25 Nov

2021 Chairmans address and presentation

ellerstoncapital.com Level 11, 179 Elizabeth Street, Sydney NSW 2000 Ph: +61 2 9021 7701 E: info@ellerstoncapital.com W: ellerstoncapital.com 25 November 2021 Company Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 ELLERSTON ASIAN INVESTMENTS LIMITED (ASX: EAI) 2021 AGM CHAIRMAN’S SPEECH AND PRESENTATION Please find attached the following documents to be delivered at EAI’s 2021 AGM today: 1. Chairman’s speech; and 2. AGM Presentation. The results of the AGM will be made available shortly after the conclusion of the AGM. Yours sincerely Ian Kelly Company Secretary 1 EAI Annual General Meeting Thursday 25 November 20 21 Chairman’s Welcome & Address On behalf of the Board, I’d like to welcome all Ellerston Asian Investment s (E A I) shareholders, invited guests and other visitors to our 20 21 Annual General Meeting. My name is Bill Best and I'm Chairman of Ellerston Asian Investments Limited. Our Board and Management h ere today include Maria n Carr, Sam Brougham and Paul Dortkamp . E A I’s Portfolio Manager, Fredy Hoh is also present along with e mployees of the Manager . Also present today is our auditor for the 2021 financial year, Rita Da Silva from Ernst & Young. R ita is available to take questions relevant to the conduct of the audit and the preparation and content of the Independent Audit Report. Representatives of EAI's share registry, Link Market Services Limited, are also present online to assist in the poll proc ess for the meeting. For the purpose s of today's meeting, I appoint Nick O’Hagan to act as Returning Officer for the poll process. Mr O’Hagan has agreed to act in this capacity and to coordinate the poll process. The Corporations Act requires that the C ompany make copies of relevant questions of the Company’s auditors received avai lable. No written questions were received. Copies of the Notice of Meeting and an online virtual meeting guide which explains how shareholders may participate in the meeting were emailed to shareholders in advance of this meeting, and are also available on the Company website and on the ASX announcements platform. As you know, today’s meeting is virtual in the sense that shareholders can only participate using the Link Online Platform. If we experience any technical issues today, a short recess or an adjournment may be required depending on the number of shareholders being affected. If this occurs, I will advise you accordingly. Thank you for your understanding as we are all well aware of why it is necessary for health and safety to conduct today’s AGM in this way. You will be able to listen to the meeting in real time, submit questions vote on the resolutions at the meeting today online. If you have a question that you would like to ask today, you can type questions into the online platform. To do this, click ‘Ask a question’ and follow the prompts. To ensure you have enough time to type and submit your question, I encourage you to type this now instead of waiting until later in the meeting. Questions that are relevant to the business of this meeting will be read aloud when we are at that item of business. We may aggregate questions if we receive multiple questions on the same topic. I will now explain the procedure for the poll. 2 First, this is a meeting of holders of EAI Shares. Each person registered in the EAI Share Register as the holder of EAI Shares at 1 1 : 00am on Tuesday 23 November 202 1 is entitled to vote through the portal, by proxy o r attorney or, in the case of a corporate holder of EAI Shares, by a corporate representative using the online portal. If you did not cast your vote prior to the meeting, you may cast a live vote using the online platform. Please click ‘Get a voting card’. You may cast your live vote at any time during the meeting. Live voting on the online platform will close five minut es after the close of the meeting. I will give you a warning when this five minute period starts. At the conclusion of the AGM, you will see a red bar appear along the top of the online platform with a countdown timer of how long you have remaining to cast your vote. You must be logged into the online platform to cast a live vote. I confirm that where undirected proxies have been given to me (the Chairman), I will vote in favour of the resolution to the extent permitted. During the meeting we will display on the presentation slides the number of direct and proxy votes received prior to the meeting on each resolution. The final results will be released to the market as soon as they are available. Your voting card should appear on your screen with the rel evant resolution to be voted on at this meeting. Shareholders and proxies can either submit a Full Vote or a Partial Vote. You can move between the two tabs by clicking on ‘Full Vote’ or ‘Partial Vote’ at the top of the voting card. Fu ll Votes To submit a full vote on the relevant Resolution, ensure you are in the ‘Full Vote’ tab. Place your vote by clicking on the ‘For’, ‘Against’, or ‘Abstain’ voting buttons. Partial Votes To submit a partial vote on the relevant Resolution, ensure you are in the ‘Partia l Vote’ tab. You can then