8I Holdings Ltd. · ASX:8IH
8I — Investor Day (December 2015)
81 slides from 8I's investor day presentation, Dec 1, 2015
Slide 1: Our Investment Strategy: Investing With Conviction To Outperform
For personal use only Our Investment Strategy: Inves1ng With Convic1on To Outperform in Times of Vola1lity and Uncertainty “Extractors Vs Compounders in the Asian Capital Jungle”
Slide 2: Our Investment Team
Our Investment Team For personal use only All Rights Reserved by 8 Investment Pte Ltd. 2 No Copy and Reproduc>on Allowed.
Slide 3: Protect the Downside: Extracting the Extractors
Protect the Downside: Extrac1ng the “Extractors” with our Systema1c and Disciplined Investment Process For personal use only All Rights Reserved by 8 Investment Pte Ltd. 3 No Copy and Reproduc>on Allowed.
Slide 4: Capturing the Upside with the Hidden Champions in our Daily Life
Capturing the Upside with the Hidden Champions in our Daily Life Presenta>on at 8I Networking Nite at MND in March 2014 For personal use only All Rights Reserved by 8 Investment Pte Ltd. 4 No Copy and Reproduc>on Allowed.
Slide 5: Paris Baguette: Up 16-Fold to Market Value US$525 Million
“Paris BagueIe”: Up 16-‐Fold (2004-‐March 2014) to Market Value US$525 Million For personal use only All Rights Reserved by 8 Investment Pte Ltd. 5 No Copy and Reproduc>on Allowed.
Slide 6: The Compounding Power of Focused Entrepreneurs
The Compounding Power of Focused Entrepreneurs “Paris BagueLe” Up Another 480% Since March 2014 to US$2.08 Billion For personal use only Operates over 6,000 food service outlets in Korea and globally The average daily sales of a Paris BagueLe outlet is around W1.9-‐2m ($1,800), at least double that
Slide 7: Two-Step Process to Portfolio Construction
Two-‐Step Process to PorWolio Construc1on Step 1: Elimina1ng “Extractors” Step 2: Elimina1ng value traps For personal use only to protect downside risk and narrow-‐moat companies OUT: P Acco oten1al Wide-‐Moat un1n g Fra Business ud Model Analysis “Wide-‐Moat Inves1ng Universe Eliminate Compound
Slide 8: Stock-Picking is a Dangerous Game
Stock-‐Picking is a Dangerous Game A minority of stocks are responsible for the majority of the market’s gains For personal use only All Rights Reserved by 8 Investment Pte Ltd. 8 No Copy and Reproduc>on Allowed.
Slide 9: Disposition Effect to Sell Winners Too Early
Disposi1on Effect to Sell Winners Too Early and Ride Losers for Too Long – Overcoming with Knowledge and Convic1on Reflexive choice under uncertainty and reflects an For personal use only aversion to loss realiza>on. In our view, investors ride losers far too long to postpone regret, hoping for a rebou
Slide 10: Buffett: Sizing Up High-Conviction Bets
BuffeI: Sizing Up High-‐Convic1on Bets For personal use only “Charlie and I decided long ago that in an investment life4me, it’s too hard to make hundreds of smart decisions. We adopted a strategy that required our being smart only a very few 4mes.. If you are a know-‐something investor, able to un
Slide 11: Buffett: 42% of Fund's Asset in Amex in 1964
BuffeI: 42% of Fund’s Asset in Amex in 1964 Amex Has Since Compounded Over 3,000% "Charlie and I operated mostly with 5 posi4ons. If I were running 50, 100, 200 For personal use only million, I would have 80% in 5 posi4ons, with 25% for the largest. In 1964 I found a posi4on I was willing to go heavi
Slide 12: Wide-Moat Business Model Dynamics: Lanchester Strategy
Wide-‐Moat Business Model Dynamics: Lanchester Strategy Adopted by Toyota, Denso, Fast Retailing (Uniqlo), SMC Corp, Canon etc For personal use only Market share benchmarks Dominance (73.9%): Unassailable posi>on Stable target (41.7%): Top share can be maintained at this level Minimum target (26.1%
Slide 13: Application of Lanchester Strategy: Canon Vs Xerox
Applica1on of Lanchester Strategy: Canon Vs Xerox Overwhelming rival in Rank Xerox For personal use only Took a foothold in the market by first concentra>ng its resources in Scotland Achieved a 40% market share ALacked selected and >ghtly defined regions in England Nikkei Invested more and more in pro
Slide 14: Application of Lanchester Strategy: SMC Corp
Applica1on of Lanchester Strategy: SMC Corp (MV $17.7Bn) 60% market share in Japan, 33% global market share, 39% in China For personal use only SMC is founded in 1959 as Sintered Metal Company by S u s u m u O m u r a a n d Yoshiyuki Takada (photo) Global leader in pneuma>c machines with a 33% marke
Slide 15: Our Investments
For personal use only Our Investments
Slide 16: 8IH Interim Report as at Sep 2015
8IH Interim Report as at Sep 2015 For personal use only Source: 8IH Interim Report on ASX hLp://www.asx.com.au/asxpdf/20151102/pdf/432nk9r3hhw4nf.pdf All Rights Reserved by 8 Investment Pte Ltd. 16 No Copy and Reproduc>on Allowed.
