Investor Update

May 3, 2019

Ladies and gentlemen, thank you for standing by, and welcome to Axiatek Group's conference call. Throughout the presentation, all participants are in a listen only mode. There will be a presentation followed by a question and answer Please mute your phone during the presentation and kindly avoid using wireless headsets. Today, the conference call is hosted by time Rija Maludin, Group CEO and Mood Karel Abduda, Axiatel Digital CEO. I would now like to hand the conference over to your speakers today, Thank you sir. Please go ahead. Good afternoon. This is Domal, the group CEO for Ajeeta. Thank you for joining us for this endless briefing, which is one of its kind. Normally we talk about our data or even excel or sat on by this time around, it's all about ADS or our how that's our digital services, the main thing announcement that we've just announced this afternoon. Actually, I'm not going to do the briefing this time around. I'm going to pass to Cairo with the CEO for ADS to give you a more detailed briefing. Cairo? Sure. Thank you very much. Ladies and gentlemen. This has been a quite a momentous location for us. We now our talented install has been in operation for a few years now. And finally, today, we have some kind of validation. I will talk a little bit about the journey so far and then take questions right at the end. Let me start with page 2 of the presentation. If you go to page 2, you'll see that actually, again, on this call, Whalsa, it may not have been known to a number of Viennaists for a long time. It's actually been in existence since 2013. It's kind of gone through 3 things based in its history. And the 1st phase was a period of experimentation. We like to call it RMD. Back then, we realized that the telco that actually the digital revolution was coming. We foresaw a number of new opportunities. Obviously, some spreads, but a number of new opportunities that we wanted to take advantage of. So we did a number of different experiments invested in some companies, largely for learning. And then the peak of this phase, we actually had something like 30 different companies through our portfolio. But then came towards the end of this period where we then started thinking of capturing all of that learnings and then focusing both into 3 very distinct companies. 1 in Financial Services called Boost one in digital advertising, ADA. And then finally, our Platforms business Appiegate. We have actually been focused us as operators of this unlike in our previous phase where we had minority interest in some of these assets. In this phase, we would direct operators of 3 digital companies, throughout this period of scaling and growing them very aggressively. Phase 3 was kind of started towards the end of last year. And what we were looking for was then looking at some strategic partners that we could bring in, not just bringing in the cash that was well required for the businesses to actually grow the businesses, but also looking at other assets that these strategic partners could bring, And today marks an occasion where we actually had one of these partners, Ms. Sui and Co invest very significant into buying a stake into a digital. I should say though that there's also this other name that Pegasus 7, this means you may have caught the news earlier in the week that alongside this deal that we've just done, the number there were 5 other assets that we had, which were not part of our core operating businesses within Aveda Digital. These were assets that we had minority interest of. I'll go on to that in a short while, but what we then did was we took these five companies transferred it into a fund, and to be managed and operated by the fund. Now if in the future, there is an exit from these 5 companies, any of these 5 companies and is that profit around that, we will get to capture up to 85% of that profit. This is a carrier infrastructure that we've arranged with the fund manager. The fund manager keeps 15%. We carry 85% of that profit. So that's PEGS-seven as well. Actually, there's one more other deal that's not on this page here that we actually did a little while back. This was about a year ago where Sumitomo, another Japanese investor, invested $20,000,000 into ADA our digital advertising business as part of around that they did last year. So in that sense, then we've kind of now moved into our, what we call the value capture or monetization and validation stage. Where we're looking for external parties to bring in additional assets to actually help us accelerate and grow our business. We move on to page 3 Very quickly now, what is Mitsui investing in? Or Mitsui is investing in Agera Digital. There are 3 main components within that. Boost, for those of you who are based out of Malaysia, hopefully this is not an Canadian name to you. It is the largest e wallet in Malaysia focused on micro payments for sure. To QR payments, bill payments, that sort of stuff. But within our financial services portfolio, we've also launched micro lending. This is a an AI based credit