Gunkul Engineering Plc.gunkul.listedcompany.com/misc/PRESN/201400828-gunkul-oppDay2… · of...

Gunkul Engineering Plc.

Opportunity Day Q2/2014

2

Strictly Private & Confidential

1. Strategic Direction

2. Company Overview

3. Financials

4. Growth Strategy

Agenda

3

1. Strategic Direction

4


Past Present & Future Direction

Section 1: Strategic Direction

PR

ES

EN

T

PA

ST

FU

TU

RE

Mostly green field

Mostly Thailand

Partially divest so as

to reinvest in higher-

yield opportunities

JV & green field

Asian countries

Position as a

developer—seek for

higher yield projects,

develop and partially

divest so as to buildup

balance sheet

initiation of new energy-

related business

Continuous capacity

ramp-up

Stable income from

diversified power

plant portfolio

further earning uplift

from EPC business

and initiation of

energy-related

business

5


Strategy

Section 1: Strategic Direction

GROWTH

DISCIPLINE

Capacity ramp-up of energy

Line-up renewable energy

construction work

Expansion in Asia

Cash return on

investment with hurdle

of ~18-20%

Dividend payout policy

of > 40%

6

2. Company Overview

7


Trading and

manufacturing, 20.0%

EPC, 30.0%

Power producer,

45.0%

O&M, 5.0%

GUNKUL– Leading Integrated Energy Player

Section 2: Company Overview

Founded in 1982

as an electrical

equipment trader

1982

Set up our

own

manufacturer

1992

Expanded business to

neighboring LVMC

countries

Found the first offshore

office in Myanmar

1997 2009

Entered into

renewable

energy EPC

business by

achieving supply

and set up the

first wind turbine

of Thailand to

EGAT

Since 2010

Trading and

manufacturing

EPC

O&M

Trading and

manufacturing

One of the largest medium- to high-voltage electrical equipment manufacturer and supplier (over 5,000 product items)

Thailand's no. 1 one-stop provider for renewable power plant EPC (Engineering, Procurement and Construction)

Own power plants. Positioned as a power developer as a shortcut to become leading power producer

Expand into renewable energy

power producer business

Possess a current renewable

energy pool of 178 MW (58 MW

of solar and 120 MW of wind)

4 business units

1

2

3

2017F Revenue

Breakdown2013 revenue

breakdown1

Remark: (1) This revenue includes dividend

income earned from the JV companies

operating solar power plant businesses

Power producer 4

8


Business Structure


GUNKUL

Group

Public

shareholders

GUNKUL PCL.

60% 40%

G.K.Assembly100%

G.K.Power

K.N.P.Supply

GUNKUL CHUBU

Powergen (1)

G-Power Source (2)

NK Sola

Wind Energy

Development

51%

40%

100%

100%

Trading and

manufacturing &

EPC business

Power producer

business

Remark: (1) the remaining stake of 49% of GCPG is

held by Chubu Electric Power Gem B.V.(2) the 60% stake of GPS is held by The

Electricity Generating PCL (EGCO)(3) GUNKUL hold 100.00 percent of shares(4) GUNKUL hold 25.01 percent of shares

Greenovation Power

100%

Gunkul LED74.99%

100%

100%

25.01%

100%

100%

100%

100%

WHA Gunkul Green Solar Roof

1,3,6,10,17

Solar Energy Society

Gunkul Solar Roof 1

Gunkul Solar Power 2

Siam Gunkul Solar Energy

Gunkul Myanmar Central Power

51%

9


Business Structure


CustomerManufacturer Distributor

GKA

GKP

External

Manufacturer

KNP

GUNKUL

Gov’t

Private entities

Foreign gov’t

Trading and Manu Business Flow1

CustomerSupplier Main Contractor

EPC Business Flow

GKA

GKP

External

Manufacturer

GUNKUL

GCPG

GPS

In/external

power

producer

2

Power Producer BU Flow

Solar 30.9 MW

3

GUNKUL CHUBU Powergen

G-Power Source

NK Sola

Wind Energy Development

Solar 26.0 MW

Solar 1.0 MW

Wind 60.0 MW

Electricity AuthorityPower plant

Greenovation PowerWind 60.0 MW

GLED

WHA Gunkul Green Solar Roof 1Solar Rooftop

636.48 kWp


832.32 kWp


832.32 kWp

WHA Gunkul Green Solar Roof 17

Solar Energy Society

Gunkul Solar Power 2

Gunkul Solar Roof 1

Siam Gunkul Solar Energy

Solar Rooftop

997.56 kWp

Solar Rooftop

723.84 kWp

Solar Rooftop

264.32 kWp

Solar Rooftop

538.56 kWp

Solar Rooftop

1,872 kWp

Gunkul Myanmar Central PowerGas Engine

25 MW


979.20 kWp

10


Trading and Manufacturing Business


1

Electricity plants:

