9

38.0%

7,107.5

  • Adj. gross profit*

1,193.4 2,638.8

  • 54.8%

620.9

92.2%

8,254.2 SG&A (1,120.1) (1,338.1)

  • 16.3%

(1,164.9)

  • 3.8%

(5,247.9) Gains (loss) on exchange rate, net 175.5 (443.8)

N/A

97.8

79.4%

(252.2) Other gains, net (64.9) 289.2

N/A

(448.7)

  • 85.5%

1,203.3 Operating profit (loss) 551.8 812.1

  • 32.1%

(433.8) N/A 3,050.2 Share of profit (loss) from investments in JV 36.4 57.0

  • 36.1%

37.0

  • 1.5%

223.7 EBITDA 1,239.3 1,449.7

  • 14.5%

179.8

589.3%

5,657.4 EBIT 588.2 869.2

  • 32.3%

(396.6)

N/A

3,273.9 Finance costs (235.3) (224.4)

4.9%

(227.7)

3.3%

(887.0) Net profit 270.0 591.9

  • 54.4%

(627.7) N/A 2,064.4 GP margin 9.6% 11.4%

  • 185.26

7.1%

251.03

9.7%

  • Adj. GP margin*

8.6% 13.3%

  • 470.00

4.2%

370.12

11.2% Operating profit margin 3.6% 4.1%

  • 46.91
  • 2.9%

655.91

4.2% EBITDA margin 8.2% 7.3%

84.11

1.2%

697.05

7.7% Net profit margin 1.8% 3.0%

  • 121.40
  • 4.2%

600.34

2.8%

slide-7
SLIDE 7

14,293 293 9,375 375 10,386 386 26,271 271 19,760 760 1,749 749 1,615 615 1,561 561 3,634 634 3,176 176

795 824 310 1,978 1,134

2,857 857 3,044 044 2,885 885 5,470 470 5,929 929

60 60 13 13 9 9 90 90 22 22

19,755 14,871 15,151 37,444 30,022

2Q 2Q18 18 1Q 1Q19 19 2Q 2Q19 19 6M18 6M18 6M19 6M19 Other hers Glove Gloves LTX RSS RSS TSR

Sale les s Reve venue nue

7

Sales s Revenue ue by Geography hy Sales s Revenue by Prod

  • duct (THB

HB million)

  • 23.

3.3%

  • 19.

9.8%

69% 66% 10%

2%

4% 20% 1%

10%

+1.9 .9%

19% 14% 14% 15% 15% 16% 16% 16% 16% 16% 16%

44% 44% 33% 33% 35% 35% 42% 42% 34% 34% 25% 25% 31% 31% 30% 30% 24% 24% 31% 31% 7% 7% 9% 9% 9% 9% 8% 8% 9% 9%

2% 2% 2% 2% 1% 1% 2% 2% 1% 1%

2Q 2Q18 18 1Q19 1Q19 2Q 2Q19 19 6M18 6M18 6M19 6M19 Other hers Eur Europe

  • pe

USA Asi Asia (E (Exculdi ulding ng China China&Thailan land) d) China China Dome Domestic stic

[Rest stated] d] [Rest stated] d]

slide-8
SLIDE 8

Gross s Profit

  • fit (THB

B million

  • n)

) – 6M19

6M19 Gross s Profit

  • fit (THB

B million

  • n)

) –2Q19

9

Gr Gross ss Pro rofit fit

8

[Rest stated] d] 2,261 61 1,970 70 1,367 67 1,053 53 1,453 53 13.3% 3% 10.6% 6% 9.4% 4.2% 8.6%