scoring engine that actually powers our lending business. So microloans, for instance, in Malaysia, loan size of about 3500 ring. And then micro insurance, where, again, we've just launched this business in November of last year, but very quickly, kind of ramped up to almost 50,000 policies that we've actually dished out so far. The, which actually used to stand for, unzetta digital advertising, it not stands for analytics data and advertising has very quickly become the largest independent digital agency in Southeast Asia. We have something like 1500 clients, some major names around this region, 3 components of the business, an agency practice, a media integration business, But something that's actually quite unique to us is the technology business where we actually leverage a whole host of data that we have, which I'll talk about in a second, to actually help all clients target customers. And then finally, Epicate, this is turning into a global API marketplace, And again, 3 components of that business, we actually built a platform and installed a platform through our Appigate AXT business, We allow for the monetization of that platform to the epi admits business and then epiGate goal, basically a short tail marketplace to actually help startups connect to assets within the telco. Again, I'll explain a little bit more about how this sort of works. The if you jump on to the next section, this is now talking about boost. Maybe it will just go straight to page 5. So boost for those of us in Malaysia, you'll recognize it as a wallet. It is the largest e wallet right now. We have, as of last Friday, crossed 4,000,000 users. They're very active. Obviously, the use cases we have are right hand side. So these will be the common use cases for most wallets that you see in the region anyway. So top ups, mobile phone top ups, utility bill payments, a gamification, component, obviously online and offline product services that you can actually pay with your boost wallet by a QR code international remittance. But actually what's very interesting is that this is to us a means to an end the boost wallet effectively becomes a virtual account for the very large unbanked or underserved segments of population in our markets. Where we have since launched microinsurance, microlending, businesses, and then very soon, microsavings and Microsoft Management. If you're going to page 6, the trend for Boost GTV so far, phenomenal growth, we actually started this business back in January of 2017. And already, the whole year 2017, we saw some fantastic growth, but 2018 was when we saw some major inflections As of the end, April 2019, as I said before, 4,000,000 users, this represents 5.4 times year on year growth. Relative to 2018. 80,000 merchants in our footprint right now. So we are the largest as well. 21 times growth year on year relative 2018. And then the one that gets us very excited is that we saw 32 times growth in our transaction value. So this is basically gross revenue if we like, right, the value that we transact on our platform. And then within our active user base 5.7x growth for GTV per user. So all in all, very exciting growth for books as a wallet. You move on to the next page, page 7, Bruce has also been launched in Indonesia. In Indonesia, we are actually much more focused on the merchant side of the equation, it is a merchant centric business that we've launched, if you like, kind of almost like a merchant wallet as opposed to a consumer wallet, We've built a very large base of almost 500,000 merchant touch points. And then through that, we have merchant solutions such as allowing merchants to pay their supplies, allowing merchants to do B2B payments, including bill payments, and obviously some micro lending for the merchants itself. So that's a boost in short. Moving on to page 8, this is our lending and our insurance business lending, as I said before, very, very small ticket sizes, right? So our working capital loan product in Malaysia, for example, It ranges from about 500 ringgit to 20,000 ringgit. Our average ticket is right now 3500 ringgit. We've actually out very small number of loans so far because we were trying to scale up this business very soon. But it is our engine is working very well. So we have had 0 NPLs to date. Likewise, our Indonesia Supply Chain Financing business average about $300 each loan size. We've dished out 1100 loans to date. And again, because of the robustness of the credit scoring engine, the NPLs are still 0. And then finally, the Invoice Financing business, average ticket size of about 6000 ringgit 2400 lumens to date, also 0 MP outs, right? So that's on the micro lending side. We are looking to kind of really sort of amp this up by almost 100 times within the next few months because now that we've tested our engine, and we feel it's very strong and very robust. We feel very confident and also taking it to the next level. On micro insurance, again, just, as I said before, very early stage, personal accident cover for consumers as well as merchants, in Malaysia and in Indonesia, if you add all of that together, that sort of works up to about 54,000 policies that we've dished out. And again, we've only launched this business back in November of last year, right? So We are also looking to end this up by about 100x within 2019, 2020. So that's the financial services side. Moving on to the next section, page 9 on with me. We'll jump to page 10. This is ADA. ADA is our digital advertising business. 