Annual General Meeting 2016 For personal use only · 24-11-2016 · § Annuity-style income streams through subscription billing generating high double digit ROIs – a focus for

Integration / Innovation / Inspiration / Information

SmartTransHoldingsLimited(ASX:SMA)

AnnualGeneralMeeting2016

24November2016

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Integrity/Innovation/Inspiration/Information

Hon.MarkVaileAO

Non-ExecutiveChairman

AndrewForsyth

Non-ExecutiveDirectorIanHawkins

ExecutiveDirectorYui(Ian)Tang

Non-ExecutiveDirectorBryanCarr

CEO&ManagingDirector

GregSimpson

Non-ExecutiveDirector

SmartTransBoardF

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MobileandinternetsoftwaresolutionsinAustralia- exploringgrowthopportunitiesinChina

Twowelldefinedoperatingbusinesses

Integration/Innovation/Inspiration/Information

SmartPay: Mobile/internet-basedbillingsystemsande-CommerceplatformsinChina

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Integration/Innovation/Inspiration/Information4

KeyrevenuedriversinChina

DirectCarrierBilling:

§ Focustodatehasbeenonscalingupplatformandrevenuebase§ Forwardstrategytosecurehighermargin,thirdpartybillingagreements– underway§ NewinitiativessuchasPressPlay agreementpresentcompellingopportunities§ Revenuegrowththroughtransactionfees+shareofcontent/productsales§ Subscriptionbillingakeyfocus

E-commerce:

§ RevenueearnedfromshareofproductsalesinChinausingWeChatandAlipay platforms§ Rollingoute-commercethroughSMA’sproprietarymarketingplatform,coveringmultiple

websites/appsinChina§ Hosting,digitalbrandmarketingandcustomeracquisitionservices

Lotteries:

§ Establishedpartnershipwithlotteriesprovider§ PilotprograminHainanprovincehasbeenasuccess§ PursuingbroaderrolloutwithGeneralAdministrationofSportplantoaccelerateinnovation§ Significantfocusonsportsbetting§ SMAappointedadvisortogovernmentsponsoredLotteriesResearchThinkTank

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SmartPay Payment Partnerships§ SmartPay facilitatese-commerce,digitalmarketingandcustomeracquisition

§ TheultimategatewaytotransactinginChina– relationshipsnoteasilyreplicated

§ DirectcarrierbillingviaChinaMobile,ChinaTelecom&ChinaUnicomallowsreachto+1.23billioncustomers

§ CreditordebitcardtransactionviaUnionPay,thuscateringtoallbankaccountholdersinChina

§ AliPay – ChineseequivalenttoPayPal,allowsconsumerstopayusingaplatformwhichhandlesover50%of

China’sonlinetransactions

§ WeChatPay– popularwaytopayviamobile.ChineseequivalentofFacebook&Twitterwith+700million

users

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China– theworld’slargestsmartdevicemarketunderpinsSMA’sgrowth

0

100

200

300

400

500

600

700

800

2013 2014 2015 2016* 2017* 2018* 2019*

NumberofSmartphoneUsersinChina2013– 2019*

(millions)Active

internetUsers

Unique

mobileusers

668M

Penetration:49% Penetration:49%

675M


Largeaddressablemarket

Source:SourceDeutscheBankiResearch

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DirectCarrierBilling– SubscriptionBilling

§ SmartTransprovidesmonthlyrecurringsubscriptionbillingintheChinasmartphonemarket

§ Distributionandbillingforarangeofproductswithpaymentsbilledandcollectedbytelcos

§ Subscription-basedrecurringbillingprovidinglong-termrevenuestreamsfromup-frontinvestment

$(100,000)

$(80,000)

$(60,000)

$(40,000)

$(20,000)

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Mth1

Mth2

Mth3

Mth4

Mth5

Mth6

Mth7

Mth8

Mth9

Mth10

Mth11

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Mth15

Mth16

Mth17

Mth18

Mth19

Mth20

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Mth35

Mth36

AnticipatedCumulativeGrossProfitofSubscription Product

CustomerValue(CV)$3.37

*

CustomerAcquisitionCost(CAC)$1.75

*

(ROI)93%*

*Expectedfuturereturnfromoneofthecompany’ssubscriptionproductsbasedonthehistoricalperformanceofitssubscriptionproducts.Itisalsoexpectedthatrevenuewillcontinuebeyondtheperiodpresentedinthegraph.

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DirectCarrierBilling– 3rd PartyAppBilling

§ SmartTransprovidesin-Appbillingtothirdpartiesinthelargestsmartphonemarketintheworld

• Distributionandbillingforwell-knowforeignbrands

• ThereductioninrevenueandtheincreaseingrossprofitforQ12017arisesdirectlyfromthedecision

tofocusuponlowervolumebuthighermarginproducts.

