Investor Presentation 2020adamasfinance.com/assets/corporate-presentations/... · Investor Presentation 2020 The London listed company focused on providing shareholders with attractive

Adamas Finance Asia LimitedInvestor Presentation

2020

The London listed company focused on providing shareholders with attractive uncorrelated risk adjusted returns from a diversified portfolio of pan-Asian investments

Disclaimer

2

This Document comprises an institutional presentation (the “Presentation”) which has been prepared by and is the sole responsibility of Adamas Finance Asia Limited (the “Company”). The content of this Presentation hasnot been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000, as amended (“FSMA”). Reliance on this Presentation for the purpose of engaging in any investment activitymay expose an individual to a significant risk of losing all of the property or other assets invested. This Presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for anysecurities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever or constitute an invitation or inducement to engagein investment activity under section 21 of FSMA.

Notwithstanding the above, in the United Kingdom, this Presentation is only being given to persons reasonably believed by the Company to be investment professionals within the meaning of paragraph (5) of Article 19 ofthe FMSA (Financial Promotion) Order 2005 (SI 2005/1529) (“FMSA Order”) or to be high net worth companies or unincorporated associations within the meaning of paragraph (2) of Article 49 of the FMSA Order or to bepersons to whom it may otherwise be lawful to distribute it. If you are not such a person (i) you should not have received this Presentation and (ii) please return this Presentation to the Company's registered office as soon aspossible and take no other action. By accepting this Presentation the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive this Presentation.

This Presentation and its contents are confidential. It must not be distributed or passed on, directly or indirectly, to any other person or class of persons. This Presentation is being supplied to you solely for your informationand may not be reproduced, further distributed or published in whole or in part by any other person and under no circumstances should persons of any other description rely or act upon the contents of this Presentation.

No representation or warranty, expressed or implied, is made or given by or on behalf of the Company or any of their respective parent or subsidiary undertakings or the subsidiary undertakings of any such parentundertakings or any of the directors, officers or employees of any such person as to the accuracy, completeness or fairness of the information or opinions contained in this Presentation and no responsibility or liability isaccepted by any person for such information or opinions. No person has been authorised to give any information or make any representations other than those contained in this Presentation and, if given and/or made, suchinformation or representations must not be relied upon as having been so authorised. The contents of this Presentation are not to be construed as legal, financial or tax advice.

The Company has not been, and will not be, registered under the United States Investment Company Act of 1940, as amended, and investors will not be entitled to the benefits of that Act. Neither this Presentation nor anycopy of it may be taken or transmitted into the United States of America or its territories or possessions (the “United States”), or distributed, directly or indirectly, in the United States, or to any U.S Person as defined inRegulation S under the United States Of America Securities Act 1933, as amended, including U.S resident corporations or other entities organised under the laws of the United States or any state thereof or non-U.S branchesor agencies of such corporations or entities. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in Canada, Australia, Japan, South Africa or the Republic of Ireland, or any otherjurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States or other nationalsecurities law.

Information contained in this Presentation may include 'forward-looking statements'. All statements other than statements of historical facts included herein, including, without limitation, those regarding the Company'sfinancial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's business) are forward-looking statements. Suchforward-looking statements are based on a number of assumptions regarding the Company's present and future business strategies and the environment in which the Company expects to operate in future. Actual resultsmay vary materially from the results anticipated by these forward-looking statements as a result of a variety of factors. These forward-looking statements speak only as to the date of this Presentation and cannot be reliedupon as a guide to future performance. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this Presentation to reflect anychanges in its expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Contents & Presentation Team

3

Contents

Page 4 – Company Overview

Page 5 – Compelling Investment Case

Page 6 - 8 – Recent Updates

Page 9 – Key Performance Metrics

Page 10 – The COVID-19 Pandemic Effect

Page 11 – Differentiation and Added Value Across Three Key Areas

Page 12 – Investment Manager Expertise: Harmony Capital

Page 13 – Significant Market Opportunity

Page 14 – Asian SME Demand for Growth Financing

Page 15 – Sourcing: ADAM’s established advantage

Page 16 – Our Investment Process

Page 17 – Our Growth Sector Focus

Page 18 – Our Strategy

Page 19 – Structured Protection

Page 20 – Our Office and Portfolio Footprint

Page 21 - 23 – Our Portfolio - Selected Investments

Page 24 – Investment Pipeline

Page 25 – ADAM: Competitive Advantages & Outlook

Page 26 – Appendix

Page 27 – Key Terms

Page 28 – Financials

Page 29 – Our Portfolio

Page 30 – The Board

John CroftExecutive ChairmanAdamas Finance Asia

• Experienced director of AIM-quoted companies via executive andnon-executive capacities

