PPAP People’s Company, People’s IPO Investor Relations 2015 PHNOM PENH AUTONOMOUS PORT 1...

PPAPPeople’s Company, People’s IPO

Investor Relations 2015

PHNOM PENH AUTONOMOUS PORT1

PHNOM PENH AUTONOMOUS PORTPeople’s Company, People’s IPO




DISCLAIMER

These materials have been prepared by Phnom Penh Autonomous Port (“PPAP” or the “Company”) solely for informational use during its presentation to prospective in-

vestors held in connection with the proposed offering (the “Offering”) of shares of the Company (the “Securities”) and may not be taken away, reproduced or redistributed

to any other person. By attending this presentation, you are agreeing to be bound by the restrictions set forth below. No part of these materials may be reproduced, re-

transmitted or redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organization / firm) or published, in whole or in part, for

any purpose. No part of these materials may be distributed, reproduced, taken or transmitted into countries other than Cambodia. Any failure to comply with these restric-

tions may constitute a violation of applicable securities laws, and could result in a substantial delay to, or otherwise prejudice, any potential offering of the Securities by the

Company.

Any decision to purchase the Securities in the Offering should be made solely on the basis of the information contained in the disclosure document relating to the Offering.

The disclosure document relating to the Offering may be obtained from the Company from 19 October 2015. It is not the Company’s intention to provide, and you may not

rely on these materials as providing, a complete or comprehensive analysis of the Company’s financial or trading position or prospects. No reliance may be placed for any

purposes whatsoever on the information contained in these materials or on their completeness, accuracy or fairness. The provision of the information in these materials

should not be treated as giving investment advice. The information may change and we are not responsible for those changes. The information and opinions in these ma-

terials are provided as at the date of this presentation and none of the Company or Yuanta Securities (Cambodia) plc. is under any obligation to update or keep current the

information contained herein. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company, Yuanta Securities (Cambo-

dia) plc. or any of their respective members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opin-

ions contained in these materials. None of the Company, Yuanta Securities (Cambodia) plc. or any of their respective members, directors, officers or employees nor any

other person accepts any liability whatsoever for any loss howsoever arising from any use of these materials or their contents or otherwise arising in connection therewith.

Certain statements contained in these materials may be statements of future expectations and other forward-looking statements that are based on third party sources and

involve known and unknown risks and uncertainties. Forward-looking statements contained in these materials regarding past trends or activities should not be taken as a

representation that such trends or activities will continue in the future. There is no obligation to update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation.

These materials do not constitute or form a part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or sub-

scribe for, any shares of the Company for sale in Cambodia or anywhere else. No part of these materials shall form the basis of, or be relied upon in connection with, any

contract, commitment or investment decision in relation thereto. There will be no offer of the Securities in any jurisdiction in which such offer or sale would be unlawful.




IPO Plan

Offering TermShareholding Ownership (Post-

IPO)

Number of Offering Shares 4,136,873 (Offering ratio: 20%)

Offering Price KHR 4,405~6,320 (USD 1.08~1.55)

Par Value KHR 4,000 (USD 1.00)

Offering AmountsKHR 18.22~26.15bn (USD 4.5~6.4mn)

Outstanding Shares after IPO 20,684,365

Offering Shares

Submission of Disclosure Document 13 August 2015

Approval on LERA from the CSX 23 September 2015

Approval in Principle from the SECC 7 October 2015

Book-building 19 – 22 October 2015

Subscription 12 – 17 November 2015

Listing Date 11 December 2015

Timetable

Shareholder Number of Shares % Term

The State repre-sented by the MEF*

16,547,492 80.0% 1 year

Lock-up Shares

* Ministry of Economy and Finance

* Applied F/X rate: KHR 4,078 / USD 1

MEF80.0%

ESOP2.0%

Private Shareholders 18.0%




COMPANY OVERVIEW

1. PPAP at a Glance

2. Corporate Identity

3. Organizational Structure

4. The Management

5. Business Overview





EXPANSION & DIVERSIFICATION

2013 Opening of the New Container Terminal (LM17)

2015 Acquired sand dredging licenses in Kam-pong Cham and Kandal province

Company name Phnom Penh Autonomous Port (“PPAP”) CEO H.E. Hei Bavy

Establishment date 1998 Capital Stock KHR 441.2 bn (USD 110.3 mn) as of 5 August 2015

