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Edited Transcript of INTUCH.BK earnings conference call or presentation 8-Aug-19 6:00am GMT

Half Year 2019 Intouch Holdings PCL Earnings Call

Bangkok Sep 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Intouch Holdings PCL earnings conference call or presentation Thursday, August 8, 2019 at 6:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Kim Siritaweechai

Intouch Holdings Public Company Limited - CFO

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Conference Call Participants

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* Supachai Chimpalee

Toyota Daihatsu Engineering & Manufacturing Company Limited - IT Senior System Analyst

* Thitithep Nophaket

Phatra Securities Public Co. Ltd., Research Division - Director & Analyst

* Tanapon Subsomboon

YDM (Thailand) Company Limited - Chief Executive

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Presentation

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Unidentified Company Representative, [1]

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So in the last part, we'll hear about the performance from INTOUCH Holding Group. And after that, we have the special invitation for a special guest from YDM Thailand. First, I'd like to invite Khun Kim and Khun Anek, the CEO; and Khun Kim, the CFO. So maybe we'll begin with CFO.

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Kim Siritaweechai, Intouch Holdings Public Company Limited - CFO [2]

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A very good afternoon. So first, I'd like to present on INTOUCH Group. So we might not touch on the AIS and THAICOM because you have already received a lot of information from them, but we're going to talk about other assets that is not THAICOM and AIS.

So first, on the dividend. We are still continually paying out the dividend on the pass-through policy. So the pass-through policy on the first half, we have already 1.45 (inaudible). So that's a payout ratio of 74%. So that 74% from the consolidate profit. But if you look at the cash basis from that, we have paid up to 100% and deducted some -- from corporate expense. And we have paid on the 4th of September this year. We're going to pay on the 4 September this year. And the yield here right now is about 4%.

So the overall performance. The Q-on-Q, we have the slight growth of 1.2% mainly from AIS. As for year-on-year, we have decreased 10% because the decrease from AIS and THAICOM.

If you look at the value of INTOUCH Group, you see that the contribution of NAV from -- 98% is from AIS and THAICOM 1%. And 1% is from cash on hand, which we have about THB 2 billion. So NVA -- NAV on general is THB 73. But I think right now, it's THB 82 to THB 83. But if we look at the discount to NAV, I think before, we are below 20%. But last year, I think there was a lot of concern about THAICOM and the AIS on the decrease on dividend no less than 70%. So the discount to NAV have decreased, I think, more than 25%. But right now, it has kicked up until to now to 23% and 24%. So if you look, for example, here, 98% is from AIS. And if we are representing AIS, if you are holding a share at a discount, at 20% discount.

So let's look at the High Shopping. High Shopping is on a continuous growth. The first year comparing from this year to last year, there's a growth -- 34% growth. Our revenue, we are still at loss, but we have less loss. But if you look at the cash flow, the cash flow is reaching the breakeven point. There is a little bit minus on the EBITDA. We are managing on the working cap. So the cash flow is stabilizing. There is no extra use on that cash flow, and we have a credit line from the bank. So if there's a necessity for us, we can actually take from that part. So High Shopping is not going to intervene Intouch.

So the strategy for High Shopping, basically, there's a couple of them. First is we're going to go towards the channel management. So it's a media commerce. So expanding platform in order to have more eyeballs that's going to affect directly on the revenue. So I think we have to continually expand the platform.

Secondly, our products. The products will have to be attractive with higher margin because the revenue sharing that we're paying to the channels is quite high.

And the third part is the cost control. The cost control, we have continuously -- we have decreased -- a continual decrease in our delivery costs. If you look at the InVent portfolio, you can see there's a growth here. We have exceeded THB 1 billion. The investment, which is the cash cost, it's THB 549 million from 6 years' investment. So our port has increased year-on-year 28% from the end of 2018. Mainly, it's from the increased -- value from next round funding. Ookbee has a higher worth increasing 7.5 -- 5.7x; and Wongnai, 4.1x. And the ShopBack, the value increase higher than the invested amount of 1.7x. So all of this actually have driven our value to be -- to exceed THB 1 billion.

