Management Discussion and Analysis
For 1st Quarter 2024 ended May 31, 2024
AEON Thana Sinsap (Thailand) Public Company Limited (“the Company”) has already submitted theconsolidated audited the 1Q/2024 financial statements ended May 31, 2024 which were audited by Deloitte Touche
Tohmatsu Jaiyos Audit Company Limited. The operating performance is summarized as follows.
Overview
According to the Bank of Thailand and Office of the National Economic and Social Development Board (NESDB)
data. Thailand’s economy in the first quarter of 2024 expanded by 1.5%, continued growing with decelerating rate from1.9% in the previous year, due to the delay of government’s budget allocation. Hence, the NESDB has cut down its
growth forecast for the Thai economy in 2024 to the range of 2.0%-3.0%, in which the supporting factors still being thecontinuous recovery of the tourism sector, the private consumption and the private investment, while the headline inflation
rate averaged of only 0.1%-1.1%. The unemployment rate in 1Q/2024 was 1.01%. However, the K-shape recovery
causes household debt (seasonal adjusted) to continue climbing up from 90.7% in the 1Q/2023 to 91.4% in 1Q/2024.
For the 1Q/2024 consolidated financial results, the Company has total revenues stable compared to the same
period of last fiscal year due to the current economic situation which is in an improved trend but the risks to asset quality
remained in concerns. The Company, therefore, proceeds with high-risk financial products with caution, as well as,expands the target group to customers with more stable incomes.
As of May 31, 2024, the Company had business distributions as below;
Number of Networks and Merchandise Partners

Feb 28, 2023

Feb 29, 2024

May 31, 2024

Branches
Bangkok
Other Provinces

104 branches
31%
69%

101 branches
29%
71%

101 branches
28%
72%ATMs (machine)

14673-Affiliated Dealers

5,846

5,276

5,463

Summary of Consolidated Financial Results
1. Operating Results
Profit and Loss Statement
Unit : Million Baht
Credit card income
Loan income
Hire-purchase income
Other income
Total Revenues
Operating and administrative expenses
Expected credit loss
Finance costs
Other expenses
Total Expenses
Profit before tax income
Income tax expenses
Net profit for the period
Earnings Per Share (Baht per share)

1Q23

Consolidated
1Q24

1Q23

Separated
1Q24%YoY%YoY

1,951

1,898(3%)

1,910

1,852(3%)

2,534

2,475(2%)

2,512

2,409(4%)

240

283

18%

6181

33%

734
5,459
2,029

851
5,507
2,187

16%
1%
8%

765
5,248
1,856

883
5,226
2,000

15%
(0.4%)
8%

2,094

2,089(0.2%)

2,044

1,992(3%)

527

558

6%

541

531(2%)

5
4,654
805

2
4,836
672(65%)
4%
(17%)

5
4,446
802

2
4,524702(66%)
2%
(12%)

161
617
2.47132524
2.10(18%)
(15%)
(15%)

1326702.681115912.36(16%)
(12%)
(12%)

Revenues
For the 1Q/2024 financial results, the total consolidated revenues were 5,507 million baht, similar to last year,
and there is no sale of written-off receivables in the first quarter per usual. However, the revenue from hire purchase andother income surged significantly, especially the 19% increase in bad debt recovery.
However, this year the Company will focus on fee-based income expansion.
Revenues Structure
100%
80%

14%
5%

14%
5%

16%
5%

60%

47%

45%

45%

34%

36%

34%

2023Personal Loan
Hire Purchase

1Q24
Others

40%
20%0%
2022
Credit Card2- Credit Card
For the 1Q/2024 credit card revenue reported 1,898 million baht, decreased by 3% from previous year andaccounting of 34% of total revenues, however, the shopping spending were from payment for shopping with partnertraders, hypermarts, hotel bookings platforms in regards to the recovery of the tourism sector and hospitals, including
the launch of a new credit card product, namely the AEON NextGen Digital Credit Card, the Company's first digital credit
card that delivers innovation and advanced security verification solutions which is in line with the Company’s sustainable
development plan that focuses on creating a secure financial service for customers, including sale promotions andcampaigns and credit card revamping programs.
However, the slight reduction in credit card revenue is inline the higher minimum repayment rate increasingfrom 5% to 8% this year, and the number of full-payment was higher than last year.
- LoanThe income from loans in the consolidated financial statements amounted to 2,475 million baht for the1Q/2024, which reduced by 2% from last year. The income from loans has 45% proportion of total revenues.
However, the Company has expanded its service channels through the online platform, which is moreconvenient for customers and also reduces the Company's operating costs, allowing AEON card members to conduct
cash loan transactions through various channels. Therefore, cash withdrawals without using a card (Cardless Withdrawal)
accounted over 99% of the total personal loan sales as a result of success digitalization for the Company’s sustainability
development.
- Hire Purchase
The Company’s incomes from hire purchase in 1Q/2024 amounted to 283 million baht, increased 18% fromlast year as a result of hire purchase business growth in Thailand and CLM.
In addition, the Company has directions and policies for sustainable development and well aware of theESG impacts. Hence, in the 3Q/2023, the Company has initiated hire purchase loans for products that reducing
environmental impact, such as electric motorcycles and solar cells, which receiving good feedbacks from customers
since their consumption behavior has changed to place more importance to products that are environmentally friendly.
The Company also has plans to expand to other products in the future. In 4Q/2023, the Company has started to offer a
new financial product, title vehicle loan under the name AEON Auto Quick Cash, which is secured loan, to enable
alternative financial product to available to customers, especially to the current customers of the Company as a response
to social sustainability. This increases opportunities for customers to access credit more thoroughly.
- Others
In 1Q/2024, other incomes were 851 million baht. It comprised of an increase in bad debt recovery income
to 525 million baht or an increase of 19% from last year, indicating a better efficiency in debt collection, expediting casesand participating in the debt mediation project of the Legal Execution Department continuously. However, in 1/2024,
there was no income from the gain on sale of written-off receivables.