Wind turbine

components

Solar panel components

Transmission lines:

Cable and accessories

Fuse and switches

Hardware and connectors

Insulators

Lightning protection

Maintenance equipment

Tools and instruments

Substation:

Battery and chargers

Capacitors

Grounding


Meters


Transformers

Low voltage lines:

Capacitors

Explosion proof products

Fuses and switches

Grounding

Hardware and connectors

Insulators


Meters

Preformed

Street lighting and control

Telephone hardware

We offer a wide range of products and services from upstream to downstream of the electricity supply system (over 5,000 electricity items)

Distribution lines:

Cables and accessories

Capacitors

Fuse and switches

Grounding

Hardware and

connectors

Insulators


Live part covers


Meters

Preformed


Transformers

Highlight in-house products

Cutout Arrester Disconnecting switch SF6 gas switch Low-voltage switch

11


EPC Business


2

Project Reference

Project Owner MW Status

1) Gunkul Powergen (Phase 1)

2) G-Power Source (Phase 1)

3) Gunkul Powergen (Phase 2)

4) G-Power Source (Phase 2)

5) NK Power Sola

6) CK & Sun Solar Power Plant

7) Solatra Solar Power Plant

8) BSE (NMA)

9) BSE (CPM1)

10) Solar Rooftop Projects

4.4

19.5

23.5

6.5

1.0

8.0

8.0

12.5

12.5

11.0

Complete

Complete

Complete

Complete

Complete

Complete

Complete

Complete

Complete

75% Complete

Total 106.9

Business Partner

With more 30-year experience in the electrical system and its integrated business model, we are well positioned to offer one-stop services for constructing renewable power plants

12


Power Plant Business


3

Project 1 (Operated since 2011)

Capacity: 3.0 MW and 4.4 MW

Location: Chondan Petchaboon

Average Radiation: 5.08 kWh/m2/d

Project 2 (Operated since Mar 2013)

Capacity: 8.0 MW

Location: Petchaboon


Project 3 (Operated since Mar 2013)

Capacity: 4.5 MW

Location: Pichit


Project 4 (Operated since June 2013)

Capacity: 8.0 MW

Location: Nakorn Nayok


Project 5 (Operated since May 2013)

Capacity: 3.0 MW

Location: Bung Samphan, Petchaboon


Solar

30.9 MW CapacityGPS Plants

GPG Plants

WED Plants

Total Plants : 18 Plants

Already COD : 60.2 MW

Going to Construction : 170 MW

Total : 230.2 MW

NK Plant

Solar

1.0 MW Capacity

Project 1(Operated since Nov 2013)

Capacity: 1.0 MW

Location: Kanchanaburi

Solar

26 MW Capacity

Project 1 (Operated since Q12012)Capacity: 6.5 MWLocation: Tasang, Nakorn - Sawan

Project 2 (Operated since Q12012)Capacity: 6.5 MWLocation: Takeed, Nakorn -Sawan

Project 3 (Operated since Q12012)Capacity: 6.5 MWLocation: Dong-Korn, Chainat

Project 4 (Operated since Feb 2013Capacity: 6.5 MWLocation: Bung Samphan, Petchaboon

Project 1 (Under Development)

Capacity: 10 MW

Location: Nakorn Ratchasima


Capacity: 50 MW


Wind

60 MW Capacity


Capacity: 60 MW


Wind

60 MW Capacity

GNP Plant

Total 17 Projects

Total Capacity: 11.18 MW

Location: Bangkok, Rayong, Samutprakarn

WHA-GUNKUL

Gas Engine

50 MW Capacity

Project 1 (Operated since Nov 2013)

Capacity: 25.0 MW

Location: Rangoon, Myanmar


Capacity: 25.0 MW

Location: Rangoon, Maynmar

GMP

13


Power Plant Business (Cont’d)