So there's an increase in 1 company, so it's P2P lending platform. It's crowdfunding, and we invest in terms of convertible notes at THB 8 million. So that's the first half investment. Maybe you say that, "oh, it's in first half. The budget is THB 200 million. You invested THB 8 million." Actually, we have authorized or approved the investment, I think, more than THB 100 million. But right now, it's -- we are in a process of due diligence and trying to close the deals, and we'll continue to authorize and approve more investment, and we want to reach the target of THB 2 million investment.

In the first year, we have exited 1 company from Digio, which is a fintech company. That's a hardware and software for payment solution. So we had IIR (sic) [IRR] at 13.5%. We invested in Digio for 2 years. The founder actually bought back the shares according to the agreement that we had.

So last part, our company has continued to be the credible company and received a lot of awards. We have been listed on the MSCI Emerging Market. Another interesting thing is that we have our Facebook page. And currently, now we -- aside from the company's information, we all provide knowledge on technology, economy or economic news. If you haven't liked our page, please go there. You can share what we've posted there and also comment. I think that's my part.

I think I'd like to give the floor back to YDM, please.

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Unidentified Company Representative, [3]

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So I would like to invite the CEO of YDM Thailand on stage, please.

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Tanapon Subsomboon, YDM (Thailand) Company Limited - Chief Executive [4]

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So sorry, I have a bit of cold, and I have my cough drops with me here. So anyway, my presentation is -- intends to be some kind an entertainment for you guys today because we have listened to some serious things for the whole afternoon already.

So we are YDM Thailand. YDM Thailand is the company called -- the full name is Yello Digital Marketing. It is a digital marketing company, the biggest in Korea. But now the company has grown so much, and it has conducted its initial public offering already. And the technology in Korea is about like 5 -- 4 to 5 years more advanced than the technology in Thailand, whether it is the AI technology, marketing technology, blockchain technology and so on and so forth. They have -- all these technologies have been used in Korea for about 4 to 5 years already. And they have a large market on e-commerce solutions, media acquisitions, and Korea is basically the #1 in the world right now.

We can see from the charts in the slide that the Facebook content purchasing, these are conducted through YDM as well. But the problem with YDM in Korea is that, now, it is reaching its maturity in the market. But -- and so when things are getting to -- things are slowing down in Korea, then they expand their company into other countries in Southeast Asia.

Firstly, they wanted to get into the market in China, but the competitiveness -- the competition in China is quite aggressive at the time. So they shifted their location to Southeast Asia. And this is the digits that I have compiled for you today. And we can see that the growth is quite large, and it's always 2 digits for the last 4 years.

From the figures here, we can see that there is a very, very substantial growth. But this reflects quite consistently with the behavior of the Thai consumers because we spend more time with our cellphones, and the budget used in advertisement has to be shifted according to the consumer behaviors.

Since YDM is basically a marketing company on the online platform, that's where -- then the money comes to us, and we generate the content on online platform.

So my company formally was Adyim. It is a digital agency company based in Thailand, and we do the strategic planning and do the creative content, social media content, influential marketing. We also do the data analysis, basically everything relating to online marketing.

So after, YDM in Korea came to Thailand and entered into negotiation with Adyim and then we entered into a merger agreement, and then we expand our business and we used the business model of Korea -- of the Korea company. So instead of having a large scope of business, we created small companies doing different types of work. Because if we start as a start-up company -- a small start-up company, then the profit will be larger than doing -- than working as a single business, single company doing a large scope of work. So that is why we opted for having a number of small companies. And we have about 9 companies, 9 subsidiary companies within our group, and the work of YDM Thailand covers 4 aspects.

The first one is digital marketing consulting. So if we receive a client, they have a problem relating to the sales target, they want to create a social media marketing content, then we will have a consulting service. We will provide them with the consulting service.

