Regal Asian Investments Limited · ASX:RG8
Regal Asian Investments — Investor Presentation (May 2023)
33 slides from Regal Asian Investments's investor presentation, May 17, 2023
Slide 1: RG8 Investor Update and Q&A Webinar – Presentation Slides
Regal Asian Investments Limited ABN 58 635 219 484 39 Phillip Street Sydney NSW 2000 Australia T. +61 2 9237 8923 www.vgipartners.com/lics/rg8 17 May 2023 ASX Market Announcements Office ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 For personal use only RG8 Investor Update and Q&A We
Slide 2: About RG8
ABOUT RG8 RG8 provides investors with access to an actively managed, concentrated portfolio, comprised of long investments and short positions in securities with exposure to the Asian region. In June 2022, portfolio management responsibilities for RG8 transitioned from the VGI Partners investment te
Slide 3: Investor update May 2023
For personal use only Investor update May 2023
Slide 4: Disclaimer
Disclaimer This document (Information) is provided by Regal Partners Marketing Services Pty Ltd (ACN 637 448 072) (Regal Partners Marketing), a corporate authorised representative of Attunga Capital Pty Ltd (ABN 96 117 683 093) (AFSL 297385) (Attunga). Regal Partners Marketing and Attunga are busine
Slide 5: Speakers
Speakers For personal use only REBECCA FESQ BRENDAN O’CONNOR PHILIP KING GLEN BARNES SHANNON MCCONAGHY Head of Client Business Chief Executive Officer Chief Investment Officer Head of Asia Senior Analyst, Asia Regal Partners Regal Partners Regal Funds Fundamental Research Regal Funds Regal Funds
Slide 6: Regal and RG8
Regal and RG8 For personal use only Brendan O’Connor, CEO, Regal Partners
Slide 7: Regal Asian Investments Limited (ASX:RG8)
Regal Asian Investments Limited (ASX:RG8) For personal use only RG8 provides investors with access to an actively- managed, concentrated portfolio, comprising long investments and short positions in securities with exposure to the Asian region. • Initially listing in November 2019, portfolio managem
Slide 8: Opportunity in Asia
For personal use only Opportunity in Asia Philip King, Chief Investment Officer
Slide 9: Asia leads in population & GDP but not market capitalisation
Asia leads in population & GDP but not market capitalisation Population GDP Market Capitalisation For personal use only 5000 45 45 4500 40 40 4000 35 35 3500 30 30 3000 25 25 2500 20 20 2000 15 15 1500 10 10 1000 500 5 5 0 0 0 North America Europe Asia North America Europe Asia North America Europe
Slide 10: Key Valuation Data
Key Valuation Data POPULATION GDP MARKET CAP FORWARD BOND DIVIDEND For personal use only (M) US$TN US$TN P/E YIELDS YIELD US 340 27 38 18 3.4% 1.7% EU 447 18 7 13 2.2% 3.4% UK 68 3 2 10 3.6% 4.4% China 1,426 19 9 9 2.8% 2.6% Japan 123 5 4 13 0.4% 2.4% Australia 26 2 1 15 3.4% 4.7% Source: World Popu
Slide 11: China Has Significantly Underperformed In Recent Years
China Has Significantly Underperformed In Recent Years, But Opportunities Continue To Emerge 220 For personal use only Low weighting to Increased weighting China in RG8 to China in RG8 200 180 MSCI US 160 140 MSCI JAPAN MSCI AUSTRALIA 120 100 MSCI CHINA 80 60 40 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Ju
Slide 12: China's Tech Sector Valuations Have Fallen Particularly Hard
China’s Tech Sector Valuations Have Fallen Particularly Hard 300 For personal use only 82% peak to trough fall 250 200 NASDAQ 150 100 CHINA INTERNET ETF 50 0 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Source: Bloomberg as at May 2023. Index levels rebased to 100. Past performance
Slide 13: China
For personal use only China Glen Barnes –Head of Asia Fundamental Research
Slide 14: China's Economic Outlook Is Stronger
China’s Economic Outlook Is Stronger CREDIT GROWTH BY REGION 18% For personal use only China 16% US EU 14% 12% 10% 8% 6% 4% 2% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Haver, Morgan Stanley research. Past performance is not a reliable indicator of future performance. It should not be
Slide 15: China's Consumption Below Trend
China’s Consumption Below Trend 4,500 China Retail Sales (March each year only) Extrapolation of 2015-19 trend For personal use only 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - Source: Bloomberg as at May 2023. Past performance is not a reliable indicator of future performance. It should not be
Slide 16: Significant Scope To Unlock Value At Alibaba
Significant Scope To Unlock Value At Alibaba INVESTMENT THESIS ALIBABA OPERATING PROFIT BY BUSINESS UNIT 300 For personal use only Valuation: 250 1. • Extremely cheap at 10x PE even including significant losses from business units 200 China Commerce • 50%+ discount to a reasonable sum of the parts v
Slide 17: Cost To Produce Power Via Solar And Wind Are Now Below Coal
