Shin Corporation. Macquarie Thailand Corporate Day. Building a stronger portfolio. Mrs.Siripen Sitasuwan President & Group CFO

Transcription

1 Shin Corporation Macquarie Thailand Corporate Day Mrs.Siripen Sitasuwan President & Group CFO November 30 December 2, 2005 Building a stronger portfolio

2 SHIN Corporation Mkt cap of Bt 111.7bn* (US$2.7bn) Wireless Satellite & International Business Media & Internet Airline & Consumer Finance SHIN holds 43% in AIS Dual-band network provider with over 16.1mn cellular subscribers (as of Sept 2005) Mkt cap of Bt 295.0bn* (US$7.2bn) Domestic Network Provider SHIN holds 41% in SATTEL 3 ThaiCom satellites in orbit with a total of 43 C-band & 9 Ku band transponders IPSTAR broadband satellite successfully launched on Aug 11, 2005 Holding 40% in CS LoxInfo PLC, an ISP in Thailand Mkt cap of Bt16.0bn* (US$389.7mn) SHIN holds 53% in ITV 3 rd ranked free-tv with a Digital broadcasting network Mkt cap of Bt13.2bn* (US$319.7mn) Content Registered Capital Bt400mn SHIN holds 50% Registered Capital Bt2.0bn SHIN holds 60% Consumers Regional Network Provider * Market capitalization as of 11/15/05 from SET 2

3 Telecom

4 Telecom Regulatory Issue National Telecommunication Commission (NTC) the new regulator was established in August 2004 TOT and CAT were granted licenses by NTC on August 4, 2005 Terms and conditions for new license (3G) to private operators will be ready by December 2005 TOT and CAT are preparing for IPO in

5 ADVANC Industry outlook Expecting 10% market subscriber growth for 2006 As of September 2005, market subscribers were 29.3mn AIS market share is 55% with 16.1mn subscribers while TAC and TAO are 29% and 14%, respectively Telenor became TAC s major shareholder Expecting more price rationality as competition move toward investment on new license Why 3G investment? Opportunity for more favorable regulatory fee Lower CAPEX per sub Right to own asset vs. BTO scheme Non-voice service enhancement 5

6 ADVANC Strategic direction CAPEX Dividend policy Revenue drivers Opportunity to raise tariff for subscribers in low- price packages after price war Maintain high-value customers Market to limited-budget segment Enterprise solution Value-added services (34% YoY growth in 3Q05, representing 14% of service revenue) 2006 estimated around US$450mn No ceiling on dividend payout but credit rating by TRIS must be no less than AA Dividend payout will continue despite new 3G investment 6

7 SATTEL Current satellites in service Thaicom 1 Thaicom 2 Orbital slot 120 o E 78.5 o E Thaicom 3 s 78.5 o E Thaicom 4 (IPSTAR) 120 o E Satellite in pipeline Thaicom 5 (2006) 78.5 o E 7

8 SATTEL IPSTAR First Asia Pacific broadband satellite Commercial launch in 4Q05 Service coverage in 14 countries (Asia Pacific Rim) Pre-launched customer base Thailand : TOT Australia : Macquarie Telecom New Zealand : ICONZ, Bay City Vietnam - VTI 10% of total capacity Myanmar - MPT 8

9 SATTEL IPSTAR potential Mature and proven 2 nd generation technology with commercial deployments (1 st generation via conventional satellites) and over 20,000 user terminals Within November, 6 gateways opened around Asia Pacific region Thailand, Vietnam, Australia (x2), New Zealand, and Myanmar Estimated useful life likely extended beyond original 12 years to Main application are broadband access, VPN, rural telephony, VoIP, mobile trunk, and SNG IPSTAR revenue model : Bandwidth utilization and User Terminal sales Potential business model from conventional satellites Digital satellite TV platform, license to be issued by NBC High definition television 9

