GROUP LEASE, a listed motorcycle-leasing company, plans to expand into Asean markets via a combination of establishing new operations and taking over local businesses, in a move aimed at boosting its lending by 67 per cent to Bt10 billion next year.
The company projects Bt6 billion in outstanding lending at the end of this year.
Group Lease plans to open a business in Myanmar next year, chairman and chief executive officer Mitsuji Konoshita said yesterday after the official opening of its leasing office in Laos.
GL Leasing (Lao) has been established with registered capital of US$250,000 (Bt8.38 million) as the company's first local-presence foray into other Asean markets, after finally obtaining a leasing licence from the Laotian central bank.
Meanwhile, the Thai company is also in negotiations for the possible takeover of a finance-related business in Vietnam, he said.
At the same time, Group Lease has been making serious preparations to enter the huge Indonesian market through collaboration with a bank in that country owned by its new strategic partner, J Trust Group of Japan.
A recent Group Lease shareholders' meeting endorsed the issuance of convertible debentures worth $30 million for subscription by J Trust Group.
"By the end of 2016, our business in Asean will equal our lending of Bt5 billion in Thailand, with Asean income coming from countries such as Cambodia and Laos. Moreover, if our takeover deal [in Vietnam] is completed, overall lending will exceed Bt10 billion next year," Konoshita said.
Thailand will, however, remain the company's centre for expansion of its Asean business, he stressed. The company also plans to set up a holding company, GL Holding, to apply for a listing on the Singapore Stock Exchange next year, which will support its business expansion within Asean, he said.
In light of its aggressive investment plans, Group Lease targets revenue and net profit achieving record growth, having posted income of Bt572.93 million and net earnings of Bt110.24 million for the first quarter of this year - up 49 per cent and 925 per cent respectively from the same period last year.
The profit figure is the best quarterly result in the company's history, said the chairman, adding that about Bt39 million was from overseas operations, some 77 per cent higher than in previous three months.
The bulk of the overseas profit was from business in Cambodia.
Konoshita said the new strategic partnership with J Trust Group, which owns Mutiara Bank in Indonesia, is expected to pave the way for Group Lease to enter "the huge and potentially lucrative leasing and nano-finance markets of the largest member country of Asean".
"Our strategy to expand the business in Asean will focus on three categories: motorcycles, agricultural machinery and nano-finance. They are successful in Cambodia and also apply to Laos, Myanmar, Vietnam and Indonesia," he said.
However, he said the company was not interested in applying for a nano-finance licence in Thailand because local demand was still more limited than in other Asean markets, while the company's overall Thai non-performing loans were also higher.
"Our business in Thailand shows non-performing loans at 9 per cent this year, whereas in Cambodia the figure is zero," he said.
In Laos, after opening its office yesterday, the company plans to establish a network of 70 point-of-sale staff at motorcycle and agricultural-machinery stores by the end of this year.