Slide 17: Major Cineplex (SET: MAJOR)
Major Cineplex (SET: MAJOR): #1 Lifestyle Entertainment Company in Thailand 1. What makes it a wide-‐moat business? For personal use only – Consolidated the cinema market with dominant 80% market share, aLrac>ng 30 million Thai consumers to its “des>na>on to be” – Adver>sing services business segme
Slide 18: Financial Summary
Financial Summary 2012 2013 2014 TTM For personal use only Profitability Gross,Profit,Margin 32.3% 35.0% 36.5% 35.3% EBIT,Margin 13.6% 15.8% 16.1% 13.5% ROE 10.6% 13.6% 15.4% 18.6% Gross,Profit/Total,Assets 19.8% 19.8% 22.6% 22.6% Operating,Efficiency Cash,Conversion,Cycle 12 15 10 11 EBIT/CAPEX,(x)
Slide 19: Price Chart Performance
Price Chart Performance For personal use only All Rights Reserved by 8 Investment Pte Ltd. 19 No Copy and Reproduc>on Allowed.
Slide 20: Hartalega (KLS: HARTA)
Hartalega (KLS: HARTA) 1. What makes it a wide-‐moat business? For personal use only – World’s largest-‐scale nitrile gloves manufacturer, highly innova>ve, fastest speed, high quality • Launched the world’s thinnest 4.7g nitrile glove in 2005 and subsequently an even thinner 3.7g nitrile glove in
Slide 21: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 33.6% 33.2% 29.8% 29.2% EBIT-Margin 39.9% 32.5% 22.3% 22.6% ROE 33.7% 27.3% 19.0% 17.9% Gross-Profit/Total-Assets 36.9% 33.1% 23.1% 21.8% Operating-Efficiency Cash-Conversion-Cycle 62 68 94 81 EBIT/CAPEX-(x)
Slide 22: Price Chart Performance
Price Chart Performance For personal use only All Rights Reserved by 8 Investment Pte Ltd. 22 No Copy and Reproduc>on Allowed.
Slide 23: Target Weight in Types of Business Model and By Country
Target Weight in Types of Business Model and By Country For personal use only Source: 8IH Interim Report hLp://www.asx.com.au/asxpdf/20151102/pdf/432nk9r3hhw4nf.pdf All Rights Reserved by 8 Investment Pte Ltd. 23 No Copy and Reproduc>on Allowed.
