'Group Lease Zooming into Golden Era'

14 May 2013

Group Lease Public Company Limited (GL) has posted a solid 63.6% growth in net profits in the first quarter this year as senior executives said the listed motorcycle-leasing company is zooming ahead into a golden era on the back of strong performance in Thailand and huge growth potentials in Cambodia.

In an official filing with the Stock Exchange of Thailand (SET) today (May 14, 2013), GL said net profits rose to 91.3 million baht in the first three months this year, compared to 55.8 million baht in the same period the year before. The big jump in profits followed the company’s sterling performance last year when net profits rose a hefty 66%.

Aside from acknowledging the first-quarter performance, GL’s Board of Directors during its meeting yesterday (May 13, 2013) also adopted a resolution for its executive directors in Thailand and its subsidiary in Cambodia – GL Finance (GLF) – to start accumulating GL stocks as a measure of commitment and confidence over the company’s long-term growth potentials.

“In the years to come, GL will grow to become a much larger company. Therefore, it is appropriate for the executive directors both in GL Thailand and GLF in Cambodia to begin buying GL stocks to demonstrate their commitment and their confidence to grow together with the company into the longer-term future,” GL chairman and chief executive Mitsuji Konoshita stated. “In the long run, I’d like to see the directors (3 Thai and 5 Japanese) to own GL stocks in the range of 1-3% each,” he added.

According to Mr.Konoshita, the jump in net profits in the first quarter this year has come as the result of aggressive sales increases which were propelled by a larger network of dealers, particularly in the industrial zones of Chon Buri and Rayong provinces where a large segment of GL’s businesses are concentrated.

The company’s favorable performance has also been achieved partly because of Thailand’s strong economic growth. GL will post a record-high monthly sales of nearly 10,000 units this month, which is projected to rise to about 12,000 units by year-end.

The company’s operations in Cambodia through GLF, are also set to take off shortly as all preparations and back-up systems have been fully tested and are now ready. GLF is projected to record monthly sales of 1,000 units in June and the numbers are expected to double to 2,000 units in the third and fourth quarters, rising to about 4,000 early next year. Revenue from the Cambodian operations will be booked by GL starting in the third quarter.

Mr. Konoshita is particularly bullish on the huge growth potentials in Cambodia where GLF has become the first company officially licensed by the Cambodian national bank to conduct the motorcycle-leasing business. Operating from a position of strength, it enjoys exclusive rights to distribute the popular HONDA motorcycle brand there.

To ensure adequate funding for the Cambodian operations, GL recently increased the paid-up capital of another subsidiary in Singapore – GL Holdings (GLH) – to S$ 4.46 million (roughly 100 million baht). GL executives said GLH takes on the funding role because it could raise low-cost funds from Singapore.

With the Cambodian operations all set to go full-steam, Mr. Konoshita said he has also begun to actively explore other related businesses, especially in the lucrative and booming areas of micro-financing.

Meanwhile, GL has completed the registration of its new par value of 50 satang (split from the original 5 baht par) and has set Wednesday (May 15) to begin trading on the new par. The new exercise price for the conversion of its warrants into ordinary shares has also been changed to 2.95708 baht per unit at the ratio of 1 : 11.836.