investor presentation 3q18 · thai wah market share source : the company and the thai tapioca trade...

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

INVESTOR PRESENTATION 3Q18

Private for Investor Forum 1

DISCLAIMERS

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 ”

Private for Investor Forum

Company Overview

2

AGENDA

Business Highlights

Starch Business & Food Business

Financial Performance

Appendix

Going Forward & Opportunities

Business Highlight


BUSINESS HIGHLIGHTS IN 9M18

• Strong Revenue Growth for “Food Business”, +7% YoY, Rice noodle +36% YoY

• Commenced 1st Thai Wah Bio Power Plant at Udonthani

• Commenced Tapioca Chip trading at Thai Wah Cambodia & Vermicelli Noodle at Thai Wah Vietnam

• Challenging Raw Material Supply in 9M18


COMMITTED TO EXCELLENCE: OUR 2018 ACHIEVEMENT

Business Overview


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 - Thai7.5% Institution -

Foreigner8.9%

Retail - Thai19.8%

Retail -Foreigner

6.7%

Ho Family40.4%

LRH10.1%

Thai NVDR6.7%

Shareholder structure**

** Data as of 30 Sep 2018

Free float 46%**Market Cap : around 7,440 MB**

COMPANY FACTSHEET


“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 starchfor:-

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 : 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

THAI WAH BUSINESS OVERVIEW

Others

Bean Sheet (Shanghai noodle)

Tapioca starch

Pearl / Sago

“Glucose” “Pearl / Sago”

8

Starch Business


Starch

Pearl

Modified Starch

Industrial BIO Application

Animal Feed

Paper

Carton

Fabric SweetenerPharmaceutical

Carton

Cosmetic

Beverage

Sauces

Glue & AdhesiveInstant Meal

Syrup & Dessert

MSG

Metal Industry

Biodegradable Products

Thai Dessert

Cassava Root

STARCH APPLICATION

10

PREMIUM FOOD GRADE


TAPIOCA PRODUCTION

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

Cambodia4.249 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


315 320329 328 328 328 328 328

338

365

408425

445

473

524

548553

520

485 488496

504

470 470

280

320

360

400

440

480

520

560

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2017

12

NATIVE STARCH EXPORT PRICE MARKET

Year 2015 2016 2017 2018

AVG FOB / tons 421 350 345 504

Source : The Thai Tapioca Trade Association

USD/Ton

2015

2016

2018


NATIVE STARCH MARGIN GAP


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”


GROWTH IN EXPORT OF THAI TAPIOCA STARCH

Source : The Thai Tapioca Trade AssociationNote Tapioca Starch is including Native & Modified Starch

1.99

2.50 2.432.68

3.083.34

3.963.83

4.22 4.14

2.84

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

1

1

2

2

3

3

4

4

5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18

Unit : M. Tons


FROM FARM TO SHELFTo be globally competitive and innovative

15

ASIA’S FOOD SITUATION

In 2050, there will be 9.7 billion people in the world, more than

50% in Asia

Smallholderfarmers produce

30% to 80%of global

food supply

Consumer patterns change from buying staple commodities towards

HVA & Quality Foodclean, gluten free, non GMO carbohydrates

Long term trend of Growing Food Demand in ASEAN

ASEAN’s urbanization will

X2 to 163 million households

by 2030 (from 2015)


THAI WAH MARKET SHARE

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%

• The largest importer of Tapioca Starch in the world

• Thai Wah market share was 6.5% in 9M18

CHINA

TAIWAN

• The 3rd largest importer of Tapioca Starch in the world

• Thai Wah market share was 18.7% in 9M18

7% of Total Native

Starch Export

in 9M18


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

17

Myanmar

OpportunitiesPioneer new small holder farmmodel (2X Yield in 2015) Tapioca plantation & ChipsExpansion into consumer foods,noodles, sauces, sweetener to tapon growing middle-class

Cambodia

OpportunitiesTapioca plantation and productivityimprovementInvestments in Tapioca given strongavailability of rootsStrong border links with Thailand andVietnam

Laos

OpportunitiesTapioca plantation and productivityimprovementTapioca chips, starch, export

Vietnam

Opportunities Enhancement of sweetener businessPho, Bun, Noodle, Rice Flour businessWill be market leader in 2018, 3X