• Sector track record working with a number of fast growthcompanies in technology and financial services

Suresh WithanaManaging Partner Harmony Capital Investors

• Founder and lead at investment manager• 25 years’ experience in investing and investment banking• The past 17 years of which focused on Pan-Asian investments• Inhouse experience with Bank of America, Merrill Lynch, Mizuho

International Plc and Tikehau Capital

Presentation Team

Company Overview

4

Attractive Income & Capital Growth

Dedicated to delivering attractive income and capital growth for shareholders

Rigorous due diligence and disciplined risk management, with downside protection through selectively investing inassets and proactively managing them

Provide growth capital and financing to emerging and established Small and Medium Enterprises (SMEs) throughoutAsia, well diversified by national geographies, instruments and asset classes

Robust Risk Management

Strategy

Sourcing private opportunities with a strong pipeline of income generation, focusing on growth sectors across Asia,including healthcare, fintech, hospitality, IT and property

Growth Sector Focus

Track RecordHarmony Capital, the investment manager, has an established tracked record of generating excess returns throughoutmarket cycles across the globe for the past 20+ years, with a focus on Asian special situations for 17+ years

Who We AreLondon listed company focused on providing shareholders with attractive uncorrelated long term risk adjusted returnsfrom a diversified portfolio of pan-Asian investments

The four experienced and independent directors comprising the Company’s Board provide strong governanceGovernance

Compelling Investment Case

5

Supportive Majority Shareholder 55% majority shareholder, supportive long-term holder since 2014 and has not sold any shares

Future Metal Holdings (42.6% of ADAM’s last reported NAV), a Chinese dolomite quarry, has commenced production.1 InDecember 2019, the quarry produced 10-20.0k tonnes of dolomite and wall rock and sold these materials during the initialtrial run of the plant. The asset is valued at US$44.7m (at 31 December 2019)

The Company’s share price is currently trading at a + 70% discount to NAV

Largest Investment

Discount to NAV

Over 250 million Asian SMEs with limited access to traditional bank financing, US$2.7 trillion funding gap (IFC), leading to significant opportunities to deploy capital selectively in this vital segment of the economy

Market Opportunity

Established Investment Expertise and Networks

The Company's investment manager, Harmony Capital, seeks to capitalise on its team’s established investment expertise andbroad networks and offices across Asia, with rigorous diligence and disciplined risk management

Investment PolicyThe London listed company focused on providing shareholders with attractive uncorrelated risk adjusted returns over theshort and longer term from a diversified portfolio of pan-Asian investments

Harmony Capital: established track record of successfully executing and exiting investments throughout market cycles;continuing to create strong pipeline of attractive income generating assets with capital growth potential for shareholders

Established Advantage

1 31 December 2019 NAV

Recent Updates

6

▪ On 21 October 2019, ADAM announced it had successfully raisedgross proceeds of approximately US$1.9million through theissuance of a US Dollar-denominated corporate bond to familyoffices in the Middle East (the "Corporate Bond"), representing thefirst close of a corporate bond issuance programme of up to US$10million.

▪ In May 2020, ADAM successfully secured a second subscription ofUS$1.7million from high net worth individuals and family offices inthe Middle East. The Company has raised a combined total ofapproximately US$3.6million to date.

▪ This Corporate Bond, which matures in October 2022, has a cashcoupon with an interest rate of 12.5% per annum payable semi-annually and is secured with a fixed and floating charge on thecorporate assets of the Company. The Company reserves the rightto change the terms of any future corporate bond issuance.

End-of-Year Financial Results Corporate Bond Issuance

▪ Since 2018, the Company’s Net Asset Value increased by 8% drivenmostly by a new investment which was acquired in exchange for theissue of the Company’s shares.

▪ Portfolio income increased by over 500% to US$2.2m year-on-yeardue to the continued repositioning of the portfolio, a trend that isexpected to continue in 2020 as new investments are made andwhere ADAM expects to monetise some of its older investments.This leaves the Company closer to a point where it can consider asustainable dividend policy.