0.0% 0.0% 3.0% 3.0% 6. 6.0% 0% 9. 9.0% 0% 12.0% 12.0% 15.0% 15.0%

  • 500

00 1,00 000 1,50 500 2,00 000 2,50 500 2Q 2Q18 18 3Q 3Q18 18 4Q 4Q18 18 1Q 1Q19 19 2Q19 2Q19

3,771 2,506 12.4% 6.4%

0.0% 0.0% 3.0% 3.0% 6.0% 6.0% 9.0% 9.0% 12.0% 12.0% 15.0% 15.0%

  • 500

00 1,00 000 1,50 500 2,00 000 2,50 500 3,00 000 3,50 500 4,00 000 4,50 500 6M18 6M18 6M19 6M19

slide-9
SLIDE 9

9

EBIT (THB

HB million

  • n) – 6M19

6M19 EBIT (THB

HB million

  • n)

) –2Q19

9

EBIT IT

812 2 823 3 280 (434) 4) 552 2

57 57 60 60 27 37 36 36

869 869 883 883 306 306 (397) 7) 588 588 4.4% 4.7% 1.8%

  • 2.7%

7% 3.9%

  • 4.0%
  • 4.0%
  • 2.0%
  • 2.0%

0. 0.0% 0% 2.0% 2.0% 4.0% 4.0% 6.0% 6.0% (50 (500) 0)

  • 500

00 1,00 000 2Q 2Q18 18 3Q 3Q18 18 4Q 4Q18 18 1Q 1Q19 19 2Q 2Q19 19

Share re o

  • f

f pro rofit ( it (lo loss ss) f fro rom m in inve vestme stments in ts in a ass ssocia iates tes and jo join int ve t ventu ture res Op Opera rating p profit (l fit (loss) s) EBIT m T mar argin in ( (%)

1,947 47 118 8

137 74 74

2,084 84 192 192

5.6% 0.6% 0.0% 0.0% 1.0% 1.0% 2.0% 2.0% 3. 3.0% 0% 4.0% 4.0% 5.0% 5.0% 6.0% 6.0% (1, (1,000 000) (50 (500) 0)

  • 500

00 1,00 000 1,50 500 2,00 000 2,50 500 6M18 6M18 6M19 6M19

Share re o

  • f

f pro rofit it ( (lo loss ss) f fro rom m in inve vestmen stments in ts in a ass ssociates iates an and jo join int ve t ventu ture res Op Oper erating p profit ( fit (los loss) s) EBIT m T mar argin in ( (%)

[Rest stated] d]

slide-10
SLIDE 10

10 10

Net Profit

  • fit (THB

B million

  • n)

) – 6M19

6M19 Net Profit

  • fit (THB

B million

  • n)

) –2Q19

9

Net Pro rofit fit

592 592 502 502 139 139 (614) 4) 270 270 3.0% 2.7% 0.8%

  • 4.1%

1% 1.8%

  • 5.0%
  • 5.0%
  • 3.0%
  • 3.0%
  • 1.0%
  • 1.0%

1.0% 1.0% 3.0% 3.0% 5.0% 5.0% (80 (800) 0) (60 (600) 0) (40 (400) 0) (20 (200) 0)

  • 200

00 400 00 600 00 800 00 2Q 2Q18 18 3Q 3Q18 18 4Q 4Q18 18 1Q 1Q19 19 2Q 2Q19 19 Ne Net pro profi fit (l (loss ss) Net Net profi profit ma margi rgin n (% (%)

1,424 24 (344) 4) 3.8%

  • 1.1%

1%

  • 5.0%
  • 5.0%
  • 3.0%
  • 3.0%
  • 1.0%
  • 1.0%

1.0% 1.0% 3.0% 3.0% 5. 5.0% 0% (50 (500) 0)

  • 500

00 1,00 000 1,50 500 6M18 6M18 6M19 6M19 Net Net profi profit (l (loss ss) Net Net profi profit ma margi rgin n (% (%)

[Rest stated] d]

slide-11
SLIDE 11

STA TA Busin siness ess Highlights ghlights

2 2

11 11

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SLIDE 12

36 36 48 48 45,000 000 rai

rai

STA’s Global Presence

(7,2 ,200 00 hectare res) s) of rubber r plant ntations ns NR processi sing g plant nts procure urement nt centers rs sales s & distribut ribution