Main business Port Operator and Port Authority Headcount 322 as of 30 June 2015

Address#694, Prah Sisowat, Sangkat Sras Chork, Khan Doun Penh, Phnom Penh, Cambodia

Website www.ppap.com.kh

PPAP at glance

THE LARGEST RIVER PORT OPERATOR AND PORT AUTHORITY

BEFORE 1998

1905 Established and equipped with two pon-toons

1980 Reinstalled and rebuilt equipment due to damages incurred during the Khmer Rouge; re-operated in the form of port zone and domestic port of the Ministry of Public Works and Transport

1995 Installed electricity / clean drainage sys-tem, 16 conveyors; constructed quay from loan and grant aid from the World Bank (USD 1.1mn) and the Japanese Government (USD 30mn)

MODERN ERA

1998 Established as a state company under Anukret No. 51 ANK. BK.

2001 Opening of the Passenger Terminal (TS1)

2007 Began the operation of handling con-tainer cargoes at the Inland Container Depot (ICD)

2009 Attained the exclusive right to regulate, operate and manage port operations within the commercial zone of 160km

(Unit: TEUs)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

7,630 15,526

30,281 38,233

47,504 47,507 43,312

62,256

81,631

95,333

110,500

133,666

Container throughputs (TEUs)

29.7% CAGR (2003-2014)




Corporate Identity

Outstanding Management

• Skilled set of enthusiastic employees and a leader with vision

Comprehensive Services

• Port operator handling con-tainer cargoes (LM17), gen-eral cargoes (TS3) and pas-sengers (TS1)

• Port authority providing port related services as well as port related education (Cam-bodia Maritime Institute)

Attractive Market Opportunities

• Capitalize on the Government’s efforts in promoting agricultural exports and industrial develop-ment policy

• Vibrant economy and continued growth in trade, FDI, and in-vestments in infrastructure

THE LARGEST RIVER PORT OPERATOR

THE 2nd LARGEST CONTAINER TERMINAL PORT

LEADER IN MEKONG SHIPPING BUSINESS AND ES-SENTIAL LINK IN MARITIME SHIPPING

Manage, develop, and operate port facilities and provide core / related services for the sustainable economic growth

and social prosperity of Cambodia




Organizational Structure

Board of Directors

Chief Executive Officer

Head of Internal Audit

Department

Corporate Secretary

Deputy Director General of Technical

Deputy Director General of Maritime

Service/Traffic

Deputy Director General of Administration/Finance

Deputy Director General of Operation

Head of Administration

Department

Head of Engineer

Department

Head of Hydrographic Department

Head of Harbor Department

Head of TS3 Operation

Department

Head of LM17 Operation

Department

Head of Planning/Marketing

Department

Administration Office

Employment Salary Office

Security/CCTVCamera Office

Research/Development Office

Accounting Office

Port Infrastructure Service Office

Technical Service Office

Terminal Planning Unit

Operation Shift Unit

Gate Unit

Invoice Unit

Maintenance and Repair Unit

Terminal Planning Unit

Operation Shift Unit

Gate Unit

Invoice Unit

Maintenance and Repair Unit

Planning/Statistic Office

Sale/Marketing Unit

Commercial/TOS Office

Harbor Service/AIS System Office

Domestic Port/Port Zone Service

Office

Pilotage Office

Passenger/Tourist Terminal

Unit

Channel Dredging/

Maintenance Service Office

Aids to Navigation

Service Office

Topo Hydrographic Survey Unit

Cambodia Maritime Intistute

Information Technology Unit

Procurement Unit

Inland Container Deport(ICD) Unit

Finance Office/Securities Market

Head of Accounting/

Finance Dept.