▪ Net loss reduced by 21% year-on-year driven largely by a significantincrease in Portfolio income which offset operational costs of thebusiness.

▪ The COVID-19 pandemic continues to create global uncertainty, butthe Company remains relatively well positioned given its resilientand diversified portfolio and strong liquidity position. In addition, allthe Company's investments have business continuity proceduresand protocols in place to effectively mitigate the impact of the viruspandemic.

▪ The Company is also seeing an increasingly attractive and growingpipeline of investment opportunities in emerging and establishedsmall and medium sized enterprises across Asia, which are evenmore starved of capital, a situation that is accelerating due to theimpact of this global pandemic.

Recent Updates

7

Share Buyback

▪ On 23 December 2019, the Company purchased 2,400,000existing Ordinary Shares of no par value in the capital of theCompany at a price of USD 0.21 per Ordinary Share, representingan aggregate purchase price of US$0.5m (the "Share Buyback").ADAM bought these shares on-market using existing cashreserves aiming to avoid the potential continuation of an on-market overhang which it believes was created recently by theseller of this block.

▪ The Company understands that the selling pressure from thisshareholder was driven by non-market considerations and thatthis purchase comprises the entire holdings of this shareholder.

▪ A portion of these shares will be held in treasury by the Company,whilst an allocation of the remaining shares with a syndicate ofthird-party investors was successfully completed on 3 March2020.

▪ On 15 November 2019, Infinity Capital Group became a 15.4%shareholder of the Company via a Share Purchase Agreementcompleted at a consideration share price of US$0.45representing a 20% premium to the 30-day weighted averageprice per share in ADAM.

Infinity Capital Group Shareholding in ADAM

Recent Updates

8

Commencement of Production at Future Metal Holdings Limited

▪ On 27 December 2019, production commenced at ADAM’s core asset, FutureMetal Holdings Limited. With the installation of the quarry's processing line, theprocessing plant’s initial run was successfully conducted, and the first salescontract was entered into with others expected to follow in Q1 2020. Furtherramping up of production commenced in the third week of December 2019.

▪ The operation continued until late January 2020 before the Chinese New Yearwith an estimated total production amount of 15,000 tonnes.

▪ As a result of the restrictions imposed by the local Government in order tocontain the COVID-19 pandemic, in February and early March 2020, theoperations of the quarry were temporarily halted. While this was a legalrequirement, local management had originally planned for limited production inthis period due to traditionally adverse winter weather conditions at thebeginning of the year. In line with wide-ranging industrial activity in China, thequarry resumed operations in mid-March 2020. The local management team isactively pursuing sales orders from domestic construction companies who haveall commenced operations.

76.8

93.6 95.0 93.096.7

100.9

0

20

40

60

80

100

120

Interim 2017 FY2017 Interim 2018 FY2018 Interim 2019 FY2019

Key Performance Metrics

9

▪ 2019 NAV increased to US$100.9m (2018: US$93.0m) as a result of the share swapwith Infinity TNP

▪ 2019 Gross income generated from the portfolio increased by over 500% to US$2.2m(2018: US$0.4K), a trend that is expected to continue in 2020 as new investments aremade and where the Company expects to monetise some of its older investments.This leaves the Company closer to a point where it can consider a sustainabledividend policy

▪ Net loss decreased by 21% to US$2.8m (2018: US$3.5m)

▪ A US$0.5m Share Buyback Programme was implemented to improve the

liquidity of shares

▪ 2019 Cash of US$4.1m (2018: US$8.8m)

▪ 2019 NAV per share of US$0.95 (2018: US$1.13)

Net Asset Value Gross Portfolio Income

FY2016

+31%

0.1

0.4

1.2

2.2

0

1

2

3

Interim 2017 FY2017 Interim 2018 FY2018 Interim 2019 FY2019

US$ MM US$ MM

Harmony Capital Appointed

Harmony Capital Appointed

▪ In 2020, the Board anticipates that income from the portfolio will

continue to increase bringing ADAM nearer to commencing dividend

payments

▪ The Board remains confident in the outlook for the business and ofdelivering value to ADAM’s shareholders over the short and longer term.

▪ The Company is continuing to monitor closely the impact of COVID-19 and

will keep shareholders updated on any material developments that affect

the Group as the situation evolves.