REVENUE GrossProfit

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SmartTranse-Commerce

ConnectingAustralianbusinessestoChina


§ SmartTransistargeting40merchantcompanieswitheachcompanytargeting$1mper

annuminsalesinChina

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§ SmartTransgeneratesrevenuefrom:

§ Marketingservices– brandpromotion,customeracquisition

§ Merchantfeeontransactionatpurchase

§ Marginonproducts

§ Feeoncross-borderpaymentsettlementtransaction

Merchant

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SmartTranse-CommerceConnectingAustralianbusinessestoChina


WhatSmartTransofferstocompaniesseekingtosellintoChina:

§ Onlinepresence– hostedmobileandwebsiteplatforms

§ Onlinemarketingandcustomeracquisition

§ Addressestaxandregulatoryrequirements

§ Multi-facetedpaymentprocessing– allthepaymentmethods

peopleareaccustomedtousinginChinawithfocusonmobile

§ AbilitytosettlepaymentbacktoAustraliainAUDorother

countriesinpreferredcurrency

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0.1 0.3

0.9

2.1

3.4

4.5

5.5

¥0.0

¥1.0

¥2.0

¥3.0

¥4.0

¥5.0

¥6.0

2012 2013 2014 2015 2016e 2017e 2018e

RMBtrnMobilePhoneGrossShopping Value


e-Commerce

§ Targetinggrowthinthelargeandrapidlygrowinge-CommercemarketinChinawhere76%ofpeoplehaveused

theirsmartphonetomakepurchaseswithinthelastthreemonths

§ China’sonlineshoppersareexpectedtoincreaseto587millionin2018generatingRMB5.5trillioninsales(upfrom

413millionshoppersin2015)

§ Focusingonhigh-growthmarketsforproductssourcedoutsideChinaforwhichitbillsconsumersinChina

§ DevelopingstrategicrelationshipswithstrongonlinepartnerssuchasShanghai-listedDodoca forWeChat

marketing

Source:SourceDeutscheBankiResearch

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e-Commerce

SmartTrans,withafocusonhigh-growthproductsectors,islaunchingthesaleofthird-party

productsinthefollowingmarkets:

§ VitaminsandsupplementsmarketinChina- a$20billionmarketgrowingat20%perannum

§ Personalhygienemarket- growingat41%perannum

§ Personalskincaremarket- growingat29%perannum

§ AustralianwineexportstoChinawhichgrewby64%lastyeartoA$397million

Sources:www.masterintelligence.com/content/intelligence/en/research/press-release/2016/digital-wallets-surge-popularity.html,www.scmp.com/business/companies/article/1994999/chinas-online-retail-sales-double-three-years-analysts-sayEuromonitor InternationalCountryReports2015,Nielsen2015onlineshopperstudy,www.wineaustralia.com/en/Market%20Development/Market%20Programs/China.aspx

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LotteriesServices

§ In2016,SmartTranscommencedworkingwithaonlineandofflinelotteryproviderinChina,providingitstechnicalsystemstoservicetheworld’slargestlotterymarket(bysalesvolume)*

§ Marketwhichhasgrownata30%CAGRsincelaunchin1987*

§ SmartTrans’lotteriesserviceinitiallylaunchedinHainanProvincetoprovideconsumerswithaccesstolotteryandassociatedproducts

§ SmartTransappointedadvisortogovernmentsponsoredLotteriesResearchThinkTank

§ TheGeneralAdministrationofSportreleasedthe13thFive-yearPlanforChina’ssportsdevelopmenton5May2016,restatingtheobjectiveofpolicymakerstoaccelerateinnovationinthesportslotterysegment

§ ThroughstrategicpartnershipsSmartTransispositioningtobecomealeadingserviceprovidertothissector.

*Source:www.agtech.com/html/industry_lottery_overview_char.php

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§ AtthenexusofTechnology,Consumption,MobileandFinance…TheGatewaytoChina

§ HighBarrierstoentry– PrivilegedandtrustedbillingaccesstoChinaMobile,ChinaTelecomandChinaUnicomcustomerdatabases

§ Diverseapplicationsofitsbillingservicesbythirdparties

o Virtualproducts- GamesandApps

o PhysicalandServices- e-Commerce

§ Annuity-styleincomestreamsthroughsubscriptionbillinggeneratinghighdoubledigitROIs–afocusforSMAmovingforward

§ Focusnowistoreduceemphasisonlowermarginin-Appbillingtopursuehigher-marginproductsande-Commercerevenue– willresultinachangeinrevenueprofile

§ DiversifiedexposuretoChina’slargeandgrowinge-commerceindustry.Nosingleproductriskexposurewhichoffersabroader,thematicexposuretoChineseconsumptionandcross-bordertrade

§ Exposuretothelargestlotterymarketintheworldgrowingat30%CAGRsince1987*

Positioningforhighermarginrevenue

Source:www.agtech.com/html/industry_lottery_overview_char.php

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Highlyscalable:

§ Asimplebusiness– we‘cliptheticket’whetheritbeamobile-basedapp,thecross-bordersaleofgoodsandservicesorthebuyingofalotteryproduct

§ Servicingthelargestmobilephonemarketintheworld– China

§ Operatinginthelargeste-commercemarketintheworld

§ Servicingthelargestlotterymarketintheworld

§ Valuablecross-borderpaymentsettlementfacility

CompellingInvestmentCase

Source:www.agtech.com/html/industry_lottery_overview_char.php,iResearch)

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Growing,diversifiedcustomerbaseacrossChinaandAustralia

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CustomersbasecontinuestogrowasmorecompaniesseektotransactinChina

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Thisdocumentdoesnot,anddoesnotpurportto,addressanyorallissueswhichareormaybematerialorofinteresttothe RecipientinconnectionwithitsownduediligencereviewoftheCompany,theBusinessorotherwise.TheRecipientmaynot,andbyreceivingthisdocument theRecipientacknowledgesthatitisnotentitledtoandagreesnotto,relyonanypartofthisdocument(whetherastoamatteroffact, forecast,opinionorbelief)foranypurposewhatsoever.

Certainstatementsinthisdocumentrelatetothefuture.Theseforwardlookingstatementsinvolveknownandunknownrisks,uncertainties,assumptionsandotherimportantfactorsthatcouldcausetheactualresults,performanceorachievementsoftheCompanyandtheBusinesstobemateriallydifferentfromfutureresults,performanceorachievementsexpressedorimpliedbysuchstatements.Suchforwardlookingstatementsare basedonnumerousassumptionsregardingpresentandfuturebusinessstrategiesandtheenvironmentinwhichtheCompanywilloperateinthefuture.Norepresentation,assuranceorguaranteeisgiventhattheoccurrenceoftheeventsexpressedorimpliedinanyforwardlookingstatementsinthis documentwillactuallyoccur.Theforwardlookingstatementsinthisdocumentreflectviewsheldonlyatthedateofthisdocument.

Pastperformanceinformationgiveninthisdocumentisgivenforillustrativepurposesonlyandshouldnotberelieduponas(andisnot)anindicationoffutureperformance.Byacceptingthisdocument,theRecipientagreesthatitwillmakeandrelysolelyuponitsownduediligenceinvestigationsandenquiriesandwillnotinanywayrelyuponanyoftheinformationinthisdocumentorusethisdocumentforanypurposeotherthanasinformationtoassisttheRecipientanditsadviserstoundertakeitsownduediligenceinvestigationsandenquiries.

Noneofthestatements,opinions,projections,forecastsorotherforward-lookinginformationcontainedinthisdocumenthave beenindependentlyverifiedandnocommitment,representationorwarranty,expressorimplied,ismadeinrelationtotheiraccuracy,reasonablenessorcompleteness.Furthermore,wherestatementsinthisdocumentaretakenfromorattributedtosourcescreatedbythirdparties,theRecipientshouldhaveregardtothosesourcesandrelyonitsownenquiries.

SmartTranshaspreparedthisdocumentbasedoninformationavailabletoitatthetimeofpreparationandsubjecttothequalificationsinthisdocument.Tothemaximumextentpermittedbylaw,neithertheCompanynoranyofitsrespectiverelatedbodiescorporateorotheraffiliates,directors,officers,employees,representatives,agents,advisorsortheirrespectiveadvisors’affiliatesorpartners,directors,officers,employeesorcontractors(eachaLimitedPartyandtogethertheLimitedParties)takesanyresponsibilityforthecontentsofthisdocumentoranyactiontakenbytheRecipientoranyotherpersononthebasisofanyinformationinthedocument.TheLimitedPartiesdisclaimanyobligationorundertakingtodisseminateafterthedateofthisdocumentanyupdatesorrevisionstoanyforwardlookingstatementstoreflectanychangeinexpectationsinrelationto thosestatementsoranychangeinevents,conditionsorcircumstancesonwhichanysuchstatementisbased.Tothemaximumextentpermittedbylawanyandallliabilityinrespectofthisdocumentandtheinformationcontainedwithinitisexpresslyexcludedincludingwithoutlimitationanydirect,indirectorconsequentialliability,expenses,losses,damagesorcostsincurredbytheRecipientoranyotherpersonasaresultoftheirreceiptoruseofthisdocumentorarisingfromtheinformationinthisdocumentbeinginaccurateorincompleteinanywayforanyreason,whetherbynegligenceorotherwise.NoLimitedPartymakesanyrepresentationorwarranty,expressorimplied,astothecurrency,accuracy,completeness,reliability,fairnessorcorrectnessoftheinformationcontainedinthisdocumentoraboutSmartTransgenerallyoranyopportunitytoinvestinSmartTransinthefuture.

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Annual General Meeting 2016 For personal use only · 24-11-2016 · § Annuity-style income streams through subscription billing generating high double digit ROIs – a focus for