The Southeast Asia Opportunity Trani, 12 July 2019 Alpha - PowerPoint PPT Presentation

The Southeast Asia Opportunity Trani, 12 July 2019 Alpha Investments Asia (Summary) $38k | 44k $30k | 38k 126m 51m $10k | 18k 1.4b $3k | 8k $2k | 8k 7m $1k | 7k 1.3b 53m $2k | 5k 166m $2k | 7k GDP $/capita $7k | 19k nominal | ppp 96m 69m $3k | 9k 107m $1k | 4k population 16m $11k | 31k 32m $63k | 99k 6m $4k | 13k 267m +some investment ideas to take advantage of SEA florian.weidinger@hansabay.com florian.weidinger@ florian.weidinger@ Sources: Hansabay & goodfreephotos.com. hansabay.com hansabay.com 1

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Executive Summary Alpha Investments Asia (Summary) $38k | 44k $30k | 38k 126m 51m $10k | 18k 1.4b $3k | 8k $2k | 8k 7m $1k | 7k 1.3b 53m $2k | 5k 166m $2k | 7k GDP $/capita $7k | 19k nominal | ppp 96m 69m $3k | 9k 107m $1k | 4k population 16m $11k | 31k 32m $63k | 99k 6m $4k | 13k 267m florian.weidinger@ florian.weidinger@ hansabay.com hansabay.com 3

Executive Summary Alpha Investments Asia (Summary) $38k | 44k $30k | 38k 126m 51m $10k | 18k 1.4b $3k | 8k $2k | 8k 7m $1k | 7k 1.3b 53m $2k | 5k 166m $2k | 7k GDP $/capita $7k | 19k nominal | ppp 96m 69m $3k | 9k 107m $1k | 4k population 16m $11k | 31k 32m $63k | 99k 6m $4k | 13k 267m florian.weidinger@ florian.weidinger@ Source: Hansabay & https://www.goodfreephotos.com/ hansabay.com hansabay.com 4

Executive Summary Alpha Investments Asia (Summary) Southeast Asia is a lost asset class yet bigger than India; corporate/FDI investors are finding out, portfolio investors not yet … and the trade war is accelerating an already ongoing trend of capital flowing into the region ▪ Southeast Asia is the 5 th largest economy in the world, yet under-represented in 1 Southeast Asia is a global capital markets with less than 9% of the MSCI Emerging & Frontier index. neglected asset class in ▪ 5k listed stocks with capital markets in transition capital markets o growing number of listings through e.g. IPOs but slowly being o local bourses become sophisticated (e.g. short selling) recognized o minimal and declining analyst coverage in the small/mid cap space with cheap valuations ▪ emerging & frontier Southeast Asia is entering demographic sweet spot AND a 2 sustainable regional investment cycle Long-term trend of o growth of the underlying economies through demographic dividend capital moving south o ageing North Asia becomes an exporter of capital seeking access to cheaper sustainable and different labour from 1997 ▪ foreign direct investment (FDI) drives sustainable regional long-term cycle o well-diversified source & long-term commitment (not hot money!) 3 ▪ SEA is not only a short-term winner from the trade war, but a sustainable and long- Trade war is term winner accelerating this trend o the investment trends have been in place way before the start of the trade war but are now seeing a catalyst, preponing long-term growth with a geostrategic ▪ Rather than being stuck in the middle, SEA is being courted by a multipolar world dimension o the investment trends have been in place way before the start of the trade war but are now seeing a catalyst, preponing long-term growth florian.weidinger@ florian.weidinger@ hansabay.com hansabay.com 5