  • n centers

rs

6% share

re of global al glove ve consu sump mpti tion in FY18

26% 26%

  • f NR producti

tionin Thailan land

7

USA Vietnam Indonesi donesia Sing ngapore pore China Myanm nmar Thailand nd

5

Glov

  • ves

s produc duction

  • n facilities

s in Thailand nd

1.34 34 mill

  • ll. tons in

in

NR’s sales volume in FY18

12 12

10% 10% share

re of global al NR consu sump mpti tion in FY18

17 17 bn

bn.. ..pcs. in Glove’s sales volume in FY18

546,117 46,117 tons in

in

NR’s sales volume in 6M19

slide-13
SLIDE 13

Infr fras astru tructu cture 13% 13%

Imma mature ure Area 77% 77%

Tapping ng Area 10% 10%

Approx. 45,000 rai 7,200 HA

Upst stre ream am Opera ration tions s –Rubb bber r Pla lant ntation ations

Lampang Sukothai Pichit Phitsanulok Petchaboon Chiang Rai Chiang Mai Sakon Nakhorn Utaradit Sakaeo Phrae Kalasin Phayao Nan Songkhla Surat Thani Krabi Chumporn Bungkan

Provin inces esin Thailand

19 19

Area a of Rubber ber Plantati antations Esti tima mate ted d Matu ture re Plantations antations

50 500, 0,00 000 1, 1,00 000, 0,00 000 1, 1,50 500, 0,00 000 2, 2,00 000,00 0,000 2, 2,50 500, 0,00 000 2, 2,00 000 4, 4,00 000 6, 6,00 000 8, 8,00 000 10 10,00 000 12 12,00 000 14 14,00 000

2018 2019F 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F

Prod

  • ducti

ction

  • n, '

'00 000 kg. 0 kg. ( (LHS) HS) Tap apping ng, trees trees ( (RHS) HS)

Thoen1,

Lampang ng

Watbo tbot, ,

Phitsanul sanulok

  • k

13 13

Note: The green provinces are where our factories located in.

Note: Information as of 30 June 2019

slide-14
SLIDE 14

14 14 Techn hnica icall lly y Specified fied Rubbe ber r [TSR] Ribbe bed d Smoke ked d Sheet t [RSS]

Mid idst stre ream am Ope perati rations

  • ns – NR Pro

rocessing essing

processi ssing ng facil iliti ties

36 36

Product

  • duction
  • n Ca

Capacity acity (mil. tons)

s)

0.00 3.00 6.00 9.00 12.00 15.00 0.00 0.50 1.00 1.50 2.00 2.50 3.00 2007 2011 2015 2016 2017 2018 2019F

Glob Global al NR NR Con Consu sumption

  • n (

(RHS HS) En Engine neer ering ng cap capaci acity ty ( (LHS) LHS) Sales es vol volume ( (LHS HS)

24 24 proce

cess ssin ing facili iliti ties es

Capacit city*: y*: 2.1

.10mil. tons/

s/ann nnum TSR RSS LTX

5 5 process

ssin ing facilit ilitie ies

Capacit city*: y*: 0.2

.21mil. tons/

s/ann nnum

7 7 process

ssing facilit ilities

Capacit city*: y*: 0.5

.55mil. tons/

s/ann nnum Capacit city*: y*: 2.86

86mil

  • mil. tons/

s/an annu num

Concen centrate trated Latex tex [LTX] TX]

