the first half of 2018 Opportunity Day Presentation2].pdfthe first half of 2018 Opportunity Day...
Transcript of the first half of 2018 Opportunity Day Presentation2].pdfthe first half of 2018 Opportunity Day...
the first half of 2018 Opportunity Day Presentation
August 14th , 2018
GC II Your best services for value creation in raw material supply.
Company Overview and Strategy
Industry info and Economic outlook
IR Report
1st half 2018 Performance
Q&A
Today Content
2
3
Since 1994 Over 30 Leading producers - Top 3 in the world -
Your best service for value creation in raw material supply
GC’s Company Overview
Sales decreased in 1st H 2018
Value -6.62% (YoY) Quantity -6.86% (YoY)
Present
2,021
1,887
169
26 9
1400
1500
1600
1700
1800
1900
2000
2100
1H-2017 1H-2018
Comparing GC Sale (MB.) between 1st H 2017 and 1st H 2018
BU1 BU2 BU3
GC’s Vision
4
Ethic Doing business with ethics and no legal offense
Sustainable Build sustainable growth of
profitability and revenue to be market leader
Employee :
Develop knowledge skill and expertise of our staff
Business Partner Connect the best supplier and bridge
advanced technologies for customer’s best value as business partner.
Work closely with Financial Institute as business partner to success
Mission
Olefin&Aromatic Producers
Monomer producers
(MEG, VCM)
Converters
Petrochemical and plastic producers
Upstream End users Intermediate
Compounders
Master batch producers
Compounders
Polymer producers
(PP, PE, PVC)
Downstream
Where we are in the value chain of Thai Petrochemical Industry
5
6
Thailand Plastics Economics Contribution 2015
Thailand Plastics Industry Over View
GC’s role and positioning in the market
Leads the differentiation
7
Suppliers S1 S2 S3 S4 S5 Sn
Customers C1 C2 C3 C4 C5 Cn
Economy of Scope to Customers
Economy of Scale to Suppliers
Logistic : Warehousing, small delivery, and repacking
Sales & Marketing : Closely contact to end markets/customers
Technical Services : Troubleshooting / Product and Market Development Financing & structuring solution : Extending our expertise to customer
Provided
8 Source: Thailand Industry Outlook 2017 Petrochemical, Krungsri Research.
Petrochemical Complex
GC’s Business Unit
BU1 COMMODITY POLYMER
BU3
SPECIALTY
CHEMICALS & INTERMEDIATE
BU2 SPECIALTY
ENGINEERING POLYMER
& RUBBER
• Polyolefins
PE: HDPE, LDPE, LLDPE (C4,C8)
PP: Homo, Block Copo, Random
• PU
• Tie Layer Polymer
• Specialty Polyolefins
• Nylon, POM, PBT, TEEE, PCT, LCP, PC
• Black/White MB
• PETG/PCTG, CA
• PS, HIPS, ABS, SAN, SBC
• EVA for HMA, Hydrocarbon Resin
• PE Plastomer, PP Plastomer, TPO
• TPVs, TPU
• TPE, TPR, Reinforcement compound
• Glass Fiber (Chop Strand, Long glass)
• EPDM , BUTYL
• BR, SBR
• TALC, SILICA, CARBON BLACK
• FLAME RETARDANT (ZB, ATO)
• Plastic Additives
• Intermediate chemical
• Water and waste solutions
9
Industry Focus : Key Drivers to growth
CONSUMERS PRODUCTS
- Flexible Film & Packaging
- Rigid Packaging
- Shoes
- Medicals
- Others
INDUSTRIAL
- Electrical & Appliances
- Constructions
- Adhesives& Sealant
AUTOMOTIVE
- Interior Part
- Exterior Part
- Under hood
10
2,021 MB.
1st Half 2017
Customer Segment by Sale Percent of Value
11
1st Half 2018
1,890 MB.
