Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
PM Capital Asian Opportunities Fund Limited
(ASX: PAF)
2016 Annual General Meeting
21 October 2016
For
per
sona
l use
onl
y
Disclaimer
2
This presentation dated 21 October 2016 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
For
per
sona
l use
onl
y
3
Agenda
Chairman’s address 4
Formal items of business 5
Item 2 – Remuneration Report 6
Item 1 – Financial Statements and Reports 5
Item 3 – Election of Directors 8
Investment Manager’s address 10
Questions and answers 17 For
per
sona
l use
onl
y
6
Item 2 – Remuneration Report
Resolution 1 – Adoption of Remuneration Report
“That the remuneration report as set out on pages 13 – 14 of the 2016 Annual Report is
adopted.”
For
per
sona
l use
onl
y
7
Item 2 – Remuneration Report
Resolution 1 – Adoption of Remuneration Report
“That the remuneration report as set out on pages 13 – 14 of the 2016 Annual Report is
adopted.”
Proxy Votes
Proxies have been received in respect of the resolution as follows:
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of each of the items of business.
For Against Open Abstained/
Excluded
13,855,062 158,441 90,761 49,307
98.24% 1.12% 0.64% For
per
sona
l use
onl
y
8
Item 3 – Election of Directors
Resolution 2 – Election of Todd Barlow as a Director
“That Todd Barlow, 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
per
sona
l use
onl
y
9
Item 3 – Election of Directors
Resolution 2 – Election of Todd Barlow as a Director
“That Todd Barlow, 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.”
Proxy Votes
Proxies have been received in respect of the resolution as follows:
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of each of the items of business.
For Against Open Abstained/
Excluded
14,016,805 0 136,766 0
99.03% 0.00% 0.97% For
per
sona
l use
onl
y
10
Why PM CAPITAL?
Long term performance accretion
Built on the integrity and consistency of philosophy and process
30+ years, same philosophy, same process
Simple ideas, simple companies, multiple iterations
Alignment through co-investment = minority protection
• PAF 13.5m shares = 24.3%^
• Investors not Fund gatherers
• Not corrupted by external pressures
Performance calculated from Inception date for the Asian Companies Fund, 28 October 1998 to 30 September 2016. ^As at 6th October 2016.
Performance (net of fees)
30 September 2016
Inception
Date
Since
Inception p.a.
Total Return
Since Inception
Asian Companies Fund 07/2008 15.3% 222.8%
MSCI AC Asia ex Japan Net Total Return Index ($A) 7.0% 74.5%
For
per
sona
l use
onl
y
11
Why PAF?
To facilitate the offshore investment proposition
A greater breadth of opportunity and superior risk reward
Australian investors over exposed to domestic dynamics
A collection of discounted businesses at a discount*
PAF discount to Pre-Tax NTA (Share Price premium to Pre-Tax NTA): 11.4% (12.9%)
Annual Gross Dividend Yield**
• PAF = 7.68%
A true stock-pickers portfolio: selective and concentrated positions
A different risk reward proposition to the market (reference portfolio)
The objective of any genuine long term investor is to buy assets at a discount to
their inherent value and sell investments that are selling at a premium.
Quasi buyback
* Price discount to NTA (14 October 2016 NTA; 19 October 2016 closing share price). **Annualised dividend grossed up for franking credits, as at 19 October 2016.
For
per
sona
l use
onl
y
12
FY16 Review - Asia
PAF 82.9%* invested given China concerns.
50%+ listings on the Shanghai Comp Exchange suspended.
China announces ‘one off’ depreciates RMB = China growth fears take centre
stage.
Portfolio holding Wumart Stores receives privatisation proposal from its
controlling shareholder, transaction finalised January 2016.
Portfolio holding iProperty Group receives takeover offer from REA Group,
transaction finalised in February 2016.
RMB depreciation continues, USDCNY reach 5yr high. New circuit breaker
rules magnify selloff. Worse case scenarios for China growth now in play.
MSCI Asia Ex Japan bottoms – valuations at GFC lows. Oil price hits 13yr lows.
PAF long equity exposure reaches 97.2%**.
August 2
October 3
January 5
February 6
November 4
July 1
March 7
June 8
China government starts to support the underlying economy.
Brexit surprise.
*As at 30 June 2015 **As at 29 February 2016.
For
per
sona
l use
onl
y
Current Portfolio
13
Gaming
Severe cyclical correction.
Long term structural growth
driven by rising affluence &
improved market accessibility.
Financials
Cyclical inflection point,
leveraged to normalisation of
global rates. Depressed
valuations.
Stock specific Misunderstood stock specific
opportunities.
Online classifieds &
e-Commerce
Structural growth. Evolution in
content delivery, consumer
habits & advertising models.
4
1
2
5
Consumer
Rising affluence, increased
distribution reach,
premiumisation, market
consolidation.
3
For
per
sona
l use
onl
y
14
• Severe cyclical recovery – industry hit by a perfect storm. Gaming
revenues peak to trough down 50%, share prices 80%
• Asia’s Las Vegas – long term structural evolution of the Chinese mass
market consumer
• Industry going ex-CAPEX with significant free cash flow available to
be returned to shareholders
Source: Bloomberg, DSEC.gov (Macau Government)
Gaming
Macau Monthly Gaming Revenues (Mil Pataca) Share Price History - Macau
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
MOP m YoY Change
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$5
$10
$15
$20
$25
$30
$35
2011 2012 2013 2014 2015 2016
Wynn Macau (HKD) MGM China (HKD) Las Vegas Sands (USD)
HKD USD
For
per
sona
l use
onl
y
15
• Beneficiaries of the shift to consumption lead economies across Asia region.
• Business with strong sustainable industry positions that will benefit from
volume growth and display strong pricing power overtime.
• Sold off short term with concerns surrounding China.
• Trading at a discount to develop market peers.
Source: Bloomberg, DSEC.gov (Macau Government)
Consumer franchises
Share Price History – Hengan International (HKD)
$50
$55
$60
$65
$70
$75
$80
$85
$90
$95
$100
2011 2012 2013 2014 2015 2016
Share Price History – Tsingtao Brewery (HKD)
$20
$25
$30
$35
$40
$45
$50
$55
$60
$65
$70
2011 2012 2013 2014 2015 2016
Initiated
position Initiated
position For
per
sona
l use
onl
y
16
High barriers to entry
Scalability
Early stages of life cycle
First mover advantage
Low capital intensity
High ROIC
High cash
generative
business
Highly attractive business models
*PM CAPITAL Limited Asian strategies as at 30 September 2016
Structural change | Classified & e-Commerce
Repeatable theme across different
sectors
Current holdings*
• 51Jobs, Zhaopin & 104 Corp. (jobs)
• Autohome Inc. & iCar Asia
(automotive)
• Baidu (search)
Share Price History – iCar Asia (AUD)
$0.00
$0.30
$0.60
$0.90
$1.20
$1.50
$1.80
2012 2013 2014 2015 2016
Initiated
position
For
per
sona
l use
onl
y