enter the number of votes you would like to vote on the resolution. The total amount of votes that you are entitled to vote for will be listed under the resolution. When you enter the number of votes in a certain box it will autom atically tally how many votes you have left. Please n ote: If you are submitting a partial vote and do not use all of your entitled votes, the un - voted portion will be submitted as "No Instruction" and therefore will not be counted. Once you have finished v oting on the relevant Resolution, scroll down to the bottom of the box and click the ‘Cast Vote’ or ‘Cast Partial Vote’ button. You can edit your voting card at any point while voting is open by clicking on ‘Edit Card’. This will reopen the voting card with any previous votes made. If at any point you have submitted your voting card and wish to make a change while voting is still o pen, you can do so by clicking the ‘Edit Card’ button and making the required change. Once you have completed your card select the ‘Cast Vote’ or ‘Cast Partial Vote’ button. The voting card can be edited up until the voting process is closed. Once voting h as been closed, all voting cards, will be automatically submitted and cannot be changed. 3 If you are a proxy, you must direct your votes according to the instructions received. If you choose not to vote, I , as Chairman will be taken to have been appointed a s the proxy and I must vote as directed in your instructions. If you are a proxy and you have not been instructed to vote in a particular manner in respect of the relevant Resolution, you may vote in favour of or against or abstain from voting on the rele vant Resolution as you see fit by completing your online proxy holder voting card. If you experience any difficulties using the online platform, a helpline number is displayed at the top of the page. Please ring 1800 990 363. Let’s now move to a discuss ion of EAI’s performance in 2021 . No one needs reminding about the extraordinary challenges caused by the COVID - 19 pandemic in 202 1 . We sincerely hope you and your family and friends remain safe and well. EAI was launched in the belief that every investment portfolio should have at least some exp osure to Asia. Asia remains one of the best structural growth stor ies in the world and, while COVID - 19 has created economic chal lenges globally, the underlying drivers of the structural growth in Asia ar e still in place. As such, we expect Asia to enjoy the strongest post - COVID economic growth globally led by China and India. We are pleased to report that for the 12 - month period to 30 June 2021, the portfolio returned 23.43% net of fees . This continues th e very strong performance over the last 3 years which has seen the portfolio return 11.08 % p.a. net of fees, an outperformance o f 1.88 % p.a. over the benchmark ’ s MSCI Asia ex Japan (non - accumulation) (AUD) return of 9.21% p.a. Now we will turn to the results for the fiscal year ending 30 June 2021 . Results for the year ended 30 June 20 21 The first item of business is the results f or the period to 30 June 2021 . The Company recorded a pre - tax profit of $ 34,969,170 and a net profit after income tax expense of $ 24,984,003 . As at 30 June 2021 the Company’s Net Tangible Assets was $1. 3595 per share before all taxes and $1. 2780 per share post all taxes. The Directors declar ed a fully franked dividend of 3 cents per fully paid ordinary share, for the year to 30 June 21 making a total dividend of 5.5 cen ts fully franked for the 20 21 FY . The final was paid to shareholders on the 5 th of Octo ber 20 21 from the Company’s dividend profit reserve account . The Dividend Reinvestment Plan (DRP) was suspended and it did not operate for this dividend. After the payment of the 20 2 1 final dividend the Company had a dividend profit reserve of 13.4 cents per share, based on the number of shares on issue at 30 June 20 2 1 . The Company intends to maintain a sustainable dividend policy for shareholders going forward, all things being equal . Resolutions We will now turn to the formal busine ss of the meeting. A s mentioned before, t he Notice of Meeting was sent to shareholders . I propose that the Notice of Meeting be taken as read. 4 I would also like to highlight that Ellerston Asian Investments directors and executives identified as key management personnel will not be voting undirected proxy votes given to them for item 1, the Remuneration Report. On all other items of business, where undirected proxies have been given in favour o f the Chairman, I will be voting those proxies in favour of all items. The first item of business listed in the Notice of Meeting is to receive and consider the Financial Report of the Company for the year ended 30 June 2021 , together with the Directors’ Report and the Auditor’s Report as set out in the Annual Report. Please note that there is no voting applicable to this item of business. As mentioned previously, R ita Da Silva from Ernst & Young , is with us today. Questions relevant to the c onduct of the audit, the preparation and content of the independent audit report, the accounting policies adopted by the Company in relation to the