Packaging 40%
Consumer products & Household
20%
Automotive 17%
Petrochemical & Intermediate
11%
Electrical & Electronics
7%
Construction 2%
Others 0%
11
Packaging 40%
Consumer products & Household
17%
Automotive 22%
Petrochemical & Intermediate
13%
Electrical & Electronics
5%
Construction 1%
Others 0%
“Matching Plastic Materials With Your Design”
Seminar
July 5th, 2018
12
Activity : To create value chain
13
GC’s Strategy
1. Boost up market share by keeping retention customers, create
new customers and reactivate inactive customers also utilize our customer database
2. looking for new business development and filling in Product Portfolio to wider product range in order to confirm our
one stop shopping service such as additive and/or chemical including plastic polymer
3. Investing in our own R&D for product creation to strength our
own brand “GC / GIC” 4. Catch up technology fast moving, innovation and disruption
5. Efficiency on cost and working capital management
Competitor Benchmark
14
15
Competitors Financial Performance Data (2017)
GC A B C E F G I K I M Benchmark(Average)
3,727
4,624
3,199 3,018 2,759
2,346
803 632 142
1,477
2,474 2,375
246 100 51 65 149 40 71 107 14 32 49 99 90 15 6 27 29 1 18 42 2
-2 8
24
Sales (MB.) Gross Profit (MB.) Net Profit (MB.)
-6.31% -1.54%
3.76% -0.86%
5.95%
-10.21%
2.83%
15.93%
2.63%
-10.60% -6.59%
-2.64%
Sale growth (%)
Remark: Sale growth (%) calculate by sale in 2016 and 2017
Economic Outlook
16
World Economic 2nd Quarter 2018
In the US, positive earnings momentum and supportive economic data outshone the China-US trade posturing to lift equities.
Growth in lost some steam in Q2, reflecting aggressive financial deleveraging and authorities’ efforts to crack down on shadow banking. Against the context of an escalating trade war with the US and the currency depreciated relative to the US dollar
Eurozone equities also delivered gains. The European Central Bank announced that interest rates will remain at current levels through summer 2019.
Japanese equities advanced despite the rising trade tensions. The Japanese yen lost ground against a generally stronger dollar.
17
0102030405060708090
Jan03,
2017
Mar30,
2017
Jun26,
2017
Sep21,
2017
Dec15,
2017
Mar16,
2018
Jun14,
2018
WTI
Brent
Do
llars
per
Bar
rel
Crude Oil Price Chart
Crude Oil Spot Price Chart
Since January 2017 – July 2018
Available from Web Page : http://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm
Source:
18
Upside Factor • US pulled out of Iran nuclear deal
and would re-impose economic sanctions
• Geopolitical tension and supply disruption
Downside Factor • US-China Trade war uncertainty
which could impact to global economy
• Saudi could raise output to offset any potential supply shortage
+
-
Thai Economic Performance in 2nd Quarter, 2018
Thai economy continued to gain further traction and would achieve higher growth, It was projected to continue expanding at 4.4 and 4.2 percent in 2018 and 2019, respectively driven by both domestic and external demand.
Merchandise exports and Tourism
31.32 31.38 31.19
31.55
32.00
33.12
Jan Feb Mar Apr May Jun
Exchange rate as of the end of each month (Baht/Dollars)
Source: Press Release on Economic and Monetary Conditions, June 2018
