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SCI ELECTRIC PUBLIC COMPANY LIMITED
Investor Presentation as of 3Q15
November 2015
For further information, please contact investor relations unit ([email protected]) or visit our website at www.sci-mfgr.com
Content
Section 1 Company Background 3
Section 2 Our Business 9
Section 3 Industry Outlook 18
Section 4 Financial Highlights 24
Section 5 Future Projects/ Investments 30
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Company Background
Company Background
• Founded as a manufacturer of small electrical appliances1966
• Moved from manufactured small electrical appliances to electrical switch boards,
cable trays, fuses, and relays1976
• Increased capital to 76.4 million Baht to cope with business growth and for
investment in manufacturing of transmission line tower and telecommunication
tower under a subsidiary of Ajikawa & SCI Metal Tech Co., Ltd. with know-how
support from AG Ajikawa Corporation (Japan) who also invested 13.8% of the
Company’s capital
1988-2002
• Founded SCI Electric Manufacturer Company with 1 million Baht registered
capital and Phruttinarakorn family was a major shareholder
• Capacity expansion and relocation of manufacturing facilities to Bangbor,
Samutprakarn
1987
• Expanded business to Lao PDR to begin with mini hydro-power project and
granted a permission to build and operate a 3.2 MW hydro-power plant2006-2010
• Registered Tadsalen Power Company in Lao PDR2009
• Signed 30 years concession agreement with Lao PDR government2012
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Company Background
• COD of Tadsalen 3.2 MW hydro-power plant in Lao PDR and granted a USD 94
million project of power distribution system in 4 major cities in Lao PDR by EDL
• Founded SCI Holding Company for investment hydro-power plant and other
renewable energy projects (100% shares in Tadsalen Power Company)• Increased capital from 76.4 million Baht to 165 million Baht in right offering (RO)
to restructure the company group structure. AG&SCIMT became SCI subsidiary
after merged with WCP
2013
• Increased capital from 397.5 million Baht to 562.5 million Baht in right offering
(RO)
• Increased capital to Baht 750 million at par value Baht 1.00 each to offer 187.5
million shares in the initial public offering (IPO) and to listed on the Thailand Stock
Exchange (SET)
2015
• Was awarded the 115 kV power transmission line project in Lao PDR2009-2012
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Company Structure
SCI Electric Public Company Limited (SCI)
• Registered / Paid-up capital 750 Million Baht
• Business : Switch board and cable tray and
power transmission and distribution turnkey
project
Ajikawa & SCI Metal Tech Co., Ltd.
(AG&SCIMT) • Registered Capital 108 Million Baht• Paid-up Capital 99.6 Million Baht
• Business : Investment on renewable
power plant
• Registered / Paid-up capital 108 Million
Baht
• Business : Transmission line tower and
telecom tower manufacturer and
galvanizing service provider
SCI Holding Co., Ltd. (SCIH)
• Registered in Lao PDR
• Registered / Paid-up capital 3.3 MUSD
• Business : Hydroelectric power plant in
Lao PDR
Tadsalen Power Co., Ltd. (TAD)
99.998% 99.96%
100%
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65%
3%2%
4%
1%
25%
70%
Phruttinarakorn Family
Yanisrangkul Family
Pheanvitayaskul Family
AG Ajikawa (Thailand) Co., Ltd.
Others
Free Float
Shareholder Structure
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750MShares
*Phruttinarakorn family, Yanisrangkul family and Pheanvitayaskul family are related family
Board of Directors
Name Position
1. Noppol Milinthanggoon Chairman of the Board / Independent Director
2. Pranee Phasipol Chairman of the Risk Management Committee/ Independent
Director / Remuneration Director
3. Chattong Tippayakalin Risk Management Director / Independent Director
4. Chaovana Viwatpanacharti Risk Management Director / Independent Director
5. Sumeth Chailertvanitkul Chairman of the Remuneration Committee / Independent
Director
6. Aunada Phruttinarakorn Director / Remuneration Director
7. Kriangkrai Pheanvitayaskul Director
8. Thanawat Yanisrangkul Director
9. Sirichai Phruttinarakorn Director
10. Vichai Yanisrangkul Director
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Our Business
Products and Services
1.2 Cable Tray and SUPPORTING SYSTEM
• Manufacture cable tray for use in private buildings, factories and electric railway systems.
