Regal Asian Investments Limited · ASX:RG8

Regal Asian Investments — Investor Presentation (November 2024)

40 slides from Regal Asian Investments's investor presentation, Nov 7, 2024

  1. Slide 1: RG8 Investor Update and Q&A Webinar Presentation

    Regal Asian Investments Limited ABN 58 635 219 484 Level 47 Gateway, 1 Macquarie Place Sydney NSW 2000 Australia T. +61 2 8197 4333 www.regalfm.com/RG8 7 November 2024 ASX Market Announcements Office ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 For personal use only RG8 Investor Upda

  2. Slide 2: Investor Update & Q&A

    For personal use only Investor Update & Q&A Regal Asian Investments (ASX:RG8) November 2024

  3. Slide 3: Introduction

    For personal use only Introduction Charlie Aitken, Regal Partners

  4. Slide 4: Disclaimer

    Disclaimer This presentation (Information), including these slides and the associated audio, 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) (Att

  5. Slide 5: Speakers

    Speakers For personal use only PHILIP KING GLEN BARNES SHANNON MCCONAGHY HENRY RENSHAW Co-Founder & Head of Asia Fundamental Senior Analyst, Asia Portfolio Manager CIO Long/Short Equities Research Regal Funds Metals & Mining Regal Funds Regal Funds Regal Funds 4

  6. Slide 6: Regal Asian Investments Limited (ASX:RG8)

    Regal Asian Investments Limited (ASX:RG8) RG8 provides investors with access to an actively- For personal use only managed, concentrated portfolio, comprising long investments and short positions in securities with $396m $2.28 $2.49 exposure to the Asian region. • Initially listing in November 2019,

  7. Slide 7: Strong performance across all listed investment vehicles

    Strong performance across all listed investment vehicles 1 yr portfolio TOTAL SHAREHOLDER RETURN INDEX2 Fund Launch Description return1 For personal use only 150 PGF RF1 RG8 VG1 +43% RF1 PGF 2013 Global L/S Equities +38.5% +43% PGF 140 +36% VG1 130 Multi-strategy +25% RG8 RF1 2019 alternatives +26.8

  8. Slide 8: RG8: Strong performance, discount to NTA improving

    RG8: Strong performance, discount to NTA improving A$/share Premium/(Discount) to NTA Key statistics as at 31 October 2024 2.50 10% For personal use only RG8 pre-tax NTA adjusted for dividends (LHS) Portfolio Size 2.40 RG8 share price adjusted for dividends (LHS) RG8 share price premium/(discount) t

  9. Slide 9: Market Outlook

    For personal use only Market Outlook Philip King, CIO Long/Short Equities, Regal Funds

  10. Slide 10: Market update

    Market update Key takeaways 11 For personal use only Lagging Asian markets have created good value opportunities – Attractive P/Es with good growth – Increasing focus on shareholder value, especially in Japan 23 Asia provides great exposure to the boom in AI – Our preferred exposures include Asian s

  11. Slide 11: Asia provides huge opportunity

    Asia provides huge opportunity POPULATION1 GDP2 m USD tn 6,000 50 For personal use only 5,000 40 4,000 30 3,000 20 2,000 1,000 10 0 0 North America Europe Asia North America Europe Asia MARKET CAPITALISATION3 ANNUAL GDP GROWTH2 USD tn 80 6% 70 60 50 4% 40 30 2% 20 10 0 0% North America Europe Asia N

  12. Slide 12: Attractive valuations in Asia

    Attractive valuations in Asia EQUITY RISK PREMIA 10.0% 9.0% For personal use only 8.0% 7.7% 6.0% 5.7% 4.5% 4.0% 2.0% 1.0% 0.4% 0.0% US Australia Japan Hong Kong South Korea Taiwan P/E (next 12 months) 21.6x 18.2x 15.0x 9.3x 8.3x 16.7x Corporate earnings yield 4.6% 5.5% 6.6% 10.8% 12.0% 6.0% 10 year

  13. Slide 13: Attractive valuations in Asia

    Attractive valuations in Asia 25.0% For personal use only South Korea 20.0% Taiwan 2025 EPS GROWTH 15.0% US 10.0% Hong Kong 5.0% Australia Japan 0.0% 5.0x 10.0x 15.0x 20.0x 25.0x P/E (NEXT 12 MONTHS) Source: Bloomberg as at 31 October 2024. MSCI US Index, MSCI Australia Index, MSCI Japan Index, Hang

