Management Discussion and Analysis
For the 2nd Quarter ended August 31, 2022
AEON Thana Sinsap (Thailand) Public Company Limited (“the Company”) has already submitted
the consolidated reviewed the 2nd quarter financial statements as of August 31, 2022 which were reviewed by
Deloitte Touche Tohmatsu Jaiyos Audit Company Limited. The operating performance is summarized are asfollows.
Overview
According to the Bank of Thailand and Office of the National Economic and Social Development
Board data, The Thai economy in the second quarter of 2022 increased by 2.5%, following a rise of 2.3% in thefirst quarter of 2022. The main supporting factors were the return-to-expansion of export goods and private final
consumption expenditure. In addition, the relaxation of the COVID-19 restrictions resulting in the number offoreign tourist. Unemployment rate in the second quarter of 2022 was at 1.37% down from 1.89% of the samequarter previous year. However, increasing interest rate, inflation rate and flooding are likely to have an impact
to the Thai economy in the second half of year 2022 which will affect to the direction of household consumption
expenditure.
The Company performance of the first half of FY2022, total new turnovers increased by 35% y-y, andthe second half of FY2022 increased by 30% y-y and 3% Q-Q.
As at August 31, 2022, the Company had total cards as below;
Number of AEONTS Cards and Networks
Number of Credit Cards (million cards)
Number of Member Cards (million cards)

August 31, 2021
3.01

August 31, 2022
3.19

Branches
Bangkok
Province
ATMs (machine)

6.28
100 branches
29%
71%
404

6.41
103 branches
30%
70%
147

Affiliated Dealers

6,272

6,132

Summary of Consolidated Financial Results
1. Operating Results
Profit and Loss Statement(Consolidated)
Unit : Million Baht

Consolidated

Separate

2Q/22%YoY

1H/21

1H/22%YoY

1H/21 1H/22 %YoY

Credit card income
Loan income
Hire-purchase income
Other income

1,878
2,629
253
715

18%
2%-2%
-21%

3,144
5,198
531
1,513

3,688
5,258
520
1,495

17%
1%
-2%
-1%

3,116
5,102
164
1,515

3,615
5,213
127
1,507

16%
2%
-23%
-0.5%

Total Revenues
Operating and administrative expenses
Expected credit loss
Finance costs
Other expenses
Total ExpensesProfit before tax income
Income tax expenses
Net profit for the period
Earnings Per Share (Baht per share)

5,475
1,985
1,851
468
1
4,305
1,170
239
904
3.61

2%
1%
-8%
4%
-83%
-3%
28%
23%
33%
33%

10,386
3,895
3,231
901
8
8,035
2,351
550
1,828
7.31

10,960
4,018
3,415
905
2
8,340
2,620
530
2,018
8.07

5%
3%
6%
0.4%
-8%
4%
11%
-4%
10%
10%

9,898
3,489
2,618
939
6
7,052
2,846
524
2,322
9.29

10,461
3,672
3,334
946
1
7,953
2,509
4722,037
8.156%
5%
27%
0.7%
-83%
13%-12%-10%-12%-12%

Revenues
In the first half of fiscal year 2022, the total consolidated revenues were 10,960 million baht, grew 574
million baht or 5% y-y. In the second quarter of FY2022, the Company recorded revenue at 5,475 million baht,increased 131 million baht or 2% y-y. The increasing mainly came from credit card income grew by 18% y-y whichcorresponds to increasing in the volume of card spending and cash advance. Other income from bad debt
recovery grew by 32% y-y. As at August 31, 2022, the Company has active customers more than 2.6 million, mainly
from Bangkok 30%, and in up-country 70%. In terms of overseas business in Cambodia, Myanmar and Laos, they
have active customers more than 118,000 users representing 6% of active customers of the Company. The
company more focus on sales activities on online channel in order to be in line with consumer behavior. Details ofeach business can be described as follows:

