Thailand Focus Prepared by Group Investor Relations. The Stock Exchange of Thailand Bangkok Aug 18

Transcription

1 Thailand Focus 2018 The Stock Exchange of Thailand Bangkok Aug 18

2 INTOUCH Investment Structure Mobile: #1 revenue market share at 48% and #1 subscriber market shares at 45% FBB: Coverage in 50 key cities with ~7% subscriber market share 40.45% 1) 1) 41.14% Only satellite operator in Thailand Operate 5 satellites with utilization rate of Conventional 59% 1) Broadband 29% 1.9mn average sale/day 94% of revenue from TV platform 51.00% Started in 2012 Focus in TMT and digital area Current value Bt647mn 14 startups under current investment 1) Listed Company on the Stock Exchange of Thailand

3 Remained pass through dividend with high yield offered Maintain pass through dividend policy with dividend received from associated and subsidiaries after deducting holding operating expenses DPS - Equity Method Unit : Baht per Share 1.54 Announced DPS for 1H18 performance at Bt1.35. As a result, total dividend announced including special dividend of 0.19/share was Bt1.54, implied 71% dividend payout ratio on equity method or 2.8% dividend yield* XD on 16 Aug 2018 and payment date on 30 Aug *As of market price at 3 Aug Unit : Million Baht 5,991 1H17 INTOUCH 574 Higher service revenue and improved handset margin Lower satellite revenue but higher bad debt provision with additional warranty cost in 1Q AIS THCOM INTOUCH & Others* *Others = ITAS, ITV, VC, and Intouch Media 463 Gain from sale CSL Normalized profit +8% YoY +16% YoY 6,938 1H18 INTOUCH 1H18 net profit increased by 16% YoY from Bt6bn to Bt6.9bn. Excluding gain on sale of CSL, normalized net profit rose by 8% YoY to Bt6.5bn. Normalized profit growth drivers were AIS s revenue growth mainly from postpaid, FBB and enterprise revenue AIS handset margin improve from -4.8% to -2%

4 Jan-17 Jan-17 Feb-17 Feb-17 Mar-17 Mar-17 Mar-17 Apr-17 Apr-17 May-17 May-17 Jun-17 Jun-17 Jul-17 Jul-17 Aug-17 Aug-17 Aug-17 Sep-17 Sep-17 Oct-17 Oct-17 Nov-17 Nov-17 Dec-17 Dec-17 Jan-18 Jan-18 Jan-18 Feb-18 Feb-18 Mar-18 Mar-18 Apr-18 Apr-18 May-18 May-18 Jun-18 Jun-18 Jul-18 Jul-18 Cheap valuation in terms of discount to NAV Bt INTOUCH Market Price Premium(Discount) to NAV (10%) (15%) (20%) (25%) (30%) Jul 18 Discount to NAV = 24.76% (35%)

5 Portfolio expansion with strong value growth Total 14 investment : Bt433mn new investment Portfolio Value Cost Current value Unit : Baht million Realized value Unrealized Value Social Nation Investment Policy Exit Strategy Monetized in 2016 VVR Asia 200 million Baht / year Early & growth stage TMT & Digital Follow-on investment Synergy among group 5-6year investment horizon New partner acquisition Founder buy back Initial public offering

6 YDM Thailand : End to end digital marketing solution 1 st investment in Martech Investment value: Bt30mn To be #1 Digital Marketing Group in Thailand and aim for IPO by 2020 Thailand digital ad spending +31% CAGR during and becomes the 2 nd in ASEAN in internet advertising spending after Indonesia. Utilize marketing technology of YDM, Korea's largest digital marketing group, as a founder of YDM Thailand Focus on the effectiveness of campaign and use advanced technology to promise target performance and KPI

7 1H18 Key Highlights and Going Forward 2016 Investment value: Bt60mn Connect People to Good Stuff Thailand #1 lifestyle review portal - 250,000 restaurants 120mn pageviews/month BrandInside users +108% since Wongnai acquired and >1mn pageviews/month Delivery, 9% Event, 10% Cooking, 11% Wongnai revenue breakdown News, 7% Others, 7% Beauty, 17% Food business, 39% Capture business growth by diversifying revenue in adjacent opportunities Bt35mn investment in FoodStory, restaurant POS startup based in Thailand Wongnai and FoodStory will launch Wongnai POS by FoodStory, a free restaurant management system that will connect restaurant owners to Wongnai users