  14. Slide 14: Asian equities continue to lag

    Asian equities continue to lag TOTAL RETURN 700 MSCI US Total Return Index MSCI Asia Pacific Total Return Index For personal use only 600 500 400 300 200 100 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Source: Bloomberg as at 31 October 2024 (monthly data). Rebased to starting

  15. Slide 15: Diverging performance of Asia's largest markets

    Diverging performance of Asia’s largest markets 10 YEAR PRICE PERFORMANCE 300 MSCI China MSCI Japan MSCI Taiwan MSCI Korea For personal use only 250 200 150 100 50 0 2014 2016 2018 2020 2022 2024 Source: Bloomberg as at 31 October 2024 (monthly data). Rebased to starting value of 100 as at 31 Octobe

  16. Slide 16: China

    For personal use only China Philip King, CIO Long/Short Equities, Regal Funds

  17. Slide 17: China economic conditions are weak

    China economic conditions are weak CHINA CONSUMER CONFIDENCE REMAINS WEAK CHINA INFLATION (GDP DEFLATOR) SHOWING DEFLATION FOR THE PAST 6 QUARTERS 130 12 For personal use only 10 120 8 110 6 100 4 2 90 0 80 -2 70 -4 2005 2008 2011 2014 2017 2020 2023 1996 2000 2004 2008 2012 2016 2020 2024 Source: L

  18. Slide 18: China's policy has turned pro-growth, but more is required

    China’s policy has turned pro-growth, but more is required 25% • Larger China stimulus has occurred numerous times Deflation, housing downturn (Q2 23-now) Monetary: 100bps RRR cuts, 50bps policy rate cuts Fiscal: 4% tightening, but imminent fiscal • Turned more pro-growth since September 2024 due to F

  19. Slide 19: Taiwan and China

    For personal use only Taiwan and China Glen Barnes, Head of Asia Fundamental Research

  20. Slide 20: TSMC

    TSMC SHARE PRICE PERFORMANCE TWD For personal use only 1,200 TWD 1,030 TWD 26.7tn 18.5x Share price Market cap P/E (NTM) 1,100 1 yr perf: 1,000 +95% 900 • Global leader in contract semiconductor chip manufacturing • Clear leader in leading edge chip manufacturing technologies 800 • Crucial player in

  21. Slide 21: TSMC

    TSMC SEMICONDUCTOR STOCK PRICES vs. REVENUE GROWTH TSMC BLENDED WAFER AVERAGE SELLING PRICE (ASP) (US$) SOX YoY Performance % For personal use only % YoY growth 80% 160% 4,000 Semiconductor stock prices tend to move in a similar direction to their revenue growth rates 3,500 60% 120% TSMC’s ASP is le

  22. Slide 22: Meituan

    Meituan SHARE PRICE PERFORMANCE HKD For personal use only 240 HKD 183 HKD 1,110 bn 20.7x Share price Market cap P/E (NTM) 220 200 • One of China’s largest ecommerce platforms 1 yr perf: 180 +65% • Dominates food delivery with c.80% share and is the largest platform for local services such as restaur

  23. Slide 23: Meituan

    Meituan CNY m MEITUAN OPERATING PROFIT MEITUAN OPERATING PROFIT BY SEGMENT 60,000 Food delivery In-store, hotel & travel Instashopping New initiatives CNY m For personal use only After years of competition and being significantly impacted by Covid, Meituan 40,000 Food delivery and In-store, hotel &

  24. Slide 24: Japan

    For personal use only Japan Philip King, CIO Long/Short Equities, Regal Funds

  25. Slide 25: Weak yen breathing life into Japanese market

    Weak yen breathing life into Japanese market 300 Tokyo Stock Exchange Japanese Yen For personal use only 250 200 150 100 50 0 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Source: Bloomberg as at 31 October 2024 (monthly data). Rebased to starting value of 100 as at 29 October 2004. Past pe

  26. Slide 26: Improving profitability in Japan

    Improving profitability in Japan PRE-TAX PROFIT MARGIN Japanese non-financial corporate profit/revenue booked in Japan For personal use only 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

  27. Slide 27: Improving shareholder returns

    Improving shareholder returns JAPANESE COMPANIES ARE LESS FOCUSED ON DELEVERAGING AND RETURNING MORE CASH TO SHAREHOLDERS Large listed corporate net debt to equity ratio Listed corporate share buy-back announcements For personal use only JPY tn, T12m 90% 18.0 80% 16.0 70% 14.0 60% 12.0 50% 10.0 40%