2Sales and Revenues Structure for the first half FY2022

2%

5%

14%

23%

Loans5%Sales
THB 49,818 Million

Revenues
THB 10,960 Million
34%

Credit card48%
Hire Purchase
Others

70%-Credit Card

In the first half year of 2022, credit card sales accounted for 70% of total turnovers with total revenues
amounted to 3,688 million baht, increased of 544 million baht or 17% y-y. In the second quarter of FY2022, credit
card revenue recorded at 1,878 million baht, increased 284 million baht or 18% y-y. For overseas business, AEON
Specialized Bank (Cambodia) Plc recorded credit card revenue in the second quarter of FY2022 of 73 million baht,grew by 30% y-y.
- Loans
In the first half of 2022, loans shared 23% of total turnovers with the loan revenue of 5,258 million baht
which was 48% of total revenues, increased of 59 million baht or 1% y-y. In the second quarter of FY2022, loan
revenue amounted to 2,629 million baht, increased of 43 million baht or 2% y-y. Moreover, loan income from AEON
Specialized Bank (Cambodia) PLC of 107 million baht, decreased by 23% y-y and AEON Microfinance (Myanmar)
Company Limited of 1 million baht, decreased by 94% y-y.
The Company has been expanding more online service channels to customers and reduced theCompany’s operation cost. As a result, the Cardless transactions currently accounted for 95% of total personalloan sales which Promptpay service shared more than 70% of total personal loan sales.

3

-Hire Purchase

The Company offers motorcycle, used car hire purchase, electrical appliances, mobile phones andothers and hire purchase business of overseas subsidiaries. For the first half of FY2022, hire purchase revenues
recorded at 520 million baht, decreased of 11 million baht or 2% y-y. In the second quarter of FY2022, hire purchaserevenue was recorded at 253 million baht, down by 5 million baht or 2% y-y. In addition, hire purchase income in
the first half of FY2022 from AEON Specialized Bank (Cambodia) Plc was 336 million baht, increased by 8% y-y
and AEON Leasing Service (Lao) Company Limited of 57 million baht, decreased by 5% y-y.
-Others

In the first half of FY2022, other incomes was recorded at 1,495 million baht or 14% of total revenues,
decreased of 18 million baht or 1% y-y. Other revenues comprising of bad debt recovery amounted to 796 million
baht, increased 25%, shared 7% of total revenues, Insurance broker business income totaled 341 million baht,
shared 3% of total revenues, gain on sales of written-off receivables was recorded at 105 million baht, collection
service income was recorded at 111 million baht, and others amounted to 142 million baht accordingly. In thesecond quarter of FY2022, other income was recorded at 715 million baht, decreased by 21% y-y because theCompany recorded a gain on sale of written-off receivables of 320 million baht in second quarter last year but there
is no gain on sale of written-off receivables in second quarter this year.
Expenses
The Company’s expenses mainly consist of operating and administrative expenses, expected credit
loss and finance cost. In the first half of FY2022, the Company had total consolidated expenses of 8,340 million
baht, increased of 305 million baht or 4% y-y. In the second quarter of FY2022, the consolidated expenses
amounted to 4,305 million baht, decreased of 127 million baht or 3% y-y. Details of expenses are shown as follows:-Operating and Administrative Expenses

In the first half of FY2022, the consolidated operating and administrative expense totaled 4,018 million
baht, increased of 123 million baht or 3% y-y. The increase in operating and administrative expense was mainly
from personal expense, administrative and transportation expense, and marketing activities. In the second quarterof FY2022, the consolidated operating and administrative expenses amounted to 1,985 million baht, shared 36%of total revenues which increased of 11 million baht or 0.5% y-y. However, considering the Company separate
financial statement cost to income ratio showed at 35% of total revenues both in the second quarter of FY2022 andthe first half of FY2022.

4

- Expected Credit Loss
In the first half of FY2022, the consolidated expected credit loss amounted to 3,415 million baht,
increased of 184 million baht or 6% y-y. In the second quarter of FY2022, the consolidated expected credit loss
was recorded at 1,851 million baht decreased of 154 million baht or 8% y-y.
- Finance Cost
The Company recorded consolidated finance cost in the first half of FY2022 of 905 million baht,increased of 0.4% y-y. In the second quarter of FY2022, the finance cost was 468 million baht, increased of 20
million baht or 4% y-y, which the portion of finance cost in the second quarter was 8% of total revenues. The
average funding cost in the second quarter of FY2022 was at 2.57%Net Profit
For the first half of FY2022, consolidated operating income was reported at 2,620 million baht,increased of 269 million baht or 11% y-y. Net profit attribute to the parent amounted to 2,018 million baht, increasedof 190 million baht or 10% y-y, and earning per share was 8.07 baht. For the second quarter of FY2022, net profit
attribute to the parent amounted to 904 million baht increased by 33% y-y. Net profit was mainly contributed bycontinuing growth of bad debt recovery and efficiently control the operation cost and funding cost.
2. Financial Status
Statement of Financial Position
Unit : Million Baht
Accounts Receivable
Total Assets
Total Borrowing
Total Liabilities
Total Equities
ROEROAD/E Ratio