3 practices, in short, one is an agency practice. So this is where we basically built, creatives or advertisements, if you like, for our clients, but we do it in a very different way. So we actually use an intelligence, a machine learning robot to actually create the ads for us, right? So actually, those ads typically take 3 days from the discussion of the brief to actually being rolled out into YouTube or into Facebook, into Google. And because it's only 3 days, the cost to a customer is very, very cheap. And so we're basically disrupting the economics of digital advertisers around the region Obviously, in the middle bucket, we have a media integration business, where we're plugged into Facebook, to Google, to telco place, as well as the AVOD players like Quoak, Netflix, iflix and the likes. But the most important part of this equation is actually our technology component where we actually use data to help advertisers we're no longer going with a traditional business model of cost per insertion, cost per action and so on and so forth, But we basically have a revenue model where we might go to a credit company credit card company and say for every single credit card user that we bring to you, you pay us $50. Right? And that equation works very well for us. We take all the media risks, but if our engines are correct, about data science is correct, we actually make a ton of we make good money out of each one of those, right? The key within those that is that we have 280,000,000 unique profiles meaning that we actually know 280,000,000 users within our region pretty well. We have 200 plus attributes of those users, right? If you go into the next page, page 11, you'll see that we're actually very focused on like all advertising agencies, very focused on a few verticals, telco being obviously our original pedigree. We also noticed that financial services is something that, because it's a high LTV, high lifetime value for the clients, they are actually willing to spend on the acquisition part of it. Page 12 is just a quick glance of the performance of ADA to date. I'll just focus on kind of the 2 bottom, bottom left hand corner text. So by year end, we are in 2018, we were in 9 countries. We have already integrated the agency business, the analytics business with the outcomes business. And then if you look at our top line growth, we saw media spend grew by 2 times. Our net revenue grew by 2.3x, and our agency practice grew by 130% think we've given guidance that actually this is the first company that we have in our portfolio that will be path positive. So we're looking at it turning path positive, PAC positive by 'twenty full year 2019. Some of the clients just a quick kind of shout out. Some of the clients on the right hand side you'll see include brand names like DBS. Obviously, we work with our telco partners like cell phone, but we're also agency on record for Watson, for Samsung and some of the agencies, sorry, some of the big clients in this region. And then final company, Applegate, This is probably the most complicated. If you're not familiar with, application interfaces, application for domain interface APIs, then it may be a little bit more challenging for me to describe it. But if you go to page 14, what is it that if you mentioned, content companies like Tencent Video, gaming companies like Steam, CMG and the likes, they have difficulty accessing customers in our footprint, right? And so actually a good conduit for them are actually the telcos, right? Because obviously the telcos are sitting on top of very large customer base. But unfortunately, the way that the industry has developed is that there have been a lot of very fragmented players across the space including the likes of Twilio, which is a very successful public listed company in this space. But there's no single player that actually helps with the connection between the mobile network operators and of course, the customers can sit below them with the gaming companies on top. And so Epic actually came up with three products. 