Note: *Total engineering capacity

[Information as at 30 June 2019]

slide-15
SLIDE 15

STA’s Ti Tire re Manuf nufact acturer urer Cu Cust stomers mers

15 15

slide-16
SLIDE 16

Down wnstre stream am Opera eratio tions ns –Fini

inished shed Pro roduc ducts ts

Expo porting rting to to

12 120+ 0+

Coun untrie ries

17 17

billion lion piece ces of gloves es sold in 2018 2018

21.2 21.2

billion lion piece ces per annum m in product uction ion capac acity ity

Sinc nce

1989 1989 6% 6%

Glob

  • bal

al Market et Share

3

locations tions in the South uth of Thailand land

8

[Information as at 30 June 2019]

slide-17
SLIDE 17

STA’s Gloves Products

17 17

  • Heavy 6.2 g
  • Balance

ce4.8 g

  • Comfort
  • rt 3.5 g
  • Comfort
  • rt Plus 3.0 g

Examin inat ation ion/ Non-Examin Examinat ation ion Gloves Latex ex

Powdere wdered Powder wder-Fr Free ee

Nitrile ile

Powder wder-Fr Free ee

  • Comfort

fort 4.8 g

  • Balance

ce 5.0 g

  • Premi

mium m 5.8 g

  • Comfort

fort 5.0 g

  • Balance

ce Comfo fort rt 5.5 g

  • Balanced

ced Plus 5.6 g

  • Balance

ce5.8 g

  • Premi

mium m 6.2 g

Informati tion

  • n as at 30 June 2019 [6-month

th period] d]

Product

  • duct Range

Product duct Mix x by Volume lume

61% 61% 68% 68% 39% 39% 32% 32% FY18 18 6M19 6M19

Ni Nitri rile le Latex

85% 85% 89% 89% 15% 15% 11% 11% FY FY18 18 6M19 6M19

Ow Own n Brand nds OEM OEM

slide-18
SLIDE 18

STA’s Glove Markets by by Vo Volu lume me

18 18

Note te: *Asia excluding Thailand, China, Japan and India **ASEAN excluding Thailand

America ica 25% 25%

Thailan land 10% 10% Japan 8% 8% China 9% 9%

Indi dia

4% 4% RoW 7% 7% Asia* a* 5%

ASEAN** AN**

4% 4%

EU EU 28% 28%

Encourag courage e a a wide var ariety ety of appl plications cations

Informati tion

  • n as at 30 June 2019 [6-month

th period] d]

Widely ely Used ed in Develo veloped ped Markets rkets, Gainin ning g Ground und in Emerging rging Markets rkets

Medical l Indust stry ry

Food d Industry stry

Hous useho hold ld Consumption nsumption

slide-19
SLIDE 19

12 12 14 14 14 14 14 14 17 17 21 21 24 24

5 10 15 20 25 30

End-2012 End-2014 End-2016 End-2017 End-2018 1H2019 End-2019 End-2020

Note:

STA’s Gl Glove ve Ca Capa pacity city Exp xpansion nsion Pla lan

19 19

+76%

[bn. pcs.]

Capacity Expansion

Inorganic Growth [The Amalgamation Process]

Organic Growth

Suratt atthani Trang Songkhla

Proce cess ssing ing Facil ilit ities ies Locatio tion

+42%

30 30

slide-20
SLIDE 20

20 20

The Completion of the Amalgamation

Facilities

Area ea: 487 87 rai i in Trang, ng, Thaila land

Ware reho house se

The amalgamation of STGT and TK was completed as of 1 April il 2019 19. The new company is named “Sri Trang ng Glove ves (Thai haila land) nd) Publi lic Compa pany y Limite ted,” which was 81.08 .08% hold d by STA.

Expa pansi nsion

  • n:

~ 6,000 000 m.pcs.

. in Produc uction n Capacity

Exi xist sting ng:

4,000 ,000

m.pcs.in Product uction Capacit city

slide-21
SLIDE 21

STGT’s IPO Plan

15 15

STA and RBL(1) STH(2)

  • Dr. Viyavoo

vood Sinc ncha haroe roenkul nkul Family(3) Others rs

Remark: (1) RubberlandProducts Company Limited (2) Sri Trang Holdings Company Limited (3) Including 1) Mr. KitichaiSincharoenkul, 2)Mr. Lee Paul Sumade, 3) Ms. Voradi Sincharoenkul, 4) Mr. Somwang Sincharoenkul, and 5) Mr. VeerasithSinchareonkul