8 1H18 Key Highlights and Going Forward 2018 Swapped shares of Infinity Level Studio and Sinoze to VVR Asia shares Investment value: Bt20mn 10% or Bt20mn The leading company for AR/VR/MR solutions in Asia 1 st VR entertainment in Thailand Be an AR/VR advisor for NBTC to promote 5G in Thailand Live concert VR broadcast on AIS Playbox

9 1H18 Key Highlights and Going Forward 2012 Investment value: Bt58mn Collaborated with China Literature, leading online literature platform in China and subsidiary of Tencent 1.2bn pageviews/month for more than 3mn contents Monetize UGC platform: Joylada & Thunwalai Launched 1 st movie with LINE TV GGEZ with >1mn views 2017 Investment value: Bt53mn Expanded business outside Thailand to tap opportunities in Asia and facilitate foreign organizers New events created ~1,000 events YTD (+41%YoY) Achieved Bt215mn GMV YTD (+30%YoY)

10 2Q18&1H18 Key Financial Highlights Baht million 2Q17 1Q18 2Q18 %YoY %QoQ 1H17 1H18 %YoY FY18 Guidance Service revenue ex. IC & equipment rental 32,153 33,147 33, % 1.0% 63,517 66, % +5-7% (revised down) Service revenue 33,221 34,565 36, % 5.0% 65,672 70, % Sales revenue 5,858 6,368 5, % 7.1% 12,265 12, % Decline Total revenue 39,079 40,933 42, % 3.2% 77,937 83, % Cost of service ,281 19,202 16% 11% 32,776 36,483 11% Total SG&A 6,701 6,336 6, % 2.2% 12,140 12, % EBITDA 17,108 18,905 18,998 11% 0.5% 34,455 37,903 10% EBITDA margin ex. equipment rental 43.8% 46.9% 47.0% 3.2% 0.1% 44.2% 47.0% 2.8% 45-47% Sales margin -2.7% -1.1% -3.0% 0.3% 1.9% -4.8% -2.0% 2.8% Near zero margin Capex 11,334 6,467 4,798 58% 26% 22,843 11,265 51% Bt25bn (revised down)

11 Mobile 4G & Postpaid remained key growth driver Growth driven by 4G and postpaid adoption 4G Penetration 39% 42% 46% 50% 54% Continue targeted handset subsidies % marketing spending to revenue* 7.7% 7.4% 5.8% 5.7% 5.5% 1,000 Net subscriber addition ( 000) , Q17 3Q17 4Q17 1Q18 2Q18 Postpaid Prepaid 2Q17 3Q17 4Q17 1Q18 2Q18 Focused on postpaid adoption Localized prepaid campaigns targeting competitive areas and segments End-to-end online package for digital native users End-to-end customer journey Order from website Digital KYC Pay via credit card Online live chat and help Postpaid Prepaid ARPU (Bt) Data speed Voice 259 2Mbps 399 4Mbps 559 6Mbps Mbps 100mins +Bt50 for 100mins Discounted handsets with pre-determined ARPU commitment Short-run, tactical handset campaigns focusing on new quality prepaids * (Marketing expense + net handset sales) divided by total revenue

12 FBB Upselling fixed-mobile plan with 800k subs target Quality acquisition continued amidst competition Q17 3Q17 4Q17 1Q18 2Q Bgn sub ('000) Net add ('000) ARPU (Bt/month) Focus on coverage in 50 key cities to build up utilization rate ARPU slightly dropped 1.2% QoQ, despite pricing competition, due to increasing FMC subscriptions Subscriber target by end-18 maintained at 800k following more salesforce and improving brand awareness 3% revenue contribution ~7% subscriber market share 50 cities FTTH coverage Drive long-term quality customer portfolio via FMC Of 623k subscribers Power4 PACKAGE Continued to post valued bundling proposition to target increasing revenue per household FMC, 20% Bt799 50/20Mbps AIS PLAYBOX Bt /30Mbps 3-month free trial of worldclass content Unlimited 4Mbps mobile SIM Non-FMC, 80% Bt1, /50Mbps 100,000 APs of SuperWiFi

