Newsletter Issue 25  – December  2011 




Economic Update


Economic news in Cambodia in the 3Q was mixed. Cambodia experienced widespread flooding in the 3Q affecting an estimated 13% of the country’s rice crop. The floods led the government to lower its GDP growth estimate to 6.0% for 2011 versus 6.8% projected by the ADB and 6.7% by the IMF.  In May, the UN’s Food and Agricultural Organization had predicted Cambodia would enjoy a record rice crop for 2011, with total paddy production at 8.5 million tons. Yields have risen substantially over the last decade from 1.5 to 2.5 tons per hectare.


Tourism, garments and real estate sectors continued to grow in 3Q. The number of foreign visitors, led by Vietnamese tourists, hit 1.9 million in the first 8 months – up 15% year-on-year – thanks to increasing direct flights and visa exemption agreements. Garment and textile exports rose 19.6% to US$ 2.3 billion in the same period, with exports to the US up 13.2% to US$ 1.3 billion and shipments to the EU up 15% to US$ 566 million.  Resurgent interest in the slumbering real estate sector – for housing projects, garment factories and rice mills – helped spur construction approvals to reach US$ 881 million in the first 8 months, up 94% year-on-year.

Cambodia is increasingly attracting investment from multi-national corporations. Hong Kong Land recently acquired JSM Indochina’s real estate holdings in Phnom Penh for US$ 33.7 million, while Japan’s Aeon Group acquired a 6.7 hectare downtown site for an estimated US$ 100 million and announced plans to build a 100,000-150,000 square meter shopping mall.  Nine Japanese manufacturers received approvals to invest a total of US$ 142 million in Cambodia, with fourteen more projects awaiting approvals. Several major Malaysian rubber companies are reportedly seeking large rubber concessions in Cambodia.             


The Consumer Price Index dipped in August to 6.4% from July’s high of 7.1%. The ADB estimates inflation will average 5.5% for 2011 and 2012, while the IMF projects inflation rates of 6.4% and 5.6% respectively.


The election of Yingluck Shinawatra as Prime Minister of Thailand in 3Q has significantly eased the border dispute between Cambodia and Thailand, and opened the door for further negotiations concerning oil and gas concessions in the Gulf of Thailand. 


In the World Economic Forum’s 2011 Global Competitive Report, Cambodia’s ranking rose 12 spots to place 97th out of 142 countries. The Kingdom scored well for competitive tax rates, burden of government regulation, and buyer sophistication. The US Senate passed a bill in 3Q to extend the Generalized System of Preferences program until 2013. Note Cambodian products already benefit from duty-free exports to the EU under its Everything but Arms initiative. 



Portfolio Company News     


Leopard Cambodia Fund has now been fully drawn down and should soon be fully committed.  Thus far the Fund has achieved one full exit and one partial exit, and is in the process of reinvesting the proceeds since the Fund’s investment period is not yet over.  The exited investments achieved a blended IRR of 37% (excluding the Fund’s operational expenses.) 


Electricite Du Laos Generating Co. ("EDL"):

EDL, which owns and operates hydropower plants in Laos, reported strong earnings for 3Q 2011 (Jul-Sep) which exceeded expectations. Net profit was US$ 31.1 million which easily surpassed the combined earnings of the first six months of 2011 (US$ 23.6 million). The company’s nine month profit of US$ 54.7 million achieved 80% of full year expectations and analysts have announced an imminent upwards revision to forecasts.


Power production is typically highest in 3Q due to seasonal factors but the amount of rainfall this year has been heavier than usual. Operating margins expanded to 82% in the quarter from 71% in Jan-Jun 2011 and greatly exceeded analyst forecasts.


As of 15 November 2011, EDL has a market capitalization of US$ 477 million and trades at 6.9x forecast 2011 net profit (before revision) and 5.1x 2012 forecast. Growth in 2012 is underpinned by new capacity coming on line in early 2012. EDL is expected to pay an annual dividend of LAK 500-600 (US$ 0.063-0.075) per share, providing a yield of 11.3-13.6%.  An interim dividend payment of LAK 178 was made in late October and a final dividend is likely to be paid in April 2012.


The long term growth prospects of EDL are favourable as the company plans to expand its hydropower assets from 387 MW at present to 1,881 MW by 2016, which is a compounded annual growth rate of more than 40%. EDL will expand its capacity by purchasing power plants from its parent company EDL (the national power utility) at favourable prices, typically at the historic cost or ‘book value’ of the plants.


