This webinar discussed how to identify and invest in Australian growth companies on the ASX. Tim Samway, Managing Director of Hyperion Asset Management, began by noting that growth will be scarce given the current low growth environment. He explained that growth opportunities can come from addressing larger markets or gaining market share. Some key criteria for identifying growth stocks included return on equity over 15%, sales growth above GDP, and interest coverage over four times. Common pitfalls to avoid included growth through excessive debt or acquisitions. The presentation concluded with insights into portfolio holdings like Amazon, REA Group, Domino's, and Seek that exemplify sustainable growth characteristics.

1. How to find
and invest in ASX
growth companies
Presented by
Tim Samway
Managing Director
Hyperion Asset Management
11 April 2017

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Housekeeping
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This webinar and information has been prepared and issued by Netwealth Investments Limited (Netwealth),ABN 85 090 569 109,
AFSL 230975. It contains factual information and general financial product advice only and has been prepared without taking into
account the objectives, financial situation or needs of any individual.The information provided is not intended to be a substitute for
professional financial product advice and you should determine its appropriateness having regard to you or your client’s particular
circumstances.The relevant disclosure document should be obtained from Netwealth and considered before deciding whether to
acquire, dispose of, or to continue to hold, an investment in any Netwealth product.
While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person,
including Netwealth, or any other member of the Netwealth group of companies, accepts responsibility for any loss suffered by any
person arising from reliance on this information.
Disclaimer
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Tim Samway
Managing Director
Hyperion Asset Management
Meet today’s speaker

5. AGENDA
NETWEALTH WEBINAR | 11 APRIL 2017

The current
low growth
environment
1
Where will
the growth
come from?
2
How we
identify
growth
stocks
3
Pitfalls to
avoid
4
Portfolio
stock insights
5
Q & A
6
5

6. GROWTH IS (AND WILL BE) SCARCE
Indexed to 100 in August 2006
Source: Factset
NETWEALTH WEBINAR | 11 APRIL 2017
MSCI World Accumulation Index
S&P/ASX 300 Accumulation Index
6 Source: Factset

7. Source: World Bank
GDP GROWTH IS THE OUTCOME OF DEMOGRAPHICS
Source: Haver, Factset, UBS estimates
DEMOGRAPHIC MODEL: EXPENDITURE WEIGHTEDOLD AGE DEPENDENCY RATIO
GDP % DMEW % DMEW forecast %
0%
5%
10%
15%
20%
25%
1960 1970 1980 1990 2000 2010
Old Age Dependency Ratio (% of working age population)
1950 1960 1970 1980 1990 2000 2010 2020
NETWEALTH WEBINAR | 11 APRIL 20177

8. EARNINGS GROWTH DRIVES PRICES IN THE LONG-TERM
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0 Oct96
May97
Dec97
Jul98
Feb99
Sep99
Apr00
Nov00
Jun01
Jan02
Aug02
Mar03
Oct03
May04
Dec04
Jul05
Feb06
Sep06
Apr07
Nov07
Jun08
Jan09
Aug09
Mar10
Oct10
May11
Dec11
Jul12
Feb13
Sep13
Apr14
Nov14
Jun15
Jan16
Aug16
Hyperion Earnings Per Share Index
Australian Equity Composite - ex dividends
S&P/ASX300 Index
300 Index EPS Index (CS) - indexed to 100 in Oct 1996
NETWEALTH WEBINAR | 11 APRIL 2017
Hyperion Earnings Per Share Index
Hyperion Australian Equity Composite – ex dividends
S&P/ASX 300 Index
S&P/ASX 300 Index EPS Index
Indexed to 100 in October 1996
8 Source: Hyperion

9. GROWTH
OPPORTUNITIES
ADDRESSABLE MARKET
GROWING THE SIZE OF THE PIE
MARKET SHARE
GROWING THE SLICE OF THE PIE
SO WHERE CAN THE GROWTH COME FROM NOW?
NETWEALTH WEBINAR | 11 APRIL 20179

10. WHICH OF THESE IS A GROWTH STOCK?
A B C
NETWEALTH WEBINAR | 11 APRIL 201710
ASX: QBE ASX: CSR ASX: BAL

11. NOT ALL “GROWTH” STOCKS ARE CREATED EQUAL
NETWEALTH WEBINAR | 11 APRIL 201711 Source: Factset
Grew strongly from 2000
- 2010 via acquisition but
organic growth was
limited.