Growth in 2015 for Vermicelli and Noodles

Established new subsidiary

TWPC Investment (Cambodia) Company Limited

January 24, 2017 Manufacturing and distributing of

starch products KHR 4,000 million (Baht 35 million) 100% Holding

DEVELOP A FOOTPRINT ACROSS ASEAN

Source : The Company


CASSAVA ROOTS SOURCING STRATEGIES

NEW AREA

THAILAND

- Lease / OEM Model

EXISTING

THAILAND

- Guarantee Price with Farmer Networks- Strategic Sourcing in Potential Areas

NEW AREA

CAMBODIA/LAOS

- Organic Cassava - Contact Farming for Cambodia/Laos



CASSAVA ROOT STATIONS

Cassava Roots Station

Sustainable Raw Material

Get Fresh Root at Source

Convenient in Cash Card

Payment

Create a Good Relationship

with Farmers


Food Business


Fresh Vermicelli Bean Sheet

Fresh Rice NoodleDry Rice Noodle

FOODS

Noodle Kit

Dry Vermicelli

New Grade Sago / Pearl

OUR FOOD PRODUCT

21

High product quality

No chemical preservatives &

gluten-free contents

Product & Food Hygiene

certification processes

1

2

3



FOOD DISTRIBUTION AND GO-TO MARKET STRATEGY

22

Phitsanulok

Udon Thani

Roi Et

Chonburi

Bangkok

Banglan

Surat Thani

Korat

Key long term driverLeveraging a Technology - Enabled platform

to build through Thailand and ASEAN

34%

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

• Increase more SKUs

• Expand more customer base



MARKETING ACTIVITIES – Q4’18

23

รอรูปอัพเดทคะ


MODERN TRADE CHANNEL

24

Visibility & DemonstrationOverview

9M18 Performance

• 36% growth YoY

Strategies

• Enhance Visibility / Activate online• Expand new Customer / Channel• Increase more SKUs • Targeting double-digit growth in 2018

Where can find us ?


FOOD EXPORT OPPORTUNITY

25

Targeting double-digit growth with 9 – 10% contributions for 2018

48%

growth YoY

for 9M18

Expansion more “Volume” especially in EU and USA / Exploring “New Customers” especially in CLMV & China


FOOD EXPORT NEW POTENTIAL AREAS IN 2018

26

USA

• Increasing volume from existing customers

• Economic Recovery• OEM & New SKUs

CHINA

• Chinese behavior shift to “Thai Food grade”

• Offer higher quality & consistency

CLMV

VIETNAM

• Offer higher quality & consistency

LAOS

• Existed in wet market

CAMBODIA

• Existed in all supermarket

EUROPE

• Increasing volume from existing customers

• Economic Recovery• OEM & New SKUs


Financial Performance


669

493

109 8

348 110

0

100

200

300

400

500

600

700

800

900

0

100

200

300

400

500

600

700

800

900

1,000

2016 2017 9M18 Q3'17 Q3'18

10.9%7.9% 7.4%

0.5%

8.0%

2.2%

-2.0%

3.0%

8.0%

13.0%

18.0%

23.0%

28.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

NP Margin

1,563 1,383

337 241 1,067 816

0

500

1,000

1,500

2,000

0

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%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

GP Margin

28

PERFORMANCE IN 9M18

Revenue from Sales EBITDA

Gross Profit Net Profit (After MI)

6,163 6,265

1,476 1,722 4,344 5,100

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

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

0

200

400

600

800

1,000

1,200

0

200

400

600

800

1,000

1,200

2016 2017 9M18 Q3'17 Q3'18



Export 55%

Local45%

China & Asia83%

Europe7%

US & Canada5%

Middle East & Others

3%

Thailand74%

Vietnam15%

China11%

Native, 43%

HVA*, 36%

Food, 21%

29

*HVA products – Glucose, Coarse flour, Pearl, Alpha starch

SALES BREAKDOWN 9M18

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


5,100 MB

5,100 MB

3,785 MB


-

500

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, 410CL 724

BV = 6.52 BAHT/share

Unit : MB

599671 655

143

0

400

800

2015 2016 2017 9M18

2016 – 0.30 BAHT/share2017 – 0.32 BAHT/share, dividend payment on 25 May 2018

232238

264

282

0%

5%

10%

15%

20%

25%

30%

35%

40%

200

220

240

260

280

2014 2015 2016 2017

STRONG CASH POSITION 9M18

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


Going Forward


INVESTING 2B FOR GROWTH IN NEXT 2 YEARS

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

HVA Products in Thailand (Pearl / Coarse Flour / High Grade Starch / Rice 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 2018E - 2020E



