khun surachai chetchotisak, ceo khun wittawat

2021 RS Business Direction19 January 2021

Virtual Conference

Khun Surachai Chetchotisak, CEO

Khun Wittawat Wetchabutsakorn, CFO

RS’s 4 Strategy Pillars for 2021

3

RS’s 4 Strategy Pillars for 2021

> Building on Our Key Strengths

> A Growth of Content Driven Utilization

> M&A Execution

> Diversification of New Products into Untapped Markets

Building on Our Key Strengths

6

Building on Our Key Strengths : RS Mall

Inbound (TV Broadcast) Outbound Online

Telemarketing Digital Marketing

Web App

New customer 30%*

Repeat purchase from 2 to 2.4 times**

New traffic 150% per month

45% 40% 15%

* New customer includes new customers not recorded in RS’s database and 1.6M existing customers purchasing new product categories** Repeat purchase rate calculated from a number of repurchases of active customers during a year

7

Inbound (TV Broadcast) Channel

New customer 30%

> Diverse TV ads : Talk, Live, Spot, PR & other blended commerce content in programs

> New TV channel partners & more precise advertising planning

> Exclusive products & campaigns for each channel

8

Outbound Channel

Repeat purchase from 2 to 2.4 times

> Predictive dialling system (PDS) improvement to cover all 1.6M customers

> An adoption of voice analytics to better understand a customer's perspective through their voice and tone

> More product assortment that match customers’ profile from data analytics

Telemarketing Digital Marketing

> Brand royalty through branding, marketing, CRM & design

9

Online Channel

New traffic 150% per month

> New traffic source : marketplace & social commerce

> More interactive website of RS Mall & a launch of app

> A launch of Coolanything’s website (new 170K potential customers per day) with long tail marketing

> Collaborative adsdriving traffic to online products and effectively retargetingcustomers

Diversification of New Products into Untapped Markets

12

New Product Lines into Untapped Markets

Functional Drinks Innovative Health Product Pet Food

40% 40% 20%

Untapped market

Convenience Store Exclusive Distribution Network (EDN) Specialty Store E-Commerce

13

New Product Lines through New Channels : Functional Drinks

Product Strategy

> Offer new sources of main ingredient

> Differentiate by price, presenter & product color

> Healthy trends driving demand for functional drinks and to boost immunity during pandemic

7-1150%

CVS/ Superm

arket17%

T/T23%

E-Comm

10%

Apr’21 Jun’21 Sep’21

Product Launch Roadmap

Target Market

Functional Drinks Market Landscape

The demand for functional drinks has been driven by perceived health benefits associated with their consumption and the overall wider availabilityin more retail stores nationwide. The distribution of functional drinks grew rapidly in the past years as consumers are becoming more healthconscious. In addition, government cut taxes on functional drinks (e.g. drinks that offer health benefits, such as those with added collagen orvitamins). In 2020, vitamin C drink continues to grow with the highest growth rate at almost 50%.

Functional Drinks in Thailand

14

Unit : THB bn 2018 2019 9M2020 YTD

Energy Drinks 23.6 24.4 21.0 7%

Functional Drinks 6.5 8.0 9.1 14%

Functional Drinks Channel

45% 55%

Traditional Trade Modern Trade

Thailand's liquid refreshment market in 2019 of THB 155bn

Source : OSP, Drinktec and Bangkok Post

15

New Product Lines through New Channels : Innovative Health Product

Product Strategy

> Strengthen premium grade of healthproduct at an affordable price

> Unlock new health & beauty equation : skin, hair, nail, bone & joints benefit

Mar’21 Jun’21

Target Market

Exclusive Distribution

Network90%

E-Comm10%


Health Product Market Landscape

Health Product in Thailand

16

Unit : THB bn 2019 2020 Y-Y

Health supplements 20.9 23.9 15%

Value of supplements market by type

The market size of health supplement products in Thailand is close to24 billion baht and continue to rise by 15% in 2020. The marketgrowth is attributed to the following factors:1. A demand is growing for products that offer a convenient way to

maintain health, boost wellbeing and/or manage weight2. Thai consumers are increasingly conscious of the importance of

good nutrition and3. Thailand has become an ageing society showing huge

opportunities in health-conscious products such as organicproduce, food supplements and low-sodium diets

Source : Marketeer and Euromonitor

17

New Product Lines through New Channels : Pet Food

Product Strategy

> Target upper standard segment at an affordable price with a concept of “Best Health Condition at all Age”

> Launch different category by flavor, breed, age and size

May’21

Target Market

18 SKU

T/T & Specialty

70%

M/T20%

E-Comm

10%

1.5kg 3kg

10kg


Unit : THB bn 2018 2019 Y-Y

Pet Market Size 32.2 35.5 10%

Pet Food Market Size 14.6 16.0 9%

Specialty Trade Channel

7.3%

The pet-loving community is becoming bigger and stronger that resulted in Thailand pet food market continue to grow. Dogs make up the largest market segment for pet food, both in terms of revenue and volume holding. The dog population continued to rise, and growth continued due to the increasing number of single people, couples without children and the elderly, who enjoy keeping a dog for company.