10 Media

11 ITV Industry Outlook 2006 GDP growth forecasted by BoT of around % Ad spending growth is expected to be around 8-10% TV is the most effective media in Thailand with market share of 60% Upcoming broadcasting reform after the establishment of NBC (Commissioners have been selected. The final endorsement is pending the outcome of Administrative Court s review on the transparency of the committee selection process) Strategies Seek more content partners to strengthen TV programs rating Increase entertainment programs to gain higher ADEX share in this category 11

12 ITV Free-to-air TV station Adex share ranked third among 6 competing stations Leader in news and variety programs which represent 44% of total ad spending Baht Outperformed industry growth 9M05 ITV revenue 632 TV advertising industry growth of 6%YoY ITV revenue grew 31% YoY Net profit growth 463% YoY

13 ITV Pending court issues Arbitration s decision in favor of ITV was reached on Jan 30, 2004 The decision is being contested by the PMO. Currently, under review by Administrative Court. It is expected that final judgment will be handed down by mid

14 Transportation

15 Thai AirAsia Budget Airline, A JV with AirAsia Malaysia Total fleet size of 8 Boeing by year end. Next year, the fleet size will increase to 12. Currently servicing 7 domestic and 8 international destinations (Singapore, Penang, Macau, Kota Kinabalu, Kuala Lumpur, Xiamen, Hanoi and Phnom Penh) Currently operating 30 flights per day out of Bangkok 9M05 carried 1.25mn passengers, representing more than 60% growth YoY Fuel surcharge implementation has mitigated oil price pressure and improved operational performance 15

16 Thai AirAsia Operational Highlight 3Q05 2Q05 3Q04 QoQ YoY Load Factor 76% 68% 84% 8% -8% Average Fare (Bt)* 1,231 1, % 24% * Excludes fuel surcharge, insurance, and administrative fee Now a household name in Thailand Distribution channel Internet 44%, Call center 28%, Airport 16%, Agent 7% Other 5% 16

17 Consumer Finance

18 Capital OK Consumer finance, a JV with DBS Singapore Rapid growth through first year of operation with more than 500,000 accounts, and portfolio size of approx. Bt8bn, and expect to achieve Bt10bn by year end. Expand distribution network to cover more than 36 provinces and 2,800 service outlets Increased paid-up capital from Bt1bn to Bt2bn to accommodate business growth Improving productivity after expanding portfolio size (OPEX/ANR reduced from 50% to less than 20%) Launched high-yield product (motorcycle hire-purchase) to enhance overall yield and improve operational efficiency to lessen pressure from BoT s interest rate cap (28%) 18

19 Capital OK Strong Growth 3Q05 2Q05 QoQ Ending Accounts 574, , % Portfolio size (Btmn) 7,900 5, % Service outlets 2,800 2, % Maintain conservative provision policy as of September 2005 % YTD provision/anr 10.0% % Accumulated provision/anr 11.8% % Write-off/ANR 3.4% Introducing new product Cash card with Master Card and looking to add VISA to the service. 19

20 Opportunity Strong balance sheets and solid cash flow Attractive dividend yield New telecom licenses Good performing assets Growth in service sector and business opportunity from 18mn customer base Group synergies Enhance content and entertainment business to compliment group service platform 20

21 Disclaimer Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forwardlooking terminology such as may, will, expect, anticipate, intend, estimate, continue, plan or other similar words. The statements are based on our management s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Shin Corporation plc 21

22 Appendices Shin Corporation plc 22

23 ADVANC - Consolidated Income statement Bt. million 3Q05 2Q05 q-o-q 3Q04 y-o-y Btmn % Btmn % % Btmn % % Service Revenue 18,989 85% 19,781 89% -4% 20,944 88% -9% Sales Revenue 3,230 15% 2,527 11% 28% 2,895 12% 12% Total Revenue 22, % 22, % 0% 23, % -7% Gross Profit 8,784 40% 9,273 42% -5% 10,610 45% -17% EBITDA 11,347 51% 11,442 51% -1% 12,531 53% -10% Earnings before tax 6,113 28% 6,338 28% -4% 7,568 32% -19% Net Income 4,415 20% 4,169 19% 6% 5,269 22% -16% Shin Corporation plc 23