Slide 24: Investment Process
Investment Process PorWolio Management Search For personal use only • Monitor the core stocks • Idea sources: Internal research, (news/events, interims, Industry network of annuals) Search: entrepreneurs • Add stock posi>on into the Finding the • Determine companies that porholio i.e. has story Hidd
Slide 25: We Are Cognizant of the Macroeconomic Risks Ahead
We Are Cognizant of the Macroeconomic Risks Ahead Uncertainty surrounding the US Fed rate hike decision and For personal use only EBIT-‐debt coverage: A quarter of Chinese firms with debt its avermath on asset pricing and asset risk unable to cover their annual interest expense currently Sharp deval
Slide 26: Vigilant of Corporate Developments: The Case of Aeon Bhd
We Are Vigilant of the Corporate Developments and Management Execu1on of Our PorWolio Stocks: The Case of Aeon Bhd For personal use only Aeon Bhd: Best shopping mall in Malaysia, wide-‐moat business but narrowing moat? FY2013 and 1Q14 results: Resilient retailing segmental profits s>ll ok All Rights
Slide 27: Vigilant of Corporate Developments: The Case of Aeon Bhd
We Are Vigilant of the Corporate Developments and Management Execu1on of Our PorWolio Stocks: The Case of Aeon Bhd For personal use only 1H14 results announced on 28 Aug 2014: Retailing segmental profits showed significant deteriora>on Share price performance aver PEAD (post earnings announcement driv
Slide 28: Staying Vigilant for Tipping Point in Business Model
Staying Vigilant for Tipping Point in Business Model to Lower Valua1on Risk New products or services, and new markets and customers For personal use only -‐ Textual analysis of the companies with relevant keywords using linguis>c databases e.g. “new product(s)”, “new development”, “patents”, “resea
Slide 29: Comment on Concentration Risk and Valeant
Comment on Concentra1on Risk and Valeant: An1dote = Understanding Corporate Culture Hedge fund manager Bill Ackman compared “plahorm For personal use only stock” Valeant to early-‐stage Berkshire Hathaway in early 2015; William Thorndike, author of The Outsiders, compared Valeant’s CEO Michael Pers
Slide 30: Buffett on Valuation
BuffeI on Valua1on For personal use only All Rights Reserved by 8 Investment Pte Ltd. 30 No Copy and Reproduc>on Allowed.
Slide 31: Tencent: Always Expensive in Valuation?
Tencent (700 HK): Always “Expensive” in Valua1on? PE 20-‐50x; Market Value Compounded >180X Since 2004 to $170Bn For personal use only 180 60.0 160 55.0 140 50.0 120 45.0 Market Value $bn 100 PE Ra1o 40.0 80 35.0 60 30.0 40 20 25.0 -‐ 20.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Mar
Slide 32: Valuation & Evolution Path of Wide-Moat Compounders
Valua1on & Evolu1on Path of Wide-‐Moat Compounders Compounding Poten1al 20X: $50M to $1Bn 20X: $1B to $20Bn 20X: $20B to $400Bn For personal use only Small-‐to-‐Mid Cap Mid-‐to-‐Large Cap $300M-‐S$1B $1-‐20B PE-‐Micro-‐to-‐Small Cap Large-‐to-‐Mega Cap PEG = PE/ Net <$50M-‐S$300M >$20-
Slide 33: Fundamental PEG: Tencent
Tencent (HKG: 700 HK) (%) only 70 2.36 2.27 2.5 60 2.0 Fundamental PEG (x) use 50 1.58 “PE” (x), “ROE” 1.43 40 1.5 For personal 30 0.94 0.94 1.0 0.71 0.69 0.64 20 0.57 0.51 0.5 10 0 -‐ 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EV/EBIT ("PE") (LHS) EBIT on Equity ("ROE") (LHS) Fundament
Slide 34: Fundamental PEG: Tencent
Tencent (HKG: 700 HK) Billion) only 200 2.5 180 160 2.0 Fundamental PEG (x) use 140 Market Cap (USD 120 1.5 For personal 100 80 1.0 60 40 0.5 20 -‐ -‐ 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Market Cap (LHS) Fundamental PEG (RHS) All Rights Reserved by 8 Investment Pte Ltd. 34 No Co
Slide 35: Corporate Lifecycle & Business Model % Portfolio Weight
Corporate Lifecycle & Business Model % PorWolio Weight For personal use only Source: 8IH Interim Report hLp://www.asx.com.au/asxpdf/20151102/pdf/432nk9r3hhw4nf.pdf All Rights Reserved by 8 Investment Pte Ltd. 35 No Copy and Reproduc>on Allowed.
