Teo Seng Capital Bhd. · MYX:TEOSENG
Teo Seng Capital Bhd — Investor Presentation (September 2020)
42 slides from Teo Seng Capital Bhd's investor presentation, September 2020
Slide 1: Teo Seng Capital Berhad Investor Presentation
TEO SENG CAPITAL BERHAD Investor Presentation September 2020 Mr. Gan Han Long Business Affairs Manager +6019 759 1368 hl.gan@teoseng.com.my
Slide 2: Table of contents
Table of contents Corporate Business Growth Financial Introduction overview overview drivers overview Company profile Milestones Product portfolio Consumption of Financial highlights commercial eggs Investment case Corporate structure Layer farming operational Segment financials process Local and in
Slide 3: Company profile
Company profile ▪ One of the largest commercial egg producers with Revenue Summary (RM'000) revenue of MYR 547m in 2019 (11% PAT margin) and 546,535 market cap of MYR 267m as of 21 July 2020 490,285 ▪ Listed on the Second Board of Bursa Malaysia on 29 412,758 433,712 424,209 October 2008 and subsequ
Slide 4: Investment case
Investment case Affordable, necessary and nutritious staple food for daily consumption One of the largest Consistent integrated dividend payout poultry players in both Malaysia and Singapore Successful management team with over 40 years of industry experience Professional and high-quality Stable cor
Slide 5: Table of contents
Table of contents Corporate Business Growth Financial Introduction overview overview drivers overview Company profile Milestones Product portfolio Consumption of Financial highlights commercial eggs Investment case Corporate structure Layer farming operational Segment financials process Raw material
Slide 6: Mission and Vision: Hatching for the Future
Mission and Vision: Hatching for the Future Vision Enhance sustainability of business by focusing on cost effectiveness and develop corporate value that is aligned with the vision. Mission 1 To innovate variety of egg products to satisfy the consumers. Mission 2 Keeping pace with the time, we develo
Slide 7: Milestones – Teo Seng Capital Berhad
Milestones – Teo Seng Capital Berhad Incorporation of Awarded waste “The Brand Laureate management Best Brand Award – business Acquired BH Fresh Product Branding” Food P/L as Successfully listed on Commencement distribution centre HAPPY EGG product Set up 1st Launched Set up feed Second Board of of
Slide 8: Milestones – Animal Health Products
Milestones – Animal Health Products Acquisition of Incorporation Professional Vet of Ritma Enterprise Sdn Prestasi Sdn Bhd in East Bhd Malaysia 2003 2004 2005 2007 2009 2011 2012 2014 2015 2016 2017 2018 2019 Business Commencement Incorporation of Ritma Premier Pte Ltd in Singapore 7
Slide 9: Corporate structure
Corporate structure Teo Seng Capital Teo Seng Paper Teo Seng Premium Egg Success Century Products Feedmill Products Teo Seng Ritma Prestasi Farming Teo Seng Integrated Ritma Premier BH Fresh Food Farming Professional Vet Laskar Fertilizer Enterprise Great Egg Industries B-Tech Aquaculture All subsid
Slide 10: Board of Directors
Board of Directors LAU JUI PENG CHOONG KEEN SHIAN Non-Executive Chairman Independent Non-Executive Director Over 20 years experience in the poultry industry Experienced in banking and finance, credit control management and financial management NAM HIOK JOO FREDERICK NG YONG CHIANG Managing Director
Slide 11: Shareholder structure
Shareholder structure Advantage Valuations Major shareholders (as of 12 Jun 2020) % Free float Sdn Bhd Advantage Valuations Sdn. Bhd. 52.2 52.19% 47.81% Evli Emerging Frontier Fund (Finland) 4.4 Public Islamic Opportunities Fund 2.4 Teo Seng Capital Leong Hup (Malaysia) Sdn. Bhd. 2.4 Berhad Saham Am
Slide 12: Dividend history and policy
Dividend history and policy Dividend / PAT Ratio 50% 41% 40% 30% 30% 30% 26% 20% 21% 19% 20% 10% 0% 0% 0% Mar-12 2017 2013 2014 2015 2016 2018 2019 Dec-12 Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 Dividend declared (sen) 1.75 NIL 2.50 10.00 3.50 1.50 NIL 3.00 6.00 Dividend policy The Board i
Slide 13: Capital raising, buybacks and M&A history
Capital raising, buybacks and M&A history Acquired BH Fresh Food Pte. Ltd. as distribution centre of egg products in SG Initial Public Offering One (1) bonus issue for Date: 29th Oct 2008 every two (2) existing Acquired Professional Vet Expanded egg trading shares Enterprise Sdn. Bhd. in No. of shar
Slide 14: Table of contents
