Gunkul Engineering Plc

Gunkul Engineering Plc.

Opportunity Day Q3/2014

9 December 2014

1

Strictly Private & Confidential

1. Strategic Direction

2. Company Overview

3. Financial

4. Growth Strategy

Agenda

2

1. Strategic Direction

3


Past Present & Future Direction

Section 1: Strategic Direction

PRES

ENT

PAST

FUTU

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

4


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%

5

2. Company Overview

6


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 Breakdown

2013 Revenue Breakdown1

Remark: (1) This revenue includes dividend income earned from the JV companies operating solar power plant businesses

Power Producer 4

7


Business Structure


GUNKUL Group

Public Shareholders

GUNKUL PCL.

60% 40%

G.K.Assembly 100%

G.K.Power Products

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)

Greenovation Power 100%

Gunkul LED 74.99%

100%

100%

25.01%

100%

100%

100%

100%

WHA Gunkul Green Solar Roof 1,3,6,10,17

Gunkul Solar Roof 1

Gunkul Solar Power 2

Solar Energy Society

Siam Gunkul Solar Energy

Gunkul Myanmar Central Power

51%

8


Business Structure


Customer Manufacturer Distributor GKA

GKP

External Manufacturer

KNP

GUNKUL

Gov’t

Private Entities

Foreign Gov’t

Trading and Manu. Business Flow 1

Customer Supplier Main Contractor

EPC Business Flow

GKA

GKP

External Manufacturer

GUNKUL

GCPG

GPS

Internal/ 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 Authority Power Plant

Greenovation Power Wind 60.0 MW

GLED

WHA Gunkul Green Solar Roof 1 Solar Rooftop 636.48 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 1,872 kWp

Gunkul Myanmar Central Power Gas Engine 25 MW


9


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 Maintenance equipment Meters Tools and instruments Transformers

Low voltage lines: Capacitors Explosion proof products Fuses and switches Grounding Hardware and connectors Insulators Lightning protection 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 Lightning protection Live part covers Maintenance equipment Meters Preformed Tools and instruments Transformers

Highlight in-house products

Cutout Arrester Disconnecting Switch SF6 Gas switch Low-Voltage Switch

10


EPC Business


2

Project Reference

Project Owner MW* Status

1) Gunkul Chubu Powergen (Phase 1) 2) G-Power Source (Phase 1) 3) Gunkul Chubu Powergen (Phase 2) 4) G-Power Source (Phase 2) 5) NK Power Sola 6) CK & Sun Solar Power Plant 7) Solarta Solar Power Plant 8) Bangchak Solar Energy (NSM) 9) Bangchak Solar Energy (CPM) 10) Solar Rooftop Projects

3.3 22.8 34.1 7.6 1.2 8.8 8.8

12.5 12.5

7.68 / 3.32

Completed Completed Completed Completed Completed Completed Completed Completed Co mpleted

80% Complete

Total 122.6*

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

* Installation Capacity

11


Power Plant Business


3

Project 1 (COD since 2011) Capacity: 3.0 MW and 4.4 MW Location: Chondan Petchaboon Average Radiation: 5.08 kWh/m2/d

Project 2 (COD since Mar 2013) Capacity: 8.0 MW Location: Petchaboon Average Radiation: 5.08 kWh/m2/d

Project 3 (COD since Mar 2013) Capacity: 4.5 MW Location: Pichit Average Radiation: 5.08 kWh/m2/d

Project 4 (COD since June 2013) Capacity: 8.0 MW Location: Nakorn Nayok Average Radiation: 5.04 kWh/m2/d

Project 5 (COD since May 2013) Capacity: 3.0 MW Location: Bung Samphan, Petchaboon Average Radiation: 5.04 kWh/m2/d

Solar 30.9 MW Capacity

GPS Plants

GPG Plants WED Plants

Total Plants : 21 Plants Already COD : 86.14 MW

Going to Construction : 140 MW Total : 226.0 MW

NK Plant

Solar 1.0 MW Capacity

Project 1 (COD since Nov 2013) Capacity: 1.0 MW Location: Kanchanaburi

Solar 26 MW Capacity

Project 1 (COD since Q12012) Capacity: 6.5 MW Location: Tasang, Nakorn - Sawan

Project 2 (COD since Q12012) Capacity: 6.5 MW Location: Takeed, Nakorn -Sawan

Project 3 (COD since Q12012) Capacity: 6.5 MW Location: Dong-Korn, Chainat

Project 4 (COD since Feb 2013 Capacity: 6.5 MW Location: Bung Samphan, Petchaboon

Project 1 (SCOD : 1Q2016) Capacity: 10 MW Location: Nakorn Ratchasima


Wind 60 MW Capacity


Wind 60 MW Capacity

GNP Plant

Total 17 Projects Total Capacity : 7.68 MW Location: Bangkok, Rayong, Samutprakarn

