Col Financial Group, Inc. · PSE:COL
Col Financial — H1 2022 Earnings Presentation
29 slides from Col Financial's earnings presentation, 2022
Slide 1: 1H 2022 COL Investor Presentation
1H 2022 COL Investor Presentation 1
Slide 2: Company Overview
Company Overview Established and The leading and fastest- licensed by the SEC in growing online stockbroker 1999 in the Philippines Focused on tapping Founder (Edward K. Lee) the underserved retail retains a 21.7% stake investor base in the and actively manages stock market the Company 2
Slide 3: Outstanding shares, ownership and market cap
4.76 Bil 21.7 Outstanding Shares % Edward K. Lee Free Float 1.16 Bil 24.9% Market Cap* Php16.4 Bil Public *As of end June 2022 14.9% Daiwa Securities Group 24.9% Other Directors & Officer 13.9% Alexander C. Yu 3
Slide 4: Business Objective
Business Objective To be the preferred source of financial services, a trusted provider of guidance and investment and a strong organization committed to delivering great value to its customers. Our goal is to be Champion of the Filipino Investor 4
Slide 5: COL Milestones
COL Milestones 1999 2000-2001 2006 2008 2010 Began operating the Listed in the PSE at Launched the COL Launched the full- Licensed by the SEC COL PH online Php0.136/sh service agency and Easy Investment to conduct business trading platform advisory team called Program (EIP) as a broker and the COL P
Slide 6: COL Milestones
COL Milestones 2012 2014 2015 2017 Officially changed Granted a Mutual Launched COL Fund Japan’s Daiwa corporate name to Fund Distributor Source - the first fund Securities Group, Inc. COL Financial License by the SEC supermarket in the acquired a 14.9% Group Inc. country stake in the company 6
Slide 7: The Biggest Philippine Based Stockbroker
The Biggest Philippine Based Stockbroker 1H22 Rank Broker Name 1H22 Value Turnover (Php Bil) % of Total 1 UBS Securities Philippines Inc 129.4 7.1 2 CLSA Philippines Inc 123.7 6.7 3 Mandarin Securities Corp 118.4 6.5 4 COL Financial Group, Inc 98.0 5.3 5 Credit Suisse Securities (Phil) Inc 87.5 4.8
Slide 8: The Biggest Philippine Based Stockbroker
The Biggest Philippine Based Stockbroker Total Accounts (as of 2021) Total Online Accounts (as of 2021) 73% 27 % 58% 42% Others Others COL COL Source: PSE 8
Slide 9: Bulk of Revenues Generated from Commissions and Interest
Revenue Breakdown 2021 2.6% Trail Fees 0.1% Others Bulk of Revenues 22.6% Interest Generated from Commissions and Interest 74.6% Commissions accounted for 74.6% of revenues. Interest income from margin loans and cash Commissions placements accounted for 22.6% of revenues. Trailer fees from the distr
Slide 10: Key Operating Highlights
Key Operating Highlights Positives Negatives 1. Interest income stabilized and grew 1. Commission revenues and net Q/Q and Y/Y income fell sharply, as market sentiment deteriorated 2. Trail fee remained stable and grew Y/Y 2. Rank and market share in the PSE slipped 3. Margin utilization rate increa
Slide 11: 1H22 Net Income -71.1% Y/Y
Pro Forma Consolidated Income Statement (Php Mil) Change 1H22 Net Income 1H21 1H22 Amount % Income -71.1% Y/Y Commissions 639.9 265.7 (374.2) -58.5% Interest 84.2 110.6 26.4 31.4% Trailer Fees 10.2 11.4 1.1 11.0% 1H22 net income fell by 71.1% to Php138.7 Mil Other income 52.9 0.8 (52.1) -98.5% due t
Slide 12: Commissions Hurt by Poor Sentiment
Pro Forma Revenue Breakdown (Php Mil) Commissions Hurt by Poor Change Sentiment 1H21 1H22 Amount % Revenue Breakdown Commission 639.9 265.7 (374.2) -58.5% Revenues fell by 50.7% due to the significant decline in commissions and the absence of other income. PH-Self-directed 595.9 217.8 (378.1) -63.4%
Slide 13: Commissions Hurt by Poor Sentiment
Pro Forma Revenue Breakdown (Php Mil) Commissions Hurt by Poor Change Sentiment 1H21 1H22 Amount % Revenue Breakdown Commission 639.9 265.7 (374.2) -58.5% On the positive side interest income from both margin and placements grew, with the total up by 31.4% to PH-Self-directed 595.9 217.8 (378.1) -63
Slide 14: Commissions Hurt by Poor Sentiment
Pro Forma Revenue Breakdown (Php Mil) Commissions Hurt by Poor Change Sentiment 1H21 1H22 Amount % Revenue Breakdown Commission 639.9 265.7 (374.2) -58.5% Self-directed clients continued to account for the lion’s share of total commission revenues at 82.7%. PH-Self-directed 595.9 217.8 (378.1) -63.4
Slide 15: Flattish Expenses
Pro Forma Breakdown of Expenses (Php Mil) Change 1H21 1H22 Amount % Flattish Expenses Trading Related Expenses Commission expenses 15.1 16.2 1.1 7.3% Agency & Advisory 14.2 15.7 1.5 10.7% Operating expenses were flat, as higher fixed CROs & Others 0.9 0.5 -0.4 -46.4% operating expenses were offset b
Slide 16: ROAE Normalized to 14.1%