24 ADVANC - Consolidated Income statement Bt. million 9M05 9M04 y-o-y % Btmn % Btmn % Service Revenue 59,956 88% 62,869 87% -5% Sales Revenue 8,293 12% 9,148 13% -9% Total Revenue 68, % 72, % -5% Gross Profit 28,786 42% 32,765 45% -12% EBITDA 35,826 52% 37,973 53% -6% Earnings before tax 20,572 30% 23,489 33% -12% Net Income 13,953 20% 15,343 21% -9% Shin Corporation plc 24

25 ADVANC - Consolidated Balance Sheet Bt. million Total liabilities/ equity (x) Net debt to equity (x) Change Btmn % Btmn % % Current Assets 16,595 14% 19,118 16% -13% Property and Equipment, net 10,096 9% 11,618 10% -13% Networks under Concession 76,886 66% 75,658 62% 2% Goodwill, net 9,296 8% 10,171 8% -9% Concession Right & Others 4,247 4% 4,603 4% -8% Total Assets 117, % 121, % -3% Account Payable-trade 5,942 5% 4,790 4% 24% Current Portion of LT Debt 4,242 4% 4,073 3% 4% Current Portion of Concession 8,390 7% 7,017 6% 20% Long-term Debt 22,206 19% 25,448 21% -13% Other Liabilities 10,246 9% 11,751 10% -13% Total Liabilities 51,027 44% 53,080 44% -4% Total Equities 66,093 56% 68,087 56% -3% Shin Corporation plc 25 3Q05 4Q04

26 SATTEL - Consolidated Income statement Bt. million 3Q05 2Q05 q-o-q 3Q04 y-o-y Btmn % Btmn % % Btmn % % Service Revenue 1, % 1, % -14% 1, % 27% Gross Profit % % -20% % 14% EBIT % % -28% % 82% D&A % % 19% % 32% EBITDA % % -2% % 46% Net Profit % % -75% 96 9% 51% Shin Corporation plc 26

27 SATTEL - Consolidated Income statement Bt. million 9M05 9M04 y-o-y Btmn % Btmn % % Service Revenue 4, % 3, % 15% Gross Profit 1,412 33% 1,357 37% 4% EBIT % % 20% D&A 1,079 25% % 13% EBITDA 1,820 43% 1,573 42% 16% Net Profit % % 73% Shin Corporation plc 27

28 SATTEL - Consolidated Balance Sheet Bt. million 3Q05 4Q04 Change Btmn % Btmn % % Current assets 4,860 15% 2,726 10% 78% Property & equipment - net 24,328 73% 19,638 71% 24% Property & equipment under concession agreement - net 2,923 9% 3,933 14% -26% Other non - current assets -net 1,262 4% 1,289 5% -2% Total assets 33, % 27, % 21% Current liabilities 4,938 15% 6,205 22% -20% Long - term borrowings - net 15,060 45% 12,142 44% 24% Other non - current liabilities 79 0% 76 0% 4% Total liabilities 20,077 60% 18,423 67% 9% Total equity 13,297 40% 9,164 33% 45% Total liabilities/equity (x) Shin Corporation plc 28

29 ITV Income statement Bt. Million 3Q05 2Q05 Q-o-Q 3Q04 Y-o-Y Btmn % Btmn % % Btmn % % Operating Revenue % % -8% % 29% Cost of Service % % -1% % -6% Gross Margin % % -13% % 68% SG&A % 98 15% 25% 93 21% 32% Operating Income % % -25% % 97% Interest Expenses 4 1% 4 1% -1% 9 2% -53% Concession Fee 58 10% 58 9% 0% 58 13% 0% Net Profit % % -31% 50 11% 237% Shin Corporation plc 29

30 ITV Income statement Bt. Million 9M05 9M04 Y-o-Y Btmn % Btmn % % Operating Revenue 1, % 1, % 31% Cost of Service % % -8% Gross Margin 1,107 62% % 76% SG&A % % 7% Operating Income % % 150% Interest Expenses 14 1% 29 2% -52% Concession Fee % % 0% Net Profit % 102 8% 463% Shin Corporation plc 30