February 28, 2022

August 31,2022

91,02890,46965,41870,205
20,264
19.2%
4.0%
3.5

93,97595,49068,80773,47822,012
19.5%
4.3%
3.3

Total Assets
As at August 31, 2022, consolidated total assets were 95,490 million baht, increased by 6% from90,469 million baht as of February 28, 2022. The main assets were attributed to the portfolio of net accountreceivables which shared 98% of total assets.

5- Accounts Receivable
As at August 31, 2022, The Company has accounts receivable of 93,975 million baht increased by 3%
from 91,028 million baht as of February 28, 2022 mainly came from new domestic turnovers increased around 3.3
billion baht or 4% from the end of last fiscal year according to marketing activities to support new customers andincreasing of outstanding. However, account receivables can be categorized by business type as follows: credit
card receivable of 42,181 million baht, grew by 7% from the last fiscal year, loans receivable of 46,218 million baht,grew by 1% from the last fiscal year, hire purchase receivable of 5,495 million baht, down by 7% from the last fiscal
year and others receivable totaled 81 million baht accordingly.
- Allowance for expected credit loss
As at August 31, 2022, the Company and its subsidiary provided allowance for expected credit lossof 10,669 million baht or 11.35% of total accounts receivable. For consolidated financial statements, the delinquentaccount receivables for 3 months and up was 5.3% and default receivables in credit risk (NPL Stage 3) was 5.5%.
In part of separate financial statement, the delinquent account receivables for 3 months and up was 4.8% anddefault receivables in credit risk (NPL Stage 3) was 5%. At the end of second quarter of FY2022, the consolidated
coverage ratio of allowance for expected credit loss to NPL (NPL Coverage ratio) was 207%
Liabilities
As at August 31, 2022, the consolidated liabilities of the Company amounted to 73,478 million baht,
increased by 5% from 70,205 million baht at the end of last fiscal year. There were both short-term and long-termborrowings totally 68,807 million baht, increasing by 5% from the end of last year. The portion of long-termborrowings was 40,549 million baht or represented 59% of total borrowings. To manage risk that might occur fromthe fluctuation in currency. The Company has entered cross currency interest rate swap contracts to hedge its
debt. In addition, the Company has unused unsecured revolving credit facilities 12,020 million baht and 3,000
million baht unused committed facilities with various financial institutions which is enough to drive the Company’soperation. The Company also has the debentures totaling 3,800 million baht that will mature within 12 months,
which the Company can issue new debentures or use a working capital to repay as scheduled.

6

Shareholders’ Equity
As at August 31, 2022, total shareholders’ equity amounted to 22,012 million baht, increased of1,748 million baht or 9% from the end of the last fiscal year. Book value as at August 31, 2022 was 86.1 baht
per share, increased from 79.6 baht per share as of February 28, 2022.
As at August 31, 2022, Debt to Equity ratio stood at 3.3 times decreased from 3.5 times at the endof FY2021. Return on Equity (ROE) and Return on Asset (ROA) for the first half of FY2022 are 19.5% and 4.3%,
respectively.
The Company also announces to pay interim dividend of six month performance at the amount 2.55
baht per share or 31.6% payout ratio. The shareholder register book for the right to receive dividends shall berecorded on October 19, 2022 (XD will be posted on October 18, 2022) and dividend will be paid on November
2, 2022.
Key Financial Ratio

2Q21

2Q22

Aug’21Aug’22

Net Profit Margin (%)

12.7%

16.5%

17.6%

18.4%

Interest Coverage ratio (Times)

3.0

3.4

3.6

3.9

Cost to Income (%)

36.9%

36.2%

37.5%

36.6%

EPS (Baht)

2.71

3.61

7.31

8.07

As of
August 2021

As ofAugust 2022

Allowance for Expected Credit Loss/ Total Receivables (%)

12.6%

11.3%

NPL Coverage Ratio (%)

243%

207%

Book Value per Share (Baht)

72.6

86.1

Key Financial Ratio

7