3

SolarSolar

RooftopWind

Gas

Engine

Project investment

costs

~THB80–100 mm

per MW

~THB 75 mm

per MW

~ THB75-85 mm

per MW

~ THB58 mm

per MW

Technology

Thin Film CIS modules

without cadmium or

Crystalline Silicon

Module

Crystalline Silicon

ModuleHorizontal Wind Turbine Gas Fired Engine

Selling price

(Base tariff)~THB3.0 per kWh

Feed-in Tariff (FIT)

THB6.16 per kWh

for 25 years since COD

~THB3.0 per kWh ~US$0.034 /kWh

AdderTHB8.0 per kWh for 10

years since COD-

THB3.5 per kWh for 10

years since COD-

BOI tax exemptionYear 1st - 8th : 100%,

9th – 13th : 50%

Year 1st - 8th : 100%,

9th – 13th : 50%

Year 1st - 8th : 100%,

9th – 13th : 50%Year 1st - 5th : 100%

Import tax100% import tax

exemption

100% import tax

exemption

100% import tax

exemption

100% import tax

exemption

Yearly revenue ~ THB 19 mm per MW ~ THB 10 mm per MW ~ THB 15 mm per MW ~ THB 2 mm per MW

Key Information

14


Power Plant Business (Cont’d)


3

Gunkul Myanmar Power

(Hlawga) Pte. Ltd.

Myanmar Local

Partner

Gunkul Engineering

PLC.

GKMCP II

SCOD : 2H 2015

GKMCP I

COD: Nov 2013

60%

51% 49%

40%

15


Progress on 120-MW Huai Bong Wind Farm


Land site: fully secured1

Fencing works : Done

Land Boundary Measurement: Done

EIA: approved

License for 120 MW Huai Bong Wind Power Project: (WED 60 MW and GNP 60 MW)fully secured

2

3 Wind Data Summary Report

Average wind speed (34 months) at 100 m height: 5.6 m/s (WED mast 1) and 5.7 m/s (WED mast 2)

The long term wind speed at 100m are 5.8m/s (Mast HB1) and 5.9 m/s (Mast HB2)

The long term wind speed at 125m are 6.0 m/s (Mast HB1) and 6.2 m/s (Mast HB2)

WED

GNP

16

3. Financials


1717

Note : Total Revenue from Government , Private and Foreign Customer is considered as revenue from Conventional Business.

Revenue Breakdown

Revenue from sales of electricity and EPC work is expected to be majority in the future.

Revenue Breakdown by Customer Type % Revenue Breakdown by Customer Type

2014

2013

THB MM

1,288

2,651

2,746

4,722

1,668

1,692


1818

Revenues & Profit as of June 30, 2014

Revenue vs. Overall Gross Margin Net Profit vs. Net Profit Margin

THB Mn

THB MM

GPS divestment GPG divestment

Included Gain From share divestment


1919

Our Financial Flexibility

Gunkul’s Liabilities D/E Ratio

Debt to Equity ratio

THB MM

657

4,355

4,814

1,459

2,643


2020

Unit : THB mm

Comparison of Balance Sheet 2014 VS 2013

Balance Sheet

Non Current Asset

Current Asset

Current Liabilities

Non Current Liabilities

Shareholders' Equity

As of Jun 30,2014As of Dec 31,2013

Total Asset 4,579.61 Total Asset 5,767.39


2121

Financial Information as of June 30, 2014

Asset Liability EquityUnit : THB MM Unit : THB MMUnit : THB MM

Transaction 30/6/2014 31/12/2013 31/12/2012 31/12/2011 31/12/2010 31/12/2009

Asset (MB) 5,767.39 4,579.61 7,197.34 5,539.78 1,789.71 856.90

Liability (MB) 2,642.89 1,458.88 4,983.90 4,356.18 657.51 351.79

Equity (MB) 3,124.50 3,120.73 2,213.44 1,183.60 1,132.20 505.11

Paid-up (MB) 880.00 660.00 440.00 400.00 400.00 300.00

Revenue (MB) 1,726.15 2,855.72 4,763.87 2,668.70 1,288.70 864.07

Revenue (MB)* 1,346.98 2,431.51 4,715.87 - - -

Net Profit (MB) 308.43 867.97 769.60 89.52 123.17 53.66

ROA (%) 5.35 18.95 11.06 1.62 6.88 6.26

ROE (%) 9.87 27.81 35.88 7.56 10.88 10.62

Net Profit (%) 17.87 11.92 10.29 3.35 9.56 6.21

Net Profit (%)** 17.87 30.39 16.15 - - -

* PROFIT SHERING FROM INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

** INCLUDED GAIN FROM SALE OF INVESTMENT

(2.03)

(2.89)


2222

Million Baht.