ROAE Normalized to 14.1% Selected Financial Ratios 1H21 1H22 Annualized ROAE normalized from 50.1% to 14.1%. Profitability deteriorated as commissions fell, Operating Profit Margin 74.1% 47.2% leading to weaker margins and lower asset turnover. EBITDA Margin 78.3% 54.3% Net Margin 60.9% 35.7% Margin
Slide 17: Now Number 4
Comparative Performance (COL vs. PSE) Change Now Number 4 1H21 1H22 Amount % PSE Ave. Daily T/O (PhpMil) 8,959.2 7,519.3 (1,440.0) -16.1% COL’s average daily turnover fell 59.8% to Php803.1 Mil in 1H22. This is much steeper than COL Ave. Daily T/O (PhpMil) 1,999.6 803.1 (1,196.5) -59.8% the PSE’s 16
Slide 18: The Biggest Philippine Based Stockbroker
The Biggest Philippine Based Stockbroker 1H22 Rank Broker Name 1H22 Value Turnover (Php Bil) % of Total 1 UBS Securities Philippines Inc 129.4 7.1 2 CLSA Philippines Inc 123.7 6.7 3 Mandarin Securities Corp 118.4 6.5 4 COL Financial Group, Inc 98.0 5.3 5 Credit Suisse Securities (Phil) Inc 87.5 4.8
Slide 19: Strong Balance Sheet
Strong Balance Sheet Pro Forma Consolidated Balance Sheet (Php Mil) Change 12/31/21 6/30/22 Amount % Cash & cash equivalents increased by 42.3% to Php2.5 Bil largely due to an increase in clients’ unutilized funds. Cash & cash equivalents 1,733.5 2,466.5 733.0 42.3% Trade receivables 958.8 940.8 -18
Slide 20: Strong Balance Sheet
Strong Balance Sheet Pro Forma Consolidated Balance Sheet (Php Mil) Change 12/31/21 6/30/22 Amount % Stockholders’ equity fell by 12.0% to Php1.8 Bil due to the payment of Php404.6 Mil worth of cash Cash & cash equivalents 1,733.5 2,466.5 733.0 42.3% dividends, partly offset by the booking of Trade
Slide 21: Customer Base Up Y/Y
Client Base +5.3% Customer Base Up Y/Y 492,642 489,154 467,765 437,048 COL’s client base grew by 5.3% Y/Y to 492,642 as of end June 2022. 332,098 292,401 Average monthly additions during the past 12 months reached 2,073. The increase would have been larger if not for the suspension of 14,439 dormant
Slide 22: Client Equity Down on Lower Asset Values
Client Equity (Php Mil) -8.9% Client Equity Down on 107,346 112,556 111,868 101,946 Lower Asset Values 72,673 72,398 Client equity was down 8.9% Y/Y to Php101.9 Bil as of end June 2022. Client equity fell due to lower asset values, partly offset by new deposits from clients. As of end June, the PSEi
Slide 23: Margin Loans Up
Ave Daily Margin Loans (Php Mil) +22.3% Margin Loans Up 767 Average daily margin loans increased by 22.3% 719 to Php767 Mil Y/Y. 627 617 As of end June, the total number of approved 536 518 margin accounts was 1,194, slightly lower compared to 1,243 during the same period last year. Roughly the same
Slide 24: MF Net Sales still Positive due to Money Market and Feeder Funds
MF Net Sales Acc to Fund Type (Php Mil) MF Net Sales still Positive due to Money Market and Feeder Funds COL’s MF distribution business still generated net 29.7 sales of Php127.8 Mil during 1H22, due to Money Market funds and the introduction of Feeder Funds. Feeder Fund Equity Fund 94.5 36.9 37.5 A
Slide 25: Average AUA Up Y/Y, Down Q/Q
Average AUA (Non-Money Market Funds Only, in Php Mil) 3,997.8 3,874.3 3,778.3 3,742.6 Average AUA Up Y/Y, Down Q/Q 3,529.5 3,483.6 Trailer fees up due to increase in average non-money market AUA on a Y/Y basis. However, AUA was down Q/Q despite the strong sales of feeder funds due 1Q21 2Q21 3Q21 4Q2
Slide 26: Percentage of Clients Owning MFs Rebounded
Percentage of Clients Owning MFs Rebounded MF Investors % of Total Clients 14.3% 70,000 14.5% 13.9% 13.8% 60,000 14.0% 13.5% 50,000 13.1% 13.5% 60,866 13.0% 13.0% 12.7% 61,489 12.8% 40,000 12.6% 13.0% 60,418 60,268 57,682 63,870 30,000 62,273 52,925 46,168 12.5% 61,044 20,000 10,000 12.0% 0 11.5% 1Q
Slide 27: MF only Clients Continued to Grow
MF Only Clients MF only Clients Continued 18,000 to Grow 16,000 14,000 The number of clients who only owned MFs 12,000 continued to increase. 10,000 As of end June, there were 15,850 clients who only owned MFs, up 14.6% Y/Y and 1.2% Q/Q. Of 8,000 the said number, 11,161 or 70.4% were Starter 6,000 c
Slide 28: Growing Number, but Lower Percentage of Clients Own MFs
29 10,000.0 20,000.0 30,000.0 40,000.0 50,000.0 60,000.0 70,000.0 0.0 SOURCE: COL ESTIMATES 5,244 3.4% 7,526 4.6% 11,859 6.9% 13,690 7.5% 16,599 8.5% 18,317 8.9% 20,493 9.5% 22,257 9.9% 24,739 10.4% 27,375 11.1% MF Investors 30,421 11.6% 32,675 12.0% 34,847 12.3% 36,349 12.4% 38,069 12.5% % of Total
Slide 29: Disclaimer
Disclaimer This presentation was prepared solely and exclusively for discussion purposes. This presentation and/or any part thereof may not be reproduced, disclosed or used without the prior written consent of COL Financial (the “Company”). This presentation, as well as discussions arising therefrom