The COVID-19 Pandemic Effect

10

Impact of the COVID-19 Pandemic on Current Operations

▪ The Company’s primary focus remains the health, safety and wellbeing of

our people and stakeholders, whilst working hard to ensure that the

Company’s financial position remains robust over the long-term and the

value of the business and its investment portfolio is protected.

▪ The COVID-19 pandemic continues to create global uncertainty, but the

Company remains relatively well positioned given its resilient and

diversified portfolio of pan-Asian investments and strong liquidity

position. The Board draws further comfort from the establishedinvestment expertise and relationships across Asia of Harmony Capital,

the Company’s Investment Manager.

▪ Whilst the markets in which the Company’s portfolio companies operate

have been affected by the pandemic to varying degrees, many of thesecountries, including China and Hong Kong, are exhibiting early signs of

recovery with the gradual lifting of lock-down measurers.

Risk Management and Opportunities

▪ Asian countries generally have benefited from the experiences gained

from previous pandemics such as Bird Flu and SARS and this resulted in far

quicker changes to behaviours and travel restrictions than was the case in

the West.

▪ All the Company's investments have business continuity procedures and

protocols in place to effectively mitigate the impact of virus pandemic.

Harmony Capital continues to be in constant communication with all of

its portfolio company investments and business partners.

▪ Through Harmony Capital, the Company is also seeing an increasingly

attractive and growing pipeline of investment opportunities in emerging

and established small and medium sized enterprises across Asia, which

are even more starved of capital, a situation that is accelerating due to theimpact of this global pandemic.

Outlook

Differentiation and Added Value Across Three Key Areas

11

Experienced Robust Risk Management Process

Diverse Portfolio and Pipeline of Attractive Investments

▪ Established, value-oriented, income focused pan-Asian SMEinvestor

▪ Senior investment team averages +20 years of relevant experience

▪ Complementary skill sets and deep industry expertise

▪ History of generating excess returns throughout market cycles

▪ Extensive financial structuring experience with significant downsideprotection from investments

▪ Established ability to successfully execute and exit investments

▪ Investment manager has +6 dedicated employees in operations andrisk management

▪ Offices: London, Hong Kong & Singapore, on-the-ground local teams

▪ Supplement traditional risk management with advanced portfolioanalytical tools

▪ Proactive rigorous diligence & disciplined risk managementprocesses

▪ Evaluate risk across both portfolio and individualinvestment/growth capital data

▪ Track growth capital-level performance across life of investment

▪ Portfolio of seven investments across four countries

▪ Proactive and selective sourcing of deals with teams that have thetalent, passion and grit to succeed

▪ Non-sponsored, self-originated and primarily private investments

▪ Investments typically structured with over collateralisation andcredit enhancements to minimise risk of loss

▪ Well-structured and downside-protected investments

Investment Manager Expertise: Harmony Capital

12

The Company’s investment manager is Harmony Capital, anestablished private capital manager with offices in London, HongKong and Singapore that has a history of generating excessreturns throughout market cycles.

Through rigorous diligence and disciplined risk management,Harmony Capital is dedicated to delivering attractive income andcapital growth for shareholders with significant downsideprotection through selectively investing in assets and proactivelymanaging them.

Since being established by Suresh Withana in 2005, HarmonyCapital managed a private pan-Asian focused SME fund forsophisticated investors diversified geographically and includingAsian Institutional Investors, North American Pension Plans andFamily Offices – the fund invested in middle-market companiesin South East Asia, China and Australia.

Today, Harmony Capital manages a pan-Asian focused SME fundfor its client, London-quoted permanent capital vehicle, AdamasFinance Asia. The fund provides growth capital and financing toSMEs, which are underserved by traditional bank financing andmaintains diverse exposure throughout Asian geographies,utilising varied instruments across assorted asset classes.

Years of Pan-Asian Investing Experience17Harmony Capital c.US$100m Asia Portfolio

Harmony Investment Fund I c.US$270m Asia Portfolio10 Yr Life Positive Returns

Mizuho International Plc c.US$450m Global Portfolio3 Yr Life Positive Returns

Years of Professional Experience25Prior to founding Harmony Capital, Mr. Withana worked

for Bank of America, Merrill Lynch, Mizuho International

Plc and Tikehau Capital

Significant Market Opportunity

13

2 MSME Finance Gap – SME Finance Forum (2017)3

Estimated number of small and medium-sized enterprises worldwide in 2010, by region – Statista (2018)4 Trade Finance Gaps, Growth and Jobs Survey – Asian Development Bank (2017)