Safety/Health/Environment

Office

Tonle Bet Terminal Unit

Oil/Gas Terminal Unit

Head of Personnel/ HR

Department

Personnel/Training Office

Head of Port Commercial Zone/

Domestic Port Department

State Controller




The Management

H. E. Hei Bavy

Ph.D. in Economic Science/ Chamroeun University of Poly-Technol-ogy, Cambodia

• 2009 - Present: Chairman of BOD and CEO of Phnom Penh Au-tonomous Port

H. E. Suon Rachana

University of Medicine, Cambodia

• 2009 - Present : Secretary of State, The Ministry of Public Works and Transport

H. E. Ly Sivanna

Certificate of High School (Bac II of Science)/ 18 March High School, Cambodia

• 2014 - Present : - Advisor to the Office of Council of Ministers- Member of the Focal Point for Forest Crime Monitoring and Re-

porting, Office of Council of Ministers

H. E. Ken Sambath

Ph.D. in Economics/ International University, United Kingdom

• 2013 - Present : - Advisor and Director of the Cabinet of the Permanent Deputy

Prime Minister - Chairman of the Committee on Economic and Financial Policy

(CEFP)- First Vice Chairman of the Council for Development of Cambodia

(CDC)- Deputy General Director of General Department of Taxation

(GDT)

H. E. Penn Sovicheat

Master of Business Administration/ University of New England, Aus-tralia

• 2009 - Present : - Director General, Domestic Trade Directorate, Ministry of Com-

merce - Trade negotiator, Member of Trade Negotiation Team for ASEAN

and other forums - Member of National Committee of Intellectual Property Right of

Cambodia

Huot Hay

Junior Ph.D. Candidate of Law/ Build Bright University, Cambodia

• 2006 - Present : Deputy Director of Administration, City Hall

Prom Sokhany

Ph.D. Candidate of Philosophy in Public Administration/ Chamroeun University of Poly-Technology, Cambodia

• 2015 - Present : Deputy Director General of Technical, Phnom Penh Autonomous Port

• 2014 - 2015 : Director of Hydrographic, Phnom Penh Autonomous Port

• 2010 - 2014 : Director of Operation TS3, Phnom Penh Autonomous Port

• 2009 - 2010 : Manager of Planning/ Accounting/ Stock Office, Ph-nom Penh Autonomous Port

Representative from Ministry of Public Works and Transport

Representative from Office of Council of Ministers

Representative from Ministry of Economy and Finance

Representative fromPhnom Penh Municipality

Employee Representative

Representative from Ministry of Commerce

* When the Company becomes a listed entity, the members of the BOD shall be amended within 6 months after the IPO in accordance with the Prakas on Corporate Governance for Listed Public Enterprises. Two members of the BOD shall be replaced with one independent director and one non-executive director as the representative of private shareholders.

Chairman & CEO




Port Authority / Port Commercial Zone

Fees on services such as pilotage, tug assistance, mooring/

unmooring, and shifting

20% of official stevedoring fees on the goods handled by other

port operators within the Port Commercial Zone

Port Operator

Fees on cargo handling, storing, stuffing/ un-stuffing, loading/

unloading and trucking of import and export containers

Port dues and passenger fees from the Passenger Terminal

(TS1)

Business (1/5) – Overview

PORT OPERATOR / AUTHORITY WITH EXCLUSIVE PORT COMMERCIAL ZONE

Others

Revenue from sand dredging license

Income from leasing assets such as land, building, and other

properties

Annual Breakdown of Revenue

Revenue Breakdown (2014)3.6%

4.1%

16.0%

33.9%

42.3%

Others

Storage

Port Services

Lift On Lift Off (LOLO)

Stevedoring

2012 2013 2014 Q1 2015

4 4.65.6

1.5

3.33.7

4.5

1.2

1.92.0

2.1

0.6

0.20.3

0.6

0.1

1.20.8

0.5

0.1

Others

Storage / Trucking

Port Services

Lift On Lift Off (LOLO)

Stevedoring

(Unit: USD mn)

10.611.4

13.3

3.5




Business (2/5) – Workflow for Imports and Export

KAMSAB requests the pilot in order to navigate the vessel to the border.

Container Export Process

Shipping line sends the Loading List.

Book the exported container on TOS. The cargo owner pays LOLO service.

Truck the container to be scanned then load to the ship.

The clearance committee completes the export formality from Custom.

The assigned pilot navigates the vessel to the border.

The ship is anchored at KA AMSOMNOR to complete export formality to enter Viet Nam.

End Process

KAMSAB requests for Pilot at least 24h before the vessel arrives at border.

Container Import Process

Clearance committee checks the relevant documents prepared by KAMSAB.

The managers of terminal planning unit and operation shift unit arranges the berth and equipment for container handing.

The clearance committee and representative of shipping line check relevant documents.

The operation shift unit discharges containers from the ship to the truck and store at Container Yard.