13 Digital services growth in Enterprise & Consumer Enterprise business driven by IDC & ICT 98.96% Delist completed on 26-Jul-18 Paid in total Bt4.6bn for 98.96% stake Consolidated around Bt800mn of service revenue in 1H18 Completed product alignment and continue migrating CSL s infrastructure to AWN for cost synergy Maintain scale and competitiveness Mobile, 70% Non-mobile, 30% Current enterprise revenue composition Drive growth in EDS/leased line Data center Cloud & ICT Solutions Managed service Mobile wallet: strong take-up rate Video platform: building up subscriptions (mn users) Feb-18 Jun-18 AIS invested Registered, but not active Active 1.3mn active users on mobile and FBB (both paid subscribers and free bundling) World-class content on AIS PLAY application and PLAYBOX Integrated Rabbit Line Pay (RLP) on myais app to increase AIS s customer adoption AIS PLAY PLAYBOX Exclusive operator billing, more convenience for AIS s customers

14 2Q18 & 1H18 Key Financial Highlights Baht million 2Q17 1Q18 2Q18 %YoY %QoQ 1H17 1H18 %YoY Satellite and related services 1,603 1,504 1, % 0.6% 3,621 2,999 17% Cost of sales and services 1,325 1,001 1,046 21% 4.5% 2,752 2,047 26% Satellite EBITDA % 56% 1,659 1,155 30% Net profit attributable to Thaicom Normalized net profit attributable to Thaicom* 216 1, % 87% 475 2, % 216 (28) % n/a % Satellite EBITDA margin 48% 31% 48% 0.2% 17% 47% 39% 7.8% *Normalized net profit attributable to Thaicom excl. loss from impairment and profit from sale of CSL s share

15 2Q18 and 1H18 Commercial Highlights Core business Broadband business Philippines WIT wholesales bandwidth to support nationwide enterprise and government broadband projects (~4% of Thaicom 4) Japan s KDDI additional bandwidth for mobile backhaul services (~1% of Thaicom 4) Broadcast business Myanmar s Canal+ and Thailand s Thai Satellite to strengthen pay-tv direct-tohome (DTH) platforms (~5% of broadcasting satellites) Total number of satellite TV grew ~5% to reach 1,049 channels Thaicom is awarded a consultancy service for Bangladesh s national satellite project Adjacent business NAVA service Total 19 vessels added in 1H18 in Thailand or total 39 vessels in services Also signed a contract with Royal Thai Navy for additional 12 vessels

16 Satellite performance continued to improve Satellite Revenue Unit: Baht million Broadband 1,555 39% 1,462 39% 1,465 39% Satellite revenue was Bt1,465mn. Conventional TV Capacity Utilization Broadband Conventional TV 61% 61% 61% 2Q17 1Q18 2Q18 48% 54% 59% 59% 25% 29% QoQ, despite the churn of some customers, revenue still maintained, partly from service up from SD to HD YoY, revenue drop 6% caused by the churn of major customers for broadband during 2Q-4Q17, and also the decrease of unit price despite the increase utilization of conventional clients. 2Q17 1Q18 2Q18

17 Moving Forward Core Business Continue satellite business under Thailand regulation Study other options: explore consortium based satellite and explore global GEO & LEO satellite resell model Adjacent Business Continue develop adjacent businesses: Maritime, LOOX TV, 4K (Ultra HD) and Direct-to-Home New Business Explore new businesses for long-term plan: VDO Analytics, Robotic and Drone

18 Satellite Fleet De-orbited In-orbited THAICOM 1A THAICOM 2 THAICOM 3 THAICOM 4 De-orbited: De-orbited: De-orbited: (IPSTAR) THAICOM 5 THAICOM 6 THAICOM 7 THAICOM 8 Scheme Operating Concession License Type of Satellite Broadband Conventional Conventional Fee 22.5% 4.00% Contract Life (Yr) 30 yr (2021) 20 yr (2032) Useful Life (Yr)