ACLEDA’s year-to-date net profits nearly doubled Year-on-Year to US$ 32.7 million.  3Q net profit of US$ 11 million represented an impressive Return on Equity of 28.8%, surely one of the better performances in the world’s beleaguered banking sector.  S&P and Moody’s nevertheless downgraded ACLEDA’s credit rating, citing its rapid loan growth and the shift in the bank’s shareholder base from development banks to private sector investors such as Jardine Matheson and Cofibred.


Intean Poalroath Rongroeurng

IPR grew its microfinance loan portfolio by 9.5% in the third quarter and generated a profit in line with projections. Rural demand for agricultural loans remains healthy.


Kingdom Breweries

Kingdom launched its second premium beer, bottled Kouprey Dark Lager (long a cult favorite in Kingdom’s TapRoom), and its first canned beer, Kingdom Gold, which targets the local mid-market. Meanwhile, Kingdom’s flagship Leopard Pilsener can now be enjoyed in Draft form at select Phnom Penh venues such as the Raffles Hotel’s Elephant Bar and the Green Vespa pub.  Kingdom can now be found overseas in Hong Kong, UK and France, and soon in Thailand; write to Kiri if you want to know where to buy it, [email protected].  Kingdom continues to generate global publicity. Read the latest story here.  


Tropical Beverage

Tropical Beverage relaunched its "Phuket Beer" with upgraded logo and  packaging created by one of the world’s top brand designers; catch a glimpse here: www.tropbevco.com/About.html. Exports as well as domestic sales in Thailand have resumed. Mobilizing a fleet of small trucks, TropBevCo’s CEO Khun Jules heroically rescued thousands of cases of beer before the rising Bangkok floodwaters deluged the warehouse.  Jules moved the stock repeatedly as the flood waters rose.

Nautisco Seafood Manufacturing

Nautisco shipped another 8 containers (103 tonnes) of frozen processed shrimp in the third quarter, mainly to Japan. Demand continues to be robust, although local operational challenges remain in what is still a new industry for Cambodia.


Greenside Holdings

We increased our investment in Greenside to help fund its development of a biomass power plant project in Kampong Speu province.          



Team News 


We welcome several new team members to Leopard Capital: 


Thomas Hugger has re-joined the team as Group CFO and Managing Partner.  Thomas spent 27 years in private banking, where he specialized in managing portfolios of listed and unlisted equity investments.  His last  position was Managing Director and Head of Portfolio Management at LGT Bank in Liechtenstein, Hong Kong. Earlier he held investment positions at LGT Bank in Zurich and Bank Julius Baer in Zurich and Hong Kong.   Mr. Hugger is a CFIA – (Federal) Certified Financial Analyst and Investment Adviser – Switzerland, and a Certified EFFAS (European Federation of Financial Analysts Societies) Financial Analyst. He is fluent in English and German and has working knowledge of French


Joseph Lovell has joined Leopard Capital as Group COO and General Counsel.  He has more than two decades of Asia-focused business, investment and legal experience. Prior to joining Leopard Capital, he served, among other roles, as Managing Director and General Counsel for a financial group with offices in New York and Beijing, Corporate Counsel for an AIM-listed private equity firm, senior consultant at PricewaterhouseCoopers, and Managing Attorney at a Honolulu law firm. His expertise include private equity investment, corporate law, and business management. He is licensed to practice law in New York, Texas and Hawaii. Joseph has a BS degree from Georgetown University (Chinese Language), and MA (Asian Studies) and JD degrees from the University of Hawaii. He is fluent in Mandarin Chinese and has a working knowledge of Thai, Min Nan and French.


Reshma Alva has joined the team as the Group ESG Officer, helping develop and manage the Group’s Environmental, Social and Governance policies and social impact development.  She has over eight years of work experience in maximizing social impact. Reshma has worked in a variety of roles- consultant, strategic planner, program manager, funder, and fundraiser- in organizations focused on social finance, social services, governance and capacity building. She earned a BA from the University of Michigan, an MBA from MIT Sloan School of Management, and an MPA from the Kennedy School of Government at Harvard University. Reshma is fluent in English and has basic knowledge of French and Tulu.