Slide 36: Lowering Our Risk: Float Like Butterfly, Sting Like a Bee
Lowering Our Risk: Float Like BuIerfly, S1ng Like a Bee We have been following closely a number of entrepreneurs For personal use only building their enterprises in Asia over the years, observing up close their struggles and their breakthroughs, compiling the progress of their corporate lifecycle dyn
Slide 37: Buffett's Folksy Marriage Test
If All Else Fails, Apply BuffeI’s Folksy “Marriage Test” For personal use only Buffeb: “Tom Murphy and Don Burke [of Cap Ci4es] are not only great managers, but they are precisely the sort of fellows that A shareholder who bought in when Capital you would want Ci>es went public in the late 1950s would
Slide 38: Our Own Folksy Proud Parent Acid Test
Our Own Folksy “Proud Parent” Acid Test For personal use only “Would you be proud and happy for your children if they are working in the company you are going to invest in?” If not, it’s probably a value trap… All Rights Reserved by 8 Investment Pte Ltd. 38 No Copy and Reproduc>on Allowed.
Slide 39: Recent Investments
For personal use only Recent Investments
Slide 40: No.1 Data Analytics and Service Provider
No.1 Data Analy1cs and Service Provider 1. What makes it a wide-‐moat business? For personal use only – Data analy>cs and service provider. Informa>on cri>cal for mul>ple industries. (Shipping, Avia>on, Land Transport, Key Events, Mass Media, Natural disaster management, Energy, Investments, Agricu
Slide 41: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross;Profit;Margin 40.7% 44.1% 44.2% 44.2% EBIT;Margin 21.2% 24.7% 24.9% 24.4% ROE 19.8% 20.1% 18.9% 19.4% Gross;Profit/Total;Assets 53.5% 49.4% 45.8% 49.8% Operating;Efficiency Cash;Conversion;Cycle 78 76 74 73 EBIT/CAPEX;(x)
Slide 42: Leading FMCG Company with Innovative Health and Natural Food
Leading FMCG Company with Innova1ve Health and Natural Food 1. What makes it a wide-‐moat business? For personal use only – >80% domes>c market share with 96% brand recogni>on and leadership. – Constant urge to want to do beLer • Relentless drive to be the lowest cost operator by taking a thoughhul
Slide 43: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 30.6% 27.8% 31.2% 31.2% EBIT-Margin 7.4% 7.3% 9.8% 9.8% ROE 9.9% 12.3% 23.3% 23.3% Gross-Profit/Total-Assets 40.3% 48.0% 54.9% 54.9% Operating-Efficiency Cash-Conversion-Cycle 152 110 103 103 EBIT/CAPEX-(x)
Slide 44: Connecting People and Bringing Tourism to the World
Connec1ng People and Bringing Tourism to the World 1. What makes it a wide-‐moat business? For personal use only – Largest provider of na>onal-‐wide tourism and transporta>on services with quasi-‐monopoly status in certain services, rendering the company a huge market share in the industry. • The
Slide 45: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 28.0% 28.6% 33.7% 33.7% EBIT-Margin 10.2% 11.2% 13.6% 13.6% ROE 23.1% 13.4% 16.1% 14.6% Gross-Profit/Total-Assets 39.5% 38.3% 41.5% 41.5% Operating-Efficiency Cash-Conversion-Cycle G7 G2 1 1 EBIT/CAPEX-(x) 2
Slide 46: No.1 Consumer Healthcare Innovator
No.1 Consumer Healthcare Innovator 1. What makes it a wide-‐moat business? For personal use only – 50% domes>c market share in its consumer healthcare product. Global 90% market share in its industrial business niche. – Highly innova>ve and constantly widening its moat by con>nuing to introduce man
Slide 47: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 22.2% 20.8% 22.6% 24.4% EBIT-Margin 6.2% 6.0% 7.7% 7.7% ROE 6.0% 6.8% 9.3% 11.1% Gross-Profit/Total-Assets 21.3% 20.5% 21.9% 24.0% Operating-Efficiency Cash-Conversion-Cycle 70 65 64 63 EBIT/CAPEX-(x) 2.2 2.