81.0 .08% 8% 5.39% 7.09% 1.93% 4.51%

Pre re-IPO IPO Post-IPO IPO

STA and RBL(1)

1)

STH(2)

2)

  • Dr. Viyavo

vood

  • d

Sinchar haroe

  • enku

nkul Family(3)

3)

Other hers

55.9 .95% 5% 3.72% 4.89% 1.33% 3.11%

Publ blic

31.0 .00% 0%

Numb mber er of newly ly-iss ssued ed ordinar ary shares es not exceed

eding ng 31.00% 0% of total al paid-up capital tal of STGT

Expected Benefits s to STA TA Expected Benefits s to STGT

  • 1. Lessening STA’s burden in providing financial support to STGT
  • 2. Lowering STA’s overall financial costs in the long run
  • 3. The business structure of STA will be clearly delineated.
  • 4. The value of STGT’s shares will be fully reflected in STA’s share prices.
  • 1. STGT will be able to independently raise funds for business expansion.
  • 2. Being a listed company will help to lower STGT’s financial costs in the

long run

  • 3. The IPO will enhance the public awareness of STGT.
  • 4. STGT’s shares will have more liquidity and its share prices can be used

as a reference price in the future.

slide-22
SLIDE 22

Gl Globa bal l Gl Glove ve Mark rket et Outlo look

  • k

150 150 148 148 160 160 171 171 180 180 194 194 201 201 233 233 268 268 287 287 370 370

50 50 100 150 200 250 300 350 400 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F

Avera rage ge growth h at 8-10% 0% per annum

150 150 100 100 76 76 11 11 8 6

40 40 80 80 120 160 US USA EU EU Ja Japan Asia sia India ia Chin ina

Global bal Glove ve Deman mand

Source: : MARGM GMA Indust ustry Brief f 2018 18 on the Rubber Glove Indust ustry

22 22

+7%

Glove ves s Consump mptio ion n Per Capita

Golden den Opportunit rtunity y for Growth wth

[bn. pcs.]

Deman mand Ke Keeps ps Growing wing & Hidden en Consumption sumption in Emerging rging Markets rkets

slide-23
SLIDE 23

233 233 268 268 287 287 370 370

50 50 100 100 150 150 200 200 250 250 300 300 350 350 400 400 FY20 FY2017 17 FY20 FY2018 18 FY20 FY2019 19F FY20 FY2020 20F

Sri Trang G Sri Trang Glove

  • ves

Kossan Kossan Supe Superma rmax Ha Hartalega ga Top G Top Glove

  • ve

Globa

  • bal G

Gloves De

  • ves Demand

nd

Gl Glove ve Ca Capa pacity city Exp xpan ansion sion

Ro Robu bust st growt

  • wth in

in de demand

provi vides des lar arge e producer ducers s with opportun rtuniti ties es for r expan pansi sion.

  • n.

Note te: Informati tion

  • n as disclos
  • sed by each compa

pany

23 23 139 139 157 157 181 181 213 213

+12% 2% +15% 5% +18% 8%

Malay laysia sia 69% 69%

Thailand nd 23% 23% China na 5% 5% Indon

  • nesi

sia 3% 3%

Global Market Share

Highlights: lights:

  • The expansion will focus on “Nitrile Gloves.”
  • Old & inefficient machines will be decommissioned

and replaced by new capacity.

  • The publicly-listed glove producers together account for 70%
  • f Malaysia’s glove production capacity.
  • Thailand has a competitive advantage in the production of

“Latex Gloves” as it is the source of the main raw material.

  • The Gov’t promotes domestic consumption of natural rubber

by giving 3% in interest rate subsidy to any manufacturers consuming more natural rubber, including glove producers.

[bn. pcs.]