WHA-GUNKUL

Gas Engine 50 MW Capacity

Project 1 (COD since Nov 2013) Capacity: 25.0 MW Location: Rangoon, Myanmar

Project 2 (SCOD : 2H2015) Capacity: 25.0 MW Location: Rangoon, Myanmar

GMP

12


Power Plant Business (Cont’d)


3

Solar Farm Solar

Rooftop Wind Farm

Gas

Engine

Project Investment Costs

~THB80–100 mm

per MW

~THB 60 mm

per MW

~ THB 70 mm

per MW

~ THB 35 mm

per MW

Technology Thin Film CIS modules without cadmium or Crystalline Silicon

Module

Crystalline Silicon Module Horizontal Wind Turbine Gas Fired Engine

Selling Price

(Base Tariff)

Peak :THB 3.85 per kWh,

Off-Peak: THB 2.04 per kWh

FT: THB 0.52 per kWh

Feed-in Tariff (FIT)

THB6.16 per kWh

for 25 years since COD

Peak: THB 3.68 per kWh

Off-Peak: THB 2.04 per kW

FT: THB 0.52 per kWh

~US$0.034 /kWh

Adder THB8.0 per kWh for 10 years since COD - THB3.5 per kWh for 10 years

since COD -

BOI Tax Exemption

Year 1st - 8th : 100%

Year 9th – 13th : 50% Year 1st - 5th : 100%

Import Tax 100% import tax exemption

Yearly Revenue ~ THB 20 mm per MW ~ THB 8 mm per MW ~ THB 16 mm per MW ~ THB 7 mm per MW

Key Information

13


Power Plant Business


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%

14


Progress on 120-MW Huai Bong Wind Farm


Land Site: fully secured 1

Fencing Works : Done Land Boundary Measurement: Done IEE: Done

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 (38 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

15

3. Financial


16 16 Note : Total Revenue from Government , Private and Foreign Customer is considered as revenue from Conventional Business.

Revenue Breakdown

Revenue Breakdown by Business Unit % Revenue Breakdown

9M/2014

9M/2013 1,594 MB

2,340 MB

** Electricity : Solar Chubu : 8.4 MW.

** Electricity : NK Solar : 0.940 KW. Solar root top : 0.802 KW.

Million Baht.

1,288

2,651

4,722

2,819 2,369 2,340

9M-Comparison

+47%


17 17

Revenues & Profit as of Sep 30, 2014

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

Million Baht. Margin %

Included Gain From Share Divestment

Million Baht. Margin % GPS

divestment

GPG divestment


18 18

Our Financial Flexibility

Gunkul’s Liabilities D/E Ratio

Debt to Equity ratio

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2010 2011 2012 2013 9M/2014

0.58

3.68

2.24

0.47

0.81 657

4,355

4,814

1,459

2,662

Million Baht.


19 19

Growth of Balance Sheet

Balance Sheet

Non Current Asset

Current Asset

Current Liabilities

Non Current Liabilities

Shareholders' Equity

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

Total Asset 4,579.61 Total Asset 5,942.79

Million Baht.


20 20

Solar Farm Profit Sharing : GPS & GCPG (2013 vs 2014F)

2013 2014 2013 2014 2013 2014 2013 2014

Million Baht. Million Baht.

2013 2014F


21 21

2014 Sales Forecast and Incoming Project

Column1 Backlog Project (Incoming) MW. SCOD

1 WED 60 Q1/16

2 GNP 60 Q4/16

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

EPC 1,389 Mn.

Service 50 Mn.

Electricity 20 Mn.

EPC & Service : THB 1,459 million

No . Bu s i n ess Un i t Amt. (THB Mn . )

1 E PC 1,389

2 Serv i c e 50

3 NK So l a 20

T o ta l 1,459

E PC & Serv i c e : THB 1,459 Mn .

Domestic Trading

970 Mn.

Oversea Trading

480 Mn.

Trading : THB 1,450 million

No . Bu s i n ess Un i t Amt. (THB Mn . )

1 Domesti c T rad i n g 970

2 Ov ersea T rad i n g 480

T o ta l 1,450

T rad i n g : THB 1,450 Mn .

Total 2,909 Mn.

22

4. Growth Strategy

23


Strategy for Trading and Manufacturing Business 1

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 9.3% YoY, compared with the average of 3.78% 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 2010-2030 is budgeted to reach THB 328 Bn.