There is a funding gap of c.US$3 trillion across Asia SMEs2

Traditional institutions restricted for regulatory and structural reasons; SMEs seek growth capital from alternative finance providers

Asian SMEs are attractive investments with built in collateral and downside protection

There are over 270 million Asian SMEs, making up 98% of Asian companies3,4

Pan-Asian SME’s account for 42% of Asia’s GDP and only receive 18.7% of lending via traditional institutions4

Significant opportunities to invest selectively in high growth SMEs in Asia and proactively manage them

Returns

Demand

Market

Growth

Opportunity

Structured Investments

Asian SME Demand for Growth Financing

14

▪ ADAM can invest across the capital structure of SME companies with a strong preference for well-structured and downside-protected investments

▪ As Asian SMEs are increasingly starved of capital, ADAM sees increasing opportunities to negotiate and invest in well structured instruments

Enterprise Value US$5m-500m

Revenue US$5m-500m

Profitability & Cash Flows Positive EBITDA; Manageable CapEx

Limited Financing SourcesRestricted access to public markets and traditional bank debt

Convertible Bonds

High Yielding Secured Loans

Loans + Warrants

Preferred Equity

Expansion Capital

Acquisition Finance & Buyouts

Bridge Finance

Re-Finance

Rescue Finance

Income + Capital Gains

Downside Protection

Return of Capital

Accountability

Governance

ADAM SME Target Features

FOR HOW WHY

Sourcing: ADAM’s Established Advantage

15

▪ As an established firm with investment expertise and broad networksand offices across Asia, Harmony Capital has an extensive and deepnetwork of relationships and a robust pipeline in this growing, butfragmented, industry where proprietary relationships are key togaining access and serve as a powerful filter of opportunities.

▪ Harmony Capital:

• has a disciplined deal origination process that has generated more than 30qualified investment opportunities across Asia over the last 14 years

• screens potential portfolio companies based on various criteria includingmanagement growth strategy, robust financials and market opportunity

• has extensive reach and ability to meet with management teams, attendconferences and diligence opportunities

▪ Through Harmony Capital’s local offices, it can originate proprietarytransactions and negotiate attractive transaction terms directly withcompanies, instead of competing in a wide auction process.

Historical Asian SME Investments

Current Asian SME Investments

Our Investment Process

16

Harmony Capital follows a multi-phase due diligence process once a potential investment is identified

Sector

Special Situations

Proprietary Access & Origination

Sustainable Exclusivity

Negotiation

Invest

Investment Filter Risk Factors

Healthcare & Life Sciences, Consumer & Retail, Industrials

Expansion Capital, Bridge Finance, Re-finance

Strong fit and value-adding opportunities

Asian SMEEstimated Enterprise Values ofUS$5m to US$500m

Cyclical Sectors

Lack of Adequate Security

Shopped Opportunities

Participating via Third Parties

Rushed Timeline

Exclusive Opportunities

Deal structure and exit evaluation

As a result of Harmony Capital’s thoroughness throughout the due diligence process,over 100 SMEs were analysed in 2019, however, only 2 companies achievedinvestment.

Our Growth Sector Focus

17

While ADAM remains sector agonistic, Harmony Capital has identified certain sectors in Asia that continue to be attractive based on experience in those specific sectors and where the team’s knowledge and contacts are deepest

▪ Supply constraints▪ Government focus on Clean Energy

Adamas Finance Asia

Energy and Resources

Consumer & Leisure

Internet & Technology

Education

Food and Agriculture

Property

Healthcare & Life

Sciences

Industrials

▪ Increased protein consumption▪ Reduced supply of arable land

▪ Hard asset backing▪ Assessable income stream

▪ Aging population▪ Medical tourism

▪ Asia is a global manufacturing hub▪ Local consumer drives demand

▪ Internet proliferation continues▪ Fintech disrupting financial sector

▪ Significant share of household spending▪ Increased demand for private education

▪ Growing middle class▪ Demand for luxury goods, services and experiences

Our Strategy

18

Our flexible investment policy enables us to evaluate opportunities across a spectrum of complexity

Asian

SME Sector

Expansion

Capital

Acquisition

Finance &

Buyouts

Bridge

Finance

Re-finance

Rescue

Finance

To rehabilitate good firms in distressed situations

To providere-financing needs

To meet short termliquidity needs

Typically for inorganic growth

Typically for organic growth

Structured Protection

19

Investing across the capital structure of pan-Asian SME companies, with a preference for well-structured and downside-protected investments