Cost To Produce Power Via Solar And Wind Are Now Below Coal, Paving The Way For Continued Significant Investment For personal use only COST TO PRODUCE 1 KWH OF POWER IN CHINA ANNUAL GROWTH (2022-30) IN CHINA FOR DIFFERENT ENERGY SOURCES 1.6 30% 1.4 24% 25% 1.2 20% 1.0 Wind 15% 13% Rmb 0.8 Solar Coal
Slide 18: Japan
For personal use only Japan Shannon McConaghy – Senior Analyst
Slide 19: Japan Exchange Driving Measures To Unlock Value to Shareholders
Japan Exchange Driving Measures To Unlock Value to Shareholders across Japanese Listed Companies SCOPE FOR MARGINS TO RISE FURTHER IN JAPAN For personal use only Japanese return-on-invested-capital is lower than global peers, due to; 20 Average Profit Margins 1. 1. Lower profit margins, with managem
Slide 20: Unlocking Value in Japan - NEC
1. Unlocking Value in Japan - NEC NEC is a global IT services company, with strength across the domestic Japan market and global leadership in software for fund managers. NEC is also expanding its 5G base station business globally and is a leader in biometric authentication, quantum computing and ar
Slide 21: Unlocking Value in Japan – Toyota Industries
2. Unlocking Value in Japan – Toyota Industries Toyota Industries is a global leader in logistics equipment with end-to-end fully automated solutions, including: fully electric guided vehicles/forklifts, stacking/storage solutions and warehouse management software. It is also the global leader in co
Slide 22: Short Case: Japan Regional Banks Increasingly Lending At A Loss
Short Case: Japan Regional Banks Increasingly Lending At A Loss KEY DOMESTIC INTEREST RATES KEY FOREIGN INTEREST RATES For personal use only 1.5% 3.0% Interest rate on new regional bank loans Yield on 5 year Japan Government Bonds Break even rate 2.0% 1.0% 1.0% 0.5% 0.0% 0.0% -1.0% FX hedged yield o
Slide 23: Australia
For personal use only Australia Philip King, Chief Investment Officer
Slide 24: Mining Investment Continues To Lag
Mining Investment Continues To Lag Australia mining investment (A$b) Commodity Price Index For personal use only 50 Australian mining investment 1 Commodity price index 2 180 160 40 140 120 30 100 80 20 60 40 10 20 0 0 1987 1992 1997 2002 2007 2012 2017 2022 Source: Minack Advisors as at May 2023. N
Slide 25: Copper Prices Over The Last Years
Copper Prices Over The Last 100 Years USD / pound (logarithmic scale) For personal use only 5.0 1999-2011: +460% 1949-1980: +420% 0.5 0.1 1921 1932 1942 1952 1962 1972 1983 1993 2003 2013 2023 Source: Broker Research, Bloomberg as at May 2023 (annual data, nominal terms). Past performance is not a r
Slide 26: Resources Trading at Material Discount to Long-Term Average
Resources Trading at Material Discount to Long-Term Average ASX 200 Resources trading at forward EV/EBITDA of 5.4x, 25% below the 20 yr average of 7.3x For personal use only 12x 9x 6x 3x 2000 2002 2004 2006 2008 2020 2022 2010 2012 2014 2016 2018 Source: FactSet, Goldmans Sachs research as at May 20
Slide 27: RG8 Update & Overview
For personal use only RG8 Update & Overview Philip King, Chief Investment Officer
Slide 28: Investment Management of RG8 transitioned to Regal Funds Management
Investment Management of RG8 transitioned to Regal Funds Management in June 2022 RG8 HIGHLIGHTS KEY PILLARS OF A SUCCESSFUL LISTED INVESTMENT VEHICLE For personal use only RG8 Fund Size1 Investment Performance Investor Engagement & Capital Management Communication Initiatives $453m • Deliver attract
Slide 29: RG8 Performance Since Listing
RG8 Performance Since Listing A$/share Premium/(discount) to NTA For personal use only 2.7 15% RG8 pre-tax NTA adjusted for dividends (LHS) Portfolio Management for RG8 RG8 share price adjusted for dividends (LHS) transitions to Regal Funds RG8 share price premium/(discount) to RG8 post-tax NTA (RHS
Slide 30: RG8: Actively Managed Asian Exposures
RG8: Actively Managed Asian Exposures PORTFOLIO EXPOSURES (% OF NTA) – BY SECTOR PORTFOLIO EXPOSURES (% OF NTA) – BY LISTING For personal use only SECTOR (GICS) NET GROSS UK Netherlands Communication Services 5% 5% Consumer Discretionary 10% 32% Australia/NZ Consumer Staples 4% 8% Energy 7% 7% Finan
Slide 31: Update to Investment Guidelines
Update to Investment Guidelines The Board of RG8 has approved a refinement and simplification of the Investment Guidelines of RG8, with changes to take effect from 1 July 2023. The table below shows the most material guidelines. For personal use only EXPOSURE PREVIOUS GUIDELINES NEW GUIDELINES Numbe
Slide 32: Investor Q&A
Investor Q&A For personal use only REBECCA FESQ BRENDAN O’CONNOR PHILIP KING GLEN BARNES SHANNON MCCONAGHY Head of Client Business Chief Executive Officer Chief Investment Officer Head of Asia Senior Analyst, Asia Regal Partners Regal Partners Regal Funds Fundamental Research Regal Funds Regal Funds
Slide 33: For personal use only
For personal use only 31
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