Profit sharing from GPS & GCPG (2013 vs 2014F)

Q1/13 Q1/14 Q2/13 Q2/14 Q3/13 Q3/14 Q4/13 Q4/14

150

241

0

50

100

150

200

250

300

Y2013 F2014


2323

Backlog & Sales Forecast and Incoming Project

- The value of backlog project and sales forecast are 2,909 million baht.

Column1 Project (Incoming) MW. Expected SCOD

1 WED 60 Q4/15

2 GNP 60 Q4/16

3 Gas Enging (Myanmar) # 1 25 COD ( NOV/13)

4 Gas Enging (Myanmar) # 2 25 Q4/15

EPC, 1,389 Mn

Service, 50 Mn

Electricity, 20 Mn

Backlog Project : THB 1,459 million

No. project Amount (Million Baht)

1 EPC 1,389

2 Service 50

3 Electricity (NK Solar) 20

Total 1,459

Backlog project : THB 1,459 million

Domestic Trading, 970 Mn

Oversea Trading, 480 Mn

Forecast Sales : THB 1,450 million

No. project Amount (Million Baht)

1 Domestic Trading 970

2 Oversea Trading 480

Total 1,450

Forecast Sales : THB 1,450 million

24

4. Growth Strategy

25


Strategy for Trading and Manufacturing Business1

Expansion and improvement of electrical system are

expected, as demand for electricity continued to

expand

In 2012 electricity peak demand in Thailand increased

strongly at 9.2% YoY, compared with the average of

2.4% of growth rate of peak demand over the past ten

years

Investment in transmission and distribution

systems will remain substantial

As indicated in PDP 2010, the investments for the main

electricity authorities during 2010-20F is budgeted to

reach THB328 bn

1,691 1,779

328421

2010-2020 2021-2030

Power generation Distribution

Section 4: Growth Strategy

Unit: THB bnUnit: MW

+9.2% YoY

Source: EPPO as of May 2013

26


Strategy for Trading and Manufacturing Business1


Gov’t budget of THB2 trillion for improving Thailand’s infrastructure including

the construction of Mass Rapid Transit for 9 routes will create demand of our

in-house productsIn-house

products

1.Bangsue-Bangyai

C1.Bangsue-Talingchan

5.Bangkapi-Bangbumru

7.Bangkapi-Minburi

C3.Bangsue-Pyatai-Huamark2.Bangsue-Thapra

Hualumpong-Bangkae

6.Taksin-Bangwa-Puttamonton sai 4

3.Morchit-Paholyathin-Sapanmai (Lumlukka)

C2.Bangsue-Thammasart Rungsit

C4. Hualumpong-Mahachai

4.Baring-Sumrong-Samutprakarn (Bangpu)

8.Outer Ring Road (A-D)

Transport network of rail and mass transit 9 lines

27


& Strategy for EPC and Power Producer


2 3

Growing number of renewable power plants is expected

From New Alternative Energy Development Plan 2012-2021, following policy announcement on November 30, 2011 by the government,

renewable energy is to contribute 25% of electricity source by 2021. On July 2013, the regulator increased generating capacity from 9,201

MW to 13,927 representing 51%

Type of Energy Previous Capacity Current Capacity PPA-Granted PPA-COD in Q1/2014

Solar 2,000 3,000 1,493 961

Biogas 600 3,600 242 275

Biomass 3,630 4,800 2,301 2,351

Waste 160 400 163 47

Hydro 1,608 324 14.03 112

Wind 1,200 1,800 1,817 223

Total 9,201 13,927 6,030 3,969

Thailand’s PDP 2010, 3rd revision

Unit: MW

PreviousTotal 9,201 MW

RevisedTotal 13,927 MW in 2021

Source: http://webkc.dede.go.th/testmax/sites/default/files/factsq1_2014.pdf

Current (install capacity)Total 3,969 MW in Q1/2014

http://webkc.dede.go.th/testmax/sites/default/files/factsq1_2014.pdf

28


On July 16, 2013, the Energy Ministry launched a solar rooftop program and set the rate of electricity to be sold back to utilities (the Provincial Electricity Authority) in a range of 6.16 to 6.96 baht

Energy Regulatory Commission was delegated to issues regulations for the purchase of power from solar roof

The Energy Ministry also revised up the target of electricity contribution from renewable energy sources by 51% from 9,201 MW to 13,927 MW, 3,000 MW of 14GW are targeted to come from solar energy sources

800MW1,400

MW

800 MW

Solar Rooftop

Provincial Solar Farm

Solar Farm

Breakdown of Thailand’s solar

power industry

Total 3,000 MW

Solar Roof

Total Value

800 MW

~THB 56 Bn.