Modern Trade Channel

40%

20%

9%

31%

Dry Food

Wet Food

Homemade

A Mix of All Food Types

1.2%

40% 60%

The types of pet food

Pet Food in Thailand

Health Product Market Landscape

18Source : Marketeer and ECOMMERCEIQ

A Growth of Content Driven Utilization

21

Content Driven Utilization : Channel 8 Popular Contents

0.50%

0.53%

0.48%

0.40%0.37%

0.35%0.37%

0.44%0.42%

0.44%0.43% 0.42%

0.45%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

CH8's Ratings Popular programs throughout 2021 : Right approach (aim to reach 0.6%) with a variety of

sales package from offline to online platforms

Source : Nielsen (15+, 18hrs)

Dra

ma

Ser

ies

No.

1 S

port

s pr

ogra

mN

ews

Var

iety

22

Content licensing contributing to an additional revenue over THB 200mn

> Broadcast programming via various online channels to maximize product value

> Original content remake into international markets

Content Driven Utilization : Content liensing

24

Content Driven Utilization : Coolism No. 1 in the Easy Listening category

Coolive : A huge success of activities/concerts for loyal fans

Coolfahrenheit : Growing both on-

air and online radio to 3.7M listeners

Coolanything : Turning listeners to be shoppers on

lifestyle shopping App & Web (soon to be launched)

26

Content Driven Utilization : Music

Digital : A higher single release

(80 singles) & new content partnership

Artist management : Customized projects & music star commerce

Music copyright : Bulk sale & annual copyright fee

Content management : At least 1 special project per

quarter & potential international market expansion

Concert & Event

28

Content Driven Utilization : Concert & Event

1Q21 2Q21 3Q21 4Q21

Concert

Event related to TV media

GPM52%

GPM58%

GPM44%

GPM49%

GPM39%

GPM46%

GPM53%

M&A Execution

30

Summary of 2021 M&A Execution

M&A summary Details

Target > 1-2 deals (excluding current deal)

Focus sector > Entertainmerce model related

Investment size > THB 300-600M per deal

Objective & benefit > Strengthen & expand RS’s ecosystem> Improve health product portfolio : key production,

capacity, cost savings & new customer database> Value added proposition : partner’s business model> Shared resources

2021 Estimated Performance

32

2021 Estimated Performance

2021 Estimated Performance THB mn

Revenue 5,700

Commerce 4,000

Existing channel (RS Mall & Coolanything) 3,000

New product lines & New channels 1,000

Media & Entertainment 1,700

Digital TV (CH8) 1,000

Radio (Coolism) 200

Music (Rose Sound, Kamikaze & RSiam) 300

Concert & Event 200

GPM (%) 50-52%

NPM (%) 12-14%

CAPEX (THB mn) 56

Deal Announcement

34

Transaction Summary

Shareholding Structure Information Disclosure to SET

Existing Shareholders

Resolution Way Co., Ltd.

CF Asia Asset Management Co., Ltd.

Courts Megastore (Thailand) Limited

17.2%

35%

100%

65%

THB 920mn35%

The transaction size is of the highest value when calculated based on the total value of consideration method equals to 21.7%

Operation :1. Disclose to the SET2. Send a circular notice to shareholders

within 21 days from the disclosure date

Investment Proportion Internal Rate of Return: IRRInvestment value

RS acquired 35% (minority) shareholding stakes in Chase Asia Co., Ltd with THB 920mn by subscribing into new shares to be issued.

Industry Overview

36

Industry Overview : Loan market & NPL Supply

AMC providers in market as of 2020 (Total Asset) Total Asset and Number of AMC firm

Loan Outstanding of Commercial Banks

Unit: THB bn

Unit: THB bn

Source : KS Research

NPLs trend continued to increase

Unit: THB bn

37

Industry Overview : Consumer Loan & NPL

Overview : Consumer Loan GrowthConsumer loan growth classified by products

• Overall consumer loan growth was stable at 4.8% in line with weakhouseholds’ purchasing power, but expanded q-q following the relaxationof lockdown measures. For 2021, commercial banks in Thailand areexpected to post loan growth of 3-5%.

• Mortgage lending grew in line with improved demand for low-riseresidential properties.

