AIRA Capital Public Company Limited AC Group Opportunity Day FY16 27 March 2017
Group Structure AIRA Capital Public Company Limited ( AIRA Capital ) has incorporated as a holding company with investments mainly in financial business. AIRA Capital Plc. Reg. Baht 1.79 Billion (Listed 7 Jul 2014) 30% 99.9% 71.5% 80% 60% 99.9% 99.9% AIRA & AIFUL Plc. Reg. Baht 2.5 Billion AIRA Securities Plc. Reg. Baht 1.2 Billion AIRA Factoring Plc. Reg. Baht 400 Million (Listed 25 Aug 2004) AIRA Leasing Plc. Reg. Baht 500 Million AIRA Property Plc. Reg. Baht 500 Million AIRA Venture Capital Ltd. Reg. Baht 20 Million AIRA Asset Management Reg. Baht 100 Million 99.9% 90% 60% 38% AIRA Advisory Co., Ltd. Reg. Baht 50 Million AIRA International Advisory (Singapore) Pte. Ltd. Reg. SGD 500,000 Aspiration One Co., Ltd. Reg. Baht 1.0 Billion Travelex (Thailand) Ltd. Reg. Baht 110 Million Source: Aira 2
3 Vision
AC Group Strategic Plan Diversified Portfolio Top 5 in non-bank financial business Nonfinance 25% Financial 75% 13,917 4
3 Years Price Performance AIRA stock outperformed both financial sector and MAI index 66.2% 19.1% 14.1% Source: SET 5
Company Highlights since 2016 Apr 16 Acquired a leasing company at majorities stake (80%) AIRA Leasing (AIL) Record FY16 profit at THB4.5m Sep 16 Set up a joint venture company with Travelex Limited (London) named Travelex (Thailand) limited to operate currency exchange services business Already obtained a license from BOT on Dec 2016 with established the 1 st branch at Wall Street Tower, Thaniya street CSR by cooperated with Queen Sirikit Foundation for selling local products at our branches 6
7 Company Highlights since 2016
Company Highlights since 2016 (Cont.) Oct 16 Dec 16 Feb 17 Spin-off AIRA Property shares to valued strategic partners : Kenedix Asia (20%) and Eugene Investment & Securities (20%) with premium 18% ROI Established AIRA Venture Capital to invest in 10 high growth industries For future Tax privilege 9 years Sumitomo Mitsui Trust Bank (SMTB) support a bridging loan of THB1.2bn to AIRA and AIFUL (A&A) FY17 projected personal loan portfolio grows 4.4x from 2016 Increased capital to 4.0 Billion in AIRA and AIFUL (A&A) on May 17 Mar 17 8 Established AIRA Asset Management to operate the business of Wealth Management and Fund Management Target customers Institutions and high net-worth
9 Company Highlights since 2016
AC Group FY16 Net Profit / Loss FY16 Result 250 AF AIL 200 AS 3.4 150 100 50 AC 88.4 57.2 50.8 200m Profit before minorities investment and JV 0 Source: AIRA Notes: AC = Aira Capital, AS = Aira Securities, AF = Aira Factoring, AIL = Aira Leasing -50 10 10
AC Group Revenue Analysis Revenue (THB million) 1000 900 800 700 600 500 400 300 200 100 0 FY16 revenue grew 3.5x of GDP 11.2% 384.7 484.2 789.4 863.5 733.7 816.1 2011 2012 2013 2014 2015 2016 90% 70% 50% 30% 10% -10% -30% -50% Source: AIRA 11 8% 6% 4% 2% 0% Source: BOT 7.2% 0.8% Thailand GDP Growth 2.7% 2.8% 3.2% 0.8% 2011 2012 2013 2014 2015 2016F
AC Group Operating Profit Operating Profit (THB million) 350 150% 300 100% 250 200 7.0% 50% 0% 150-50% 100-100% 50 0 95.4 162.5 306.8 289.3 185.9 198.9 2011 2012 2013 2014 2015 2016-150% -200% Source: AIRA 12
AC Group Investment Investment in subsidiaries (THB million) 2,500 Investment in Subsidiary Growth 43.8% 50% 2,000 25.4% 1,500 0.0% 0.0% 10.9% 14.9% 0% 1,000 500 0 963 963 1,068 1,340 1,926 2,214 2011 2012 2013 2014 2015 2016-50% Source: AIRA 13
AC Group FY17 Planning and Strategies Focus more on high margin businesses e.g. FL & HP, Personal finance, Asset & wealth management Developing a relationship with strategic partners Technology transfer and cost saving SG&A to sale < 10% Investment criteria Minimum IRR = 15% Focus on monitoring and controlling our subsidiaries companies to complied with their budgeting plan 14
15 Subsidiaries Performance