Table of contents Corporate Business Growth Financial Introduction overview overview drivers overview Company profile Milestones Product portfolio Consumption of Financial highlights commercial eggs Investment case Corporate structure Layer farming operational Segment financials process Local and in
Slide 15: Product portfolio
Product portfolio Eggs Paper Egg Trays Fertilizer Animal health Fresh layer hen Our farm has been We produce sturdy Contains over 60% of products Quality and highly- accredited with the paper egg trays by rich, organic matter We distribute a great demanded brands is Malaysian Good using recycled tha
Slide 16: Product portfolio – Layer farming
Product portfolio Layer farming Farm and production capacity: ▪ 24 farms categorized into Pullet and Layer farms (8 Pullets, & 16 Layers) ▪ The existing capacity for layer farming is 5.5m birds (layer), daily laying approximately 4m eggs (3.8m in Year 2018), approximately 40% of which is exported to
Slide 17: Product portfolio – Feed and Paper Egg Tray
Product portfolio Feed Paper Egg Tray ▪ Produced and consumed 100% of it own manufactured Paper Egg Trays and Production Capacity feeds ▪ 2 machine set-up ▪ Maximum production capacity per month can produce ▪ Effectively recycle used paper into paper egg tray with the approximately 30,000 matrix ton
Slide 18: Product portfolio – Animal Health Products
Product portfolio Animal Health Products ▪ To promote animal health care with quality products and customized solutions ▪ First-hand information on the latest innovation and research available for deployment toward our business ▪ Acquired Professional Vet Enterprise Sdn. Bhd. in Sep 2019 to directly
Slide 19: Product portfolio – Organic Fertilizer
Product portfolio Organic Fertilizer ▪ Turning the chicken manure into organic fertilizer ▪ Recycle farm waste ▪ Sustain the environmental protection ▪ Awarded Bionexus status last October 2015 18
Slide 20: Layer farming operational process
Layer farming operational process Breeder (D.O.C.) Pullet Farm Layer Farm (1 day to 16 weeks old) (17 to 90 weeks old) Central Packaging Station (Grading and Packaging) Finished Goods (Wholesalers, Hypermarket, Retails, Food Processing) 19
Slide 21: Integrated layer farming operational process
Integrated layer farming operational process Layer Day-old-chick (“DOC”) Medicine, vaccine, and supplements Grower feed Pullet farm Animal health products Feedmill plant (DOC to 16th week) Medicine, Raw vaccine, and chicken supplements manure Layer feed Layer farm Paper egg tray plant (17th to 90th
Slide 22: Key customers
Key customers Wholesalers Hypermarkets / Retailers Food Producers 21
Slide 23: Geographic footprint
Geographic footprint Headquarters and subsidiaries are in Yong Peng (Johor), Puchong (Selangor), Kuching (Sarawak) and Singapore East Malaysia Peninsular Malaysia Professional VET Teo Seng Enterprise Capital Ritma Singapore Prestasi Our sales network in regional areas is: ▪ Peninsular Malaysia – egg
Slide 24: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (“ESG”) o Corporate governance and regulatory compliance overseen by Corporate Affair Committee and reporting to Economic & management team and Board of Directors Market Place o Rigorous biosecurity and disease control at farms to minimize risk of disease outbreak
Slide 25: UN Sustainable Development Goals
UN Sustainable Development Goals ▪ 42% of management staff are women ▪ Equal remuneration for women and men ▪ Zero-tolerance policy towards all forms of violence at work. No cases of workplace violence and harassment ▪ Wastewater treatment system for egg packing station and washing division and pape
Slide 26: ISO Certifications & Company Awards
ISO Certifications & Company Awards First company in Malaysia to be awarded with ISO 22000 and PEFC ST 2002:2013 (Teo Seng Paper Products) Others 2015 – Teo Seng Farming Sdn. Bhd. 2006 – Ritma Prestasi Sdn. Bhd. 2013 – Teo Seng Farming Sdn. Bhd. Outstanding Innovative Layer Farm Excellent Business A
Slide 27: COVID-19 impact
COVID-19 impact ▪ As an “Essential Services and Goods” supplier, Teo Seng was allowed to continue to operate as usual during period of Movement Control Order (“MCO”) and Conditional MCO. ▪ No breach of contracts and we continue to meet our bank covenants and other contractual covenants. ▪ No need to
Slide 28: Table of contents