31 ITV Balance Sheet Bt. Million 3Q05 4Q04 Change Btmn % Btmn % % Curent assets 1,102 34% % 63% Concession assets, net 2,157 66% 2,288 77% -6% Other non-current assets 11 0% 11 0% -1% Total Asset 3, % 2, % 10% Concession payable % % -13% Other current liabilities % % 3% Non-current liabilities % % -42% Total liabilities 1,041 32% 1,327 45% -22% Paid up capital 6, % 6, % 0% Share discount (174) -5% (175) -6% 0% Accumulated deficit (3,628) -111% (4,201) -141% -14% Total shareholders' equity 2,230 68% 1,647 55% 35% Total liabilities & equity 3, % 2, % 10% Total liabilitites to equity ratio (x) Shin Corporation plc 31

32 Capital OK Income statement Bt. million 3Q05 2Q05 q-o-q % Total Revenue % Operating Expense % Interest Expense % Operating Profit % Reserve for Loan Loss % Net Loss (91) (130) 30% Shin Corporation plc 32

33 Capital OK Income statement Bt. million 9M05 Total Revenue 993 Operating Expense 727 Interest Expense 107 Operating Profit 159 Reserve for Loan Loss 450 Net Loss (287) * The operation started in August 2004 Shin Corporation plc 33

34 Thai AirAsia Income statement Bt. milliion 3Q05 2Q05 q-o-q % 3Q04 y-o-y % Revenue % % Cost of Sales % % Gross Profit 45 (27) 267% (3) 1818% SG&A % 67-8% Gain - Foreign Exchange % (3) 670% Net Profit % (73) 102% Shin Corporation plc 34

35 Thai AirAsia Income statement Bt. milliion 9M05 9M04 y-o-y % Revenue 1, % Cost of Sales 1, % Gross Profit 60 (39) 253% SG&A % Gain - Foreign Exchange N/A Net Profit (Loss) 6 (210) 103% Shin Corporation plc 35

36 SHIN Equity Method Income Statement (Unconso) Bt Million 3Q05 2Q05 q-o-q 3Q04 y-o-y Bt mn % Bt mn % % Bt mn % % Revenue % % 0% % -2% SG&A (74) -103% (83) -115% 11% (90) -122% 17% Operating Loss (2) -3% (11) -15% 81% (16) -22% 87% Financial Expenses (11) -15% (45) -62% 76% (45) -62% 77% Financial Income 10 14% 14 20% -27% 8 11% 33% Other income / expenses (net) 5 7% 1 1% 397% 0 0% 1604% Gain (loss) before net results 2 3% (41) -56% 106% (53) -72% 105% Total net results from investments 1, % 2, % -6% 2, % -12% Net Income 1, % 2, % -4% 2, % -10% Total net results from investments - normalized* 1, % 1, % 2% 2, % -12% Net Income - normalized* 1, % 1, % 4% 2, % -10% *Excluding non-recurring item of SATTEL s insurance claim and one-time impairment of Thaicom 3 in 2Q05 Shin Corporation plc 36

37 SHIN Equity Method Income Statement (Unconso) Bt. million 9M05 9M04 y-o-y Btmn % Btmn % % Revenue % % -4% SG&A (241) -112% (252) -113% -5% Operating Loss (26) -12% (29) -13% -10% Financial Expenses (98) -46% (134) -60% -26% Financial Income 37 17% 21 9% 75% Other income/expenses (net) 7 3% 2 1% 364% Gain (Loss) before net results (80) -37% (140) -63% -43% Total net results from investments 6, % 6, % -2% Net Income 6, % 6, % -1% Total net results from investments - normalized* 6, % 6, % -4% Net Income - normalized* 6, % 6, % -4% *Excluding non-recurring item of SATTEL s insurance claim and one-time impairment of Thaicom 3 in 2Q05 Shin Corporation plc 37