• Credit card loan expanded following the relaxation of lockdown measures.Tailwinds that will support growth in credit card such as growth of MBpayment, e-Commerce and e-KYC. (Interest rate: 16% per annum)

• Auto and personal loans grew at a lower rate in line with weak households’purchasing power. (Auto loan interest rate: 24%, PL interest rate: 25%per annum)

• On the loan quality front, NPL ratio of consumer loan declined across allloan types, both secured and unsecured loans, following debt reliefmeasures and banks’ NPL management.

• However, moving into 2021 lenders will focus more on quality of thecustomers and more cautious to check customers’ qualification to controltheir asset quality.

%NPLs of consumer loan classified by products

Source: Bank of Thailand

* Consumer loan consists of mortgage, automobile loan, credit card and personal loan

3.23% 3.25%

3.71%4.04% 4.04%

3.88%

1.60% 1.66%1.86%

2.09%1.88%

1.58%

1.92% 1.81% 1.93%

2.64% 2.53%

2.01%

2.50% 2.5…

3.01%3.33%

3.04%

2.72%

0%

1%

2%

3%

4%

5%

2017 2018 2019 1Q20 2Q20 3Q20

Mortgage Auto Credit card Personal loan

6.1%

9.4%

7.5%

5.6%4.8%

4.8%

5.5%

7.8%

5.4%

3.4%

4.4% 5.4%

8.4%

12.6%

7.7%

6.1%

4.1%

5.5%

3.4%

7.4%

10.1%

2.0%-0.7%

1.0%

5.7%

10.1%

11.8%10.9%

7.8%

5.6%

2017 2018 2019 1Q20 2Q20 3Q20

Consumer Loan Mortgage Auto Credit card Personal loan

38

Industry Overview : Personal Loan & NPL

Overview : Personal Loan IndustryPersonal Loan growth vs Private Consumption

• Currently, personal loan business grew 5.6% compared to 7.8% in FY2019due to the COVID-19 pandemic that impacted on consumer spending andeconomic condition.

• The number of account of PL increased to 16.9 million or 11% y-y andoutstanding increased to 566,500 million baht or 1% y-y. The NPL ratio ofPL decreased to 2.72% as a result of debt relief measures.

• BOT cut interest rate on personal loan by 3% from 28% to 25% per annum,effective from August 1, 2020 onwards .

• In 2021, it is expected that banks and non-bank financial institutions willcontinue to focus on personal loan to help sustain their interest income.They will focus on expanding their loan portfolios to middle-incomecustomers together with more cautious in approval process and use theiradvantages in digital platforms/applications to develop a digital lendingmodel.

• In addition, BOT introduced the Digital Personal Loan that will increaseaccessibility to loan for consumers.

%NPLs of Personal Loan

Banks Non-Banks Total %y-y

2017 3.02 2.10 2.50 0.6%

2018 2.98 2.22 2.55 0.1%

2019 4.20 2.08 3.01 0.5%

1Q20 4.40 2.57 3.33 0.1%

2Q20 3.69 2.60 3.04 0.5%

3Q20 3.06 2.50 2.72 0.7%

2020 (E) 3.5-4%

Source: Bank of Thailand

6.1% 9.4%7.5%

5.6%

4.8% 4.8%5.7%

10.1%11.8%

10.9%

7.8%

5.6%

-0.6% -0.9%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

2017 2018 2019 1Q20 2Q20 3Q20 FY2020E

Consumer Loan Personal Loan Pivate Consumption

* Starting in February 2019, BOT includes Car Title Loan into the Personal loan amount

39

Interest Rate Trend : Lower Interest Benefit AMC Business

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

The 10Y-Government Bond Yields Average MLR of Commercial Banks

Source of funding for AMC are financial institution loans and debentures. KResearch expects that AMC will

benefit from a reducing of government bond yields and MLR

The 10Y-Government Bond reduced to 1.33% in December, 2020

Average MLR of commercial banks reduced to 3.12% in November, 2020

About Chase

41

Chase’s Shareholding Structure

Chase AsiaCo., Ltd.

CF Asia Asset Management Co.,

Ltd.

Resolution Way Co., Ltd.


100%

Share CapitalTHB 170.5mn

@ Par THB 1,000

THB 520.0mn

@ Par THB 1,000

THB 367.1mn

@ Par THB 100

Share Capital THB 509.7mn

@ Par THB 100

99.76% 0.08% 0.08% 0.08%

Mr. PrachaChaisuwan

Miss HathairatKaewsaenmuang

Miss WaraluckChaisuwan

Miss SuthidaChaisuwan

42

Chase : Business Structure, Overview & Flow

Business Overview and Process flow

Chase Asia Co., Ltd.CF Asia Asset

Management Co., Ltd.Resolution Way Co., Ltd.