Table of contents Corporate Business Growth Financial Introduction overview overview drivers overview Company profile Milestones Product portfolio Consumption of Financial highlights commercial eggs Investment case Corporate structure Layer farming operational Segment financials process Local and in
Slide 29: Consumption of commercial eggs
Consumption of commercial eggs Consumption per year (million pcs) Consumption per capita - MY & SG 16,000 450 14,087 13,413 400 383 14,000 361 365 363 11,943 341 350 12,000 11,368 358 309 349 10,442 300 299 338 300 323 307 308 312 313 10,000 9,289 8,708 8,829 250 8,000 200 6,000 MY: 54%; CAGR 6.37%
Slide 30: Raw material cost and egg selling price trend
Raw material cost and egg selling price trend ▪ Prices for maize and soya fluctuate due to supply and demand dynamics in the international market, caused by several complex factors, including adverse regional weather conditions, global currency fluctuations, and market speculation. ▪ Price of eggs i
Slide 31: Local and international promotion
Local and international promotion Promotion of eggs in Malaysia Promotion of eggs overseas ▪ To increase the market share and ▪ To export 40% of daily egg production grow the sales on premium product to overseas (Happy Egg) and designated eggs (eggs sold to hypermarket) ▪ To explore direct sales ▪ T
Slide 32: Capacity utilization and expansion
Capacity utilization and expansion Capacity utilization and expansion Plant Current Utilization Planned expansion Layer farm 100% +50% (by 2026) Feed mill plant 70% +30% Paper egg trays plant 100% - 31
Slide 33: New products
New products Hard-boiled Egg Soft-boiled Egg Herbal Egg 32
Slide 34: Company outlook
Company outlook Daily Egg Production (million eggs) Acquired Professional Vet Enterprise 6 S/B to directly penetrate East 5.0 5 4.5 Malaysia market for trading of 4.1 4.0 animal health products 4 3.4 3.6 3.7 3.0 Investing in solar panel systems across 3 farms and factories for renewable 2 energy gen
Slide 35: Table of contents
Table of contents Corporate Business Growth Financial Introduction overview overview drivers overview Company profile Milestones Product portfolio Consumption of Financial highlights commercial eggs Investment case Corporate structure Layer farming operational Segment financials process Local and in
Slide 36: Financial highlights
Financial highlights Revenue Summary (RM mil) EBITDA Summary (RM mil) 600 600 Revenue growth of 11.5% in 2019 was largely attributed to the stability of egg price and growth 547 500 in egg sales 490 500 434 424 In line with the continuous growth of capital expenditure, Teo 413 400 381 Seng recorded
Slide 37: Segment financials – Revenue
Segment financials – Revenue Revenue by segment EBITDA by segment Poultry farming Investment and trading of poultry-related products 2018 2018 12.6% 12.3% 87.4% 87.7% 2019 2019 9.8% 12.3% 87.7% 90.2% 36
Slide 38: Segment financials – Geography
Segment financials – Geography Revenue by geography Malaysia Singapore Others 2018 2019 8.22% 5.51% 29.01% 32.28% 62.77% 62.22% 37
Slide 39: Key financial data and ratios
Key financial data and ratios RM’000 2016 2017 2018 2019 % change (2018 vs. 2019) Revenue 433,712 424,209 490,285 546,535 11.5 Finance cost 6,676 7,332 8,310 7,821 -5.9 Profit before tax 25,968 4,086 41,298 77,068 86.6 Profit after tax 20,721 3,460 30,393 58,835 93.6 Total assets 468,195 494,980 543
Slide 40: Earnings Guidance
Earnings Guidance 2020/2nd half Movement Control Order (“MCO”) and Conditional MCO implemented by Malaysia government have been lifted and Recovery MCO is on-going until 31st August 2020 and further extended to 31st December 2020. Since the lifting of Conditional MCO, the government allows the busin
Slide 41: Disclaimer
Disclaimer The financial information in this document is consolidated earnings and financial positions based on Annual Reports. This document is provided for the convenience of investors only. Selected key financial data is only for easy and useful review of historical financial performance and comp
Slide 42: THANK YOU!
THANK YOU! Teo Seng Capital Berhad aspires to provide a variety of healthy egg products and create a happy life for our stakeholders through product innovation, ethical business practices and environmentally sustainable measures to align with our core value of “Hatching for the Future.” Mr. Gan Han
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