preparation of the accounts, and their independence in relation to the conduct of the audit may be directed to them through me as Chairman. I will now open to questions received through the online platform in relation to the Financial Report, the Directors’ Report or Auditor’s Report. We will give participants a couple of minutes to enter any questions. RESOLUTION 1 - REMUNERATION REPORT The next item of business, Resolution 1, is the Adoption of the Remuneration Report. The Corporations Act requires a resolution be put to vote at the Compa ny’s annual general meeting that the remuneration report be adopted. The vote on this resolution is advisory only and does not bind the directors o r the Company. The Remuneration Report to shareholders is contained on pages 9 to 12 of the 20 2 1 Annual Report. This item gives you the opportunity to ask questions about or make comment on E A I’s remuneration policies. We will give participants a couple of minutes to enter any questions. Can I now ask you to commence completing your voting card on Resolution 1 – we will give s hareholders a couple of min ute s to do so. We will move to the next item of business. RESOLUTION 2 – ELECTION OF DIRECTOR MARIAN CARR The next item of business to consider and if thought fit to pass the following resolution “ That Marian Carr, who retires as a Director pursuant to the requirement in the ASX Listing Rule 14.5 and section 63 of the Company’s Constitution and being eligible be elected as a Non - executive Director ”. I will now invite Ms Carr to say a few words The Board (with Ms Carr abstaining in respect of this resolution) recommends the election of Ms Carr . We will give participants a couple of minutes to enter any questions. Can I now ask you to commence completing your voting card on Resolution 2 – we will give shareholders a couple of min utes to do so. 5 We will move to the next item of business. RESOLUTION 3 – RE - ELECTION OF DIRECTOR SAM BROUGHAM The next item of business to consider and if thought fit to pass the following resolution “ That Sam Brougham, who retire s as a Director pursuant to the requirement in the ASX Listing Rule 14.5 and section 63 of the Company’s Constitution and being eligible be re - elected as a Non - executive Director ”. I will now invite Mr Brougham to say a few words The Board (with Mr Brougham abstaining in respect of this resolution) recommends the re - election of Mr Brougham . We will give participants a couple of minutes to enter any questions. Can I now ask you to commence completing your voting card on Resolution 3 – we will give shareholders a couple of minutes to do so. You can still lodge your vote via the online platform, up until 5 minutes after the close of the meeting. A countdown timer will appear at the top of the screen in the online platform. Once this closes, any vote you have placed will automatically be submit ted. The results of today’s AGM will be released to the market and made available on the ASX website as soon as possible, which should be later this afternoon. This now concludes the business section of the AGM. I declare the meeting closed . I will now hand over to the Portfolio Manager for E A I, Fredy Hoh . Q&A Ladies and gentlemen, that completes the items on the agenda of the 2021 Annual General Meeting today. I will now allow an opportunity for questions or comments in relation to the management and/or general business of the company. We will give participants a couple of minutes to enter any questions. As there are no more questions , I would like once aging to thank you all for particip ating and for your support of EAI. 7 14 +++ 16 • • • • • • • • • • • • • 17 Source: Bloomberg, Ellerston Asia. Key Recent and Upcoming Events 18 • • • • Company Ticker Market cap (A$bn) Total liabiities (US$bn) Net gearing (%) Cash-to-ST- debt ratio (x) Liability-to- asset ratio (%) Net gearing (%) Cash-to-ST- debt ratio (x) Liability-to- asset ratio (%) R&F 2777 HK 2.7 54 123.5 0.2 74.9 130.2 0.4 76.7 Evergrande 3333 HK 6.6 299 99.8 0.4 81.0 152.9 0.5 83.4 Kaisa 1638 HK 1.3 35 95.4 1.5 69.9 97.9 1.6 70.3 Yuzhou 1628 HK 0.9 22 89.5 1.4 74.0 96.8 1.2 77.9 Sunac 1918 HK 12.1 143 86.6 1.1 76.5 96.0 1.1 78.7 Jinmao 817 HK 5.5 44 78.5 1.3 67.9 75.3 1.6 66.8 SCE 1966 HK 1.7 20 77.9 1.2 69.5 59.2 1.3 68.7 Agile 3383 HK 3.8 36 69.9 1.2 68.8 95.7 1.1 72.3 Seazen 1030 HK 6.9 71 65.2 1.6 76.9 50.7 1.9 76.2 CIFI 884 HK 6.9 45 63.7 2.7 72.1 71.3 2.7 72.5 Midea RE 3990 HK 3.0 37 58.2 2.2 76.1 79.2 1.5 77.6 Zhongliang 2772 HK 2.3 37 56.1 1.2 79.3 65.8 1.1 79.9 Shimao 813 HK 6.5 67 55.3 1.2 68.3 55.5 1.2 68.5 KWG 1813 HK 4.0 27 54.1 1.8 71.8 61.7 1.6 75.1 Redsun 1996 HK 1.2 14 53.9 1.3 69.4 50.3 1.1 69.4 Yuexiu Prop 123 HK 3.9 30 49.8 1.3 69.4 47.5 1.7 69.2 Country Garden 2007 HK 28.9 269 49.7 1.9 78.5 55.6 1.7 80.5 COGO 81 HK 2.2 21 48.0 1.2 71.3 45.5 1.5 71.9 Longfor 960 HK 42.7 88 46.0 5.5 68.3 46.5 4.2 66.9 COLI 688 HK 35.5 76 32.5 2.6 53.4 31.2 2.5 53.3 CRL 1109 HK 42.9 94 28.5 2.3 60.9 29.5 2.5 59.7 Vanke 2202 HK 47.3 233 20.2 1.7 69.7 18.1 1.8 71.8 1H21 FY20 • • • • • • • • • • • • • 19 • • • 21 • • • • • • • 23 • • • •
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