asia economic forum april 7, 2009 confidential sailing through rough seas: a cambodia investor’s...

Asia Economic Forum April 7, 2009

confidential

Sailing Through Rough Seas:

A Cambodia Investor’s Perspective

confidential

Global Investment Backdrop

2Leopard Capital, LP

• Risk Aversion

• Darwinism / Upheaval

• Worst or best of times

• Opportunities in Crisis

confidential

The World Economy

3

• Building on fire

• Most developed – top floors

• Least developed – bottom floors

Leopard Capital, LP

confidential

Asia’s Situation


Cambodia Vietnam Philippines Indonesia Thailand Malaysia South Korea Japan Singapore0

10,000

20,000

30,000

40,000

50,000

60,000

1,900 2,600 3,200 3,600

8,000

14,500

25,000

33,500

49,900

GDP per capita - PPP basis (USD) 2007 (source: CIA)

confidential

Coping with the Credit Crunch

5

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Domestic Credit to GDP (2007) Source: ADB

Korea Malaysia Vietnam Thailand Cambodia

Leopard Capital, LP

confidential

The Situation

6

Catch-up opportunity for LDCs – to take bigger slice of smaller pie

• Improve internal policies

• Reduce inefficiencies, barriers, and unofficial costs

• Bypass export sectors that are overinvested

Leopard Capital, LP

confidential

Investment Backdrop


Next Cycle’s Winners:

• Unused Resources vs. Population size

• .

• .

• .

• .

confidential

Cambodia’s Commodities Endowment


• Crops: Rice, Cassava, Corn, Soybeans, Sugar

• Trees: Rubber, Palm, Fruit, Teak, Acacia, Cashew

• Energy: Oil, Gas, Coal

• Mining: Gold, Bauxite, Nickel, Zinc, Copper, Lead, Iron

• Water: Irrigation, Hydropower

• Meat potential

• Aquaculture potential

confidential

Investment Backdrop


Cambodia Malaysia Indonesia Thailand Vietnam Philippines Japan South Korea0

100

200

300

400

500

600

Population Density

ADB Population density per km2

confidential

Investment Backdrop



• Unused resources vs. Population size

• Sustainable energy policy

• .

• .

• .

confidential

Investment Backdrop



• Unused resources vs. Population size


• .

• .

• .

confidential

Electrification


Cambodia Indonesia Philippines Malaysia Japan Thailand0

500

1,000

1,500

2,000

2,500

77

487

653

1,826

1,9782,048

Power usage per capita (kwh) 2007 (source: ADB)

confidential

Investment Backdrop



• Significant resources vs. Population size


• Favorable Demographics

• .

confidential

Differing Challenges Ahead

14

Population Age Pyramid Comparison

Cambodia: Investing in Modernization

confidential

Investment Backdrop






• Political and Policy Stability

confidential

Assessing Risks Now

16

Indi

a

Thai

land

Mal

aysia

Indo

nesia

Phili

ppin

es

Cambo

dia

China

Vietn

am012345678

2007-20082008-2009

2007 and 2008 (Source: Political & Economic Risk Consultancy Ltd.)

Cambodia: Investing in Modernization

confidential

Investment Backdrop







• Sufficient Infrastructure

confidential

Cambodia’s Improving Infrastructure

• Sea Port upgraded, new ports coming

• International Airports (3)

• Roads and bridges

• Railroads

• Electricity

• Wireless Network

• Internet fiber backbone


confidential

Investment Backdrop







• Sufficient Infrastructure

• Pro-investment policies and low taxes

confidential

Tax Comparison


Cambodia Singapore Philippines Malaysia South Korea Vietnam Indonesia Thailand Japan0

5

10

15

20

25

30

35

40

45

20 20

2527 27.4 28

30 30

40.7

Corporate tax rate (% of GDP) 2006 (source: ADB)

confidential

Countercyclical Investment Opportunities


• Tourism Development (beyond Siem Reap)

• .

• .

• .

• .

confidential

Tourism Development Opportunity


Cambodia Philippines Vietnam Indonesia Singapore Thailand Malaysia0

5

10

15

20

25

2.13.1

4.2

5.5

10.3

14.5

21

Tourist arrivals (mn) 2007 (sources: various)

confidential




• Rural Banking

• .

• .

• .

confidential

Banking Opportunity

24

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Bank loans to GDP (2007) Source: ADB

Korea Malaysia Vietnam Thailand Cambodia

Leopard Capital, LP

confidential




• Rural Banking

• Wireless Communications for the poor

• .

• .

confidential

Communications Opportunity


Cambodia Vietnam Indonesia Philippines Thailand Japan South Korea Malaysia Singapore0

20

40

60

80

100

120

140

13

3033

56

7176

85 86

116

Mobile phone penetration (%) 2007 (source: Asia Mobile Communications & Mobile Data report)

confidential




• Rural Banking


• “Off-grid” Renewable Power

• .

confidential

Electrification Opportunity


Cambodia Indonesia Philippines Malaysia Japan Thailand0

500

1,000

1,500

2,000

2,500

77

487

653

1,826

1,9782,048

Power usage per capita (kwh) 2007 (source: ADB)

confidential




• Rural Banking


• “Off-grid” Renewable Power

• Affordable Housing

confidential

Property Development Opportunity


Cambodia Vietnam Thailand Indonesia Malaysia Japan South Korea Singapore0

20

40

60

80

100

120

17.8

27.432.9

43.1

63.466

80.8

100

Urban population (% total pop.) (source: ADB)

confidential

Opportunity for Cambodia

31

• Retool the Economy

• Create Tourism Paradise

• Add Value to Natural Resources

• Champion emerging global themes:

• Renewable / Sustainable

• Safe / Organic

• Fair / Equitable

• Import Substitution

Leopard Capital, LP

asia economic forum april 7, 2009 confidential sailing through rough seas: a cambodia investor’s...

Documents

lp slide

floors leopard capital

overinvested leopard

modernization slide

policy stability slide

confidential sailing

confidential coping

confidential electrification