38 SHIN Equity Method Net Results from investments Bt Million 3Q05 2Q05 q-o-q 3Q04 y-o-y Bt mn % Bt mn % % Bt mn % % AIS 1,891 96% 1,787 85% 6% 2, % -16% SATTEL 59 3% % -77% 52 2% 14% SATTEL - normalized* % 52 14% ITV 69 3% 108 5% -37% 6 0% 1057% THAI AIRASIA 1 0% 1 0% -37% (43) -2% 102% CAPITAL OK (55) -3% (78) -4% 30% (38) -2% -44% OTHERS 9 0% 22 1% -59% 18 1% -50% TOTAL 1, % 2, % -6% 2, % -12% TOTAL - normalized* 1,974 1,939 2% 2,256-12% *Excluding non-recurring item of SATTEL s insurance claim and one-time impairment of Thaicom 3 in 2Q05 Shin Corporation plc 38

39 SHIN Equity Method Net Results from investments Bt Million 9M05 9M04 y-o-y Bt mn % Bt mn % % AIS 5,980 92% 6,588 99% -9% SATTEL 423 7% 273 4% 55% SATTEL - normalized* 264 4% 273 4% -3% ITV 242 4% (8) 0% 3258% THAI AIRASIA (6) 0% (109) -2% 94% CAPITAL OK (172) -3% (58) -1% -197% OTHERS 39 1% (42) -1% 193% TOTAL 6, % 6, % -2% TOTAL - normalized* 6,347 6,645-4% *Excluding non-recurring item of SATTEL s insurance claim and one-time impairment of Thaicom 3 in 2Q05 Shin Corporation plc 39

40 SHIN Equity Method Balance Sheet Bt Million 3Q05 4Q04 Change Bt mn % Bt mn % % Cash & cash equivalent 1,996 5% 2,127 5% -17% Other current assets 40 0% 59 0% -3% Investments 37,718 95% 37,415 94% 5% Other assets 68 0% 84 0% -15% Total Assets 39, % 39, % 4% S-T borrowing & current portion 2,151 5% 1 0% % Other current liabilities 379 1% 62 0% 11% Long-term borrowing 1 0% 2,681 7% -100% Other liabilities 404 1% -100% Total Liabilities 2,531 6% 3,149 8% -34% Shareholders' Equity 37,291 94% 36,535 92% 7% Total Liabilities & SHs' equity 39, % 39, % 4% Total Liabitiites / Equity (x) Net Debt / Equity (x) Shin Corporation plc 40

41 SHIN Equity Method Net Asset Value Share price* Mkt Cap % owned Value (Local) Bt mn by SHIN Bt mn AIS , % 127,635 SATTEL , % 6,808 ITV , % 7,344 Total market value of AIS, SATTEL and ITV 141,787 Cash at end of 3Q05 1,996 Debt at end of 3Q05 (2,151) SHIN's NAV ** 141,632 SHIN's NAV per share (THB) SHIN's share price* % Discount -17% * Closing price on Nov 4, 2005 ** Excluding non-listed companies Shin Corporation plc 41

42 20% Share Price Performance Relative to SET, SET50 and Telecom Index Sep 30 15% 10% 5% 0% -5% -10% 9% 6% 8% 6% 3% -2% -2% -7% -15% -20% 04-Jan Jan Feb Feb Mar Mar Mar Apr May May Jun Jun Jul Jul Aug Aug Aug Sep Sep Oct Oct-05 SHIN Telecom Index SET Index SET 50 Shin Corporation plc 42

43 % Premium (Discount) to NAV 0% 50 % Premium (Discount) to SHIN's NAV SHIN share price (5%) (10%) (15%) (20%) Discount SHIN's NAV (25%) SHIN share price 30/12/ /1/ /1/ /2/2005 1/3/ /3/ /3/ /4/2005 3/5/ /5/2005 2/6/ /6/ /6/ /7/2005 1/8/ /8/ /8/ /9/ /9/ /10/ /10/2005 Shin Corporation plc 43