Japan’s Aeon is looking to expand in five ASEAN countries

April 2, 2014 Leave a comment

Japan’s Aeon is looking to expand in five ASEAN countries

Sunday, March 23, 2014 – 11:13

Sucheera Pinijparakarn

The Nation/Asia News Network

That is especially the case for Cambodia, Laos and Myanmar.

The Aeon Group has assigned Aeon Thana Sinsap (Thailand) to oversee microfinance and leasing businesses in Cambodia, Myanmar and Laos through the latter’s wholly owned subsidiaries.

Aeon Thana Sinsap holds a 20-per-cent stake in Aeon’s leasing business in Vietnam.

Yasuhiko Kondo, managing director of Aeon Thana Sinsap, said yesterday that Aeon in Japan was looking at increasing its investment in the region once the new markets showed good prospects.

Kondo said the company’s wholly owned subsidiaries in Cambodia and a subsidiary in Vietnam generated 5 per cent of Aeon Thana Sinsap’s profits, which the company hoped would double to 10 per cent within three to five years as Laos and Myanmar gradually generated a profit.

He said a microfinance company in Cambodia, which opened almost three years ago, generated a net profit of Bt10 million (S$0.4 million) to Bt15 million last year.

Aeon in Cambodia has two branches with a customer base of 15,000 but plans to open more. Kondo said Aeon Thana Sinsap hoped that its consumer-finance net profit in Cambodia would be accelerated when Aeon opens in a shopping mall in that country midyear.

Aeon Cambodia provides leasing for motorcycles, home appliances and mobile phones. Kondo said Cambodia was a high-growth market.

But he said two subsidiaries in Myanmar and Laos that opened last year were not generating a profit yet but the company hoped that in the next two or three years both markets would start contributing.

In Vietnam last year, the company reported consumer-finance net profit of Bt50 million to Bt60 million, while Aeon Thana Sinsap’s 2013 net profit as at the end of November was Bt1.89 billion.

Its full-year financial results will be announced next month.

Kondo said Aeon Thana Sinsap provided capital to the firms in Cambodia, Myanmar and Laos, and once the companies started generating a profit the other firms would seek to fund themselves, including through bond issues.

Kondo said Aeon Thana Sinsap had no plan to increase its capital from the current level of Bt250 million, although the company had several sources of funds to strengthen its business in Thailand.

Every year, the company issued bonds to roll over the previous bonds, with around 70 per cent long-term bonds with tenors of three to five years while around 30 per cent are short-term bonds.

It plans to issue debentures in the second half of this year.

Kondo said Aeon Thana Sinsap collected a monthly debt of Bt5 billion to Bt6 billion and provided a monthly debt of Bt7 billion to Bt8 billion, with the good collection ratio helping cash flow.

The company this year projects loan growth of 10 per cent from outstanding loans of Bt50 billion.

Kondo said the Constitutional Court’s decision yesterday to nullify the general election might have an impact on consumer spending, and the company would monitor the situation before reviewing its business plan again.

 

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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