Slide 48: No.1 Premium Consumer Product Artisan
No.1 Premium Consumer Product Ar1san 1. What makes it a wide-‐moat business? For personal use only – Enjoy a 60% global market share where its brand is synonymous with the best quality and innova>on; The Louis VuiLon of its class. – The company grew its moat with more than 50 years of innova>on and
Slide 49: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 33.1% 40.2% 42.2% 42.2% EBIT-Margin 11.6% 19.7% 21.6% 21.6% ROE 10.6% 18.7% 20.3% 20.3% Gross-Profit/Total-Assets 39.3% 46.9% 46.7% 46.7% Operating-Efficiency Cash-Conversion-Cycle 105 84 88 88 EBIT/CAPEX-(x
Slide 50: 8I Hidden Champions Fund
For personal use only 8I Hidden Champions Fund
Slide 51: What is a Better Strategy - Invest in Berkshire, or Buffett's Stock Picks?
What is a BeIer Strategy -‐ Invest in Berkshire, or BuffeI's Stock Picks? For personal use only All Rights Reserved by 8 Investment Pte Ltd. 51 No Copy and Reproduc>on Allowed.
Slide 52: 8I Hidden Champions Fund
8I Hidden Champions Fund Currently, we have the problem of having more ac>onable stock ideas For personal use only than funds to fully execute our investment process to deliver poten>ally greater returns to our shareholders. We are exploring the se|ng up of an offshore Mauri>us-‐based fund structure
Slide 53: Entrepreneurs Investing in Entrepreneurs
Entrepreneurs Inves1ng in Entrepreneurs Caring is an exac>ng, serious and demanding business, For personal use only especially when it comes to inves>ng in another person’s financial assets, which are a tangible product of his or her life’s work, a repository of aspira>ons for the future. We do not b
Slide 54: Q&A
Q&A For personal use only All Rights Reserved by 8 Investment Pte Ltd. 54 No Copy and Reproduc>on Allowed.
Slide 55: Appendix: Some of Our Potential Actionable Stock Ideas
For personal use only Appendix: Some of Our Poten1al Ac1onable Stock Ideas
Slide 56: Creating Unique and Authentic Holidays for Travellers
Crea1ng Unique and Authen1c Holidays for Travellers 1. What makes it a wide-‐moat business? For personal use only – Exclusive leases to must-‐see award-‐winning aLrac>ons and key player providing popular and essen>al services travellers in the country; and it is the market leader in its vehicle c
Slide 57: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 72.6% 74.3% 74.5% 74.5% EBIT-Margin 6.4% 11.1% 15.6% 15.6% ROE 2.7% 7.0% 11.5% 11.5% Gross-Profit/Total-Assets 49.4% 55.6% 54.7% 54.7% Operating-Efficiency Cash-Conversion-Cycle 7 F59 F87 F87 EBIT/CAPEX-(x)
Slide 58: HungryGoWhere Equivalent
HungryGoWhere Equivalent 1. What makes it a wide-‐moat business? For personal use only – Strong ecosystem >e-‐in with suppliers, users and customers: Connect the vast number of eateries to one by the Internet and create a "food" culture of the 21st century 2. Why it has the poten>al to double in 3
Slide 59: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 73.7% 73.4% 73.5% 74.0% EBIT-Margin 14.5% 15.6% 16.7% 18.1% ROE 13.0% 14.8% 18.9% 22.2% Gross-Profit/Total-Assets 136.4% 123.0% 118.9% 114.9% Operating-Efficiency Cash-Conversion-Cycle 48 56 58 56 EBIT/CAPEX
Slide 60: World's #1 Innovator of Money Handling Machines
World’s #1 Innovator of Money Handling Machines 1. What makes it a wide-‐moat business? For personal use only – Customer-‐centric business model backed by a highly specialised intangible know-‐how to con>nuously roll out industry-‐first high-‐performance products, from single-‐func>on to high-