Marina Pok has joined the Group as the resident ESG Officer in Cambodia.  She founded Ethical Step, a company that consults clients on environmental management best practices, and developed the "Green Days" environmental training and team-building program for HSBC in France. As a sustainability advisor, Marina conducted a carbon audit for the Meurice Palace that outlined recommendations to reduce CO2 emissions. She launched Ecran Vert, a TV program on France’s TV5 Monde that promoted sustainable development education. As the Kingdom of Cambodia’s Under Secretary of State for Foreign Affairs from 1993-98, Marina sought greater involvement from civil society organizations in post-war Cambodia. She holds a master’s degree in sustainable development from the University of Paris Dauphine. Marina is fluent in French, Khmer, English and Japanese.




Secondary Market


Leopard Capital attempts to match buyers and sellers of LCF commitments and shares of LCF’s "feeder fund", Leopard Cambodia Investments (BVI) Ltd.  Potential buyers and sellers should email Mohamed Ahamed at [email protected]. 




Swiss Accounts  


Need a Swiss bank account or asset management services? Our trusted partner in Zurich can assist. Please write to Thomas Hugger ([email protected]) for more info.




Travelogue:  "The Crossing", by Don Phan 


As part of my Leopard internship, I was assigned to travel overland from Bangkok to Phnom Penh. I had previously spent time living in Tuy Hòa, a small town in central Vietnam where my mother had grown up, and was now eager to attain a greater understanding of how life in rural Cambodia compared to that of its neighbors.


To the Cambodia Border

My 670 km journey included a van ride from Bangkok across Eastern Thailand to the twin border towns of Aranyaprathet and Poipet, followed by a bus journey to Phnom Penh. I would have preferred to travel by train, which runs from Bangkok to the border, but Cambodia’s railroad system, built by the French in the 1930s, is unfortunately closed and undergoing reconstruction for the next two years.


The five hour drive through Thailand took place on smooth four-lane highways. The countryside appeared fairly prosperous; ”iron buffalos" had long since replaced the leather variety, and the towns along the way were wired with electricity. The route was once a favourite for low-end backpacker tourists, Thai casino gamblers, and unauthorized foreign expatriates making monthly visa-runs to enable re-entry for another 30 days in the "Land of Smiles". However, over the past two years the number of travelers had decreased due to violence caused by land disputes around the Preah Vihear temple complex, a Khmer Empire masterpiece located just north of the Thai-Cambodian border.  The skirmishes over the current border, based on a 1907 French-drawn map, ultimately proved not to be a source of uninterrupted violence; tensions quickly eased following the reelection of the Cambodia-friendly Shinawatra family, which regained power in Thailand in August 2011.


Crossing the Border into Poipet

My entrance into Cambodia via border crossing bore little resemblance to the organized processes and quiet efficiency I experienced at Phnom Penh’s international airport. In Poipet, I encountered a scene of near-chaos,  a great deal of yelling … and a lot of pigs. The local economy seemed to be driven by both cross-border trade and a string of casinos dotting the Cambodian side of the border that serve visitors from Thailand, where gambling is as much an obsession as it is illegal. Within the no-man’s land between the Thai and Cambodian checkpoints, we passed a series of rundown casinos, one of which advertises a Texas Hold ‘Em poker event despite the complete absence of Western gamblers. The Thai game of choice is baccarat, a high volume game with slightly better odds.


My fellow van passengers were mostly Cambodian women who had recruited a man to carry our luggage. However, I was soon separated from my fellow riders when a Cambodian immigration officer pointed out that I did not yet have a Cambodian visa and directed me back to the border to purchase one. I quickly did as I was told, but when I finally returned with visa in hand, the luggage carrier informed me that my bus had already departed to Phnom Penh. A crowd of tuk-tuk and motorbike drivers quickly surrounded me and demanded I pay the man for carrying my belongings. I was relieved when I found a Vietnamese-speaking motorbike driver who  safely took me to the bus stop.


While I waited for the next bus to depart, the motorbike driver shared his life story as a Vietnamese immigrant living in Cambodia. He grew up in the Mekong delta region, but has lived along the Cambodian-Thai border for the last twenty years. He now prefers to live here because it provides him with a more affordable and leisurely lifestyle.  


