Srisawad Power 1979 Public Company Limited Srisawad Power 1979 Public Company Limited 1 Company Background 2 Revenue Structure and Operating Results 3 Operational Goals 4 Investment Highlights 2 Overview of Business 1 • Collateral-backed loans • Asset owners, in need of quick cash • Branches throughout Thailand 3 Organization Structure – Types of Loan Collateral 1 Srisawad Power 1979 Plc. (SAWAD) All types of vehicle, excluding cars and pick-up trucks 100% *Srisawad Power 1982 Co. Ltd. (SP1982) 100% Fast Money Co. Ltd. (FM) 100% Srisawad Asset Management Co. Ltd. (AMC) Debt Collection Cars, pick-up trucks, house, and land *Combination with parent company October 1,2014 New motorcycles Personal loans (Bank of Thailand stipulated) 4 Industry Overview 1 Market: 18 – 20 million low income population who do not have the means to access traditional loans of banking institutions. SAWAD Group serves as an alternative to access loans, in place of black market lenders. Microfinance market is rapidly growing. Loans backed by auto title have lower risks. Returns are considered to be high . Increased volume of cars (and owners) in the market from the Government’s first-car incentive program. Large portion of the overall demand for loans are still “untapped”. Borrows have quick access to loans by using common assets as collateral such as motorcycles, cars (including pick-up trucks), houses, and land properties. Motorcycles and cars are the most common types of loan collateral. Motorcycles 120,850 contracts (66% of all loan accounts) cars 43,520 contracts (23% of all loan accounts) Volume of newly registered vehicles Million cars +CAGR 12% Auto backed microfinance industry has been steadily growing at rates between 10%-20% per year. Source: Department of Transportation 5 Overview of Business (SAWAD Group) 1 Auto Backed Loans House and Land Backed Loans Personal Loans New Motorcycle Hire Purchase Company (SAWAD Group) SAWAD , SP1982 SP1982 FM FM Principal Receivable as of 30/09/14 (totaling 7,101.90 MB) 6,168.23 MB (171,868 contracts) 734.51 MB (4,450 contracts) 13.79 MB (1,399 contracts) 185.37 MB (6,252 contracts) 86.85% 10.34% 0.19% 2.61% Payment period 6 - 48 installments 12 - 24 installments 12 - 36 installments Loan Approval Rate Discount 30% - 70% From Market Price 50% – 70% Of Assessed Value 24 - 36 installments 2.5 times monthly income But no more than 50,000 Baht Loan (Unsecured) Hire Purchase (title-transfer) Proportion to all loans Types of contract Hire Purchase (title-transfer) Loan (no title-transfer) Loan (Mortgage or Sale with Right of Redemption) 80%-100% Of Market Price 6 Business Strategy 1 Effective Loan Management Tight Loan Approval Policy Concentrate on Borrowers With Stable Source of Income for the Personal Loan Portfolio Speed of Service Main Strategy Focus on Local-Level Marketing Through Relationship Building Diverse Loan Options Accessibility Through Branches Expansion 7 1 Company Background 2 Revenue Structure and Operating Results 3 Operational Goals 4 Investment Highlights 8 Structure of Income and Expense Profit and Loss Statement (Million Baht) 2011 2012 2 2013 Q1 2014 Q2 2014 Q3 2014 Income from Interest and Fees - Hire Purchase - Loan Total 234 431 665 303 727 1,030 413 1,034 1,447 116 314 430 124 338 462 129 382 511 Other Income 199 276 490 156 192 186 1,306 1,937 586 654 697 (643) (981) (300) (371) (368) 663 956 286 283 329 Total Income Operational Expenses Profit before interest and Taxes Interest Expense (Cost of Funds) Tax Expenses Net Profit 864 (575) 289 (96) (131) 61 (137) (121) 405 (230) (60) (62) (48) (151) (39) (44) (57) 575 186 177 224 53% 7% 8% 32% Operational Expenses Cost of Funds Taxes Net Profit 9 Operating Results 2 Expense Breakdown Income ~ Expense Million Baht Million Baht 1,039 981 642 575 18% 14% 18% 29% 22% 13% 16% 14% 14% (-1%) 15% 19% 21% 41% 38% 14% 12% 22% 40% 8% 10 Profit Analysis 2 Net Profit Quarter to Quarter Comparison Rates of Return Million Baht ~38% ~30% ~30% /1 /1 ROE = Net Profit Avg. Equity /2 /2 ROA = Net Profit Avg. Assets 11 Financial Summary 2 Balance Sheet (Million Baht) 2011 2012 2013 Q3 14 Cash and Cash Equivalents Receivables from Related Entities Loans Due Within 1 Year Loans Due Beyond 1 Year Total Assets Loans From Financial Institutions Other Short Term Borrowing 25 29 20 379 21 -- 175 1,793 859 3,125 2,712 1,136 4,505 3,987 1,552 6,046 4,788 2,024 7,626 1,776 2,551 4,565 3,617 Debt to Related Entities Other Liabilities Total Liabilities Paid-in Capital Premium Accumulated Net Income Other Reserves 251 0 311 2,339 200 0 254 0 0 893 451 3,894 356 0 219 36 0 94 256 4,915 750 0 345 36 0 17 821 4,461 1,000 1,422 707 36 Other Controlling Interests Shareholder’s Equity Debt to Equity Ratio 332 786 3.0x 0 611 6.3x 0 1,131 4.3x 0 3,165 1.4x Principal Receivable and Number of Branches Principal (Million Baht) Branches 68% 69% 66% 34% 68% 32% 32% 31% 32% 12 Proportion of Principal Receivables and Receivable Aging Proportion of Principal Receivables by Type of Collateral as of end of Q3 2014 Home Land Condo 10% Motorcycles 16% 2 Proportion of Receivable Aging 0.2% 1% Personal Loans Agriculture Vehicles 3% New Motorcycles Current or Past Due < 1 Month 73% 13% Commercial Trucks Cars and Pick-up Trucks 57 % Past Due > 1 to 3 Months, 22% Past Due > 3 to 6 Months, 2% Past Due > 6 to 12 Months, 2% Past Due > 12 Months, 1% Total Principal Receivables = 7,102 Million Baht “More than 70% of the Loans are in the current category.” Information as of 30/09/14 13 Quality of Loans 2 Nonperforming Loans and Provision for Bad Debt as at 30 September 2014 211 /1 Principal Receivables = Accounts Receivable less Unearned Interest Revenue less Unapplied Receipts 14 1 Company Background 2 Revenue Structure and Operating Results 3 Operational Targets 4 Investment Highlights 15 Operational Targets 3 Branch Expansion Lending Expansion • By end of 2014 – 1,000 branches • By end of 2015 – 1,200 branches Loan Portfolio of 9 billion Baht By 2015 2015 16 1 Company Background 2 Revenue Structure and Operating Results 3 Operational Targets 4 Investment Highlights 17 Investment Highlights 4 High growth in the business with large population still without means to access the traditional banking system. Team of senior management with more than 30 years of experience in the business. More than 600 branches covering all regions that are managed with tight system of internal controls. Strict loan approval policy (verification of collateral / guarantor) and Loan to Value range of 30-70%. Investment Highlights High Interest and Fees Income sufficiently matching the risks and expenses. Effective Risk Management Process in Assessment and Collection based on a vast database. Consistent pattern of growth for revenues and net income. 18 Q&A 19
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