The cargo owner starts processing the relevant documents with CUSTOM and EXCISES, KAMCONTROL and KAMSAB.

The containers are scanned and the cargo owner completes the procedure for the cargo release from Customer and Exercises.

With cargo release from PPAP, the container can be trucked out through gate unit inspection.

End Process




Business (3/5) – Imports and Exports

Imports Handled in 2014 Imports Handled in H1 2015

Exports Handled in 2014 Exports Handled in H1 2015

IMPORTS AND EXPORTS HANDLED AT PPAP

* Source: PPAP * Source: PPAP

* Source: PPAP * Source: PPAP

50.08%

23.36%

10.92%

8.31%

7.34%

Construction Material

Garment Accessories

Food & Beverage

Others

Empty Container

40.57%

22.74%

14.22%

12.38%

10.09%

Ceramic Product

Others

Fabric

Construction Material

Food & Beverage

68.12%

19.55%

7.22%

2.85% 2.26%

Garment

Rice

Empty Container

Food & Beverage

Others

51.61%38.28%

5.41%3.38% 1.31%

Garment

Rice

Empty Container

Others

Rubber




Business (4/5) – PPAP’s Terminals

Multipurpose Terminal (TS3)

• Location: 104°55’31”N 11°34’55”E (Phnom Penh)

• Type: General / Con-tainer cargo / Passen-ger

• Capacity: 76,650 TEUs

PPAP WILL CONTINUE TO EXPAND ITS HANDLING CAPACITY OF BOTH CONTAINER AND GENERAL CARGO TO MEET THE INCREASING DEMAND

Passenger Terminal (TS1)

• Location: 104°55’54”E 11°34’26”N (Phnom Penh)

• Type: Passenger

Tonle Bet Terminal (UM2)

• Location: 105°28’48”E 11°53’58”N (Thbong Khmom)

• Type: General cargo

New Container Terminal (LM17)

• Location: 105°08’52”E 11°28’24”N (Kandal)

• Type: Container cargo

• Capacity: 150,000TEUs




2010 2011 2012 2013 2014

6.2

8.5

10.611.4

13.3

2010 2011 2012 2013 2014

62.3 81.6

95.3 110.5

133.7

77.2 84.6 84.6

229.1 226.7

Business (5/5) – Performance

Handling Capacity Total Number of Passengers

Revenue Net Income

CAGR 21.2%

REMARKABLE ACHIEVEMENTS OF PPAP

Output (‘000 TEUs)Handling Capacity (‘000 TEUs)

(Unit: USD mn)

2010 2011 2012 2013 2014

39,376

33,021

37,930 36,488

47,861

(Unit: USD mn)

2010 2011 2012 2013 2014

1.5

2.12.0

0.8

2.1




INVESTMENT HIGHLIGHTS

1. Exclusive License2. Strategic Location 3. Expansion and New Developments 4. Vibrant Developing Economy and Trade5. Business Plan6. Attractive Dividend Policy





Exclusive License

Port Commercial Zone

160km long stretching from Neak Leung - Tonle Bet -

Tonle Sap

Port Authority

Manages and monitors nav-igation of all vessels along

the zone

Competition

No main direct competition over the river port business

Exclusive License from the Government

The Government requires any private company wishing to develop port within the zone to consult and cooperate with PPAP.




Strategic Location

Phnom Penh City

Proximity to production and consumption hub

Cai Map International Port

- Establishment of the Cai Mep Hub Port (2009) no longer re-quires PPAP shipments to call on the feeder port in Ho Chi Minh City to transit at the hub port in Singapore before heading to the final destinations (shorter transit time, less cost)

- Proximity to consumers, manufacturers/ producers and industrial zone (55.4% of GDP, 57.4% of country annual expense*)- Connection to major roads; new express way and railway

are planned to connect or run through LM17

CONNECTING PHNOM PENH TO THE REST OF THE WORLD

* Source: 2011 Economic Consensus of Cambodia

Convenient connection to Hub Port




Waterway

TS1

MSL

UM2

TS3

LM17

Expansion and New Developments

Phase II

From 150,000 TEUsto 230,000 TEUs

Stage 1

2016 2017 2018 2019

Stage 2

From 230,000 TEUs to 300,000 TEUs

Phase III

2028

From 300,000 TEUs to 500,000 TEUs

Construction of Specialized Bulk Terminal

Expected annual capacity of 2mn Tonnes

Modernize to better accommodate leisure craft activities

Multipurpose Terminal(Consolidation and distribution hub for

export of agricultural products)