Top 5 Capacity

Remark: FY2018 data

slide-24
SLIDE 24

24 24

NATU TURA RAL L RUBB BBER ER MA MARK RKET ET SIT ITUATION TION

3 3

slide-25
SLIDE 25

Deman and (LHS)

Gl Globa bal l NR Sit ituati uation

  • n

10.8 11.0 11.0 11.4 12.1 12.1 12.6 .6 13.2 .2 13.8 14.1 14.3 14.6 15.0 15.3 15.6 16.0 16.4 16.7 10.4 11.2 11.7 12.3 .3 12.1 12.3 .3 12.5 13.6 .6 13.9 14.2 14.4 14.7 15.1 15.5 15.8 16.1 16.4 16.7

(356) 205 612 911 (22) 129 (136) 341 108 108 93 52 103 103 120 175 175 178 178 104 104 78 78 30 30

  • 4
  • 400

400 800

  • 5
  • 5

5 10 10 15 15 20 20

2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019F 2019F 2020F 2020F 2021F 2021F 2022F 2022F 2023F 2023F 2024F 2024F 2025F 2025F 2026F 2026F 2027F 2027F

(Unit : million tons) Supply ly (LHS) Supply ly Surp rplu lus s / (Defi eficit cit) (RHS)

Natural l Rubber Demand nd & S Supply ly

Glob

  • bal NR demand

nd is expected to be 14.0 .09 million n tons, s, +2.3 .3% % in 201 019 9 and average ge +2.1 .1% in the next 3 years

Demand nd

Glob

  • bal NR supply

y is expected to be 14.1 .18 million n tons, , +2.2 .2% % in 2018 and average ge +2. 2.1% 1% in the next 3 years. s.

Supply ply

(Unit : ‘000 tons)

25 25

  • Increased tapping frequency to maintain

the same levels of income

  • Increased untapped mature trees
  • Lack of good agro-management
  • Skilled labour shortages [shifting from

rubber farming to other jobs]

Short-term term impact ct Long-term term impact act

  • Discouragement of new planting
  • Delay of replanting schedule
  • Uprooting of rubber trees & replacing with
  • ther crops
  • 71%

71%of NR consumption mption comes s from m the tire indust stry, y, whose demand is expected to grow w by 1.3%in 2019, in line with global tire production.

  • 29%

29%of NR consump mpti tion comes s from m non-ti tire e consumer mers, s, whose demand is expected

to increase ease sharply y by 4.9%in 2019, driven by increased consumption by gloves producers.

Source : IRSG, July 2019

slide-26
SLIDE 26

0% 0% 20% 20% 40% 40% 60% 60% 80% 80% 100% 100% 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020

Ame Americ rica Afr Africa ica Ot Other r AS ASIA AS ASEAN AN

NR Supp pply ly

Indo dones nesia ia 23%

Thail ilan and d 37% 37%

Vietnam nam9% 9% China na 6% 6% Cote d'Iv Ivori

  • rie5%

5%

India5% 5% CAMAL AL 4% Malays ysia ia 5% 5% Others rs6% 6%

14.1 4.18

  • mil. ton
  • ns

2019F 19F globa bal produ ducti tion n growth th = 2.2% 2%

2019F 9F Major Produc ducers rs by Country ry

26 26

~80% 80% of NR output came from ASEA EAN

100 200 300 400 500 600 700 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

(Unit: ‘000 H.A.)

  • Expect

ct to be less s than 50,000 ha each year r

  • Drop larg

rgely ely in Thailan land and Indonesia sia 50 50 100 150 200 250 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

10, 0,000 00 10, 0,500 00 11, 1,000 00 11, 1,500 00 12, 2,000 00 12, 2,500 00 13, 3,000 00 13, 3,500 00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

New Plant nting ing Area Re Re-Pl Plant nting ing Area

(Unit: ‘000 H.A.)

  • Durin

ring 2019-2020, the growt wth is expected ted from m Malay aysi sia a and Vietnam. am.

  • The major

r risk k is the limit itatio ation of capital tal financin ing to small all farmers mers.

Total l Area

(Unit: ‘000 H.A.)

