Vingroup Joint Stock Company · HOSE:VIC
Vingroup Joint Stock — Investor Presentation (March 2014)
40 slides from Vingroup Joint Stock's investor presentation, Mar 12, 2014
Slide 1: Vingroup Joint Stock Company Investor Presentation
VINGROUP JOINT STOCK COMPANY Investor Presentation March 2014 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 2: Table of contents
Table of contents A. Introduction to Vingroup 3–9 B. Business Strategy 10 – 12 C. Key investment highlights 13– 22 D. Business overview 23– 24 E. Financial overview 25 – 31 F. Appendix 1 – Debt Matrices 32 – 35 G. Appendix 2 – Vincom Retail 36 - 38 2 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 3: A. Introduction to Vingroup
A. Introduction to Vingroup 3 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 4: History of Vingroup
History of Vingroup Vincom – Leadership in Residential, Commercial and Retail Transformational Merger in 2011 to form Vingroup Established in May 2002 Expanded operations into consumer focused industry Listed on the HOSE in 2007 sectors such as hospitality and leisure Opened the first commerci
Slide 5: Integrated platform focused on the Vietnamese urban consumer
Integrated platform focused on the Vietnamese urban consumer Uniquely positioned to benefit from Vietnam’s consumption growth Consumer Expenditure Consumer Expenditure Consumer Expenditure Total Consumer on Housing on Tourism on Healthcare Spending (1) (US$ Bn) (US$ Bn) (US$ Bn) (US$ Bn) 12.4 142.1
Slide 6: Significant Focus on Recurring Revenue Streams
Significant Focus on Recurring Revenue Streams Gradual shift towards a greater percentage of revenues coming from recurring income streams such as retail, hospitality and healthcare enhances the resilience of the business model. Recurring Revenue Streams Continue to Grow (1) Existing Portfolio Conti
Slide 7: Strategic Investment in Vincom Retail to Further Accelerate Growth
Strategic Investment in Vincom Retail to Further Accelerate Growth The strategic investment by Warburg Pincus in Vincom Retail, wholly-owned by Vingroup, is a clear vote of confidence in both Vietnam and its retail markets, and Vingroup’s strategy, business model and management team The largest init
Slide 8: Locked In Cashflows With Meaningful Growth Potential From New Projects
Locked In Cashflows With Meaningful Growth Potential From New Projects Continue to ramp up our major development projects, with a substantial amount of presales locked in with cash deposits on hand. Resilient Apartment and Villa Sales with Upside to Come Promising Pipeline of New Projects (2) (US$mn
Slide 9: Understanding the Land Acquisition & Purchase Process
Understanding the Land Acquisition & Purchase Process Understanding the development and presale process is a crucial part of appreciating Vingroup’s locked-in revenue streams. Land Acquisition Presales (1) Delivery 1. Obtaining approval-in-principle Stage 3 – Stage 1 – Loan Stage 2 – Sale & Apportio
Slide 10: B. Business Strategy
B. Business Strategy 10 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 11: Leading Real Estate Player in Vietnam with Entrenched Competitive Advantages
Leading Real Estate Player in Vietnam with Entrenched Competitive Advantages Fully Integrated Real Unique Vingroup Capital Recycling Model Largest Developer in Estate Owner & Membership Platform That has been Vietnam with Premium Developer with Exposure that Strategically Unites Successfully Brand N
Slide 12: Business Strategies Are Reinforcing
Business Strategies Are Reinforcing Focus on High-quality, Large-scale Mixed Use Developments in Prime Locations and Further Expand into Selected Grow Recurring Revenues Across Consumer Segments Strategic Cities and Enhance Inventory Property Turnover Leverage on expertise and experience in identi
Slide 13: C. Key investment highlights
C. Key investment highlights 13 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 14: Investment Highlights
