2. Disclaimer
These presentation materials have been prepared by Hyundai Commercial Inc. (“HCI or the Company”), solely for
the use at this presentation and have not been independently verified. No representations or warranties, express or
implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information
presented or contained in this presentation. Neither the Company nor any of its affiliates, advisers or representatives accept
any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation.
The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice and its accuracy is
not guaranteed. Neither the Company nor any of their affiliates, advisers or representatives make any undertaking to update any such information
subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice.
Certain information and statements made in this presentation contain “forward-looking statements.” Such forward-looking statements can
be identified by the use of forward-looking terminology such as “anticipate,”“believe,”“considering,”“depends,”“estimate,”“expect,”
“intend,”“plan,” “planning,” “planned,” “project,” “trend,” and similar expressions. All forward-looking statements are the Company’s
current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in
the forward-looking statements. Caution should be taken with respect to such statements and you should not place undue reliance on any such
forward-looking statements.
Certain industry and market data in this presentation was obtained from various trade associations, and the Company’s have not verified such data
with independent sources. Accordingly, the Company makes no representations as to the accuracy or completeness of that data, and such data
involves risks and uncertainties and is subject to change based on various factors.
This presentation does not constitute an offer or invitation to purchase or subscribe for any shares or other securities of the Company and neither any
part of this presentation nor any information or statement contained therein shall form the basis of or be relied upon in connection with any contract or
commitment whatsoever. Any decision to purchase shares in any offering of shares of the Company should be made solely on the basis of the
information contained in the offering document which may be published or distributed in due course in connection with any offering of shares of the
Company, if any.
The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole
or in part, for any purpose.
3. 2010 2011 2012 2013 YoY
Operating Revenue 236 324 347 346 -0.1%
Operating Expenses 178 236 264 270 2.5%
Bad Debt Expense 9 20 22 25 16.2%
Operating Income 58 88 83 76 -8.4%
Net Income 57 74 44 37 -16.1%
Income Statement (KRW Bn)
Solid Profitability Underscores Strong Fundamentals
3.3%
2.9% 3.0%
2.7%
2010 2011 2012 2013
ROA
ROA*
Key Highlights & Strategy
Profit growth slowed down but revenue streamProfit growth slowed down but revenue streamProfit growth slowed down but revenue streamProfit growth slowed down but revenue stream
has been diversifiedhas been diversifiedhas been diversifiedhas been diversified
- Revenue slightly went down due to low-interest policy
- But profit margin of high-yield lease product increased
Net Income declined with increased operating expensesNet Income declined with increased operating expensesNet Income declined with increased operating expensesNet Income declined with increased operating expenses
- Increased in personnel and bad debt expense
- Loss on equity method valuation of HLI increased
ROA was maintained well above industry averageROA was maintained well above industry averageROA was maintained well above industry averageROA was maintained well above industry average
EfficiencyEfficiencyEfficiencyEfficiency----focused system will be implemented tofocused system will be implemented tofocused system will be implemented tofocused system will be implemented to
manage leverage levelmanage leverage levelmanage leverage levelmanage leverage level (~2015)(~2015)(~2015)(~2015)
- Accelerate revenue stream diversification(Lease,
Rental)
- Keep focus on cost-efficiency
1
4. Asset Portfolio (KRW Bn)
Sound Asset Portfolio and Dominant Market Share
Market Share
• Total Balance : 3.5 Tn KRW
• Auto portion : 77.5%
96.2%
87.7% 91.0% 86.5%
62.5%
51.4% 52.5% 50.5%
2010 2011 2012 2013
Key Highlights & Strategy
New Auto
46.0%
Used
Auto
31.5%
Machine
Tool
6.0%