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Expenses
The Company’s expenses mainly consist of operating and administrative expenses, expected credit loss, andfinance cost. In 1Q/2024, the Company had total consolidated expenses of 4,836 million baht. Details of expenses areshown as follows:- Operating and Administrative ExpensesThe consolidated operating and administrative expense which including director and management
remuneration expense in 1Q/2024 were 2,187 million baht. As a result, the expense to income ratio (Cost-to-IncomeRatio) this year increased to 39.7%, driven from the expansion of subsidiaries in overseas. However, the Company will
be able to manage its efficiency in operating and administrative expenses well through the Digitalization process in thefuture. The separate financial statements has cost-to-income ratio at 38.3%, as there are increasing of incentives foroutsourced debt collector and one-time write off for terminated system.
- Expected Credit Loss (ECL)
The Bank of Thailand (BOT) increased the minimum credit card payment rate from a rate of 5% to 8%,
starting from January 1, 2024 onwards, which affects the quality of assets in Stage 3. However, the Company has set
aside Management Overlays which covered the exposure from the minimum credit card payment rate adjusting.
Therefore, the ECL expense in 1Q/2024 was totaled 2,089 million baht, caused by the seasonal impact in relating to manylong holidays during the first quarter, but maintained from the same quarter last year.
- Finance Cost
The Company recorded consolidated finance cost in 1Q/2024 of 558 million baht, in which increased
by 6% from the last year from the increase of policy interest rate. However, the Company has an appropriate capitalmanagement to optimize the efficiency of funding cost and the reduction of interest-bearing loans, along with liquiditymanagement. The average funding cost for 3-month period of fiscal year 2024 ended May 31, 2024 was 3.07%,
increased from 2.99% at the end of last year.
Net Profit
In 1Q/2024 and 3-month period of 2024 ended May 31, 2024 financial results, the consolidated profit attributable
to the owners of the parent for the period was reported at 524 million baht, reduced by 15% from last year and earningper share was 2.10 Baht. Moreover, the overseas subsidiaries in Cambodia, Myanmar and Laos generated revenues
and net profits for 1Q/2024 totaled 396 million baht and 26 million baht, respectively.
However, the subsidiary in Myanmar has suspended loan disbursement to new customers starting from February 24,
2024, due to the impact of the political turmoil in Myanmar.

42. Financial Status
Statement of Financial Position
Unit : Million Baht
Accounts Receivable
Total Assets
Total Borrowing
Total Liabilities
Equity Attributable to Owners of the Parent
ROE (attributable to owners of the parent)
ROA
D/E Ratio

February 29, 2024

May 31, 2024

91,30592,49962,51367,437
24,472
13.8%
3.5%
2.7

91,453
94,52863,601
68,68025,201
16.6%
4.3%
2.7

Change%YTD
0.2%
2.2%
1.7%
1.8%
3.0%
-Total Assets
As of May 31, 2024, the consolidated total assets were 94,528 million baht, increasing 2% from 92,499 million
baht as of February 29, 2024. The main assets were attributed to the portfolio of net account receivables which shared
88% of total assets.
- Accounts Receivable
The Company had accounts receivable of 91,453 million baht as of May 31, 2024, increased 0.2% fromthe end last year as of February 29, 2024. In the past quarter, the Company focused to activate low-risk customer groups
who have high spending power, high ability to repay debts. The accounts receivable consisted of credit card receivable
40,177 million baht, reducing 2% from end of last year; loan receivable 43,639 million baht, increased by 1% from end oflast year; hire purchase receivable 7,567 million baht, increasing by 14% from end of last year and other receivables 71
million baht.
- Allowance for expected credit loss
As of May 31, 2024, the Company provided allowance for doubtful accounts of 8,289.19 million baht,
stable from the end of last fiscal year, where the default receivables in credit risk (NPL Stage 3) in accordance with TFRS9
was 5.4% increasing from last quarter. The consolidated coverage ratio of allowance for expected credit loss to NPL(NPL Coverage ratio) was at 168%, decreased from 183% as of the end of last year, remained being at appropriate level.