19 Revenue boosted by viewer base expansion 2017 YTD2018 Average sales per day (Btmn) 7% 92% % 6% % 1.9 1% TV Internet/Mobile Others 1H17 1H18 2H18 Strategy Platform and Product strategies More revenue from airtime buying channels Others Cable Airtime Satellite 13% 7% 6% 7% 30% 40% 50% 47% 2017 YTD2018 Airtime strategy: expanded viewer base on new channels starting Jun 18 More high margin product sales: explore exclusive products with the diversity of product category: fashion, health, and beauty

20 Appendix

21 Consolidated Financial Statements 2Q18 & 1H18 Statements of Profit or Loss Baht million 2Q17 1Q18 2Q18 %YoY %QoQ 1H17 1H18 %YoY Revenues from sales and services Share of profit of investments in associates 2,319 1,767 1,528-34% -14% 5,086 3,295-35% 2,885 3,268 3,279 14% 0.3% 5,992 6, % Total revenues 5,530 6,755 4,986-10% -26% 11,576 11, % Cost of sales and service 1, % -11% 3,172 1,783-44% SG&A % -53% 1,175 1,007-14% EBIT 3,211 4,899 3,589 12% -27% 6,714 8,488 26% Net profit attributable to Company 2,871 3,640 3,298 15% -9.4% 5,990 6,938 16% Normalized net profit* 2,871 3,177 3,298 15% 3.8% 5,990 6, % *Normalized net profit excl. profit from sale of CSL s share

22 2Q18 & 1H18 Statements of Profit or Loss Separate Financial Statements Baht million 2Q17 1Q18 2Q18 %YoY %QoQ 1H17 1H18 %YoY Share of net results from investments in subsidiaries Share of profit of investments in associates % -80% % 2,885 3,268 3,278 14% 0.3% 5,992 6, % Other income % 20% % Total revenues 2,972 3,723 3,381 14% -9.2% 6,187 7,104 15% SG&A % -1.2% % EBIT 2,870 3,637 3,296 15% -9.4% 5,987 6,933 16% Net profit attributable to Company 2,869 3,637 3,295 15% -9.4% 5,985 6,932 16%

23 2Q18 & 1H18 Statements of Financial Position Baht million Cash & cash equivalents and current investment Investments in subsidiaries and associates Investments in associates and joint ventures Consolidated Separate Dec-17 Jun-18 Dec-17 Jun-18 8,418 10,043 1,869 1, ,968 29,818 22,978 25, Property and equipment 7,943 7, Intangible assets under operating agreements 3,987 3, Other assets 7,634 5, Total assets 50,960 51,885 29,942 31,811 Interest-bearing debt 7,335 7, Other liabilities 6,298 5, Total liabilities 13,633 12, Total shareholders equity 37,327 39,148 29,800 31,700 Total liabilities & shareholders equity 50,960 51,885 29,942 31,811

24 Maintained 2018 Guidance Consolidated Financial Statement Revenue from satellite and international businesses Mainly Contributed from Share of Profit of Associates Standalone Financial Statement General & Administrative Expenses Dividend Policy Venture Capital 2018 Guidance Slightly decrease YoY 40.45% of AIS Net Profit 2018 Guidance Around Bt400mn Pass through Not more than Bt200mn

25 General Information of the Company Company Name Symbol INTOUCH General Information Intouch Holdings Public Company Limited INTUCH Year of Establishment 1983 Website Market Capitalization (as of 6 Aug 2018) 1-Year Average Trading Value (as of 6 Aug 2018) 179, million Baht (5,441 million USD at 33Baht/USD) million Baht (12.8 million USD at 33Baht/USD) American Depositary Receipt ADR Ticker Symbol Depositary INTHY The Bank of New York Mellon

26 Disclaimer Some statements made in this presentation are forward-looking statements with the relevant assumptions, 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 forward-looking 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. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.