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2. Transmission &
Telecom Tower,
Steel Fabrication
and GulvanisingService
3. Power
Transmission and
Distribution
Turnkey Projects
4. Renewable Power Plant
1. Switch Board,
Cable Tray and
Supporting Systems
1.1 Electrical Switch Board
• Manufacture, design and install electrical switch board, main distribution board (MDB), control panel and related equipment with IEC standard.
Products and Services
2.2 Telecommunication Tower
• Manufacture steel towers for installing devices used in telecommunication systems including mobile phone networks and radio or television broadcasting systems.
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2. Transmission &
Telecom Tower,
Steel Fabrication
and GulvanisingService
3. Power
Transmission and
Distribution
Turnkey Projects
4. Renewable Power Plant
1. Switch Board,
Cable Tray and
Supporting Systems
2.1 power Transmission Line Tower
• Manufacture and distribute transmission line towers used for transmitting electricity from power plant to substation
• Varieties of voltage of transmission line towers can be produced including 69 kV, 115 kV, 230 kV and 500 kV. The tower height ranges from 30m up to 100m
Products and Services
2.3 Steel Substation and Galvanized Steel Fabrication
• Take Off Structure - small lattice tower which support high voltage transmission line from transmission line tower to electricity substation
• Equipment Support – fabricated steel structure for supporting equipment in power substation
• Produce galvanized steel fabrication and other related products such as fabricated support structure for solar panel, railways steel bridge and steel railroad sleeper
2.4 Gulvanizing Service
• Provide the galvanizing service to both internal and external parties (for internal: approx. 80%)
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2. Transmission &
Telecom Tower,
Steel Fabrication
and GulvanisingService
3. Power
Transmission and
Distribution
Turnkey Projects
4. Renewable Power Plant
1. Switch Board,
Cable Tray and
Supporting Systems
Products and Services
3. Power Transmission and distribution turnkey project
• Provide EPC (Engineering, Procurement and Construction) turn-key project of high voltage transmission line and power distribution system in overseas:
– High voltage transmission line system
– Substation
– Power distribution system and maintenance
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2. Transmission &
Telecom Tower,
Steel Fabrication
and Gulvanising
Service
3. Power
Transmission and
Distribution
Turnkey Projects
4. Renewable Power Plant
1. Switch Board,
Cable Tray and
Supporting Systems
Products and Services
4. Renewable power Plant - Hydroelectric
• Tadsalen Power Company invested in Tadsalen hydroelectric power plant (capacity 3.2 MW) located at Xepone, Savanakhet in Lao PDR.
• Officially distributed power to EDL in 2013 with 30 year concession period (2013 – 2042).
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2. Transmission &
Telecom Tower,
Steel Fabrication
and Gulvanising
Service
3. Power
Transmission and
Distribution
Turnkey Projects
4. Renewable Power Plant
1. Switch Board,
Cable Tray and
Supporting Systems
Current Project: PDSR-1
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Power Distribution System Rehabilitation Project: PDSR
• State-owned electricity authority in Laos (EDL)
targeted to improve efficiency of low and medium
voltage distribution systems in 4 major cities
including Vientiane, Thakhek, Savannakhet and
Pakse.
• SCI were awarded as a turn-key contractor.
• Total project value = 94 MUSD
• Contract period = 36 months
• Currently 99.5% completed and expected to be
100% complete within 4Q2015 Vientiane
Thakhek
Savannakhet
Pakse
Customers
• Switch Board
• Cable Tray
• Supporting Systems
• Contractors
• Project Owners
• Traders
• Private sector (eg. Energy,
Petrochemical, Transportation)
• Industrial sector
• Government sector
• High-rise building
• Transmission Tower, Telecom Tower
• Steel Fabrication Structure
• Gulvanizing Service
• Contractors
• Project Owners
• Private sector (eg. Energy, Electrical,
telecommunication)
• Industrial sector
• Government and stated-own
government sectors such as EGAT,
PEA, MEA
• High Voltage Transmission
Line And Power Distribution System Installation
• EDL • Electricity consumers in Laos PDR
• Hydro Power Plant • EDL • Electricity consumers in Laos PDR
Products & Services Customers End User
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SCI Competitive Advantages
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• SCI have varieties of business both domestic and
international, which support and facilitate each other. Also,
SCI have many on-going opportunities for project
development in the future;
• SCI Management team have extensive experiences of more
than 20 years, leading to high creditability and credentials.