Investment Highlights 1 Vietnam’s Largest Listed Real Estate Developer Capital Efficient Real Estate Platform with Track Record of Successful Asset 2 Disposals 3 One of the Largest Landbank in Prime Locations Across Vietnam 4 Well-recognized Premium Brand Names in Vietnam 5 Proven Track Record of Ac
Slide 15: Vietnam's largest listed real estate developer
1 Vietnam’s largest listed real estate developer Vingroup is the largest listed real estate company in Vietnam by market capitalization with controlling interest in over 30 developments, which are in prime urban and high growth areas in key cities throughout Vietnam. The Largest Company(1) and the o
Slide 16: Integrate Real Estate Platform
2 Integrate Real Estate Platform Synergies Amongst Consumer Segments & Increases Membership Program Allows Clear Identification of High Exposure Across All Brands Value Consumers Strong capability in the development and management of high- VIP Vingroup offers premium services and end commercial and
Slide 17: Capital Efficient Business Model (Cont')
2 Capital Efficient Business Model (Cont’) Integrated Development Model Recycle Capital through Opportunistic Disposals Royal City 2006 2010 2012 2013 2013 Vincom Center Vincom Center Vincom Center A Vincom Center Vincom Ba Trieu Ba Trieu – Tower HCMC Dong Khoi Financial Tower –Tower B A (office (sh
Slide 18: One of the Largest Landbanks in Prime Locations Across Vietnam
3 One of the Largest Landbanks in Prime Locations Across Vietnam Effective Landbank Breakdown by Construction Status (1) GFA Breakdown by Type (1)(2) (million sqm) Others 16% 10.03 million sqm 60.71 million sqm Hospital and school 4% 39.2 Villa Hotel 53% 21.51 5% 8,16 0,05 1,87 3,77 Retail and Offic
Slide 19: Well-recognized Premium Brand Names in Vietnam
4 Well-recognized Premium Brand Names in Vietnam Numerous Awards from independent media is a Strong Brands Across Segments testimony of the Group’s brand name Secured 2 (1) out of the 20 Golden Sites in Vietnam International Shopping Centre 2013 for Vincom Vingroup develops its commercial, retai
Slide 20: Well-recognized Premium Brand Names in Vietnam (cont')
4 Well-recognized Premium Brand Names in Vietnam (cont’) Vingroup’s brand names are instrumental in securing new sites, achieving premium pricing and attracting global brand tenants Premier Retail Malls and Offices in Key Cities Attract Global Brand Tenants (1) Hanoi Total Retail NLA (2): 341,862m2
Slide 21: Track Record in Accessing Capital Markets
5 Track Record in Accessing Capital Markets Vingroup has a pioneering track record of success in the international capital markets, having raised more than US$1 billion since 2009 through 6 major transactions RegS/144A International Private Equity Unsecured Loans Convertible Bonds Convertible Bonds
Slide 22: Experienced Management Team, Good Corporate Governance and Strong Sponsor
Experienced Management Team, Good Corporate Governance and 6 Strong Sponsor Mr. Pham Nhat Vuong Chairman of the Board of Management Holds a Bachelors Degree in Geological Economic Engineering Long track record as an entrepreneur both in and out of Vietnam, founded Technocom Limited Company in Uk
Slide 23: D. Business overview
D. Business overview 23 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 24: Operational Properties
Operational Properties Effective Start date of Description Occupancy rate (1) GFA breakdown (m2) Ownership (1) Construction/Operation Vincom Center Ba Retail, office, in Hanoi 99.16% Office – Sold 2003 - Nov 2004 Retail: 27,103; Parking: 7,089 Trieu - Tower A&B Office: Tower A was sold to BIDV
Slide 25: E. Financial overview
E. Financial overview 25 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 26: Share Price Performance over the Last Months
Share Price Performance over the Last 12 Months 90,000 5.0 4.5 4.0 80,000 Share Price (VND) 3.5 Volume (m) 3.0 70,000 2.5 2.0 1.5 60,000 1.0 0.5 50,000 0.0 Mar-13 Apr-13 Jun-13 Jul-13 Sep-13 Oct-13 Dec-13 Jan-14 Mar-14 Vingroup Share Volume Vingroup Share Price VN Index rebased Price VND75,000 as of
Slide 27: Income Statement Highlights