As Asian SMEs are increasingly starved of capital, we see increasing opportunities to negotiate and invest in structured instruments

HybridCovenants Provide Ability to Influence

Security & Downside Protection

Income +

Capital Gains

Amortisation & Early Return of Capital

Board/Monitoring Rights

Convertible Bond + Covenants

Loan + Warrants/Royalties

Secured LoanPreferred Equity +

Governance

Structured Instruments

Our Office and Portfolio Footprint

20

Investment Exposure

China

Japan

Singapore

Malaysia

Hong Kong

Indonesia

Office Location

Key

Vietnam

The United Kingdom

Portfolio DiversificationPeriod Ending 31 December 2019

54.7%26.2%

2.1%

9.0%

4.0%3.9%

China

Hong Kong

Singapore

Japan

Receivable

Cash

The Company’s investment portfolio from a valuation perspective has not been materially impacted by the global COVID-19 pandemic and the Board expects this to remain the case in 2020. The markets in which the portfolio companies operate have been affected by the pandemic to varying degrees. However, many of these countries, including China and Hong Kong, are showing early signs of recovery as lock-down measures are being gradually lifted.

Our Portfolio - Selected Investments

21

Infinity Capital GroupA Developer of Premium Residential Projects

2018 ADAM invested in Infinity Capital Group, the developer

of a high-end development project in Niseko, Japan – a world-

class skiing destination.

An attractive transaction:

✓ Ability to benefit from the rising popularity of winter tourism in Niseko, Japan due to its reputation as a

world-class ski destination and its proximity to major Asian cities.

✓ Investment proceeds are secured against significant collateral with a conservative ‘Loan to Value’ ratio.

✓ We believe that the high-end residential developments of Infinity Capital Group will appeal to Asia’s

prospering middle class as their propensity to spend on luxury goods and travel increases.

This investment provides ADAM exposure to the rapidly growing Asian winter tourism market andfurther diversifies its portfolio.

Property

DocDocA Leader in Asian Clinical Informatics & Patient Empowerment

2018 ADAM invested in DocDoc, the leading Pan-Asian virtual

network of physicians, clinics and hospitals assisting patients in

finding the highest quality of medical care at the best prices

This investment enables ADAM to take a significant step into the growing clinical informatics sectorwhich is disrupting the traditional healthcare landscape.

Healthcare & Life Sciences


✓ The company’s Artificial Intelligence (“AI”) powered doctor discovery system enables patients to find

their optimum care provider, screening by criteria such as outcome, experience and cost.

✓ Its network of 23,000 doctors, 685 clinics and 108 hospitals across 8 countries in Asia is believed to be

the largest of its kind.

✓ Contracts have been signed with leading health insurance providers in China and in Singapore to

partner in offering the company’s service to policyholders.

Domicile: Japan

Sector: Lodging and Leisure

Carrying Value: US$2.1m

Governance:

Quarterly and Annual Reporting Monthly Interaction with Management

Investment Type:

Secured Loan + Warrants(Two Tranche Investment)

Portfolio Attribution:

2.0%

Interest Rate:17.5% p.a. payable semi-annually in cash

Security:1st Ranking Asset Pledge

Target Exit:2024, Repayment at Maturity

Domicile: Singapore

Sector: Healthcare


Governance:Board SeatQuarterly and Annual Reporting

Investment Type:

Convertible Bond


2.1%

Interest Rate: 8.0% PIK

Conversion: Not Publicly Disclosed

Security: Not Publicly Disclosed

Target Exit: IPO, Trade Sale etc.


22

Fook Lam Moon (“FLM”)A 70 Year Veteran and Leader in Hong Kong’s Food and Beverage

Sector

2018 Convertible bond issued to ADAM by a Hong Kong-

based high-end food and beverage business with multiple

Michelin stars.


✓ ADAM secured the Convertible Bond in FLM in exchange for certain assets of its legacy portfolio.

✓ Fook Lam Moon is engaged in the operation of high-end Chinese restaurants and F&B management.

✓ It is long established as the premier brand for fine Cantonese cuisine in Hong Kong with its 70-year

history, renowned both locally and internationally.

✓ This investment is directly in-line with ADAM’s strategy to generate capital gain from exposure to value

accretive businesses and investment instruments across Asia.