Our important end users included EGAT, EDL, mobile network
operators, contractors of large infrastructure projects;
• SCI business operate in high growth potential sector, for
example, an expansion of electric power industry and telecom
industry, both in domestic and international markets;
• SCI have strong technological supports from an alliance,
therefore, SCI products and services are accepted at an
international level standard;
• SCI products are certified by both local and international
standards and “SCI” brand is widely known in electrical
system design and engineering field; and
• SCI can provide full scale services of design, manufacturing and galvanizing of products.
Switch Board
Steel Tower
Power Plant
Turnkey Project
Lifetime Responsibility
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Industry Outlook
Construction and Real Estate Industries
• The number of industrial factories permitted to operate rises in the first 6 month of 2015 compared to 20141.
• In 2015, Thai government has been preparing for ASEAN economy by investing in more infrastructures and transportation. Hence, government spending in construction sector is expected to grow 7% – 10% or THB 464 – 477 billion from 20142
• Private sector benefits from government’s transportation network expansion project leading to growth in construction sector and real estate sector
Electrical Switch Board and Cable Tray Industry
1 Source : Department of Industrial Works2 Source : Kasikorn Research
6M2014 6M2015 Growth (%)
The number of plants (Plant) 2,000 2,043 2.15% (%)
Investment (MB) 171,126 171,233 0.06%
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Telecommunication Tower Industry
• The National Broadcasting and Telecommunications Commission (NBTC) expects that the number of mobile subscriptions and percentage of mobile subscription per population will continuously increase.
• The Auction of 4G spectrum in Thailand has prompted three leading mobile network operators as well as the new joiner to earmark massive capital expenditure to expand their network capabilities to support growing users and rapidly changing technologies.
Telecommunication Tower Industry
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108.43 116.03 123.63 131.26
161.3%
172.0%
182.8%
193.5%
140%
150%
160%
170%
180%
190%
200%
0
20
40
60
80
100
120
140
2015F 2016F 2017F 2018F
Mobile Subscriptions (million)
% Mobile Subscriptopns per 100 ppl
Domestic Power Industry
• Peak demand and electricity consumption continued rising over years
• Length of transmission system and number of high voltage substation continued to increase to support higher electricity demand and consumption.
• PDP2015 targets the electricity production in 2015 – 2036 to be 57,467 MW or increase 153% from 2014 production
Transmission Tower Industry
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Thailand peak demand for electricity and consumption EGAT’s transmission line length and substation numbers
• Electricity demand in Laos is taking off.
• EDL plans to expand high voltage transmission line for 4,405 Km within the next 5 years.
Offshore Power Industry
Power industry in Lao PDR
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0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2555 2556 2557 2558 2559 2560 2561 2562 2563 2564 2565 2566 2567 2568
MW
ครัวเรือน อตุสาหกรรม รวม
Steel and Zinc Price • In 2015, steel price is expected to be sluggish
due to low oil price and also an oversupply of steel in China.
• China Iron and Steel Association saw the oversupply of steel in China will continue and therefore less likely chance for the steel price to rise significantly in the near term.
Source: World Bank Commodities Price Forecast (4 Nov 2015)
• World Bank forecasted Zinc price will continue to increase up to 2025
• Also, International Zinc Association forecasts that the world zinc demand would likely to increase at least 5% each year until2018, therefore; effecting the zinc price on an uptrend.