1,691 1,779

328 421

2010-2020 2021-2030

Power generation Distribution

Section 4: Growth Strategy

Unit: THB Bn. Unit: MW

+9.3% YoY

Source: EPPO as of NOV 2014 http://www.eppo.go.th/info/5electricity_stat.htm

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Strategy for Trading and Manufacturing Business 1


Gov’t budget of THB 2 trillion for improving Thailand’s infrastructure including the construction of Mass Rapid Transit for 9 routes will create demand of our in-house products

In-house Products

1.Bangsue-Bangyai

C1.Bangsue-Talingchan

5.Bangkapi-Bangbumru

7.Bangkapi-Minburi

C3.Bangsue-Pyatai-Huamark 2.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

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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 October 2014, the regulator increased generating capacity from 9,201 MW to 14,724 MW representing 60%

Type of Energy Previous Capacity Current Capacity PPA-Granted PPA-COD in Q3/2014

Solar 2,000 3,800 1,424 1,083 Biogas 600 3,600 89 188

Biomass 3,630 4,800 118 976 Waste 160 400 111 43 Hydro 1,608 324 14 0.35 Wind 1,200 1,800 1,750 180 Total 9,201 14,724 3,506 1,870.35

Thailand’s PDP 2010, 3rd revision

Unit: MW

Previous Total 9,201 MW

Revised Total 14,724 MW in 2021

Source: http://webkc.dede.go.th/testmax/sites/default/files/factsq1_2014.pdf http://www.erc.or.th/ERCSPP/MainPage.aspx

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

& Strategy for EPC and Power Producer 2 3

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

http://www.erc.or.th/ERCSPP/MainPage.aspx

26


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 THB 6.16 to THB 6.96 and THB 6.06 for industrial ( 250 KW

to 1 MW) since August 2014.

On October 22, 2014, the Energy of Ministry have a resolution of meeting to achieved 200 M and postpone SCOD date

solar rooftop to be within December, 2015.

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 60% from

9,201 MW to 14,724 MW, 3,800 MW of 14GW are targeted to come from solar energy sources.

Breakdown of Thailand’s solar

power industry

Total 3,800 MW

Solar Rooftop Total Value

200 MW

~THB 14 Bn.


Thailand’s Solar Industry Snapshot


27



Thailand’s Solar Industry Snapshot

Growth Capacity for Power Plant & EPC Business

PPA + EPC

( FIT = 5.66 Baht) (~ THB 90,000 Mn.) EPC Value

( ~ THB 32,000 Mn.)

( FIT = 5.66 Baht)

800 MW + 576 MW Solar Farm & 800 MW Government and Cooperative Solar Farm PPA would have been granted

within 1H2015. Both Sector have to COD within 2015.

800 MW 800 MW

28



Solar’s PPA Quota Plan

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 Customer Local communities

Small buildings

Agriculture

Local communities

Medium buildings

Agriculture

Industries

Industries

Retail

Logistic centres

Installed capacity

6.96 6.55 6.01 FIT

(Baht/unit)

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


30



PPA status of Wind Energy

Currently, GUNKUL has been granted PPA 120 MW GUNKUL is looking for opportunity to acquire more PPA approx. 50-100 MW


PPA Granted : 1,750 MW

31



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!”

32


Existing & Potential Power Plants of Domestic Renewable Market

Extracting growth from existing domestic assets & potential developing projects


3

Energy/ Capacity Company Project Location 2013 2014 2015 2016 Capacity

Accumulated Installed Capacity

(GUNKUL + Partner)

% Own and Accumulate of

Install Capacity by GUNKUL’

Proportion (MW) (MW) % (MW)

Solar Farm 56.9 MW

GCPG Project 1 Chondan COD since 2011 7.5 7.5 51% 3.83 GPS Project 1-3 Tasang,Takeed, Dong-Kon COD since Q12012 19.5 27.0 40% 11.63 GPS Project 4 Bung Samphan COD since Feb, 2013 6.5 33.5 40% 14.23

GCPG Project 2 Petchaboon COD since Mar, 2013 8.0 41.5 51% 18.31 GCPG Project 3 Pichit COD since Mar, 2013 4.4 45.9 51% 20.55 GCPG Project 4 Bung Samphan COD since May, 2013 3.0 48.9 51% 22.06

GCPG Project 5 Nakorn Nayok COD since June, 2013 8 56.9 51% 26.16

Solar Farm 1 MW NK Project 1 Kanchanaburi COD since Nov, 2013 1 57.9 100% 27.16

Solar Rooftop 7.83 MW

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

Nongthaburi, etc 4 Projects COD since 2Q2014 7.68 65.58 100%

25.01% 30.56 31.63

Wind #1 - 60 MW WED Project 1 Huai Bong 1& 2 SCOD 1Q2016 10 75.58 100% 41.63

WED Project 2 Wayu SCOD 1Q2016 50 125.58 100% 91.63

Wind #2 - 60 MW GNP Project 1 Salarnlom SCOD 4Q2016

60 185.58 100% 151.63

Gas Engine 50MW

GKMCP1 Project 1 Yangon, Myanmar COD since Nov, 2013 25 210.58 51% 164.38

GKMCP2 Project 2 Yangon, Myanmar SCOD 2H2015 25 235.58 60% 179.38

Wind #3 - 50 MW Potential Developing Project 50 285.58 100% 229.38

Solar Farm 100 MW Potential Developing Project 100 385.58 100% 329.38

Total (MW) 385.58 329.38

33


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

MON

Tanintharyi

34

Q & A

35


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]

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Gunkul Engineering Plc