Income Statement Highlights Revenue Gross Profit (In US$m) 869 (In US$m) 76.1% 48.2% 694 43.5% 38.1% 374 331 183 252 109 180 139 149 175 65 122 48 34 45 Dec-10 Dec-11 Dec-12 Dec-13 Dec-10 Dec-11 Dec-12 Dec-13 Non-recurring income Recurring income Gross profit Gross margin EBITDA (1)(2) Profit for th
Slide 28: Revenue Performance
Revenue Performance Total Revenue Rental Sale of Inventory Properties (In US$m) (In US$m) ((In US$m) 85 694 869 58 45 34 252 148 65 2010 2011 2012 2013 2010 2011 2012 2013 Hospitality and Beauty Care Health Care 374 (In US$m) (In US$m) 76 13 183 57 109 7 2010 2011 2012 2013 NA NA NA NA 2010 2011 201
Slide 29: Profitability – Gross Profit and Margin
Profitability – Gross Profit and Margin Total Gross Profit Rental Sale of Inventory Properties (In US$m) (In US$m) (In US$m) 300 100% 331 72% 249 250 80% 80% 65% 67% 61% 200 60% 51 150 50% 36% 40% 39 100 29 119 29% 24 127 20% 50 19 - 0% 2010 2011 2012 2013 2010 2011 2012 2013 180 Gross Profit Margin
Slide 30: Balance Sheet Highlights
Balance Sheet Highlights Total Cash and Short-Term Investments Total Assets (In US$m) (In US$m) 623 3,579 356 2,641 258 256 259 1,680 58 1,237 72 77 266 186 198 183 Dec-10 Dec-11 Dec-12 Dec-13 Dec-10 Dec-11 Dec-12 Dec-13 Cash and cash eq. ST investments Total Equity Total Debt (1) and Net Debt (2) (
Slide 31: Vingroup – Equity storyboard
Vingroup – Equity storyboard Growing book value(1) and valuation Strong revenue(2) growth and contracted sales (In US$m) (In US$m) Market 38.1% 25.4% Capitalisation 1.7 1.8 2.7 2.7 16.9% 13.1% (US$bn) ROE Price / Book 2.6x 2.7x 3.5x 3.1x Strong balance sheet with headroom for growth Solid execution
Slide 32: F. Appendix 1 – Debt Matrices
F. Appendix 1 – Debt Matrices 32 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 33: Debt Maturity
Debt Maturity As of 31 December 2013, Vingroup has VND13,161 billion cash and cash equivalents and short term investment which is adequate to cover the near term debt maturities. (VNDbn) 982 6,246 4,231 527 35 6,050 6,217 369 2,250 107 Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Corporate
Slide 34: Debt Mix Analysis
Debt Mix Analysis Diversified Funding Sources (1) Debt Breakdown (1) By Currency Others International 3.4% Bank Loans Bonds 20.8% 15.4% VND USD 47% 53% Convertible Bonds By Interest Rate 22.8% Domestic Bonds 37.6% Fixed 42% Float 59% Total: VND27,384 Bn (US$1.3Bn) Notes: Based on an exchange rate of
Slide 35: Key Credit Metrics
Key Credit Metrics Recurring Income / Interest Expense (1) EBITDA / Interest Expense (1) (x) (x) 1.33x 4.13x 1.04x 2.53x 0.57x 0.55x 1.58x 1.05x Dec-10 Dec-11 Dec-12 Dec-13 Dec-10 Dec-11 Dec-12 Dec-13 Note: (1) Interest expense includes capitalized interest. Note: (1) Interest expense includes capit
Slide 36: G. Appendix 2 – Vincom Retail
G. Appendix 2 – Vincom Retail 36 INVESTOR PRESENTATION INVESTOR PRESENTATION
Slide 37: Modern retail sector set to 'take off' in Vietnam (cont'd)
Modern retail sector set to ‘take off’ in Vietnam (cont’d) Aggressive expansion plans for retailers Type Current stores Expansion by 2017 Replay Sketche Apparel Ecko ~780 ~3,500 Hyper / super market ~190 ~750 Hiway F&B ~310 ~1,050 Others ~150 ~1,500 Citimart B&A Recent / known new entrants Sources:
Slide 38: Potential for cap rate compression
Potential for cap rate compression Retail yields vs. borrowing rates – major markets 15% 10% 5% 0% Hanoi / HCMC New Delhi Jakarta Bangkok KL Guangzhou Beijing Singapore Shanghai Hong Kong Retail Yield Borrowing Rates Sources: CBRE, Savills, Central Banks. 38 RATINGS UPDATE PRESENTATION
Slide 39: Disclaimer
Disclaimer This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes, and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Represe
Slide 40: Investor Relations Department
Investor Relations Department Vingroup JSC Vingroup Office Tower, Vinhomes Riverside Eco-Urban Area Long Bien District, Hanoi, Vietnam Tel: +84 (4) 3974 9999 ext. 926 Fax: +84 (4) 3974 8888 Website: http://www.vingroup.net E-mail: [email protected] INVESTOR PRESENTATION INVESTOR PRESENTATION
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