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500
1000
1500
2000
2500
2013 2016 2019 2022 2025
World Bank Zinc Price Forecast ($/mt)
Iron Ore Price ($/mt)
Source: World Bank (Last observation Sep 2015)
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For further information, please contact investor relations unit ([email protected]) or visit our website at www.sci-mfgr.com
Financial Highlights
Revenues
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267M Baht
Switch Board
746M Baht
Steel Tower & Gulvanising
564M Baht
Projects Management
14M Baht
Hydro Power Plant
1,590M Baht
Revenues from sales and services
328
478
327
225 267
2012 2013 2014 9M14 9M15
+18.26%
1,0
25
546
1,1
06
714
746
2012 2013 2014 9M14 9M15
+4.54%
91
1,1
23
1,3
46
1,0
31
564
2012 2013 2014 9M14 9M15
-45.27%
29 30
23
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2012 2013 2014 9M14 9M15
-41.72%
1,4
44
2,1
76
2,8
09
1,9
92
1,5
90
2012 2013 2014 9M14 9M15
-20.18%
• Revenue from EPC project
decreased since the PDSR (phase
1) is near completion The phase 2
project is to be expected in
4Q2015
• Revenue from the power plant
decreased due to lower rainfall
(delayed rainfall period compared
with 2014)
9M2015
17.2%
40.8%
39.0%
0.9% 2.1%
Income Structure
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Income Structure 2012-2014 Income Structure 9M20150
*Other incomes includes interest income, gains from property sales, bad debt recoveries, FX gain
16.7%
46.7%
35.3%
0.9% 0.5%
Switch Board
Steel Tower &Gulvanising
ProjectManagement
Renewable PowerPlant
Others*
220
326
578
370
324
15.23% 14.99%
20.57%18.55%
20.35%
0%
5%
10%
15%
20%
25%
0
100
200
300
400
500
600
700
2012 2013 2014 9M14 9M15
Profits & Margins
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(million Baht)
Gross Profit and Gross Profit Margin
Net Profit and Net Profit Margin
65
171
327
206
190
4.28%
7.72%
11.56%10.34%
11.93%
0%
2%
4%
6%
8%
10%
12%
14%
0
50
100
150
200
250
300
350
400
2012 2013 2014 9M14 9M15
(million Baht)
Gross Profit Margin by Products (9M2015)
• For 9M2015 Period, gross margin and profit
margin decreased due to decreased revenues.
• However, gross profit margin and net profit
margin increased by 9.70% and 15.34%
respectively. The increase was primarily due to
better cost management
-5.41%
25.27%
14.42%
27.86%
Hydro Power Plant
Project Management
Steel Tower & Gulvanizing
Switch Board+9.70%
+15.34%
Returns
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Earning Per Share (x) Return on Equity (%) Return on Asset (%)
37.0% 9M2015
79.4%
88.9%
70.3%
37.0%
2012 2013 2014 9M15
5.4%
10.9%
16.9%
13.6%
2012 2013 2014 9M15
0.47 9M2015
0.851.04
1.98
0.47
2012 2013 2014 9M15
*Annualized
**No. of shares vary each year
ROE (%)EPS
13.6% 9M2015
ROA (%)
• EPS changed mainly from an
increase in share amount,
however; net profit for
9M2015 period did not have
significant changes from the
same period last year (<10%)
• ROE decreased due to an
increase in shareholder’s
equity (retained earnings continuously increased)
• ROA decreased due to a
decrease in net profits
*Annualized *Annualized
Capital Structure
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13.82
5.39
2.081.31
2012 2013 2014 9M15
Interest Bearing Debt-to-Equity Ratio Total Assets (million Baht)
3.53
1.060.69
0.36
2012 2013 2014 9M15
Debt-to-Equity Ratio (D/E)
• For 9M2015 period total asset decreased due to the
short-term loan repayment from financial institution.
• D/E ratio continuously decreased due to an increase in
retain earnings.
• Liabilities are mainly account payables.
1,219.26
1,936.36 1,927.09 1,845.80
2012 2013 2014 9M15
Interest Bearing Debt Non-interest Bearing Debt
Total Equity Total Assets
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Future Projects/Investments
Future Projects/ Investments
ProjectsProject Value
(approx.)
Period
(Months)
Tentative Starting
Period
Expected Revenue
Recognition Period
1 Power Distribution System
Rehabilitation (PDSR) Project
Phase 2
67 MUSD 28 4Q2015 Starting 1Q2016
2 Building Power Transmission
Line Tower and Telecom Tower
Plant in Myanmar– SCI plans to invest at least 40%
with other alliances
26 MUSD 18 1Q2016 2018-2019
3 Wind Power Plant– SCI plan to invest approximately
30% with the another alliance
3.5 - 3.7k MB ≤ 24 1Q2016 2H2017
4 Power Transmission Line and
Substation in Lao PDR
700-800 MUSD 48 Feasibility study
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