12. NOT ALL “GROWTH” STOCKS ARE CREATED EQUAL
NETWEALTH WEBINAR | 11 APRIL 201712 Source: Factset
Grown revenue at
double digits over the
past 3yrs, due to cyclical
upturn in Australian
building industry.

13. NOT ALL “GROWTH” STOCKS ARE CREATED EQUAL
NETWEALTH WEBINAR | 11 APRIL 201713 Source: Factset
Grew strongly over a
short period of time, not
proven to have staying
power.

14. 

Return on Equity
Equal to or greater
than 15%
Historical Sales Growth
Greater than nominal GDP
over three to five years
Interest Cover
Greater than four times
HOW WE IDENTIFY GROWTH STOCKS
HYPERION’S PRIMARY SCREENING FILTERS:
NETWEALTH WEBINAR | 11 APRIL 201714

15. PITFALLS TO AVOID
Growing through debt
Growing through acquisitions
Specific sectors: even the best company in a
sector facing structural headwinds may not
be a good investment
NETWEALTH WEBINAR | 11 APRIL 201715

16. AMAZON: KILLING THE COMPETITION
NETWEALTH WEBINAR | 11 APRIL 201716
THE PLATFORM REVOLUTION
• The strongest platforms are
driven by the best features, depth &
functionality.
• Coupled with superior
data/information ecosystems and
networks are created.
• As platforms grow in size the value
created for each user on the platform
increases (network effects).
Proven, quality management
Culture of innovation
Compelling customer value proposition

17. AMAZON: KILLING THE COMPETITION
NETWEALTH WEBINAR | 11 APRIL 201717 Source: Factset

18. PORTFOLIO STOCK INSIGHT: REA GROUP (REA)
NETWEALTH WEBINAR | 11 APRIL 201718
Value proposition: convenience,
price and choice
Network effect
Global expansion

19. PORTFOLIO STOCK INSIGHT: REA GROUP
NETWEALTH WEBINAR | 11 APRIL 201719 Source: Factset

20. PORTFOLIO STOCK INSIGHT: DOMINO’S (DMP)
Value proposition: convenience,
price and choice
Superior customer experience
Innovation
NETWEALTH WEBINAR | 11 APRIL 201720

21. PORTFOLIO STOCK INSIGHT: DOMINO’S
NETWEALTH WEBINAR | 11 APRIL 201721 Source: Factset

22. PORTFOLIO STOCK INSIGHT: SEEK (SEK)
Network effect
Superior customer experience
Deep understanding of the user
NETWEALTH WEBINAR | 11 APRIL 201722

23. PORTFOLIO STOCK INSIGHT: SEEK
NETWEALTH WEBINAR | 11 APRIL 201723 Source: Factset

24. DISCLAIMER
This communication is intended for financial advisers only. Retail investors should not rely on any information in this document without first seeking
advice from their financial adviser.
This communication was prepared by Hyperion Asset Management Limited (‘Hyperion’) ABN 80 080 135 897 AFSL 238 380. Any opinions or
forecasts reflect the judgment and assumptions of Hyperion and its representatives on the basis of information at the date of publication and may
later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future. The
information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision
in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s
objectives, financial situation or needs. Any persons relying on this information should obtain professional advice relevant to their particular
circumstances, needs and investment objectives. Past performance is not a reliable indicator of future performance.
Hyperion believes the information contained in this communication is reliable, however its accuracy, reliability or completeness is not guaranteed
and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the Competition and
Consumer Act 2010 and the Corporations Act, Hyperion disclaims all liability to any person relying on the information contained in this
communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly
or indirectly in respect of such information.
The information contained in this presentation is not to be disclosed in whole or part or used by any other party without the prior written consent of
Hyperion. Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the
information contained in this presentation is prohibited without obtaining prior written permission from Hyperion.

25. Questions and answers

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This webinar and information has been prepared and issued by Netwealth Investments Limited (Netwealth),ABN 85 090 569 109,
AFSL 230975. It contains factual information and general financial product advice only and has been prepared without taking into
account the objectives, financial situation or needs of any individual.The information provided is not intended to be a substitute for
professional financial product advice and you should determine its appropriateness having regard to you or your client’s particular
circumstances.The relevant disclosure document should be obtained from Netwealth and considered before deciding whether to
acquire, dispose of, or to continue to hold, an investment in any Netwealth product.
While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person,
including Netwealth, or any other member of the Netwealth group of companies, accepts responsibility for any loss suffered by any
person arising from reliance on this information.
Disclaimer
Thank you
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