Slide 61: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 38.6% 39.8% 39.3% 38.9% EBIT-Margin 7.6% 7.7% 8.5% 9.0% ROE 4.3% 5.3% 6.5% 6.1% Gross-Profit/Total-Assets 23.1% 25.6% 25.7% 25.7% Operating-Efficiency Cash-Conversion-Cycle 111 119 127 145 EBIT/CAPEX-(x) 2.3
Slide 62: #1 Nutritious and Healthy Beverage
#1 Nutri1ous and Healthy Beverage 1. What makes it a wide-‐moat business? For personal use only – Ability to inculcate the fondness for the drink in the consumers at a young age so that it eventually develops into a “habit” consuming it – The beverage is more than a casual drink. It represents qual
Slide 63: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 47.5% 48.4% 49.7% 50.6% EBIT-Margin 10.9% 10.4% 10.4% 11.2% ROE 18.6% 17.5% 19.4% 24.1% Gross-Profit/Total-Assets 65.4% 67.1% 69.0% 68.1% Operating-Efficiency Cash-Conversion-Cycle 69 67 69 59 EBIT/CAPEX-(x)
Slide 64: Hidden Global Motion Enabler
Hidden Global Mo1on Enabler 1. What makes it a wide-‐moat business? For personal use only – More than 50 years of innova>on and acquired technologies; its solu>ons are the quietest, lightest and have the highest power-‐to-‐weight ra>o. – It has global produc>on facili>es in Asia, Europe and the A
Slide 65: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 27.0% 28.5% 28.6% 28.3% EBIT-Margin 12.0% 11.6% 11.6% 9.1% ROE 14.2% 12.3% 11.3% 11.5% Gross-Profit/Total-Assets 24.7% 23.9% 21.5% 21.2% Operating-Efficiency Cash-Conversion-Cycle 79 66 75 67 EBIT/CAPEX-(x)
Slide 66: Global #1 Bus Manufacturer
Global #1 Bus Manufacturer 1. What makes it a wide-‐moat business? For personal use only – Having the largest and the most technologically advanced manufacturing base of large and medium-‐sized buses in the world. – Enjoyed great economies of scale and reinvest substan>ally back into R&D to widen
Slide 67: Financial Summary
Financial Summary 2012 2013 2014 TTM For personal use only Profitability Gross,Profit,Margin 21.2% 21.7% 26.4% 25.0% EBIT,Margin 7.5% 8.4% 10.7% 11.4% ROE 20.5% 20.9% 23.9% 23.9% Gross,Profit/Total,Assets 28.4% 26.9% 26.7% 26.7% Operating,Efficiency Cash,Conversion,Cycle 15 41 32 32 EBIT/CAPEX,(x) 0
Slide 68: #1 Cookware Company
#1 Cookware Company 1. What makes it a wide-‐moat business? For personal use only – Constant innova>on yearly tailoring to the demand and needs of the consumers – #1 in its country: pressure cooker, frying pan, wok, steamer and electric cooker – #2 in its country: Rice cooker, electric pressure coo
Slide 69: Financial Summary
Financial Summary 2012 2013 2014 TTM For personal use only Profitability Gross,Profit,Margin 30.4% 29.6% 30.1% 28.7% EBIT,Margin 8.4% 9.0% 8.9% 9.2% ROE 15.8% 18.1% 18.1% 18.1% Gross,Profit/Total,Assets 42.4% 43.5% 43.2% 43.2% Operating,Efficiency Cash,Conversion,Cycle 73 65 56 56 EBIT/CAPEX,(x) 6.2
Slide 70: 2nd Largest Domestic Elevator Maker
2nd Largest Domes1c Elevator Maker 1. What makes it a wide-‐moat business? For personal use only – It has a 20% domes>c travellator market share. Its products are exported to 80 countries globally, including US, EU, AU, ME & Asia. Its clients include IKEA, Carrefour, Wal-‐Mart, LVMH and Burberry.
Slide 71: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 24.5% 26.9% 28.5% 29.4% EBIT-Margin 8.7% 9.0% 10.0% 9.9% ROE 10.8% 13.0% 15.1% 15.8% Gross-Profit/Total-Assets 26.2% 27.6% 22.1% 29.8% Operating-Efficiency Cash-Conversion-Cycle 28 29 27 27 EBIT/CAPEX-(x) 3.