5Liabilities
The consolidated liabilities of the Company as of May 31, 2024 totaled 68,680 million baht, a increase of 2%
from last year. There were both short-term and long-term borrowings totaled 63,601 million baht, decreasing by 2% fromthe end of last year. The portion of long-term borrowings was 34,053 million baht or represented 54% of total borrowings.
However, in order to manage risk that might occur from the fluctuation in foreign currencies, the Company has enteredcross currency interest rate swap contracts to fully hedge its debt.
Debentures, Solvency and Liquidity Management
As of May 31, 2024, the Company has outstanding long-term debentures, representing unsubordinated andunsecured debentures, amount 5,815 million baht, reduced from the outstanding of 5,966 million baht as of February 29,2024, with the interest rate ranged between 0.65%-3.18% (debenture details can be referred to the Financial Statement’snotes). However, the Company can maintain financial ratios and other requirements according to the conditions as
specified in the agreement and has debentures maturity due within 12 months amounted 1,999 million baht.
In addition, the Company has unused credit facilities of 11,220 million baht and committed credit facilities of
3,000 million baht with various financial institutions and cash and cash equivalent 4,286 million baht, which is sufficientfor the Company’s operation and debt payment.
Credit Ratings
The Company has received credit ratings and have reviewed annually by accredited credit rating agencies suchas Fitch Rating and Japan Credit Rating Agency. The credit rating details as of May 31, 2024 are as follows:
Credit Ratings

Credit Rating Agency
Fitch Ratings

A-/Stable

Japan Credit Rating Agency

A/Stable

Shareholders’ Equity
As of May 31, 2024, total equity attributable to owners of the parent amounted to 25,201 million baht, increasing
3% from as of February 29, 2024, Book value (attributable to the owners of the parent) as of May 31, 2024 was 100.8
baht per share, increased from that of 97.9 baht per share as of February 29, 2024.

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Debt to Equity ratio as of May 31, 2024 was at 2.7 times, stable from 2.7 times as of February 29, 2024. Returnon Equity (attributable to the owners of the parent) (ROE) and Return on Asset (ROA) for the 3-month period of 2024 are
16.6% and 4.3%, respectively.
Key Financial Ratio

Net Profit Margin (%)
Debt-to-Equity ratio (Times)
Cost-to-Income (%)
EPS (Baht)
Key Financial Ratio

Allowance for Expected Credit Loss/ Total Receivables (%)
NPL Coverage Ratio (%)
Book Value per Share(attributable to owners of the parent) (Baht)

FY2022
17.7%
3.1
35.0%
15.26

FY202315.20%
2.7
38.2%
13.04

1Q/2024
9.8%
2.7
39.7%
2.10

FY202210.8%
190%

FY20239.1%
183%

1Q/2024
9.1%
168%

91.3

97.9

100.8

Sustainability Development
The Company operates the business with awareness of environmental, social and governance and bring theSustainable Development Goals; SDGs as the part of organization driven continuously to respond client and all
stakeholders needs and to consecutively operate the business under the challenging situation.
Environmental
The Company has joined as a member in Greenhouse Gas Reduction workforce in Aeon Financial Services Group,Japan, in which established goals and short-term and long-term action plans to reduce greenhouse gas emissions toZero CO2 Society as follows;• 35% reduction within the year 2030
• Zero CO2 by the year 2040
The Company has implemented environmental development through strategic plans. Digitalization Roadmap since2017 and implementation of resource management in business operations, which are;
1. Reducing the use of paper and plastic;
2. Waste management; and3. Management of electrical energy, water, and fuel energy.

7SocialThe Company conducts business in accordance to human rights principles, based on its philosophy whichplaces importance to peace, human beings and society, which aims to conduct business with responsibility to bothcustomers; via the development of financial products and services regularly to enhance the financial service accessibility
and the use of financial services with safety and fairness, and employees; via our Human Resources Management policy
to treat employees equally through recruiting, providing a safe working environment and good occupational healthy
environment, performance appraisal, employee development, layoffs, and retirement processes.
In addition, the Company also supports various social projects through AEON Thailand Foundation with thefollowing objectives:
1. Promote and support forest conservation;
2. Promote education, including granting scholarships and/or donations to students and/or schools;
3. Develop Thai society and promote and support general public interest;
4. Conduct or cooperate with other charitable organizations. for public benefit; and5. Do not engage in any political activities.
Governance
The Company is aware of the industry risks, therefore, we place importance to technology development andmanagement as well as financial innovations in response to customer’s needs by focusing on providing personal loan
services responsibly and customer satisfaction. In addition, the Company develops corporate governance and risk
management continuously to maintain credibility and trust of all stakeholders. Besides operating under the supervisionof the SEC/SET, Bank of Thailand, related laws and regulations, the Company also complies ISO world-class standards
to control various operational processes to ensure that the Company conducts business with transparency and fairness
for stakeholders’ confidence.
Details of governance performance results in detail can be viewed in the Sustainability Report and 56-1 One
Report, Section 2, Corporate Governance and environmental, social and economic performance in detail can be viewed
in the Sustainability Report and Report 56-1 One Report, topic: Driving Business for Sustainability.

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