  28. Slide 28: Japan

    For personal use only Japan Shannon McConaghy – Senior Analyst

  29. Slide 29: Mitsubishi Heavy Industries

    Mitsubishi Heavy Industries SHARE PRICE PERFORMANCE JPY For personal use only 2,800 JPY 2,193 JPY 7.4tn 25.7x Share price Market cap P/E (NTM) 2,600 2,400 1 yr perf: 2,200 +185% 2,000 • Global leader in gas turbines, leveraged to rising Liquid Natural 1,800 Gas power generation as nations look to re

  30. Slide 30: Mitsubishi Heavy Industries

    Mitsubishi Heavy Industries SIGNIFICANT NEW ORDER GROWTH LEVERAGED TO LNG AND NUCLEAR POWER DEMAND MITSUBISHI HEAVY INDUSTRIES (ORDER INTAKE, TRAILING 12 MONTHS) ENERGY SYSTEMS SEGMENT (ORDER INTAKE, TRAILING 12 MONTHS) 7,000 Yen, Bn 3,000 Yen, Bn For personal use only 6,000 2,500 5,000 2,000 4,000

  31. Slide 31: Softbank Group

    Softbank Group SHARE PRICE PERFORMANCE JPY For personal use only 13,000 JPY 9,498 JPY 14.0tn -60% Share price Market cap Discount to NAV 12,000 11,000 1 yr perf: 10,000 +55% • Holding company 29% owned by Masayoshi Son 9,000 • A “software-bank” with investments in technology companies and communicat

  32. Slide 32: Softbank Group

    Softbank Group SOFTBANK GROUP TRADES AT A 60% DISCOUNT TO NAV ACTIVIST PRESSURE TO CLOSE THE NEAR RECORD DISCOUNT For personal use only SOFTBANK GROUP PORTFOLIO SOFTBANK GROUP DISCOUNT TO NAV OVER TIME 250 0% 20 -10% - 60% discount to Total NAV 74 200 -20% 3 19 -30% 150 21 -40% -29% discount 219 100

  33. Slide 33: Mining

    For personal use only Mining Philip King, CIO Long/Short Equities, Regal Funds

  34. Slide 34: Gold equities lagging gold price gains

    Gold equities lagging gold price gains 200 Gold price VanEck Gold Miners ETF (USD) For personal use only 180 160 140 120 100 80 60 40 2019 2020 2021 2022 2023 2024 Source: Bloomberg as at 31 October 2024. Rebased to a starting value of 100 as at 31 October 2014. Past performance is not a reliable in

  35. Slide 35: De Grey Mining

    For personal use only De Grey Mining Henry Renshaw, Portfolio Manager, Regal Funds

  36. Slide 36: De Grey Mining

    De Grey Mining SHARE PRICE PERFORMANCE A$ For personal use only 1.80 A$1.53 A$3.8b Share price Market cap 1.60 1 yr perf: +30% • Australian-based gold developer with 100% ownership of the 1.40 Hemi gold project located in Western Australia • Once the project has been constructed, the Hemi mine will

  37. Slide 37: One of the ASX's largest gold mines and miners

    One of the ASX’s largest gold mines and miners DE GREY’S HEMI PROJECT CAN BE THE LARGEST IN AUSTRALIA1 HEMI MAY ENABLE DE GREY TO BECOME ONE OF THE ASX’s REGAL’S EXPECTED ULTIMATE CAPACITY VS OTHER LARGE MINES LARGEST GOLD MINERS2 For personal use only 900 3,000 2,000 2,800 800 2,800 1,800 2,600 700

  38. Slide 38: Size and scale compelling vs peers

    Size and scale compelling vs peers EV / ANNUAL PRODUCTION1 EV / RESERVE2 DE GREY 69% UPSIDE TO ASX PRODUCER AVERAGE DE GREY 25% UPSIDE TO ASX PRODUCER AVERAGE For personal use only 20,000 2,500 18,000 16,000 2,000 14,000 EV / Reserve (A$/oz) 1,500 12,000 10,000 1,000 8,000 +69% +25% 6,000 500 4,000

  39. Slide 39: Investor Q&A

    Investor Q&A For personal use only Please submit your questions via the side menu on the webcast player PHILIP KING GLEN BARNES SHANNON MCCONAGHY HENRY RENSHAW Co-Founder & Head of Asia Fundamental Senior Analyst, Asia Portfolio Manager CIO Long/Short Equities Research Regal Funds Metals & Mining Re

  40. Slide 40: For personal use only

    For personal use only 39

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