Thailand’s Solar Industry Snapshot

& Strategy for EPC and Power Producer2 3

29


Solar Roof Government Feed-in Tariff Program

Residential Industrial Building

0 to 10 kW 10 to 250 kW 250 kW to 1 MW >1 MW

Private CustomerLocal communities

Small buildings

Agriculture

Local communities

Medium buildings

Agriculture

Industries

Industries

Retail

Logistic centres

Installed capacity

6.96 6.55 6.16FIT

(Baht/unit)

0 to ~77 sq.m. ~77 to ~1,900 sq.m. ~1,900 to ~7,700 sq.m.


30


11 MW

Our Solar Roof Project Pipeline


Yr. Residential (MW) Industrial (MW)

GrantedQuota

Submit / Granted

Granted Quota

Total Submission

Granted PPAfor GUNKUL

Remark

1 100 36 100 456 11 GUNKUL submitted in total 81 MW

2 100 100 -

70 GUNKUL Opportunity3 100 100 -

4 100 100 -

Total 400 400 -

7.5 MW

3.5 MW

100% EPC by GUNKUL

100% Own by GUNKUL

GUNKUL with Partner

31



PPA status of Wind Energy

Currently, GUNKUL has been granted PPA 120 MW

GUNKUL is looking for opportunity to get more PPA around 100-150 MW

Already COD,

209 MW

PPA-Not COD yet,

1,608 MW


32



With unusable land of wind projects

(2,100 Rais with additional land for new

projects), plantation of high heat plants

is an interesting option for biomass

power plant or trading business

Biomass Business


New opportunity to fulfill

“Smart Energy in Action!”

33


Existing & Potential Power Plants of Domestic Renewable Market

Extracting growth from existing domestic assets & potential developing projects


3

Energy/

CapacityCompany Project Location

2013 2014 2015Installed

Capacity

Accumulat

ed

Installed

Capacity

Q2 Q3 Q4 Q2 Q1 (MW) (MW)

Solar/57 MW

GPG Project 1 Chondan COD since 2011 7.5 7.5

GPS Project 1-3 Tasang, Taked, Dong-Khon COD since Q12012 19.5 27

GPS Project 4 Bung Samphan COD since Feb, 2013 6.5 33.5

GPG Project 2 Petchaboon COD since Mar, 2013 8 41.5

GPG Project 4 Nakorn Nayok COD since June, 2013 8 49.5

GPG Project 3 Pichit COD since Mar, 2013 4.5 54

GPG Project 5 Bung Samphan COD since May, 2013 3 57

Solar/1 MW NK Project 1 Kanchanaburi COD since Nov,

20131 58

Solar Roof Top Solar Entities Project 1-17Bangkok, Saraburi, Rayong,

Nongthaburi, etc

Amount 3 Projects

COD since April,

2014

5.36 63.36

Wind # 1/60 MW

WED Project 1 Huai Bong 1& 2SCOD

Q41510 73.36

WED Project 2 WayuSCOD

Q41550 123.36

Wind # 2/60MW GNP Project 1 SalarnlomSCOD

Q41660 183.36

Wind # 3/60 MW Potential developing projects 50 233.36

Wind # 4/60 MW Potential developing projects 50 283.36

Solar/40 MW Potential developing projects 40 323.36

Total 323.36 MW

34


Potential Oversea Wind Projects

Granted MOU by

MOEP2 (Ministry of

Electric Power 2) to

conduct feasibility

study for wind

projects in Myanmar

with total capacity of

1,000MW


3

35

Q & A

36


Disclaimer

This presentation includes statements of future expectations, projections or other forward-looking

statements, which reflect our current views with respect to future events and are not a guarantee of further

performance. A number of important factors, risks and uncertainties could cause actual results or

outcomes to differ materially from those expressed in any forward-looking statement. No assurance is

given that these future events will occur, or that the Company’s assumptions are correct.

Contact us at [email protected]

37


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