  • Durin

ring 2010-2014, total al planti ting area in Asia-Pacifi cific c region jump mped ed sharp rply ly ~20%.

  • In the next decade,

e, total al rubber er area a is expected cted to drop more e than 500,000 ha or ~4%. Source : IRSG, July 2019

slide-27
SLIDE 27

China 39% 39%

EU EU 12% 12% Indi dia9% 9% USA7% 7% Thailand nd6% 6%

Japan5% 5% Indonesia sia4% 4% Malays ysia ia4% 4% Others rs12% 12%

2019F 9F Major NR Consume mers rs

2019F 19F globa bal growth wth in consumpti nsumption n = = 2.3%

14.09 .09

  • mil. ton
  • ns

NR Deman and

NR Consump mptio ion n Dive versi rsific ficatio ion

27 27

Source : IRSG, July 2019

(Unit: ‘000 tons)

NR Consump mptio ion n in Non-Tir Tire Indust stry ry

0% 0% 20% 40% 60% 80% 100% 2016 2017 2018 2019 2020 Ame Americ rica EU EU AS ASEAN AN Ot Other r As Asia ia Chin ina

NR Consump umptio ion n in Tire Industry ustry

0.0 1.0 2.0 3.0 4.0 5.0 6.0 2,000 4,000 6,000 8,000 10,000 12,000 2016 2017 2018 2019 2020 Ame Americ rica EU EU AS ASEAN AN Ot Other r As Asia ia Chin China % G Gro rowth

(Unit: ‘000 tons) (%) (%)

0.0 1.0 2.0 3.0 4.0 5.0 6.0 1,000 2,000 3,000 4,000 5,000 2016 2017 2018 2019 2020 Ame Americ rica EU EU AS ASEAN AN Ot Other r As Asia ia Chin ina % G Gro rowth

slide-28
SLIDE 28

28

Th Thailand iland NR Sit ituation ation

Source : IRSG, July 2019 & Office of Agricultural Economics, 2016

South, th, 61% Central tral, , 11% Northe rtheast, t, 23% North rth, , 5%

0.0 0.2 0.4 0.6 0.8 1.0 1 2 3 4 5 6 2014 2015 2016 2017 2018f 2019f

NR ou R outpu tput [ t [mi mil.ton

  • ns]

NR con R consumpti tion

  • n [

[mi mil.tons ns]

16 16 18 18 20 20 22 22 24 24 2014 2015 2016 2017 2018f 2019f

Plant ntation n Area [mi mil. l.rai] rai] Tappi pping ng Are Area [mi mil. l.rai]

  • 22

22 mil.

. rai

  • f planta

ntati tion n area

  • 28

28%

%

  • f global

l plantatio ion

  • 37

37%

%

  • f global

l productio ion

  • 5.25

25 mil.

. tons in productio ion

  • 0.80

80 mil.

. tons s in consump mptio ion Produc ductio ion n & Consum sumptio ion NR Plant ntatio ion n Area

slide-29
SLIDE 29

Co Commodity modity Pri rice ce Movem

  • vement

ent & & Qi Qingd ngdao ao and d SHF HFE Stock tocks s

29 29

Commodity

  • dity Pric

ice Moveme ment nt

Source : IRSG, December 2018 and Bloomberg

Qingdao gdao & SHFE E Stocks, s, China [tons]

ns]

Note: There is no QD data announced since 20/10/18.