And the other aspect is the digital marketing solution. So we will purchase Facebook ad, YouTube ad and so on and so forth. And also, we'll have the digital marketing platform as well, which will respond to the needs of our clients. Basically, we're the service business. We work with clients based -- on the project-base basis. After 1 project is finished, then we will do another project. So -- and that generates the idea of having a platform that we can actually reuse among our clients.

So basically, these are the 4 segments of our business. And below, you can see these are the subsidiaries within our group. Adyim is basically the digital marketing agency doing every business relating to digital marketing. So the client usually starts with Adyim.

The second company is Gottimize. It's the performance digital media agency. It is a media acquisition company. So with the name performance, it reflects that, basically, when clients approach us, the clients will expect performance. For example, they pay me THB 10 million. They will want to know what would be the rate of return. For example, like a gaming company, they will act like how many people will see the advertisement and how [much] money will be spent on purchasing the items in the game and so on and so forth. So this is what Gottimize do.

And the next one is Alternate65. It is a content marketing company. I think all of us, we have experienced this kind of a thing. For example, like when we turn on YouTube and then there is an ad popped up in the YouTube clip, then basically, we'll be waiting when we can skip the ad. So basically, we use that notion and then we try to -- and then we came -- and then we realized that, basically, consumers, when they want to purchase a product, they will search for such product by themselves. And with that in mind, then we've tried to use that marketing strategy in Alternate65.

The other company is the Jamjaras company. Because nowadays, when we talk about digital marketing, people will think that it relates only to teenagers or people in the city area. But that's not always the case because, now, almost everyone has their smartphones. And we can see that the top 5 YouTube trends in Thailand is basically the Thai country music. We live in Bangkok, so the #1 artist in Bangkok is Bodyslam, which is like 130 million views. But if we talk about like the whole country's trends, none of the Bangkok -- none of the people in Bangkok will actually know like any of these songs. But these songs, these YouTube medias are actually popular with all the rest of the people in the country. And that is why we shifted how to do the marketing for the people, like in the upcountry area, in the rural area. I work with the country -- or music artists and other artists, which are popular with the people in the urban area as well. So I basically work with the music company and also try to stimulate their growth.

So the next company is Adpocket. Adpocket is the company that focuses on trying to create a digital platform, and the revenue of this company basically is paid -- or the money of this company is basically paid to Google and Facebook. And I have come across this mobile application, which is created by a company in Korea. And if I install this application, once I unlock my phone, the first screen that shows up on my phone will be the advertisement. And when I unlock my phone, every time I unlock my phone, I will get a point, and it can be changed into money and use it in 7-Eleven or other grocery stores. And I did the marketing for this application for about 2 years already. And currently, we have about 5 million users. And I think that none of us are using this application because the target group of this application is basically students. So that is Adpocket.

The next company is Doer. Doer is a start-up company -- start-up companies that are trying to get funding from YDM Thailand. And Doer will -- oversees the website creation and -- because we can see that the problem with the programmers and the website creator industries is that most of the skillful website creators, they work as a freelance. So by working as -- with Doer, they are allowed to work from home. And basically, it is like we are acquiring all these freelancers -- all these freelance programmers, they can work at home. But if they work with us, they are allowed to also work at home, and they -- but they have to work through the platform that we have provided.

AVG. AVG is a digital marketing company working mainly in China. We have like 10 million Chinese tourists coming to Thailand each year, and they spend like billions of baht in Thailand. If we work -- if we do the marketing only for the Chinese market, that would -- we can gain a lot of money from that as well. For example, [Koh Samui or Amphawa], we can see that this is like very famous among Chinese tourists, and also other business like souvenirs and also other local businesses as well. And if you want to do marketing in China, the channels of social media is quite different from the rest of the world. For example, like we don't use Facebook. They have their own application. They have their own programs and software. So we have to have like a specific company, and AVG is a joint venture company between the Thai company and China company working together to try to create a marketing content for the Chinese market.