1 is, of course, the platform, the platform that cuts across all the bits in the middle, and then a monetization model that allows the likes of Tencent games allows the likes of Facebook or Google and Apple to kind of very quickly plug in and then get access to the assets within the mobile network operators. So if you take turns of page 15, you will see this at work right? So at the gate being the intermediate layer, the little icons in the middle, these are all the different product sets that we have. So we will help the clients with a targeted acquisition. We'll help the companies with authentication and even provide detection And now, obviously, we'll help the companies with monetization because a vast majority of the markets that we serve, I don't have credit cards. So if you don't have credit cards, very hard for the gaming companies to be selling tokens or spares or guns or whatever to their users in the network, right? So, we are providing monetization for them. The thing to kind of note within Appigate is that this is a platform that is now connected to 110 telcos around the world. So Middle East, Africa, Latin America, South Asia, Southeast Asia. And if you add 110 MNOs, the subscriber base of the 110 MNOs, it's now reaching over 3,500,000,000 mobile users, right? So from that base, the likes of all these northbound companies or gaming companies, content companies like the Tencent of the world, finding ways to sort of connect with us because we give them access to the large customer's base that we have access to. Very quickly, the next page, page 16, a quick highlight on the 2018 performance for Applegate. You'll see that from a business perspective, the business has grown Gross transaction value grew 3.3x. Net revenue grew 4.8x. The partnership base has definitely grown as well. So we right now serve about 250 what we call large long tail partners. So this would be the themes, the Twitters, the game laws, the payables of the world. And you'll see some very, very big brand names under Netflix, ITG and whatnot. But what's actually something that we're starting to focus on is actually the long base as well. So these are very small startups that you'll see litter across our portfolio, litter across our footprint that want to get access to the markets around the world. So that's, happy gate performance in summary. Let me now move to what we announced today. So page 17, Actually, maybe we'll jump to page 18. So we received an offer from an investment from Mitsui and Co. With the following terms. We've now agreed to that and we've signed on that. So the key terms is that it basically establishes a pre money valuation and enterprise value of the 3 companies within the Agera Digital Services portfolio, I. E. ADA boosts and Applegate We establish a pre money valuation of 500,000,000. This is a strategic minority stick for them. We will be using those funds for essentially our operating expenditure within those three companies, but also to look very opportunistically some potential M and As that we might want to do within each one of these three companies to actually bolt on and grow and accelerate the growth of the business. Mitsley obviously is a partner that we brought on board because they were able to bring quite a lot of strategic partnerships that they have through their subsidiaries through their investments in digital business to actually help us grow. And even before the deal was completed, some of those synergies were already starting to come through the businesses that we had So that's the Mitsui deal. Happy to take more questions around that. But before I end, maybe just going to highlight the other thing that we announced earlier this week, this was the set of assets, 5 in total, which includes 11th Street, our e commerce company in Malaysia, Beema, a Swedish microinsurance company that's actually present in Africa in some of our markets as well, stalking, which is based out of India these five assets were essentially assets that we didn't have operating control over. We had minority stakes in them. And as part of this move to invite strategic investments at the ADS level, we basically carve these out and actually transfer this to a separate fund to a fund manager. The fund manager is Texas 7 Ventures. It's part of the Gordian Capital Fund Management Group. And the transfer value for these assets is $140,000,000 in equity value As I said before, we now have a carry infrastructure with Pegasus 7. So if there are any exits within this within these assets, we will then be able to capture 85 percent of the profit from the transfer. So that's in summary, the kind of the two big news items that, that we announced this week, including the signing summary ceremony with Mitsui this morning. I'm happy to take any questions. Maybe I'll hand it over to the MC to coordinate the questions. We will now begin the question and answer session Your first question comes from Wei Shu Wu from Citibank. Please ask your question. Hi. This is Wei Shi from BNP Paribas. I have three questions. Firstly, can you let us know how much or what was the stake that was sold to Ms. Wei? And secondly, can you bring us through this thought process behind the selection of Ms. Sui for this investment? Were there other partners for instance that you considered? And in view of Ms. Sui's very diverse this interest. Can you talk us through exactly where and what's what value you seamlessly as bringing to the table? And then the third question is with regard to the non core assets that are now parked under the external fund manager. What are the specific plans for these assets and any associated