Slide 72: Leading Healthy Snack Company
Leading Healthy Snack Company 1. What makes it a wide-‐moat business? For personal use only – Hidden Champion with 62% domes>c market share in healthy snacks while expor>ng to 35 countries. – Export revenue has been growing steadily and con>nuously, which accoun>ng for 43% of total sales now. – Abi
Slide 73: Financial Summary
Financial Summary 2012 2013 2014 For personal use only Profitability Gross)Profit)Margin 29.7% 34.5% 34.8% EBIT)Margin 6.8% 6.8% 10.1% ROE 42.5% 49.9% 56.3% Gross)Profit/Total)Assets 72.9% 86.0% 74.2% Operating)Efficiency Cash)Conversion)Cycle 22 22 17 EBIT/CAPEX)(x) 1.6 2.5 2.8 Net)Debt)%)of)NTA P1
Slide 74: Leading Fully Integrated In-land Logistics Service Provider
Leading Fully Integrated In-‐land Logis1cs Service Provider 1. What makes it a wide-‐moat business? For personal use only – Hidden Champion owns and operates 40 different warehouses with total space of 210,000 m2 and an area of around 557,000m2 for automakers to rent for parking their cars before e
Slide 75: Financial Summary
Financial Summary 2012 2013 2014 TTM For personal use only Profitability Gross Profit Margin 37.8% 41.0% 36.0% 36.6% EBIT Margin 17.4% 25.2% 11.6% 18.0% ROE 16.7% 25.3% 9.5% 10.6% Gross Profit/Total Assets 19.4% 20.9% 18.0% 18.0% Operating Efficiency Cash Conversion Cycle 7 -13 19 6 EBIT/CAPEX (x) -
Slide 76: No.1 Domestic Air-con & Refrigerator Maker
No.1 Domes1c Air-‐con & Refrigerator Maker 1. What makes it a wide-‐moat business? For personal use only – It Innovated an air-‐con solu>on that addresses local needs and thus garnered a loyal following over the past 50 years. – It has a 35% domes>c air-‐con market share, and a 25% domes>c refri
Slide 77: Financial Summary
Financial Summary 2012 2013 2014 TTM For personal use only Profitability Gross,Profit,Margin 25.8% 32.3% 33.1% 31.0% EBIT,Margin 10.4% 11.8% 12.9% 15.9% ROE 33.3% 22.1% 23.5% 20.5% Gross,Profit/Total,Assets 35.1% 50.9% 40.1% 39.5% Operating,Efficiency Cash,Conversion,Cycle 123 121 136 133 EBIT/CAPEX
Slide 78: Top Education Solution Provider
Top Educa1on Solu1on Provider 1. What makes it a wide-‐moat business? For personal use only – Hidden Champion with strong, leading posi>on and the only player with ICT know-‐how in educa>on solu>on provider industry to win government tenders and penetrate into new business segment and market. – Op
Slide 79: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 41.2% 46.3% 47.5% 47.5% EBIT-Margin 22.7% 21.8% 24.8% 24.8% ROE 20.0% 13.1% 14.9% 14.9% Gross-Profit/Total-Assets 42.2% 32.1% 28.8% 28.8% Operating-Efficiency Cash-Conversion-Cycle 193 297 361 361 EBIT/CAPEX
Slide 80: Leading Elevator Manufacturer
Leading Elevator Manufacturer 1. What makes it a wide-‐moat business? For personal use only – Focus on tailor-‐made elevator to differen>ate itself with other players. – Synergy across 3 business segment (Manufacturing, Distribu>on of E&E components, Maintenances). By serving 1 customer, all 3 segm
Slide 81: Financial Summary
Financial Summary 2013 2014 2015 TTM For personal use only Profitability Gross-Profit-Margin 27.5% 27.5% 28.0% 28.0% EBIT-Margin 11.5% 9.2% 13.1% 13.2% ROE 14.5% 10.9% 15.7% 15.7% Gross-Profit/Total-Assets 23.2% 32.5% 33.4% 33.4% Operating-Efficiency Cash-Conversion-Cycle 294 194 214 214 EBIT/CAPEX-