Next, Nawin Consultant. Nawin Consultant is the branding company. I made acquaintance with Mr. Golf Nuntawat, which is the CCO of the advertisement, one of the major advertisement company, and he has been awarded with a number of awards for something like the [Khan's] award and so on and so forth. And he consulted me once about the marketing -- digital marketing business. So I advised him that instead of trying to start a company, just try to start a consulting -- a consultant business because you don't have to really get into the business, you're just providing consulting. And Mr. Golf is actually quite happy with that business structure that I advised, so that is why he is now working with us in Nawin Consultant.

So the last one is FCB. FCB is the integrate online to off-line business. And the former owner of FCB is basically Osotspa, which is a Thai company, and they sold their business to Hakuhodo. Most -- and FCB actually has quite a large client base. For example, like the Nivea or Eucerin products. Hakuhodo does not -- did not acquire FCB because FCB has the client being Nivea and Eucerin, so it was a conflict of interest at the time. So that's why Hakuhodo did not purchase or did not acquire FCB from Osotspa. And since FCB is now an independent company, so I acquired FCB. Because the business structure nowadays, we are not -- we have to think holistically, and I think that by acquiring all these companies, we can operate in the -- using the holistic approach.

So starting from the first company that I established. From that time until today, it has been 10 years already, and we have many successful clients. We have Thanachart Bank and also other financial institutions. I have -- my clients include like business from other sectors, the automobile business, beauty business. And we have about 220 employees and half of that is the experts in digital marketing. And our strategy is that since we have 9 subsidiaries in the group, when a client approaches us, then we will try to see what the client actually wants and try to pair that with a company with much -- that is most expert in the needs of the client.

So basically, the strategies would be -- we are doing everything. We will come up with the strategies for them. The strategies company are basically Adyim, FCB Bangkok and Nawin Consultant. And also, on the creative side, we have Adyim and Doer. For media acquisition, we have Gottimize and AVG. Gottimize for medias in Thailand and AVG for medias in China. And on the executive side, we have Alternate65, Adpocket and Jamjaras.

And also, the last one is analytic or data analytic. Because in the near future, mass communication will not be the only channel of doing marketing anymore. Now we are moving into the era of personalized marketing. In the past, when we create an advertisement, 1 million people see the same advertisement. But now what will happen in the near future is that 1 million people will see a personalized advertisement according to the consumer's behavior, the individual consumer behavior. So we will have to employ data analytic for that particular purpose.

So this is the performance of YDM Thailand. The growth you can see is always double digit. And last year, 2018, we can see that the growth is basically 76%. And we think that for this year, we should reach about THB 800 million. And we have a number of consumers -- clients who have now become our partners and among that of financial institutions and so on and so forth.

So basically, we focus on not only -- we are not like a sole advertising company. We do creative work, we do marketing, and we also do technology as well. So basically, YDM Thailand is a 3-in-1 company. We do everything.

So that is all for YDM Thailand. Thank you.

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Questions and Answers

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Unidentified Company Representative, [1]

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So please raise your hand for questions. Please state your name and company as well before posing your question. You can pose your question both to Intouch and YDM.

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Unidentified Analyst, [2]

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So (inaudible) from Kasikornbank Asset. Three questions. First question is the strategy to diversify the value from AIS in the past was the goal of your company, but right now, I think it's going the other way around. My question is does that goal still exist? And by embarking on start-ups like this, it's not going to add a lot of value in a short period of time. Will there be an opportunity to see maybe M&A or other types of M&A aside from actually investing in start-ups?

The second question is on the TV home shopping. Where is the end game in that? Are we becoming offline or are we becoming exclusively online? Or there are other value chains that maybe can add up or expand since you've been in the business for several years?

The last question addressed to YDM. What's your percentage of market share in digital advertising? And your business, how does that address the pinpoint in traditional media? And how do you differentiate yourself from other global media agency? Because they already have -- they also have online services as well. How do you compete with that? And lastly, you have a large company in Korea. And why are you raising funds in Thailand?