SUSTAINABLE GROWTH 2019 - 2020


5 - 10% 10 - 20% FOCUS

Native• China Direct• TH Direct• CRM Improvement

SCALE

HVA• Organic• Modified / CF / Pearl• NPD

INNOVATE

Food – TH• MT Channel• Van Sales Channel• New format / NPD

PENETRATE

Food – High Growth • Rice Noodle• Export• Thai Wah Vietnam

DOUBLE

High-Single Digit Growth

1

2

3

4


GOING FORWARD

• To be A leading Small Cap in ASEAN, recognized for consistency and strong financial discipline

• Core long term strategy to pursue High-single digit Growth and Sustainability

• Consistently improve YoY on company operating margins, increasing mix of HVA products

and improving returns on capital to shareholders

• Aggressive regional growth expansion, over the next 2 years with ~2B Baht investment

• Embracing technology of our value chain to a long term competitive advantage


Q&A

Contact: [email protected]

APPENDIX


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 BanglaneDistrict and

create Thailand’s single largest

vermicelli factory

1989TWFP listed on the SET

1985TWS listed on 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

1947 1950s – 1960s 1970s – 1980s 1985 201819631963 1990s – 2000s 2001-2007

HISTORICAL OF THAI WAH GROUP

37

2015 - 2017

2018Operate TWBP,

TWVN and TVCBD



TAPIOCA STARCH EXPORTED FROM THAILAND

Source : Thai Customs Department

TAPIOCA STARCH EXPORTED FROM THAILAND

CountrySep. 1 - 30, 18 Sep. 1 - 30, 17 Jan. 1 - Sep. 30, 18 Jan. 1 - Sep. 30, 17

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

S. Korea 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

Quantity257,841 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 TonsValue: Million Baht


STARCH PRICE (DOMESTIC VS EXPORT)

5,000

9,000

13,000

17,000

Starch Price Starch Export Price

THB/Ton

Source : The Thai Tapioca Trade AssociationNote: Used FX Rate as a period-average (BOT)

Start to recovery since Sep 2017


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

De

c-0

8

Mar

-09

Jun

-09

Sep

-09

De

c-0

9

Mar

-10

Jun

-10

Sep

-10

De

c-1

0

Mar

-11

Jun

-11

Sep

-11

De

c-1

1

Mar

-12

Jun

-12

Sep

-12

De

c-1

2

Mar

-13

Jun

-13

Sep

-13

De

c-1

3

Mar

-14

Jun

-14

Sep

-14

De

c-1

4

Mar

-15

Jun

-15

Sep

-15

De

c-1

5

Mar

-16

Jun

-16

Sep

-16

De

c-1

6

Mar

-17

Jun

-17

Sep

-17

De

c-1

7

Mar

-18

Jun

-18

Sep

-18

Starch Export Price Root Price

USD/Ton


China stop to subsidy Corn that

drag tapioca price dropGovernment

guarantee price to farmer at price at

1.7 Baht/Kg

The ‘Mealy bug’ disease spread out in Thailand &

neighborhoodCorn starch price also

increase

The ‘Srilanka Mosaic virus’ disease spread

out 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


STOCK PRICE

6

7

8

9

10

11

12

13

4-J

ul-

16

22

-Ju

l-1

6

9-A

ug-

16

26

-Au

g-1

6

13

-Se

p-1

6

29

-Se

p-1

6

17

-Oct

-16

3-N

ov-

16

21

-No

v-1

6

8-D

ec-1

6

27

-De

c-1

6

16

-Jan

-17

1-F

eb

-17

20

-Fe

b-1

7

8-M

ar-1

7

24

-Mar

-17

12

-Ap

r-1

7

3-M

ay-1

7

22

-May

-17

7-J

un

-17

23

-Ju

n-1

7

12

-Ju

l-1

7

31

-Ju

l-1

7

17

-Au

g-1

7

4-S

ep

-17

20

-Se

p-1

7

6-O

ct-1

7

27

-Oct

-17

14

-No

v-1

7

30

-No

v-1

7

20

-De

c-1

7

9-J

an-1

8

25

-Jan

-18

12

-Fe

b-1

8

28

-Fe

b-1

8

19

-Mar

-18

4-A

pr-

18

25

-Ap

r-1

8

14

-May

-18

31

-May

-18

18

-Ju

n-1

8

4-J

ul-

18

20

-Ju

l-1

8

9-A

ug-

18

28

-Au

g-1

8

13

-Se

p-1

8

1-O

ct-1

8

18

-Oct

-18

Stock Price

THB

Source : SET

XD on 8 May 2018 0.32 Baht / Share

The lowest price on12 Oct 2016 @ 7.25

investor presentation 3q18 · thai wah market share source : the company and the thai tapioca trade...

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