Thevelia Holdings Ltd.

Overview Key strengths Key risks Largest provider of corporate services in Asia, with high customer retention. High leverage with debt-to-EBITDA at 7x-8x in the next 12-24 months. Good revenue visibility. Material exposure to reputation and regulatory risk. Stronger profitability than the industry average and of direct peers. Operating in fragmented markets. We do not expect the company to make large acquisitions over the next 12-24 months. However, small bolt-on acquisitions funded by internally generated cash and revolver borrowings are possible. Our base case assumes Thevelia will deliver above-GDP level EBITDA growth and maintain high cash flow conversion with low working capital and capital expenditure requirement. We anticipate the group will accelerate expansion in product offerings (such as corporate trust and

...Thevelia Holdings Ltd.'s leverage should remain high in the next 12-24 months. We do not expect the company to make large acquisitions over the next 12-24 months. However, small bolt-on acquisitions funded by internally generated cash and revolver borrowings are possible. Our base case assumes Thevelia will deliver above-GDP level EBITDA growth and maintain high cash flow conversion with low working capital and capital expenditure requirement. We anticipate the group will accelerate expansion in product offerings (such as corporate trust and business advisory) and increase geographical coverage (in Asia and other regions) to cater to growing customer needs, hindering margin expansion. The group has used acquisitions to achieve its expansion goal. Net- net, we anticipate the ratio of adjusted debt to EBITDA ratio will gradually decline to mid-7x over the next 12 months., compared with a proforma of 8.5x in 2021. The proforma forecast for 2021 assumes a hypothetical scenario that financial...

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