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Unidentified Company Representative, [3]

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To address the first question, the diversification, I have said before, there maybe -- adjust the proportion of AIS and non-AIS which is 70-30, which is quite challenging. In a couple of years, we're focusing more on VC. We may not diversify in the traditional M&A like before, but we see that if we are investing for growth, it may not be a great leap, and that's going to change the balance sheet of Intouch in a -- 1 or 2 years. But we are trying to seek new business under the budget that we have, with the cash on hand that we have, and the scope will be continuing like this. And it's not a major shift like a great leap, like what Khum Kim is saying.

The M&A that we're looking at, it's within the budget we have set. It's not going to require additional capital. So mainly, the shareholders, mostly, it's dividend pay. Even if -- even though now AIS contributes 98%, THAICOM 2%, THAICOM may be in the category of value protection and how we're not going to have impact on the value of AIS that's contributing to Intouch.

For dividend pass-through, we'll continue to be like that in terms of cash [flow], P&L may be affected from the same -- the [RE] that can be accommodated to a certain level, that I think investors, which are in dividend pay, may not -- should not be concerned about this. But the diversification would not be a huge merger and acquisition, but it will be within the scale of capital that we have, which is not going to affect the dividend of the shareholders. Can Khum Kim answer High Shopping?

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Kim Siritaweechai, Intouch Holdings Public Company Limited - CFO [4]

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So the business will continue to grow. And TV home shopping, it's actually a very -- highly competitive. But if you look at the business model from Korea, who is our partner, they are still able to grow their business towards other products that is high in margin and expensive products like brand name products. So we are considering this opportunity as well and how we can adopt that.

As for online, it is something that we're working on and will continue to work on.

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Tanapon Subsomboon, YDM (Thailand) Company Limited - Chief Executive [5]

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And first question was on market share, right? So I'm punching my calculators right now, and I think we are about 6% market share. But with a bearing in mind that market has a lot of players, and we are conducting a survey, like 200 survey, and there's a lot of freelance in the market.

So how do we differentiate ourself from global agency in terms of traditional service? If you look at the number from a traditional company in global platform or even in Thailand, their off-line advertising is suffering because all the money has been shifted to companies like my company. So why? Even if they're a global company, why are they still suffering, I think partly because there's a great shift change in consumer behavior. Advertising has now changed. It's a mixture of everything. Advertising traditionally actually competes in creativity with (inaudible) award that. But actually, today, it's not creativity, but you need to have that technological edge as well and that data edge as well. But a global company, their human resources, most of them are creative and they can -- they don't really have access. They don't really understand that technology. And it's also difficult for them to acquire a technology company. And then when they participate, when they come in, they face like culture shock, like technology nerds and agency creatives. So there's a lot of success and failure. Asia is actually very successful, like Dentsu. Like they -- it's very Asian culture. But in Europe, United States, their mergers have not been successful. Like WPP has not been successful. So I think I'm still #1. I think we're -- I'm still at a position of #1 in Thailand.

So your question is on the company in Korea and why they're raising funds in Thailand. So when they wanted to invite -- when they invested in my company, they were minority share. I was holding the majority shares. And I don't want my business to be like an international corporate. So I still wanted to be a Thai company. I'm still looking at Thai investors.

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Thitithep Nophaket, Phatra Securities Public Co. Ltd., Research Division - Director & Analyst [6]

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So Thitithep from Phatra Securities. So I'd like 2 questions to YDM. First is on the online advertising or digital advertising, which you are competing with conventional media buyer. So my understandings, for example, like GroupM -- like large corporate, like Unilever, Toyota, so are you multinational as well? Do you have the same client base?

The second question, so advertising has shifted from conventional media to online and digital, but figures in online advertising, how do you measure that? So that is not -- as they say, it's not accurate, but then people are still purchasing from YouTube and Google. How do you actually measure your success?

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Tanapon Subsomboon, YDM (Thailand) Company Limited - Chief Executive [7]

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So addressing your question on the client base, how do I answer this? Sometimes it's also conflicting because there's about 200 players in the market. The client do not really have high royalty, it's more like offline, so when they sign contracts, it's for 2 to 3 years. But for digital, they only sign for a year. And I was very happy -- or they come by as projects. And they -- like there are a lot of clients from GroupM. And sometimes, my clients will go to GroupM. So there's a shift, always a shift here. And we -- I have domestic and international market. And also, I also see this year a lot from the government agency. So GroupM do not have a lot of government clients.

