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BANGKOK, Feb 16, 2016 - (ACN Newswire) - SET-listed motorcycle leasing firm Group Lease PCL ("GL"; SET:GL) has announced that it is expanding its business model to include its pioneering e-Finance system across ASEAN, to drive revenues and profits to even greater heights. GL posted record-high profits of THB192.9 million in the last quarter of 2015.
Mitsuji Konoshita, GL Chairman and CEO, explains that the new business model builds around an efficient and low-cost e-Finance system developed by GL to serve the financing needs of the company's growing number of clients in the rural countryside of Cambodia, Laos, and other markets in ASEAN where GL is expanding.
The system has worked successfully in Cambodia and, on top of traditional products like Honda motorcycles and Kubota agricultural machinery, it is now used as a financing platform for other products such as solar panels and consumer durables. It essentially facilitates the entire business process from loan-application evaluation to e-Payment of monthly installments by clients.
"This e-Finance system has been developed exclusively by us to serve our specific purpose. As a result, our operations are cost-effective, assets-light, easy and fast. The system puts us in a very advantageous position since other traditional finance companies or banks cannot compete with us," Mr. Konoshita said.
In Cambodia, GL operates nearly 200 e-Finance PoS (Points of Sale) nationwide which serve the growing needs of villagers in the countryside, most of whom have no bank accounts or access to mainstream financing. These PoS link clients directly with GL's head office in Phnom Penh, without having to direct them through costly and cumbersome branch offices as done by other traditional finance houses.
GL's operations in Laos, which kicked off in May last year, took only five months to reach the break-even point and contributed THB2.5 million to the group's consolidated net profits.
Announcement of GL's new business model comes after the company reported record net profit of THB192.9 million (US$5.4 million) for Q4 2015, twice that of Q4 2014, comprising THB90 million (US$2.5 million) from Thailand, and THB102 million (US$3 million) from overseas operations, largely from Cambodia. For full FY 2015, GL recorded net profit of THB582.9 million (US$16 million) on revenue of THB2,884.7 million (US$81 million).
Maintaining that this has been a major factor behind GL's current success, Mr. Konoshita said the new digital finance model will drive the group's revenues and profits to new heights in the years to come.
Mr. Konoshita projected that the group's aggregate portfolio, which doubled from THB4.5 billion (US$126 million) in FY2014 to THB9.2 billion (US$258 million) in FY2015, will further double to THB18 billion (US$505 million) by the end of this year. He also forecast that 2016 net profit will top THB1 billion (US$28 million).
GL management is particularly bullish on the Cambodian growth prospect. According to Mr. Tatsuya Konoshita, GL Executive Director and Chief Investment Officer, GL Finance (the group's wholly-owned subsidiary in Cambodia) provided leasing for 23,000 motorcycles last year, or less than 10% of the total 260,000 new motorcycles sold in the country. "So, there is still enormous growth potential," he said.
Another prospective high-growth market is Indonesia where GL has registered a joint-venture company with its strategic partner J Trust Bank group since last December and is now waiting for a license from the Indonesian authorities before kick-starting the consumer-finance business. GL's management has been in Indonesia since the end of last year to do all the necessary preparations; the license is expected this quarter while operations can kick off in the second quarter.
Maintaining Indonesia is a huge market ten times the size of Cambodia, Mr. Konoshita stated that GL hopes to launch with US$20-30 million sales in the first year, but full market potential for GL could top US$1 billion in the years ahead.
*US$ conversions are approximative on the date of this release.
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Topic: Business Plan
Source: Group Lease PCL
Sectors: Daily Finance
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From the Asia Corporate News Network
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