Corporate
Finance
13.3%
PF 3.2%
Used AutoNew Auto Captive
Maintained dominant market positionMaintained dominant market positionMaintained dominant market positionMaintained dominant market position
- New Auto Captive MS 80%, Used Auto MS 50%
Diversified asset portfolioDiversified asset portfolioDiversified asset portfolioDiversified asset portfolio
- Corporate finance, Machine tool, Lease portions
increased
- Stable growth on Corporate Finance focusing
captive loans for HMG group
Reinforce NonReinforce NonReinforce NonReinforce Non----Auto partAuto partAuto partAuto part
- Improve expertise and restructure HR system
Continue to develop highContinue to develop highContinue to develop highContinue to develop high----yield productsyield productsyield productsyield products
- Operating lease, Rental, Inventory financing
2
5. Excellent Asset Quality and Conservative Reserve Policy
30+ Day Delinquency Rate (%)
1.0%
0.8%
1.1% 1.1%
2010 2011 2012 2013
2010 2011 2012 2013
Total reserve 261 253 381 413
Total Reserve
/Regulatory Requirement
168% 102% 142% 136%
Total Reserve (KRW Bn)
Key Highlights & Strategy
Superb asset qualitySuperb asset qualitySuperb asset qualitySuperb asset quality
- Delinquency rate decreased despite the recession
Conservative reserve policyConservative reserve policyConservative reserve policyConservative reserve policy
- Total reserve well exceeded regulatory requirement
Enhance risk management systemEnhance risk management systemEnhance risk management systemEnhance risk management system
- Adopt collection management system
- Improve new product management system
Maintain conservative reserveMaintain conservative reserveMaintain conservative reserveMaintain conservative reserve policypolicypolicypolicy
3
6. Sound Capital Structure
1,806
3,494 3,381 3,544
16.1x
10.9x
12.5x
11.6x
2010 2011 2012 2013
Leverage Trend (KRW Bn)
Leverage*
* FSS reported
Total Equity
Capital Adequacy Ratio
2010 2011 2012 2013
Capital Adequacy Ratio 10.1% 14.0% 11.3% 11.0%
* FSS guideline: 7%
Key Highlights & Strategy
Adopted leverage management systemAdopted leverage management systemAdopted leverage management systemAdopted leverage management system
- Restricted dramatic asset growth
- Issued True-Sale ABS (Nov, 2013)
Diversify leverage management toolsDiversify leverage management toolsDiversify leverage management toolsDiversify leverage management tools
- Consider additional tools other than true-sale ABS
Maintain Capital Adequacy Ratio above regulatory levelMaintain Capital Adequacy Ratio above regulatory levelMaintain Capital Adequacy Ratio above regulatory levelMaintain Capital Adequacy Ratio above regulatory level
4
7. • Total Balance : 3.7 Tn KRW
• Long-Term Borrowings : 61.5%
Funding Portfolio by Product
Bonds
78.1%
Loans
12.1%
CP 2.5%
ABS
7.2%
Well Diversified, Stable Funding Portfolio
Key Highlights & Strategy
Minimized RefinancingMinimized RefinancingMinimized RefinancingMinimized Refinancing RiskRiskRiskRisk
- Long-term borrowings > 60%
- ALM index target > 130%
Pursue stability and efficiencyPursue stability and efficiencyPursue stability and efficiencyPursue stability and efficiency
- Increase long-term Bonds, low interest CP
- Long-term borrowings target > 63%,
ALM index target > 134%
2014201420142014 FundingFundingFundingFunding Plan(KRW)Plan(KRW)Plan(KRW)Plan(KRW)
- Bond 1.0 Tn, CP 0.6 Tn, ABS 0.2 Tn
* KOFC excluded
5
8. 26.4%
41.0% 46.2% 48.6%
100
276 283 281150
175
325 405
250
451
608
686
2010 2011 2012 2013
6
Strong Liquidity Position and Well-Spread Debt Maturity
* Short-term Debt Coverage Ratio
= (Cash + Unused committed credit line)/ Short-term debt balance
Credit LineCash Short-term Debt Coverage Ratio*
Liquidity Profile (KRW Bn)
745 665
1,043
767
443
20.3% 18.2%
28.5%
20.9%
12.1%
1H14 2H14 2015 2016 2017~
Debt Maturity (KRW Bn)
Key Highlights & Strategy
Solid liquidity positionSolid liquidity positionSolid liquidity positionSolid liquidity position
- Debt maturity has been extended to cover 3-year
cash flows
Flexible policies can be appliedFlexible policies can be appliedFlexible policies can be appliedFlexible policies can be applied
Maintain conservative liquidity policyMaintain conservative liquidity policyMaintain conservative liquidity policyMaintain conservative liquidity policy
- Liquidity coverage target > 3M
- Flexibly reflect financial market monitoring results
on liquidity strategy