What was your second question?

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Thitithep Nophaket, Phatra Securities Public Co. Ltd., Research Division - Director & Analyst [8]

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I have a follow-up question because you provide online media, right? But you don't provide conventional media like television ads.

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Tanapon Subsomboon, YDM (Thailand) Company Limited - Chief Executive [9]

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So we're only working on creative, but we don't buy the media television. We only provide digital advertising purchase.

What was the second question?

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Thitithep Nophaket, Phatra Securities Public Co. Ltd., Research Division - Director & Analyst [10]

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So it's not exactly a question, but how do you actually measure that online advertising?

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Tanapon Subsomboon, YDM (Thailand) Company Limited - Chief Executive [11]

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Nielsen doesn't work because if it's Nielsen, we -- I have like 50% market share. I think still that, that statistics is still accurate because they are collecting from agencies like mine, and they also have estimation from other sources as well. So it may not be the exact color -- numbers, but I think from that, it's probably most closely accurate.

Any additional question?

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Supachai Chimpalee, Toyota Daihatsu Engineering & Manufacturing Company Limited - IT Senior System Analyst [12]

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So I would like to ask in the Intouch executive. I am Supachai from Toyota. I would like to know whether there is any strategy to protect our investment in THAICOM. For example, if we are not continuing or renewing our concession or PPP, is there any strategy that Intouch can use to protect our investment?

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Unidentified Company Representative, [13]

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I think on the part of THAICOM, Mr. Anant has already mentioned a lot on the revenue growth and also how to seek adjacent business. So I think in terms of the business, it is quite clear as to the protection of our investment. But for the regulatory part, that can be a bit sensitive because we have to adjust according to what the government are issuing in terms of the regulation or rules. And also, for example, if hiccup in the concession renewal means that we'll have to suspend our business for a period of time, then those can be issues and we can -- we will have to plan for that. If there is to be a new satellite, whether satellite is -- belongs to THAICOM or not, then basically, the movement in terms of the regulation by the government will have to be -- we will have to plan accordingly. And that depends on how NBTC will approach in terms of issuing such regulations.

So basically, the key issue that we're facing is regulatory issues. And also, we have to take into account the factor that the government is a new government. They're all in the transitional period. And the price war that we're -- that we can see now, this is not the first time that we can see the price war. And also, we can see that the LTC is paying tax to the government, and we're now trying to signal them that if this goes on, then we will try to stop paying the dividend.

Mr. Anant said that LTC is under MoF. And so the competitor is also under the Ministry of Defense or MoF. So with that in mind, we may have to suspend or put a pause on the payment of dividend. But personally, I believe that with aggressive competition, LTC has acquired other companies, and that will increase their frequencies, and also, that will increase the chance of winning the auction as well. But I believe that -- with that strategy, I think the protection of investment is quite safe. We have already mentioned this particular issue in the shareholders' meeting as well, and there are other companies that are interested in working with THAICOM to operate a satellite after the concession has ended. But with the current condition, as I said, that Intouch has to hold the shares in THAICOM for the amount of 40%. So we have to say that we are open to our proposal if they can clarify all these conditions with the government.

They may show -- there are other companies that show interest in working with THAICOM, but there's nothing quite concrete on that yet.

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Unidentified Company Representative, [14]

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Please state your name and company.

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Unidentified Analyst, [15]

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[Tathaporn] from Nomura. I have 1 question addressed on the process on the registration on subsidiary companies. So like Wongnai or YDM, do you -- because you have a lot of revenue.

And the second question is on the exit strategy. I'd like the executive to share on what is your point where you are going to exit from InVent.