timelines for these? Thank you. Let me start first on the mid 3 and then before I pass to Kyrao, to give you a full picture, about 2 years ago, we mid-three and us has been talking about, from a strategic offense at Jeff as a group, very strategic perspective, because they wanted to invest in in some of our operations, in some of the operating companies and ATS few others, right? So, and they believe in us, they believe that we are a very good company, I guess so. And they wanted to invest in us. So what they did, is to allow them to invest in Cambodia efforts for the 1st 10% just kind of get to know your basis and then they're very happy with the investment and they're followed by additional 10% of Smart in Cambodia. So that simultaneously, we're looking at other operations and that includes the ADS. So This is like the turn investment in a Zettler company or in a Zettler company. And of course, the view that to broaden the relationship with us. So that's a much bigger perspective. So when a message in Smart, at one point, it's very hard for me to explain totally that it's not it's the first of the many steps, right? Some people who are asking to why it's mine. I couldn't explain only to some extent because I was not given the liberty to explain the whole plan by this tree. So now it's pretty clear which I did not talk about, that that is their plan. So one was actually a first step towards the much bigger issue with us. So this is a test step. Kind of So let me see if I can just add on to that, Doug. I think the original mission at least within Ontario Digital is that we were actually going to look at fundraising at the individual operating So meaning to say that at some stage, we will be fundraising for Boost. We had closed a fundraising round, very successfully because fundraising round for ADA in 2018, we were going to start looking at fundraise for boost and fundraising for Applegate. There were some discussions that and in fact, there have been discussions that we've had with several parties on fundraising. I think Mitsui both through the connection that came from Anziata from their relationship with Anziata and their previous investment at Smart. We're sort of willing to take an investment at the ABS, if you like ADS whole core level. And so that kind of gave us a little bit of sort of breathing room from the individual fundraising that we were planning to do on boost and planning to do and advocate. Having said that, we did take almost kind of a year in courtship because we really needed to understand the strategic value add that they will bring. We looked at the digital investments across the region. We look at actually the non digital investments as well, which could potentially be some of the partners that we would want to have in our financial services business, right? So including auto manufacturing where we potentially could be helping them with some of the distribution of the parts and some of the financial services around the distribution of the parts. So those are some of the things that we actually kind of dive deep into in our if you like reverse due diligence of Mitsui as a party. With regards to a question number 3 noncore assets part on the fund manager, so there are plans that we will probably fully exit from these businesses within a 3 year time frame. These are not new businesses anymore, right? I mean, if you like, 11th Street was actually founded 2015. So it's been around for a long time now. So actually within 3 years, that will be that will take us up to 2021. That's a 6 year time frame for for a startup investment. So at that stage, we'll probably be looking at a full exit from these businesses. We will obviously sort of play it to a little bit kind of the environment at that stage, but for now, the fund is set up for a life of about 3 years. I'll just add on to what Danshi and Kyle said. I think this is quite in line with our strategy of shifting gears where we said that we will cap our exposures in digital ventures and digital businesses. And that's one of the thinking around the carving of the digital ventures on the first stage and also getting investments coming in. From midstream to the digital ADS, these three core businesses. Sorry, I just realized we now received a question number 1. We are not unfortunately, we're not in liberty to disclose how much their investments is, but all I can say is that when all is said and done, after the Google investment from Mitsui, they were hold close to 10% stake at ADES. Thank you. Your next question comes from Arthur Pineda from Citibank. Please go ahead. Hi, thanks for the opportunity. Several questions. First, given these transactions, are there any changes to the loss guidance or the investment budgets for the year on the ABS side? 2nd question I had is with regard to any gains that you will be booking as a result of the asset transfer and the buy in from Mitsui. Is there something that you will be booking on this? And does that figure into your dividend discussion? And third question I had is with regard to the