Executive Summary Alpha Investments Asia (Summary) Hansabay: unique partner to access Southeast Asia with a niche public markets strategy with absolute return elements, and long history of responsible investing. ▪ “we buy from local short - term investors and sell to Fidelity” – our target markets are 4 dominated by local investors, and are growing to be attractive to foreign investors niche strategy ▪ very few Southeast Asia specialist investing teams around – and no one known to us with minimal competition employs our strategy : o the opportunity is bigger than India in GDP and market-terms, yet India is over- to take advantage of the covered opportunity ▪ long-only track record of lower market correlation, down-market outperformance yet full upside capture absolute return/valued 5 ▪ “special situation”: seek superior risk -rewards across capital structure or events: added investing o trusts at discounts, preference shares, GDRs o holdco, credit or convertible alternative de-risking through security ▪ “activism”: engagement with portfolio companies to achieve better corporate selection governance and disclosures to public investors & successfully advocate for value- & impact on portfolio creating measures companies/their business, ▪ “discovery”: among first to invest in less covered companies for an attractive return not just buying paper ▪ integration of responsible investing elements in process throughout (UN PRI member) investor-ready 6 ▪ Hansabay is a registered fund management company, regulated by Monetary Authority of Singapore alternative investment & o stable team of 4 ½ professionals managing total AUM >$100mn primarily on and not an illiquid behalf of family offices from Germany, Italy, Hungary, Switzerland and the US + allocation one US institution following 6 years of ▪ Flagship fund (Luxemburg SIF) offers monthly-to-quarterly subscription and building a track record as redemptions o only invests in publicly traded securities a regulated entity florian.weidinger@ florian.weidinger@ hansabay.com hansabay.com 6

Southeast Asia Opportunity 1

Long-term growth in emerging & frontier Asia Southeast Asia Opportunity Southeast Asia is an undiscovered and inefficiently priced asset class, featuring some of the world’s most attractive long -term investment destinations such as Vietnam, Indonesia and the Philippines. IMF World Economic Outlook 2019-2024 Average Growth Rate (%) 8 discovered ~6% average long-term growth supported by positive basic balance & demographics 7 6 education 5 & infra challenges 4 3 ~1-2% and 2 ageing 1 0 BD CD ID MY MM PH VN TH SG CN IN LatAm SSA G7 0.6bn people 2.7bn people 0.8bn people $0.6tn MSCI market cap $2.1tn MSCI market cap $40tn MSCI market cap florian.weidinger@ florian.weidinger@ Sources: MSCI & Bloomberg. hansabay.com hansabay.com 8

Southeast Asia: undiscovered large & growing economies Southeast Asia Opportunity Southeast Asia’s almost 600mn people today generate close to $3 trillion in nominal GDP, about the size of the UK, the 5th largest economy in the world. PPP GDP is $8tn. Its MSCI market cap is only just over $600bn. $38k | 44k $30k | 38k 126m 51m $10k | 18k 1.4b $3k | 8k $2k | 8k 7m $1k | 7k 1.3b 53m $2k | 5k 166m $2k | 7k GDP $/capita $7k | 19k nominal | ppp 96m 69m $3k | 9k 107m $1k | 4k population 16m $11k | 31k 32m $63k | 99k 6m $4k | 13k 267m florian.weidinger@ florian.weidinger@ Sources: Hansabay estimates based on MSCI, Bloomberg, World Bank data. hansabay.com hansabay.com 9

An active value investor’s playground Southeast Asia Opportunity All Share Data MSCI Analyst Ratings % rep Mkt Traded avg rating % no in rating # Firms Cap Value per stock MSCI $bn $mn TH 794 $533 $1,699 4 28% 23% PH 266 $269 $141 5 53% 22% ID 649 $505 22% $623 5 49% MY 944 $419 $573 3 72% 28% SG 649 $583 31% $840 2 22% VN 1,565 $191 $136 1 68% 10% BD 312 $35 9% $66 1 86% florian.weidinger@ florian.weidinger@ Sources: Hansabay estimates based on MSCI, Bloomberg, World Bank data. hansabay.com hansabay.com 10

Why Asia Now? Southeast Asia Opportunity 1 Inbound FDI into ASEAN by source country ($bn) 40.0 FDI 2007 FDI 2017 30.0 emerging & frontier Asia is entering demographic sweet spot AND a 20.0 sustainable regional investment cycle 10.0 0.0 intra JP CN KR US EU RoW 5 Year Bond Yields & Inflation Rates (%) 2 9.0 CPI 7.5 6.0 Real Yield Real Yields are moderately higher, and less 4.5 Nominal Yield affected by central banks – should attract 3.0 capital; Asian countries with low real 1.5 yields are at least high growth 0.0 -1.5 -3.0 ID IN CN MY PH VN TH US DE Small/Large Cap Index in Asia (x) 3 1.05 1.00 0.95 0.90 Hansabay’s typical target universe is 0.85 0.80 historically cheap 0.75 0.70 florian.weidinger@ florian.weidinger@ Sources: (1) ASEAN; (2,3) Bloomberg. hansabay.com hansabay.com 11