Delivering exposure to exciting high growth businesses in Asia while aiming to provide a secureincome yield for ADAM.

Consumer & Retail

Future Metal Holdings LimitedChinese Dolomite Quarry

2014 ADAM is the major shareholder of Future Metal Holdings

Limited, which wholly owns a large open pit dolomite quarry (the

“Quarry”) in Linfen City, Shanxi Province, China

This investment enables ADAM to participate in the long-term growth of a mineral asset producer inone of world’s largest emerging markets.

Energy and Resources


✓ The Quarry is positioned to capture the growth of the magnesium market in China, as dolomite is one

of the key ingredients in magnesium pyrometallurgy and with a wide range of applications.

✓ The Quarry is strategically located with convenient access points to maximise operational efficiency.

✓ It has successfully renewed its Mining Licence in August 2018.

✓ An onsite team including a quarry manager were appointed by Harmony Capital to oversee operations

at the site. In December 2019, the Quarry began production and is forecast to ramp up to full capacity

in 2020.

Domicile: Hong Kong

Sector: Food & Beverage


Governance:Quarterly and Annual Reporting

Investment Type:

Convertible Bond


26.2%

Interest Rate:3.0% Cash Payable Quarterly and 2.0% PIK

Conversion:Discount Rate Not Publicly Disclosed

Security: Negative Pledge


Domicile: China

Sector: Metals & Mining



Investment Type:

Equity and Shareholder Loans


42.6%

Interest Rate: Not Publicly Disclosed

Security: Not Publicly Disclosed


23

Infinity TNP7 units in a high-end condominium hotel

2019 Share swap with Infinity Capital Group. ADAM gained a 40% interest in

Infinity TNP, the structure which holds the units in Tellus Niseko, issuing

16,179,310 shares in ADAM at a 20% premium to the 30-day weighted average

price per share in ADAM as consideration.

Consumer & Retail

Domicile: Japan

Sector: Leisure and Travel



Investment Type: Equity


7.0%

Dividend Yield: Minimum 6.0%

Target Exit: N/A



✓ Supplements ADAM’s ability to benefit from the rising popularity of winter tourism borne through the Infinity Capital Group

transaction.

✓ The terms of the transaction guarantee a dividend yield of 6.0% and internal analysis projects that the yield will reach +7.0%.

✓ The property, Tellus Niseko, which has been independently valued by Jones Lang LaSalle at US$20.0m.

Strategic utilisation of shares swapped at a premium to market value, resulting in the consolidation of ADAM’s rapidlyincreasing income yield

Investment Pipeline

24

Prospect Sector Geography Use of proceeds Investment Type Interest Rate Target IRR Target Exit Date Exit Strategy

1Multi-Channel

NetworkSecured

Convertible Bond12-16% 30-40% 2025 IPO/Trade Sale

2 Cloud ComputingSecured

Convertible Bond12-16% 20-30% 2024 IPO/Trade Sale

3 P2P FinancingSecured

Convertible Bond12-16% 20-30% 2025

Repayment/ IPO/Trade Sale

4 FintechSecured


IPO/Trade Sale

5 E-CommerceSecured


IPO/Trade Sale/Refinancing

6 F&BSecured


Repayment/ Trade Sale/ Refinancing

Disciplined approach to new investment opportunities in growth sector where Harmony Capital has expertise

Business Expansion across Asia


Working Capital


Domestic Expansion

Domestic Expansion

South East Asia

South East Asia

India

Hong Kong

Japan

Singapore

ADAM: Competitive Advantages & Outlook

25

Asian Investing Expertise• Offices in London, Hong Kong,

Singapore with on the ground local teams

• Expertise investing in private companies, often unable to access traditional sources of capital

Dedicated Team with Experience• Cycle-tested team with a mixture

of buy-side experience

• Over a decade of executing and manging investments across jurisdictions

Investment Approach• Provides growth capital with a focus on

capital gain and income generation

• Selectively financing both emerging and established businesses across various growth sectors across Asia

Strong Risk Management• Detailed and through due diligence

process undertaken

• Provides proactive management throughout the life of an investment using data analytics and customised risk tools

Deal Sourcing• Proprietary relationships with

companies and sell-side brokers

• Extensive reach and ability to meet with management teams

Single Solution• Able to execute transactions

across the capital structure

• Can provide exposure to European and Asian markets through our offices

Appendix

26

• Key Terms

• Financials

• Our Portfolio

• The Board

Key Terms

27

Company Name:Adamas Finance Asia Limited(ADAM.LN)

