pm capital asian opportunities fund limited (asx: paf) for ...2015/09/18 · mar-10 jun-10 sep-10...

PM Capital Asian Opportunities Fund Limited

(ASX: PAF)

2015 Annual General Meeting

18 September 2015

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Disclaimer

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This presentation dated 18 September 2015 is provided for information purposes only. The information contained in this presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of securities in the Company nor does it constitute financial product or investment advice nor take into account your investment objectives, taxation situation, financial situation or needs. You must not act on the basis of any matter contained in this presentation but must make your own assessment of the Company and conduct your own investigations and analysis. Before making an investment in the Company, you should consider whether such an investment is appropriate to your particular investment objectives and financial situation and seek appropriate advice, including legal, taxation and financial advice appropriate to your circumstances. The Company is not licensed to provide financial product advice. Certain statements in this presentation may constitute forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company and which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements. While all reasonable care has been taken in relation to the preparation of this presentation, none of the Company or its directors, officers, employees, contractors, agents or advisers accepts any responsibility for any loss or damage resulting from the use of, or reliance on, the presentation by any person. Past performance is not indicative of future performance, and no guarantee of future returns is implied or given. All values are expressed in Australian currency unless otherwise stated. Further information is available at the ASX Company Announcements Platform at www.asx.com.au.

PM CAPITAL Asian Opportunities Fund Limited | ACN 168 666 171

Level 27, 420 George Street

Sydney NSW 2000

Telephone: +612 8243 0888

www.pmcapital.com.au

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http://www.pmcapital.com.au/

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Agenda

Chairman’s address 4

Formal items of business 6

Item 2 – Remuneration Report 7

Item 1 – Financial Statements and Reports 6

Item 3 – Appointment of Auditor 9

Investment Manager’s address 15

Questions and answers 27

Item 4 – Election of Directors 11

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Chairman’s address – Brett Spork

Share price as at 17 September 2015 Close.

1 $54m raised at initial public offering (IPO) (net amount)

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55,087,501 ordinary shares and 55,087,500 options issued (exercisable at $1.00 on or before 31 May 2015) under the IPO

Current share price of $0.89. Trading range $0.86 to $1.01 since IPO

Current option price of $0.018. Trading range $0.018 to $0.07 since IPO

31 August before any tax accrual NTA $1.1043

31 August NTA after realised and unrealsied tax accrual $1.0726

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Chairman’s address – Brett Spork

Profit before tax $9.9m

Profit after tax $6.9m

Total assets $65.3m

Total shareholders’ equity $60.4m

Summary of 2015 financial results

NTA per share after tax $1.0922

Earnings Per Share $0.126

As at 30 June 2015

NTA per share before tax $1.1445

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Item 1 – Financial Statements and Reports

Any Questions?

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7

Item 2 – Remuneration Report

Resolution 1 – Adoption of Remuneration Report “That the remuneration report as set out on page 19 of the 2015 Annual Report is adopted.”

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Item 2 – Remuneration Report

Resolution 1 – Adoption of Remuneration Report “That the remuneration report as set out on page 19 of the 2015 Annual Report is adopted.”

Proxy Votes Proxies have been received in respect of the resolution as follows:

For Against Open

4,856,237 346,070 20,511

92.98% 6.63% 0.39%

The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of each of the items of business.

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Item 3 – Appointment of Auditor

Resolution 2 – Appointment of Auditor “That, for the purpose of Section 327B of the Corporations Act 2001 (Cth) and for all other purposes, HLB Mann Judd, having consented in writing to act in the capacity of auditor, be appointed as an auditor of the Company.”

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Item 3 – Appointment of Auditor

Resolution 2 – Appointment of Auditor “That, for the purpose of Section 327B of the Corporations Act 2001 (Cth) and for all other purposes, HLB Mann Judd, having consented in writing to act in the capacity of auditor, be appointed as an auditor of the Company.”