AIRA Securities (AS) - Performance Revenue and Net Profit (THB million) 700 600 500 400 300 200 100 0-100 Revenue Net Profit 651.5 566.0 524.7 562.5 303.9 226.6 97.9 113.8 38.9 10.5-3.9 2011 2012 2013 2014 2015 2016 57.2 Source: AIRA Key Highlight FY16 revenue increased 7.2% YoY Net profit surged 15.6x in 2016 Avg. commission rate = 0.136% vs. Market at only 0.11% Market share improved to 1.21% (FY15: 1.17%) 16
AIRA Securities (AS) Strategies Margin Loan (THB million) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Source: AIRA 1,700 1,500 1,400 1,300 2016 2017F 2018F 2019F Key Strategies 17 Expanding margin loan portfolio Increase high-quality staff team by 10-15% Focus on high net worth account Maintaining commission rate at 0.136% compared to avg. market rate at 0.11%
AIRA Factoring (AF) Performance Revenue and Net Profit (THB million) Revenue Net Profit 250 200 174.8 214.4 185.9 191.2 189.6 150 133.7 100 50 0 Source: AIRA 64.7 43.5 44.0 24.9 0.1 2011 2012 2013 2014 2015 2016 50.8 Key Highlight FY16 revenue flat YoY on sluggish recovery Net profit turn positive from lower finance cost and provision Factoring volume sustained despite a slowdown in export 18
13,052 16,246 20,382 17,904 19,406 19,356 AIRA Factoring (AF) Strategies Factoring volume THBm 25,000 20,000 Revenue by segment Others 20.0% 15,000 10,000 Modern Trade 45% 5,000 0 2011 2012 2013 2014 2015 2016 Auto 35% Source: AIRA Source: AIRA Key Strategies 19 Focus high-growth SMEs and high quality customers Diversified to new sectors (Electronics, Telecom, Health & Beauty) Implementation E-Factoring platform Active customer acquisition via product program Conservative provision rule
AIRA Leasing (AIL) Performance Revenue and Net Profit (THB million) 80 60 40 67.0 Revenue Net Profit Acquisition 58.8 62.6 64.1 63.2 68.6 20 0 0.54 4.14 5 1.29 4.5-20 Source: AIRA -9.89 2011 2012 2013 2014 2015 2016 Key Highlight FY16 revenue grew 8.5% YoY vs. Industry -7.5% Net profit jumped 3.5x to THB4.5m Started financial lease and hire purchase services in Dec 16 Streamlined an operating lease business 20
AIRA Leasing (AIL) Strategies Operating Lease, Financial Lease and Hire Purchase Key Strategies Shift toward financial lease (FL) and hire purchase (HP) OL : Focus on high-margin products e.g. Wheel loader, Excavator FL : Target corporate car and launching new product program e.g. Solar-roof leasing, Micro bus Boost up a yield and control the NPLs Improve OL asset portfolio short-lived + high liquidity 21
AIRA Property (AIP) ASPIRATION ONE Project (ASP1) Start commercial operation in 2019 28 Fl. Building with 57,470 sqm. LEED-Gold office building in CBD area Lease CPB land for 30 years+ Project value : THB2.5bn Project Assumptions Rental rate : THB900 / sqm. (approx.) Occupancy rate : 95% in 1 year IRR : 9-10% Source: AIRA 22 ASP1 + ASP2 + ASP3 + ASP4 REIT
AIRA Venture Capital (AVC) Focus on 10 industries in Thailand 4.0 policy 5 new S-curve industries 5 existing industries with high potential Source: SCG Logistics 23
24 Joint Ventures Performance
AIRA & AIFUL (A&A) Performance Investment Highlights A-Money branding = Money Buddy for 1 st jobber Current customer at 100,000 accounts (Feb 2017) FY17 budget, customers at 300,000 accounts Target IPO on 2019 Source: AIRA, A-money branch at MRT Asoke 25
AIRA & AIFUL (A&A) Performance Investment Highlights Loan Portfolio 1.5bn Start Operation 0.23bn Customer Accounts 10,454 88,173 2015 2016 26
Travelex (Thailand) Limited Investment Highlights Open branches mainly in CBD and tourist areas First branch at Wall Street Tower, Thaniya Street Support by strong in-bound tourists 32.6m in 2016 Avg. market size of non-bank on currency exchange = THB50bn Strong partnership : Travelex (London) & UAE Exchange are the leader of the world on FX business 1,500 stores in 28 countries Source: Contactdir.uk 27
28 Q & A