Establishment Aug 1988 April 2012 Mar 2003 April 2002

Type of Business

Debt Tracking &Collections ServiceBusiness & LawyerServices

AMC Registered with theBOT in accordancewith the EmergencyDecree on AssetManagement Companies B.E. 2541

AMC Lending Business Personal loan

business is supervisedby BOT

Personal LendingBusiness

Formerly: ElectronicsBusiness

Business Partner/Customers

Target Companies

Type of Debtor

Type of Revenue Service Fee Capital Gain / Interest Interest

Corporate entity(i.e. bank, leasing)

Financial Institution

Non-FinancialInstitution

Personal loan(> 1 creditors)

Chase Asia C F Asia Asset Mgmt(BOT)

Resolution Way(BOT)

Courts Megastore

Individual and Corporate

Individual and Corporate Collateral and Non-Collateral

Individual and Corporate Collateral and Non-Collateral Governed by BOT regulation

Individual and Non-Collateral Not Governed by BOT regulation

Tracking & Collecting

ProvidingService

Managing Managing Lending Restructuring &Lending

Negotiating /Advising

Purchase /Auction Purchase /Auction

Providing services to related company

20192018

43

Chase : Group Performance Highlight

Group Performance

Unit: THB mn

NPL Portfolio as of 31 August 2020

O/S balance

IBD/EBITDA (x)

2018 2019

32%

26%Personal loan

Auto loan

Electrical appliance hire purchase

Claim balance

THB 27bn THB 925mn

17,630

8,327

1,039

570

386

25

(Total 85 ports, 107,657 accounts, Avg cost 4.9%)

(36 ports, 22,449 accounts, Avg cost 4.7%)



Hope Loan as of 31 August 2020

Accumulated loan amount of THB 373mn with 1,177 accountsas of 31 Aug 20

Loan amount per year (THB mn)

(IBD : THB 151mn)

(IBD : THB 35mn)

44

Chase : Group Performance Highlight

Chase Asia Co., Ltd.CF Asia Asset

Management Co., Ltd.Resolution Way Co., Ltd.


Ty

pe

of

Bu

sin

ess Debt Tracking &

Collections ServiceBusiness & LawyerServices

AMC AMC Personal Lending Business to NPL

Personal Lending Business to NPL

Hope Loan from Resolution Way

Po

rtfo

lio

as

of

31 A

ug

ust

20

20

Deb

tC

oll

ecti

on Unit : No. of Portfolio

THB mn Account Value

NP

Ls

Man

agem

ent Type of No. of No. of O/S Claim

Loan Portfolio Account Balance CollectionBalance

Type of No. of No. of O/S ClaimLoan Portfolio Account Balance Collection

Balance

Type of No. of No. of O/S ClaimLoan Portfolio Account Balance Collection

Balance

Per

son

al

Len

din

g No. of No. of Loan PrincipalAccount Account Amount Balance

Balance

No. of No. of Loan Principal Account Account Amount Balance

Balance

Biz partner 181,258 17,993.33

Corporate group

108,623 26,792.13

Total 289,881 44,789.46

Auto 29 35,712 4,219.11 240.05

PL 26 15,046 2,018.67 258.65

Electrical Appliance

11 39,900 1,038.77 24.25

Total 66 90,118 7,276.55 524.15

1,427 543 388.52 154.68

Auto 11 10,136 4,108.18 146.21

PL 8 7,076 15,144.99 279.86

Total 19 17,212 19,552.17 436.07

PL 2 327 139.92 31.68

Total 2 327 139.92 31.68

724 634 293.63 217.20

45

Chase : Customer & Business Partner

Benefits from Investment

47

Benefits : Potential Synergy for Both Companies

Media & Sales Channels

TelemarketingData Analytics &

ManagementProduct & Service

Debt Tracking & Call Center

Collection Service AMC & License Personal Lending

A complete synergy : Media utilization, Telemarketing, IT system & Database

management in RS’s ecosystem

Brand image : A trusted confidant / advisor for all clients

Expansion Expansion

Shared resources : Platform, Telemarketing &

Customer Database

> Corporate Branding for a public company> Media & marketing strategy> Corporate restructuring to become a

public company in 2022

Expansion

48

Benefits : Financial Outlook of Chase resulting from RS Investment

P&L (THB mn) 2020(E) 2021(F) 2022(F) 2023(F) 2024(F)

Revenues 681 850 1,270 1,423 1,835

%Growth 25% 49% 12% 29%

Net Profit/(loss) 174 265 419 484 679

%NPM 26% 31% 33% 34% 37%

A capital injection of THB 920mn to Chase Asia &

Immediate earning contribution to RS

35% to RS 77 147 169 238(10-month)

RS Investor Relations & Sustainable Development

+662 037 8125-6, 8128

http://www.rs.co.th/investor.html

[email protected]

https://www.facebook.com/RSInvestorRelations/

https://twitter.com/rs_ir

ir_rs

khun surachai chetchotisak, ceo khun wittawat

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