For Against Open

5,004,557 0 244,811

95.34% 0.00% 4.66%


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Item 4 – Election of Directors

Resolution 3 – Election of Brett Spork as a Director “That, Brett Spork, who retires as a Director by rotation under clause 15.6 of the Company’s Constitution, and being eligible for election, is elected as a Director.”

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Resolution 3 – Election of Brett Spork as a Director “That, Brett Spork, who retires as a Director by rotation under clause 15.6 of the Company’s Constitution, and being eligible for election, is elected as a Director.”


For Against Open

4,753,557 250,000 242,811

90.60% 4.77% 4.63%


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Resolution 4 – Election of Ben Skilbeck as a Director “That Ben Skilbeck, a Director appointed to the Board to fill a casual vacancy, and being eligible for re-election, is elected as a Director.”

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Resolution 4 – Election of Ben Skilbeck as a Director “That Ben Skilbeck, a Director appointed to the Board to fill a casual vacancy, and being eligible for re-election, is elected as a Director.”


For Against Open

4,728,557 300,000 220,011

90.09% 5.72% 4.19%


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Why the Asian Opportunities Fund Limited?

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A portfolio of businesses, not

just shares

Only the most compelling investments considered

A true stock pickers portfolio: selective and concentrated

positions

No conviction = no investment

Net equity exposure: 88.5% As at 31/08/15

PAF Top 10 MSCI Asia ex Japan Top 10

Donaco International Ltd Samsung Electronics

51job Inc. Taiwan Semiconductor

Mindray Medical Tencent Holdings

Baidu Inc. China Mobile

HSBC AIA Group

Turquoise Hill China Construction

Genting Malaysia ICBC

Sinopec Kantons Holdings Hon Hai Precision

Astro Malaysia Holdings Bank of China

Tingyi CK Hutchison Holdings

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Online Classifieds & Service

Gaming

Infrastructure providers

Our best Asian ideas…

Market liberalisation, rising affluence, infrastructure improvements.

Monopoly assets, quasi consumption plays

Evolution in the way consumers view content and advertisers spending advertising dollars.

Consumer Rising affluence, household incomes and per capita spending.

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Recent research trips

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Attendees Kevin Bertoli & Paul Moore Focus Regional gaming & China

China, Macau, Vietnam and Cambodia

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Fixed asset investment cycle has come to an end…

Source: CEIC Data; RBA. *Diffusion index; average of the official and Caixin.

China – Activity Indicators – Year-ended growth

Fixed asset investment growth continues to decline, down 11.2% year on year in July

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19 Source: Morgan Stanley – as at 31 August 2015

China can no longer revert to fixed asset investment to stimulate growth

Over capacity in manufacturing sector

Increased leverage

Property overbuild

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Fixed asset investment cycle has come to an end… F

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3.2%

-1.2%

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-6.1%

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-9.2%

-12% -9% -6% -3% 0% 3%

Indonesia

Hong Kong

India

Korea

China

Thailand

Philippines

Malaysia

Singapore

Taiwan

PPI Inflation, %YoY, Latest*

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28

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31

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36

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1. Over capacity in manufacturing sector

Months in deflation | PPI Inflation, %YOY – Latest 36 months

Source: Morgan Stanley – as at 31 August 2015

Nine out of ten ASJ Countries are in outright producer price deflation

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2007: 145%of GDP

2014E: 206% of GDP

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1120

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AXJ Overall Debt, % of GDP

Overall Debt Breakdown (2014):Non-financial Corporate: 130% of GDPGovernment: 46% of GDPHousehold: 30% of GDP

AXJ Overall Debt | % of GDP

2. Increased leverage

0 2014E 206% of GDP

2007 145% of GDP

Overall Debt Breakdown (2014): Non-financial Corporate: 130% of GDP

Government 46% of GDP

Household 30% of GDP

Aggressive Rise in Leverage in AXJ

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(mn sqm)12M Rolling Total FS Started, bn sqm 12M Rolling Total FS Sold, bn sqm

Completed inventory

China Residential Property Market: Over-supply likely to take more time to improve

3. Property overbuild

Significant inventory build in the property market

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Economic vs. equity market miss match…

Source: * Morgan Stanley Research. MS-CHEX Index components include China’s electricity production, steel production, fiscal revenue, real imports and exports, and car sales.

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% YoY% YoY

MS-CHEX Index MSCI China ( RHS)

MS-CHEX Index vs. MSCI China YoY Change

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A-share market concerns reinforced

Source: CEIC, Morgan Stanley Research.

0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%20.0%

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A share total margin financing balance (USD mn)

Total margin financing as % of free float mkt cap. (RHS)

Monthly New Accounts Opening on Shanghai and Shenzhen Stock Exchanges Monthly New Accounts Opening on Shanghai and Shenzhen Stock Exchanges

Heavy manipulated

market

Rapidly evolving market access mechanisms

Leverage Corporate Transparency

On the way up Bullish government rhetoric

despite weakening economy

At the top Stocks suspensions, sales restrictions and forced

buyers

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Consumption driven growth the focus

Source: World Bank. *Literacy rates linked to higher rates of poverty and therefore government subsidies. The Indian society is highly reliant on government assistance which has slowed the ability of the government. to reinvest in the economy. 25

Population Growth Wage growth

1 2 3

Australia USA Japan China Korea Taiwan Malaysia Philippines Indonesia India Thailand

Population 22.5 318.9 127.1 1,355.7 49.0 23.4 30.1 107.7 253.6 1,236.3 67.7

Population growth 1.1% 0.8% -0.1% 0.4% 0.2% 0.3% 1.5% 1.8% 1.0% 1.3% 0.4%

Median age 38.3 37.6 46.1 36.7 40.2 39.2 27.7 23.5 29.2 27.0 36.2

Urban population 89.2% 82.4% 91.3% 50.6% 83.2% 78.0% 72.8% 48.8% 50.7% 31.3% 34.1%

GDP

- Agriculture 3.8% 1.1% 1.1% 10.0% 2.6% 2.0% 11.2% 11.2% 14.3% 17.4% 12.1%

- Industrial 27.4% 19.5% 25.6% 43.9% 39.2% 29.4% 40.6% 31.6% 46.6% 25.8% 43.6%

- Services 68.8% 79.4% 73.2% 46.1% 58.2% 68.6% 48.2% 57.2% 39.1% 56.8% 44.3%

Principal religion Buddhist 18%/ nil 52%

Christian 32%/ Buddhist 24%

Buddhist/ Taoist 93% Muslim 61% Christian 93% Muslim 87% Hindu 81% Buddhist 94%

Literacy* 99.0% 99.0% 99.0% 95.1% 97.9% 96.1% 93.1% 95.4% 92.8% 62.8% 93.5%

Urbanisation

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Asia: the fastest-growing middle class consumer

Source: Australia in the Asian Century Oct 2012 Australian Federal Government

North America 2009: 338 m 2030: 322m

Central and South America 2009: 181 m 2030: 313m

Middle East and Africa 2009: 137 m 2030: 341m

Europe 2009: 664 m 2030: 680m

Note: ‘Middle class’ is defined as those households with daily expenditures between US$10 and US $100 per person. The blue border circles and orange border circles depict the size of the middle-class population in 2009 and 2030 respectively.

Asia Pacific 2009: 525 m 2030: 3228m

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QUESTIONS AND ANSWERS

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PM Capital Asian Opportunities Fund Limited �(ASX: PAF) �DisclaimerSlide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7Slide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Why the Asian Opportunities Fund Limited?Slide Number 16Recent research tripsSlide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26QUESTIONS AND ANSWERS

pm capital asian opportunities fund limited (asx: paf) for ...2015/09/18 · mar-10 jun-10 sep-10...

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