Structure: Permanent Capital Vehicle

Market:The London Stock Exchange, Alternative InvestmentMarket

Investment Manager:Harmony Capital Investors Limited, with four-yearterm from May 2017

Total Issued Share Capital 104,912,379

Valuation: Yearly Audited Valuation

Independent Board: Comprises of four experienced directors

Management Fee:

1.75% of NAV Payable Semi-Annually, plus 20% of AnyYear on Year Increase in Audited NAV, subject to HighWater Mark and the Hurdle. Payable in cash andshares.

Advisors:

WH Ireland Limited (Nominated Advisor)Pello Capital Limited (Corporate Broker)Locke Lord (UK) LLP (Legal Advisor)Crowe UK LLP (Auditor)Maitland/AMO (Media and Communications Advisor)

Financials

28

Adamas Finance Asia LimitedConsolidated Statement of Financial Position

31 December 31 December

2019 2018

Audited Audited

US$’000 US$’000

Assets

Unquoted financial assets at fair value through profit or loss 67,172 55,519

Loans and other receivables 33,720 28,902

Cash and cash equivalents 4,071 8,828

Right of use asset 34 -

Total assets 104,997 93,249

Liabilities

Other payables and accruals 2,211 201

Current Liabilities

Loans and borrowings 1,909 -

Total liabilities 4,120 201

Net assets 100,877 93,048

Equity and reserves

Share capital 145,027 134,054

Treasury share reserve (671) -

Share based payment reserve 2,936 2,555

Accumulated losses (46,415) (43,561)

Total equity and reserves attributable to owners of the parent 100,877 93,048

No. of shares 104,912 82,465

NAV per share (US$) 0.95 1.13

12.7

44.7

27.5

7.3

4.1

2.12.2

NAV US$100.9m

Our Portfolio

29

An AIM-quoted company targeting delivery of income and capital gain from a diversified mix of pan-Asian investments in the SME Sector

Infinity Capital Group (“ICG”) – A senior secured loan investment in a real estate developer of luxury residential properties in one of Asia’s premier ski destination – Niseko, Japan.

DocDoc – In March 2018, ADAM invested in DocDoc, a leading pan-Asian virtual network of physicians, clinics and hospitals assisting patients in finding the highest quality of medical care at the best prices.

Future Metal Holdings – ADAM is the majority shareholder of Future Metal Holdings, which wholly owns the largest magnesium dolomite quarry in Shanxi Province, China.

Legacy Investments – ADAM’s Legacy Investments include our Limited Partnership Interest in the Greater China Credit Fund, a loan to Jinhongbang Real Estate Development Co. Ltd, and our investment in Meize Energy Industrial Holdings.

Fook Lam Moon – A convertible bond issued to ADAM by a high-end Hong Kong-based food and beverage business.

Future MetalHoldings

Fook Lam Moon

Legacy Investments

Cash

DocDoc ICG

31 December 2019

Infinity TNP

Infinity TNP – In November 2019, ADAM acquired a 40% holding in Infinity TNP, a wholly owned subsidiary of ICG, containing 7 units in a luxury hotel condominium being built by ICG, Tellus Niseko.

The diagram shows investments and cash only

The Board

30

John CroftExecutive Chairman

Hugh TrenchardNon-executive Director

Stuart CrockerNon-executive Director

Dr. Lee George LamNon-executive Director

John Croft is an experienced director of AIM-quoted companies and has previously worked in executive and non-executivecapacities with a number of fast growth companies in the technology and financial services sectors.

Hugh Trenchard began his career at Kleinwort Benson in 1973 and has more than 40 years' experience in investmentbanking, including 35 years of involvement with Japan and 12 of them as a resident.

Stuart Crocker started his career in banking at Merrill Lynch after leaving the British Army in 1985. He is a FoundingMember of the English Business Council in Dubai where he currently resides.

Dr. Lee George Lam is the Chairman of Hong Kong Cyberport Management Company Limited and the Non-ExecutiveChairman of Macquarie Bank’s Infrastructure and Real Assets business in the Hong Kong and ASEAN region.

Investor Presentation 2020adamasfinance.com/assets/corporate-presentations/... · Investor Presentation 2020 The London listed company focused on providing shareholders with attractive

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