structure, Can you help us understand why you're going into a preferred share structure with Pegasus rather than units in the fund itself? Thank you. I'll take the first one and then we can decide how we spread the others. First one, I think, clearly, we have guided last year that we will cap our investments in digital businesses to the extent of US50 million dollars. So that this is one of the activities to keep the funding into those businesses up to that level. Question number 2 I think on the mid fee transaction itself, there will no there will not be, what do you call it, any realization of value, booking of profit. However, in the transfer of assets, to peg at this. So on the second one, let me just, I think, 1st of all, this is not a very significant transaction that has an impact on overall dividend from our perspective. Second thing is that is money coming in and money coming in does not change any status of the company because we still own majority of this companies. So there's no profit booking as such on the midstream transaction, right? Now, on the last one, I think on the Pegasus, I think we decided to go for a preference share option for a simple reason that this the timelines for us to monetize this is not very undecided very firm. It will take 3, 4 years. So it's not the objective is not to have future funding into this business. Objective is not to have any control over the running of this business. We are just pure investors into this business, but we expect these businesses to over time evolve and generate further value for us to be able to monetize it. Profit implication on account of Pegasus, we will have a one time profit as we transfer from our books into the fund. And that one time profit we will be disclosing when we report about quarter 1 numbers later in the month. Subsequent to that, Since there is no equity stake, there's no influence the tree exercise, we wouldn't be like any investor into the park. Which means we will only have any movement in the value of this fund. We'd only go to the balance sheet. It will not come and hit our profit and loss the comp. Understood. Thank you very much. Thank you. Your next question comes from zoom Chen Fong from CIMB. Please go ahead. Hi, thanks for the call. Two questions from me. Firstly, on the deal with Pegasus. Just wanted to clarify and confirm that Zietta would be receiving $140,000,000 in cash proceeds from Pegasus. Is that correct? And in terms of the losses from the companies under, I guess, digital ventures, could you remind us what was the number for 2018? And am I right to say that going forward after this sale, we will not account for those losses in the future. That's the first question. 2nd question on the ADS deal with Mitsui. Can you sort of give us an idea of the outlook for earnings for the ADS companies into the next few years? You mentioned ADA will be positive in 2019. How about boost and also at peak gate? And that's the entry of we sort of help accelerate the scaling up of the businesses and maybe sort of bring ADS towards breakeven or even profitability sooner than previously. Yes, those are my two questions. Thank you. Okay. Deal on the biggest we as total ABS business, last year, we had around $300,000,000 ringgit sorry, $300,000,000 or ringgit sorry, ringgit is what was the total expenditure for us, P and L this year, we are talking about a $50,000,000, which is around $200,000,000. So that's the kind of numbers we are looking at from a funding perspective into the digital businesses, which includes the 3 core businesses as well as the ventures in. Question 1? Instance, no. No, so as I said earlier, we will get preference shares. We will not get cash at this point in time. Only when the investment funds will monetize and get cash from subsequent sale that we will be getting cash and redeeming our preferred shares? Maybe I'll take question 3 in terms of the deal with the 3 companies. So I think the guidance that we provided so far is that ADA will be profitable path positive by 2019. So for 2019, full year, ADA will be path positive. By 2020, both ADA and Applegate will be PAC positive. And then, obviously, the big one, Boost2 will be PAC positive by 2021. Given the size of a boost. So, you know, ADS as a whole will be that positive by 2021 and not before that. The only caveat of course is that the more successful it is, the more we might have to invest and it might delay further. So that's only caveat. So let me proceed. Assuming it's so much more successful than we ever thought we might have seen this fall and it might trend for a year or so. But that's a funny thing about these investments. But generally, we're trying to target for all to be positive at least a bad neutral by end of 2021. That's the budget. Okay. And just two follow-up questions for one for Vivek on the $300,000,000 expenditure book for for ADS in 2018, right? What was it for, specifically for, as desktop digital ventures itself? Because I think is it right to say that going forward, you will not be booking in any more share of losses from as you get done digital ventures? And so I just want to find out what that amount was in terms of losses last year. And also maybe for Dansry on the, on the Aljeta Digital services, for AD and FTGate, since they're going to sort of break even or even be PET positive in 2019, 2020, should we sort of expect that these assets could also be spun off in terms of an IPO maybe within the next 2 to 3 years? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes. So digital ventures was around close to 40,000,000. Premier. So on the question of And he had a second part of the question, which was, are we going to see any more drag from the digital ventures? So digital ventures, all of them have been now bundled, moved into the funds. So as I said earlier, we will have one time gain based on what's the value of $40,000,000 versus what's our carrying value, which we will disclose in quarter 1. Beyond that any investments are we are we don't plan to put any further money into these businesses. And given that we would have actually taken out of a P and L impact. So any impact in future will be into the balance sheet. So it will not come into the P and L going forward. So on the question 5, let me give you the 2 side of it. Currently, there's no plan to spin it off. But obviously, there is an advantage of doing so because at this point in time, the whole of ADS the 3 companies which have been valid by a third company who put money to the company to be valued at USD 500,000,000 But from an SOTP perspective, it's practically 0 today in practically most of the the value given by our shareholders and our analysts. So that's the frustration. On the other hand, In which state of, we might definitely eliminate the value even beyond $500,000,000 U. S. Dollar, but The disadvantage is that there's a lot of synergy between those companies and our core mobile companies in terms of analytics in terms of the asset we have billing assets and many others. So we are not thinking of it right now. But we won't rule it out in the future. Thank you. Your next question comes from Alex Goe from AMBanc. Please ask your question. Thanks, Anshu. Thanks, Anshu. I've got a few questions. The first is, I have a moment for ADS, what is your net debt level Carly, just want to find out what's the equity value after you knock off against your enterprise value? That's my first question. And I noticed your announcement mentioned that there's 30 brands, but you're going to spin off 3 to ADS and the other five is going to Pegasus ventures, what about the other brands? Where are you going to talk them under, right? That's my second question. My third question, it's regarding your stake in ADS. I just want to confirm that mid sweepstakes will only be 10% and it's going to inject only the equity portion or later, how would the actual funding for future CapEx be financed? Okay. Let me ask the number 2 first and then the recognize, let me ask you to number 1 in 3. So let me start by again. Let me put you to perspective. When we started this in a couple of years ago, we either organically and inorganically, we've built 30 brands, yes? So there are 4 components to what happened to those brands, right? 11 of them, we moved back to the opcos because they're so tied to opcos, right? A string of that. Shut down. The duration sorry, we shut down about 2 out of 10, 12 of that She has a shutdown and we saw them, right? And then 3 became the new ABS that Vince really got into. And 5, we move into the digital venture, right? So there are 4 categories, right? So 11 move to of course, 3, the new ADN that we talk about today and 5, the digital ventures. Let me just complete information, really investment of $500,000,000 is attributed to the new ADS and the valuation of $140,000,000 is attributed to the 5 residential companies. So together, it's $640,000,000. Our investment for all the 30 brands was $244,000,000. Yes. So I hope you got it, right? So the, I guess that answers your question, right? I hope. Yes. You invested in RMB44 1,000,000, your own cash But did you raise any debt into this EDS besides the 1,000,000? The entire investment was in the form of equity from Exjeta Group Birhad. There is actually some cash there. So the it's actually around $20,000,000 of cash there. So you would look at equity value as $500,000,000 plus 20. And then the question number 3, the answer is it's equity only. So your question around the Mitsui stake, Mitten or whether there will be a debt funding of any kind. No, it's equity funding, right. And for now, it's, up to 10%, but in future, just like what we saw in smart, probably are not shy to doing further investments into ADS. Yes. Can I follow-up with one other question? What percentage would Guardian Capital half in the Pegasus 7, yes? So Gordon Capital is the fund management company, I guess, Pexasys is the effectively the site car fund, right? So, Texas is the fund itself. So, technically speaking, Gordon Capital will have the ordinary shares within that. We will have the preference shares within that. So you can