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Unidentified Company Representative, [16]

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I'd like to give example like YDM. Some of the partners are holding their shares. They are interested in acquiring additional shares, actually. So I think this is an opportunity where we see this opportunity to exit because some shareholders, they're actually seeing interesting tractions, and they think it's going to be more value. So it is pending on you're going to bet on, so holding on the shares or selling it.

So in the same manner, Wongnai may have new partner on how -- if they are going to hold on to more shares and they expand their businesses. So we can say may acquire some shares, we may not sell at the time. We will see if we have new partners, and we foresee it's going to contribute to further value. We're still holding it.

Such as for Ookbee, there will be another round of fundraising. So the raised fund will continue to increase the value, but we still have monetization direction that we see for this year.

If you look at Digio, we monetized that, but it's at a small scale. Well, that's one of the example where we are monetized. But if we monitor that, if we weren't monetized and if we take the fund to invest in new VC, so that's going -- not going to affect on the capital allocated for investment.

So this is how we're going to focus from this year onwards, but it's also in consideration of the timing, whether to monetize what and what and considering many elements.

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Unidentified Analyst, [17]

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One more question to the CFO. I'd like to know the VC market in Thailand. And the venture capital in Thailand can still grow aggressively. If the global economy is going to late cycle, will we have problems in exit? How do you see VC market?

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Kim Siritaweechai, Intouch Holdings Public Company Limited - CFO [18]

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So the VC that we've invested, we don't have a lot of impairment. But -- and what we are operating right now, the performance is actually by the plan. And after our investment, we have the business plan and budget that we monitor closely, and we are meeting our goals, sometimes exceeding the goal, sometimes under. But on the overall, it's -- the result, it's actually in line, either in line or higher than the budget.

Some of the VC that we invested internationally near -- is actually near closing. So we are considering VC where we're not investing fund to fund, but we are directly -- investing directly in VC. What we're investing in some of the platforms that may have the opportunity that AIS consumers can use. But if we announce closing, like I -- as we mentioned that has been approved, but we're closing.

But we are seeing that we are expanding the [VC] phasing from Thailand. We still have some in Thailand, though, that is still in pipeline and under review. But there's limitations on investment in VC. We are extending also in order and [to see it] and we maybe also want to have more high-risk and high return.

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Unidentified Analyst, [19]

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So on VC, from 18 VC that we have, how many is making profit?

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Unidentified Company Representative, [20]

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So the VC that we have, I have to ask YDM whether or not we are making a profit. So basically, from what we have, Wongnai is making profit. YDM is making profit as well. I think there are 4 to 5 VCs that we have right now that are profitable. Also, personally, I think VC has become stronger in terms of the competition, the competitiveness and also in terms of entering into new markets as well by saying that we have a budget of THB 200 million.

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Unidentified Analyst, [21]

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I would like to know whether that trend has decreased or not.

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Unidentified Company Representative, [22]

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Well, we just -- for example, like we have the VC committee. We may approve a certain budget. Recently, we have just asked for an increase in the budget for acquiring our VC as well. For example, like if we want to invest in a certain VC, but we are not quite sure about the risk of that particular VC, that we may invest a minimum amount of money at the beginning and then try to see whether -- how it will turn out, and then we'll invest even more.

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Unidentified Analyst, [23]

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So I would like to know whether the THB 200 million budget is still applicable.

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Unidentified Company Representative, [24]

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Well, we have approved about THB 100 million already, and there is a budget remaining for the second half of the year.

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Unidentified Analyst, [25]

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Well, I would like to ask whether it makes sense to use THB 200 million for VC acquisition.

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Unidentified Company Representative, [26]

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Well, I think THB 200 million is quite reasonable for the VC in Thailand. But if it is a sizable VC that will cost even more, then we will have to also consider. Basically, THB 200 million is the amount that we try to basically put out to investors, and they are quite comfortable with that number as well.

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Unidentified Company Representative, [27]

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If there is no other questions, I would like to thank the analysts and investors for coming here today. And also, I would like to thank the executives from INTOUCH and YDM. And we will meet again at the beginning of next year for the INTOUCH Group Analyst Meeting.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]