Investment in Machinery and Equipment
Source: Monetary Policy Report, June 2018 19
Export
20
21
Source: Automotive Group – The Federation of Thai Industries (FTI) and analyzed by Automotive Intelligence Unit (AIU) – Thailand Automotive institute (TAI)
Thailand’s Production, Sale and Export Numbers of Motor Vehicle as of 2011 - 2017
1,457,795
2,453,717 2,457,057
1,880,007 1,913,002 1,944,417 1,988,823
1,056,569
795,250
1,436,047 1,330,672
881,832 799,632 768,788 871,650 489,118
735,627
1,026,671 1,128,152
1,128,102 1,204,895 1,188,515 1,139,696
561,960
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2011 2012 2013 2014 2015 2016 2017 1H2018
Production Sale Export
Unit(s)
22
Business opportunity : Thailand in EEC development policy
First half of 2018 : increase and expand 2,504 plants 1. Food industry 2. Plastic Industry 3. Rubber Products Industry 4. Electrical Appliances and Equipment
Source : bangkokbiznews July 10, 2018
Higher EEC Zone Factory Operation Permission
24
IR Report
-
100,000
200,000
300,000
400,000
500,000
600,000
4.00
4.20
4.40
4.60
4.80
5.00
5.20
5.40
5.602
/4/6
1
5/4
/61
11
/4/6
1
18
/4/6
1
23
/4/6
1
26
/4/6
1
2/5
/61
7/5
/61
10
/5/6
1
15
/5/6
1
18
/5/6
1
23
/5/6
1
28
/5/6
1
1/6
/61
6/6
/61
11
/6/6
1
14
/6/6
1
19
/6/6
1
22
/6/6
1
27
/6/6
1
Tra
de
vo
lum
e (
sh
are
s)
GC
Clo
sin
g p
rice
(T
H))
GC Trade Volume (shares) GC Closing price (THB)
4.00
5.00
6.00
7.00
8.00
1,450
1,500
1,550
1,600
1,650
1,700
1,750
1,800
1,850
2/4
/61
12
/4/6
1
25
/4/6
1
7/5
/61
16
/5/6
1
25
/5/6
1
6/6
/61
15
/6/6
1
26
/6/6
1
GC
Clo
sin
g P
rice
(T
HB
)
SE
T IN
DE
X
SET INDEX GC Closing Price (THB)
Benchmark GC Average Petro
Industrial*
P/E** Ratio 11.66 17.65
Dvd Yield (%) 8.13 5.56
ROE*** 18.15 14.17Source : SETTRADE’s website on June 29th 2018
Closing Price Q2/2561 Q1/2561 High 5.45 5.45 Low 4.98 5.10
Average 5.15 5.30 -2.83% (QoQ) 2.32% (QoQ)
Stock Volume Q2/2561 Q1/2561 High 510,300 1,005,200 Low 6,100 15,300
Average 121,636 178,983
Total 7,298,150 11,096,922
25
Investor Relations Report
1sthalf 2018 Performance
26
STATEMENTS OF COMPREHENSIVE INCOME
Unit : Million Baht
2018 2017 Change 2018 2017 Change
Sales 917.70 948.69 -3% 1,887.06 2,020.73 -7%
COGS 847.02 897.95 -6% 1,740.96 1,899.03 -8%
Gross Profit 70.68 50.74 39% 146.10 121.70 20%
Selling & Admin Expenses 39.22 29.93 31% 81.07 60.88 33%
Reduction of inventory to net
realisable value (Reversal) 0.00 3.00 -100% 0.00 3.00 -100%
EBITDA 31.46 17.81 77% 65.03 57.82 12%
Depreciation 2.43 3.12 -22% 4.92 6.30 -22%
Interest Expenses 2.83 3.95 -28% 5.53 7.72 -28%
Profit Before Other Income 26.20 10.74 144% 54.58 43.80 25%
Other Income 2.30 3.00 -23% 3.97 5.00 -21%
Gain (Loss) on exchange rate (1.51) 0.17 -988% 1.24 1.82 -32%
Profit before Tax 26.99 13.91 94% 59.79 50.62 18%
Tax 6.61 3.20 107% 15.37 10.05 53%
Deferred Tax Expenses 0.76 (0.68) 212% 0.57 (0.21) 371%
Profit for the period 19.62 11.39 72% 43.85 40.78 8%
Actual Q2 Actual 1st_Half
27
SALES STRUCTURE
-
10
20
30
40
50
60
70
2014 2015 2016 2017 1H/2018
35.1 40.8 51.0
42.7
20.9
19.0 21.7
21.9 22.0
11.7
0.1 0.1
0.1 0.1
0.1
'000 T
Sales Quantity BU3
BU2
BU1
62.6 64.8
54.2
32.7
73.0
0%
20%
40%
60%
80%
100%
2014 2015 2016 2017 1H/2018
