Srisawad Power 1979 Public Company Limited

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