almost think of working capital and I guess this is 1 and the same. I see. Okay. But Exerta would have how many percentage within the packer suspension. I mean, the asset that holds the 5 assets. So we will only have preferential. We will not have any equity investment in It will be only preference shares. This is again, Alex? Yes. So Guardian Capital only gave 15% from the profit sharing, right, from the from these five assets. There is a management fee. It's 1%. We do it's charter and it's funded by the fund. Okay. But I remember hearing mentioned earlier something about 15% sharing that Guardian Capital did. Did I hear correctly? Yes. So if you've mentioned a carry infrastructure, right? So upon exit of the asset, for instance, if there is a delta, a profit upside of $100,000,000, PEGSIS 7 will keep $15,000,000 of that. We will keep we will get to book $85,000,000 of that profit, right? So if that's kind of the carry infrastructure, it's a very common structure used by private equity fund and venture capital, just to simplify, we will transfer at $140,000,000. Then let's say after 4 years, he says that $200,000,000 the profit which is generated 15% 15% is the carrying for him and the balance would be given along with the $140,000,000 back to us. Thank Your next question comes from Ranjan Sharma from JP Morgan. Please go ahead. Hi, thank you for the call and congratulations on the deal. A couple of questions from my side. Firstly, the $100,000,000 valuation that you've talked about, does that also include the $140,000,000 preferred shares in the digital ventures? Secondly, what will be your next funding requirements to scale these businesses? Because thinking out loud, mobile payment seems to be a very competitive business. You have probably 30 to 40 wallets in every country in Southeast Asia. And Grad just completed a 5,000,000,000 dollars, $6,000,000,000 fundraise. And payment seems to be a big a big focus for them as well, it seems. So how do you compete with some of the other players in the market without without raising far more capital than you have raised so far? Yes. So let me take both questions. First question, the $500,000,000 valuation does not include the $140,000,000. The $140,000,000 is separate. So that's why as Transrige announced it earlier in total, it establishes an equity value. It establishes a valuation of a pre money valuation of $500,000,000 plus $140,000,000. So total of $640,000,000 for the assets that are in place. In this discussion today. Question number 2, so the next run of funding is actually going to come in the form of the individual companies, right? So our next plan will be directly raise our capital for the individual units As I said before, there are already conversations going on, both at the aggregate and the ADA level, to raise potential funds. Obviously, we are obviously very aware of some very well funded players in this space. Our understanding is a big chunk of that, that funds is actually going into very large markets that they're participating in like Indonesia, like Thailand, Having said that, though, we are actively also looking up for funding within Boost as well. But just to kind of summarize though that there are active conversations going on for the next round of fundings. So certainly the amount of investment committed by Mitsui as well as ARZEA to date, that will take us well into 2018, sorry, 2019 and beyond. Okay. Thank you so much. And our next question comes from Arthur Pineda from Citi. Please ask your question. Hi, thanks. Just a follow-up question. If there are funding needs acquired for the assets that you've transferred to Pega 7 fund, How will that be met going forward? Does Akshata have to put in more money or is that all going to be done on the local level? So it is the responsibility of the fund manager to raise additional capital should any of the 5 portfolio companies require additional funding, right? So just like any fund manager, they will be raising funds on their own to supply for these companies. Yes. Well, so again, ours is a preference share and then it is not how should I say it's not a reflection of our equity value in the asset. The agreement of the exit value obviously will have to reflect the value of the asset that we are injecting in. So in short, yes, there is a potential dilution impact on money that they will additionally put in there. That will be accounted for before they then kind of look into the net profit that we will from the asset that we injected in. But just to be sure, you will not, whatever it is, good plan for ministers, we will have no impact on our P and L. From the Davis in which one's been ordered. Understood. Thank you. Your next question, we have no further questions. At this time, we now pass the call back to the speakers. Please continue. Okay. Thank you very much for joining us today's conference call. I really appreciate all the questions. And have a good weekend. Thank you. Thank you very much. This concludes today's call. Thank you for your participation. You may now disconnect.