65% 65% 70% 66% 64%
35% 35% 30% 34%
36%
0% 0% 0% 0% 0%
Sales Quantity in Percentage BU3
BU2
BU1
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2014 2015 2016 2017 1H/2018
1,937 1,915 2,287 1,976
969
1,692 1,707 1,661
1,714
897
18 24 31
37
21
Sales Value-Million Baht BU3
BU2
BU1
3,646 3,727
1,887
3,6473,979
0%
20%
40%
60%
80%
100%
2014 2015 2016 2017 1H/2018
53% 52% 57% 53% 51%
46% 47% 42% 46% 48%
1% 1% 1% 1% 1%
Sales Value in Percentage BU3
BU2
BU1
28
GROSS PROFIT STRUCTURE
-
50
100
150
200
250
300
2014 2015 2016 2017 1H/2018
51 67 85 63 35
162 170
180 189
113
5 8
9 11
7
Gross Profit By BU BU3 BU2 BU1
155
245 218
263 274
0%
20%
40%
60%
80%
100%
2014 2015 2016 2017 1H/2018
23% 27% 31% 24% 22%
74% 70% 66% 72% 73%
3% 3% 3% 4% 5%
Gross Profit in Percentage BU3 BU2 BU1
2.6% 3.5% 3.7% 3.2% 3.6%
9.6% 9.9% 10.8% 11.0% 12.6%
30.1% 33.3%
30.2% 31.3% 34.6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2014 2015 2016 2017 1H/2018
Gross Profit Margin by BU BU1BU2BU3
29
STATEMENTS OF COMPREHENSIVE INCOME HIGHLIGHT
Profitability Ratio
Profit Margin
• GC’s gross profit margin of 1H/2018 was higher than
1H/2017’s due to higher selling price in Q2/2018
resulting from plant maintenance shutdown of some
producers. In addition , during Q2/2017 there was a
severe price war among traders led by oil price
fluctuation.
• GC’s net profit margin of 1H/2018 has been
increasing compared to 1H/2017’s due mainly to the
higher gross profit margin.
Revenue and Net Profit
In 1H/2018, Sales value decreased from 1H/2017’s
around 7% due to the decline in sales value of BU1 as
a result of soften private consumption.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2005 2006 2007 2008 2009
-
5
10
15
20
25
30
35
5.48 6.29 6.48 6.64
7.74
1.31 2.17 2.33 2.40 2.32 12.08 19.56
21.69 20.44 19.72
-
5
10
15
20
25
30
35
40
45
50
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2014 2015 2016 2017 1H/2018
Gross Profit Margin (%) Net Profit Margin (%) ROE (%)
ROE Profit Margin
3,659 3,659 3,985
3,741
1,892
48
79 93 90
44
-
30
60
90
120
150
0
500
1000
1500
2000
2500
3000
3500
4000
2014 2015 2016 2017 1H/2018
Revenue (
Mill
ion B
aht)
Revenue Net Profit
Revenue & Net Profit
30
STATEMENTS OF FINANCIAL POSITION Unit : Million Baht
Asset 30/6/2018 31/12/2017 Change %
Trade Receivables 672.33 611.90 60.43 10%
Inventory 463.34 467.30 -3.96 -1%
Net Fixed Assets 112.88 116.95 -4.07 -3%
Total Assets 1,289.86 1,242.08 47.78 4%
Liabilities
Short Term Loan 534.14 575.00 -40.86 -7%
Trade Payables 271.51 179.44 92.07 51%
Total Liabilities 845.33 797.40 47.93 6%
Equity
Paid up Capital 200.00 200.00 0.00 0%
Share Premium 56.03 56.03 0.00 0%
Retained Earnings 188.50 188.65 -0.15 0%
Total Equity 444.53 444.68 -0.15 0%31
STATEMENTS OF FINANCIAL POSITION HIGHLIGHT
D/E ratio is relatively lower. D/E ratio drop from 4.35 times since
2004 which was decreased after IPO proceeds. However, the higher D/E
ratio in 1H/2018 compared to ending 2017 was resulting from the increase in trade accounts payable.
Continuous increase in current ratio
GC current ratio has been improving to higher than 1.0x since GC got more working capital from IPO proceed.
This higher liquidity can reduce GC’s financial costs.
2.01 2.27 2.16
1.79 1.90
-
0.50
1.00
1.50
2.00
2.50
2014 2015 2016 2017 1H/18
Debt to Equity Ratio
1.36 1.33 1.34 1.43 1.40
-
0.50
1.00
1.50
2.00
2014 2015 2016 2017 1H/18
Current Ratio
32
Dividend
(BPS.) Before On X-Date
30-Jun-18 0.18 7-Sep-18 20-Aug-18 n/a n/a 3.46%*
31-Dec-17 0.22 30-Apr-18 12-Apr-18 5.45 5.15 4.04%
30-Jun-17 0.18 8-Sep-17 23-Aug-17 5.25 5.10 3.43%
31-Dec-16 0.20 17-May-17 27-Apr-17 5.60 5.40 3.57%
30-Jun-16 0.22 9-Sep-16 24-Aug-16 5.15 4.88 4.27%
31-Dec-15 0.20 29-Apr-16 18-Apr-16 4.44 4.20 4.50%
30-Jun-15 0.15 4-Sep-15 19-Aug-15 4.04 3.84 3.71%
31-Dec-14 0.08 30-Apr-15 10-Apr-15 4.42 4.30 1.81%
30-Jun-14 0.15 4-Sep-14 18-Aug-14 4.40 4.28 3.41%
31-Dec-13 0.14 30-Apr-14 11-Apr-14 4.46 4.32 3.14%
30-Jun-13 0.18 5-Sep-13 20-Aug-13 4.84 4.60 3.72%
31-Dec-12 0.19 30-Apr-13 12-Apr-13 5.00 4.84 3.80%
30-Jun-12 0.17 6-Sep-12 21-Aug-12 4.96 4.76 3.43%
31-Dec-11 0.16 30-Apr-12 12-Apr-12 4.96 4.86 3.23%
30-Jun-11 0.24 9-Sep-11 25-Aug-11 5.90 5.55 4.07%
31-Dec-10 0.26 29-Apr-11 18-Apr-11 5.80 5.50 4.48%
30-Jun-10 0.24 10-Sep-10 26-Aug-10 5.50 5.20 4.36%
31-Dec-09 0.26 30-Apr-10 16-Apr-10 4.72 4.22 5.51%
30-Jun-09 0.14 11-Sep-09 27-Aug-09 3.28 3.28 4.27%
31-Dec-08 0.12 30-Apr-09 16-Apr-09 2.40 2.40 5.00%
30-Jun-08 0.20 12-Sep-08 26-Aug-08 4.84 4.60 4.13%
31-Dec-07 0.26 30-Apr-08 17-Mar-08 4.06 3.90 6.40%
30-Jun-07 0.14 7-Sep-07 21-Aug-07 3.46 3.32 4.05%
31-Dec-06 0.15 27-Apr-07 9-Mar-07 2.92 2.78 5.14%
30-Jun-06 0.10 8-Sep-06 22-Aug-06 2.64 2.54 3.79%
31-Dec-05 0.14 28-Apr-06 10-Mar-06 2.46 2.48 5.69%
* Calculated from closing price on 3/8/2018 @ 5.20 baht
Operation
Period EndingPayment Date X-Date
Price with X-Date Dividend Yield
(cal. From before
X-Date Price)
DIVIDEND PAYMENT RECORD
DIVIDEND PAYOUT RATIO
108
77 96
124
80 76 70
48
79 93 90
44
74%84% 83% 80%
99%94% 91%
97%88% 91% 89%
82%
0%
20%
40%
60%
80%
100%
120%
140%
-
20
40
60
80
100
120
140
Div
ide
nd
Pa
yo
ut
Ra
tio
Ne
t P
rofi
t (M
illio
n B
ah
t)
Net Profit (Million Baht.) Dividend Payout Ratio
34
4.50 4.70
2.30
5.50
(0.90)
3.30 3.81
3.02
2.18 1.89
(0.90)
0.20 0.70
3.00
4.50
2.32 1.88
0.83 1.55
2.85 2.43 2.25
1.73 1.40 1.40 1.40
5.69
8.92
10.45
9.13 9.78
8.85
7.29 7.23 6.86
5.22
8.22 7.84 7.62
(2.00)
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Inflation Rate Avg 1 Year Deposit Interest Rate GC's Dividend Yield (%)
Remark : Source Bank of Thailand http://www2.bot.or.th/statistics/ReportPage.aspx?reportID=409
*Interest rate is a average interest rate from Bank of Thailand
GC’S DIVIDEND YIELD
35
Thank you, Questions are welcome