Maintain the water depth of 6 meters Maintain the water depth of 7.5 meters

Installation of 4 Conveyors

2013

Phase I Complete







2 2

0

5

10

15

20

25

30

0%

2%

4%

6%

8%

10%

12%

14%GDP ($bn) Real GDP growth (%)

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

e

-

500

1,000

1,500

2,000

0%

2%

4%

6%

8%

10%

12%

14%FDI, net inflows ($mn) FDI, net inflows (% of GDP)

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

0

5

10

15

20 Exports ($bn) Imports ($bn) Total trade ($bn)

Vibrant Developing Economy and Trade

Real GDP Growth in Cambodia Trend of FDI in Cambodia

Trade Growth in ASEAN (CAGR, 2010-2013) Trend of Trade in Cambodia

IMPRESSIVE ECONOMIC INDICATORS

* Source: International Monetary Fund (“IMF”)* Figures in 2015-2018 are forecasted

* Source: World Bank* Figure in 2014 is forecasted.

* Source: Asian Development Bank (“ADB”) * Source: Asian Development Bank (“ADB”)

Cambo

dia

Brune

i

Indo

nesia

Lao

PDR

Malays

ia

Myanm

ar

Philipp

ines

Singap

ore

Thail

and

Viet N

am

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

17.7%

9.6%8.0%

11.5%

5.4%

17.8%

3.6% 2.8%

6.8%

18.9%




Business Plan

Revenue to Grow to USD 16.6 million, EBIT to USD 5.9 million and Net Income to USD 3.6 million in 2016

Revenue Projection EBIT Projection

* PPAP projection with assistance from Grant Thornton

2014 2015E 2016F 2017F

13.3 15.3 16.6 18.1

16.7%

15.0%

8.5%9.0%

Revenue (USD mn) Growth Rate (%)

Net Income Projection

2014 2015E 2016F 2017F

2.1 3.1 3.6 4.1

16.1%

20.6%21.5%

22.9%

Net Income (USD mn)

Net Profit Margin (%)

2014 2015E 2016F 2017F

4.1 5.4 5.9 6.7

30.8%

35.3% 35.5%37.0%

EBIT (USD mn) EBIT Margin (%)




Attractive Dividend Policy

ATTRACTIVE DIVIDEND POLICY

Greater confi-dence for in-

vestors

Increase liquid-ity

Price supportMinimize poten-

tial losses

Class AVoting Shares

5.0% 5 years

PreferentialGuaranteed

Dividend Yield*

Guaranteed

Duration

Fundamentally different preferential dividend policy available only to the

public shareholders (Class A Voting Shares)

* The guaranteed dividend yield of 5% is based on the IPO price.




OTHERS

1. Financial Statements and Financial Projection

2. Use of Proceeds





Financial Statements

Income Statement

2012 2013 2014 Q1 2015

ASSETS 149,361,056 152,417,984 151,805,422 152,045,853

LIABILITIES 33,799,741 35,443,525 32,338,296 32,307,760

EQUITIES 115,561,315 116,974,459 119,467,126 119,738,093

Balance Sheet

* Audited 2012, 2013, 2014 and Reviewed Q1 2015

* PPAP projection with assistance from Grant Thornton

(Unit: USD)

(Unit: USD)

2012 2013 2014 Q1 2015 2015 F 2016F 2017F

REVENUES 10,606,345 11,402,763 13,292,255 3,526,767 15,291,383 16,621,398 18,056,353

EBITDA 4,120,382 4,744,820 6,373,666 1,897,042 7,655,947 8,261,315 9,227,254

EBIT 3,134,743 2,864,842 4,094,317 1,326,160 5,357,579 5,930,985 6,680,545

NET INCOME 1,990,025 772,185 2,145,109 716,426 3,148,795 3,578,850 4,141,020




Exclusive License

CAPEX

• Phase II of LM17• Expansion of handling capacity

Working CapitalOther general pur-

poses

IPOPROCEEDS

PPAP People’s Company, People’s IPO Investor Relations 2015 PHNOM PENH AUTONOMOUS PORT 1...

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