( (100,000) 1 100,000 3 300,000 5 500,000 7 700,000 Jan Jan-14 Mar ar-14 14 May- ay-14 Ju Jul-14 Sep-14 Nov-

  • v-14

Jan Jan-15 Mar ar-15 15 May- ay-15 Ju Jul-15 Sep-15 Nov-

  • v-15

Jan Jan-16 Mar ar-16 16 May- ay-16 Ju Jul-16 Sep-16 Nov-

  • v-16

Jan Jan-17 Mar ar-17 17 May- ay-17 Ju Jul-17 Sep-17 Nov-

  • v-17

Jan Jan-18 Mar ar-18 18 May- ay-18 Ju Jul-18 Sep-18 Nov-

  • v-18

Jan Jan-19 Mar ar-19 19 May- ay-19 Ju Jul-19 SHFE FE QD QD QD & D & S SHF HFE

  • 5%

5% 5% 15% 25% 35% Jan Jan-19 Jan Jan-19 Feb Feb-19 Feb Feb-19 Mar ar-19 Mar ar-19 Ap Apr-19 Ap Apr-19 May- ay-19 May- ay-19 Ju Jun-1 n-19 Ju Jun-1 n-19 Ju Jul-19 Ju Jul-19 Au Aug-19 SICO COM M -

  • TSR20

20 Bre rent nt Cr Crude ude Oil l Pri rice Bloo loombe mberg Commo Commodity Ind dity Index

slide-30
SLIDE 30
  • 50

50 10 100 15 150 20 200 25 250 30 300 35 350 40 400 45 450 50 500 55 550 60 600

Jan-04 Apr Apr-04 Jul-04 Oct- t-04 Jan-05 Apr Apr-05 Jul-05 Oct- t-05 Jan-06 Apr Apr-06 Jul-06 Oct- t-06 Jan-07 Apr Apr-07 Jul-07 Oct- t-07 Jan-08 Apr Apr-08 Jul-08 Oct- t-08 Jan-09 Apr Apr-09 Jul-09 Oct- t-09 Jan-10 Apr Apr-10 Jul-10 Oct- t-10 Jan-11 Apr Apr-11 Jul-11 Oct- t-11 Jan-12 Apr Apr-12 Jul-12 Oct- t-12 Jan-13 Apr Apr-13 Jul-13 Oct- t-13 Jan-14 Apr Apr-14 Jul-14 Oct- t-14 Jan-15 Apr Apr-15 Jul-15 Oct- t-15 Jan-16 Apr Apr-16 Jul-16 Oct- t-16 Jan-17 Apr Apr-17 Jul-17 Oct- t-17 Jan-18 Apr Apr-18 Jul-18 Oct- t-18 Jan-19 Ap Apr-19 Jul-19

575 cent/ t/kg.

30 30

TSR20 20 Hi Histo storica rical l Pri rices ces Movement vement [2004 – 2019]

102 cent/ t/kg.

Source : Bloomberg ABBREVIATION ON AET : Agreed Export Tonnage Scheme

228 cent/k t/kg.

TSR20 20 (US cent

nt : Kg.)

slide-31
SLIDE 31

31 31

6th of Agreed Exports Tonnage Scheme (AETS):

Cut ut Exports ports of NR NR ~240 240,000T ,000T News s Update ate

Export rt Quot

  • ta

[tons] ns]

Jan’18-Mar’18

[3 Months] ths]

Apr’19-Aug’19

[4 Months] ths]

Period

Tota tal l Reducti tion 350,000 0,000 240,000 0,000

Thailand nd 230,000 126,000

20 May 19 – 19 August 19

Indone donesi sia 95,000 98,000

1 April 19 – 31 July 19

Malaysi ysia 20,000 16,000

The US anno noun unced d an increas rease in tariff ff on rubb bber r products s importe rted from m China, na, from m

10% 10% to 25% 25%, effectiv

tive from

  • m

10 May 2019 19 onwards rds. .

The US’s Tariff Schedule hedule for Glove ves

Produc

  • duct

Coun untry ry of Origi gin Thailand nd Malaysi ysia China na Latex & Nitrile rile

Medical Free Free Free Non-Medical GSP 3% 3% + 25%*

Vinyl yl

Medical Free Free Free Non-Medical Free Free Free

Note: *It was increased from 10%.

slide-32
SLIDE 32

32 32 Conta tact t Inve vestor stor Relations tions Tel:(+66)2-207-4500 Ext. 1402 E-Ma Mail il:IR@sritranggroup.com