As we casually conversed, the sound of squeals pierced the air as a large triple-decker truck stacked with pigs hurtled by us. My new friend explained that at least ten large trucks like this one cross over from Thailand into Cambodia each day; he added that Cambodia produces fewer than 30% of its pork requirements and imports the rest, primarily from Thailand. Shortly before my bus arrived (and while the driver was recounting a memorable cockfighting match he once saw), two more trucks full of squealing hogs zoomed by us. Apparently their visa procedure was much smoother than mine, though their journey was most likely a one-way trip.


Poipet To Phnom Penh

The bus to Phnom Penh was unencumbered by luxuries such as air conditioning, water, snacks, or even the over-amplified video system which is considered a mandatory feature on every Thai bus. Upon crossing the border, the four-lane modern Thai highway promptly morphed into a shoulder-less two-lane Cambodian road. But at least this road is now paved; absent are the meter- deep potholes that used to make driving in this part of Cambodia an adventure sport.


The Cambodian countryside was lush and green, similar to the landscape on the Thai side of the border. Chickens, cows, and water buffaloes wandered everywhere. Most houses did not have the small pickup trucks that are ubiquitous in the Thai countryside. Motorcycles are much more affordable and common. Still, signs of progress and development were abundant. It was not uncommon to spot new houses under construction alongside antiquated ones. Rural Cambodia suffers from a dire lack of electricity, yet numerous low voltage power lines could be seen in towns, presumably strung up by clever entrepreneurs importing power across the border. I counted three branches of ACLEDA Bank, which is the largest lender of micro-finance and SME loans in areas like these. ACLEDA has over 220 rural branches and their offices are noticeably the nicest buildings in these small towns.


Our first pit stop in Thailand was a modern 7-11-style convenience store and gas station. Cambodia does not have 7-11s and the quality of rest stops decreased the further we traveled away from the border, with one stop featuring an outhouse amidst quietly grazing cows. The rest stops enabled us to survey the consumer culture of these country folk. Small shops are clustered together selling cigarettes and drinks or phone Sim cards; most local people along this route appeared to own a mobile phone. Modern marketing has already made early inroads into rural Cambodia, illustrated by billboards advertising ‘OK Condoms’ and using famous footballers like Cristiano Ronaldo and Lionel Messi to hawk Pepsi Cola and Castrol Motor Oil.


Our tour confirmed the notion that Cambodia has one of the lowest population densities in Asia. We passed more temples than towns, and long stretches of land appeared to have few if any inhabitants. It is obvious this country has barely scratched the surface of its agricultural potential.


After fourteen hours of travel, we finally arrived in Phnom Penh. I had not been there since 2007 and the city has changed greatly and is noticeably busier now. Before our final stop, the bus passed the beautifully restored Psah Thom Thmey Central Market. Later I saw Independence Monument lit up in all its splendor providing a perfect end to the journey.




Picture of the Month: Kingdom Beer Goes Global


Ferdinand de Lesseps, in the number 50 car, features the Kingdom Beer logo at the Paul Ricard Race in France on 9th October 2011.  





This document does not constitute an offer to sell, or a solicitation of an offer to invest in Leopard Cambodia Fund LP, Leopard Cambodia Investments (BVI) Ltd., Leopard Cambodia-Laos Fund II LP, or any other funds sponsored by Leopard Capital LP or its affiliates (collectively, "our Funds"). We will not make such offer or solicitation prior to the delivery of a definitive offering memorandum and other materials relating to the matters herein. Before making an investment decision with respect to our Funds, we advise potential investors to read carefully the respective offering memorandum, the limited partnership agreement or operating agreement, and the related subscription documents, and to consult with their tax, legal, and financial advisors. We have compiled this information from sources we believe to be reliable, but we cannot guarantee its correctness. We present our opinions without warranty. Past performance is no guarantee of future results. © Leopard Capital LP. All rights reserved.

In this Issue

Portfolio Company News

Team News

Secondary Market

Swiss Accounts


Picture of the Month




Quick Links 



The NAV of Leopard Cambodia Investments (BVI) Ltd. was US$ 991.74 as of 30th September 2011


Leopard Cambodia Fund, LP  

Fund size: 

USD 34,135,000








Valoren No:






Lipper ID:



Leopard Cambodia Investments (BVI) Ltd. 


Fund size: 

USD 20,610,000








Valoren No:






Lipper ID: