Management Discussion and Analysis
For the 1st Quarter 2022 ended May 31, 2022
AEON Thana Sinsap (Thailand) Public Company Limited (“the Company”) has already submitted theconsolidated reviewed the 1st quarter financial statements as of May 31, 2022 which were reviewed by Deloitte
Touche Tohmatsu Jaiyos Audit Company Limited. The operating performance is summarized are as follows.
Overview
According to the Bank of Thailand and Office of the National Economic and Social Development Board
data. The Thai economy in the first quarter of 2022 expanded by 2.2% (y-y), accelerating from 1.8% growth inthe previous year due to continue an increase of export and private consumption, as well as an expansion ofprivate investment. In addition, there were supporting factors from domestic demand from the recovery of thetourism sector and the return of foreign tourists. However, economic expansion remains at risk from the impactof higher cost of living on households and headline inflation tends to rise mainly form energy prices. Therefore,
the unemployment rate at 1.53% in the first quarter of 2022 dropped from the previous year and household
debt tends to increase due to rising prices of consumer goods.
The Company performance of the first quarter of 2022, the Company has total new sales increased
by 41% y-y, mainly due to the continual increase in credit card spending through online channels andmarketing with business partners. In the first quarter of 2022, online credit card spending shared 18% of total
spending
As of May 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)

May 31, 2021
2.98

May 31, 2022
3.15

BranchesBangkok
Province
ATMs (machine)

6.27
102 branches
29%
71%
407

6.37
103 branches
30%
70%
309

Affiliated Dealers

6,260

6,192

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

Consolidated

Separate

1Q/21 4Q/21 1Q/22 %QoQ %YoY

1Q/21 1Q/22 %YoY

Credit card income
Loan income
Hire-purchase income
Other income

1,550
2,612
273
607

1,642
2,572
268
712

1,810
2,628
267
780

10%
2%
-0.3%
10%

17%
1%-2%
29%

1,549
2,551
84
690

1,7732,603
65
857

14%
2%
-23%
24%

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)

5,041
1,921
1,226
453
2
3,602
1,439
355
1,149
4.60

5,194
1,987
1,619
418
3
4,026
1,169
231
911
3.64

5,485
2,033
1,563
437
2
4,035
1,450
291
1,115
4.46

6%
2%
-3%
5%
-33%
0.2%
24%
26%
22%
23%

9%
6%
28%
-4%
0%
12%
1%-18%
-3%
-3%

4,874
1,732
872
471
1
3,076
1,797
317
1,480
5.92

5,297
1,853
1,530
458
2
3,844
1,454
259
1,194
4.78

9%
7%
75%
-3%
100%
25%
-19%
-18%
-19%
-19%

Revenues
In the first quarter of 2022 ended May 31, 2022, the total consolidated revenues were 5,485 million
baht, showing an increase of 443 or 9% y-y. This was mainly increased in credit card income by 17%, in linewith the higher of credit card spending and cash advance in this quarter and other incomes in bad debt
recovery increased by 17% y-y. As of May 31, 2022, the Company has active customers more than 2.6 million
IDS, mainly from Bangkok 30%, and in up-country 70%. For overseas business in Cambodia, Myanmar andLaos, they have active customers more than 118,000 customers representing 5% of active customers of theCompany. Details of each business can be described as follows:2

Sales and Revenues Structure for the first quarter of 2022

- Credit Card
In the first quarter of 2022, credit card turnover accounted for 69% of total turnovers with revenueof 1,810 million baht, an increase of 260 million baht or 17% y-y. As a result of the relaxation of various
measures, recovery of the tourism sector and also credit card spending increased by 18% y-y. For overseas
business, AEON Specialized Bank (Cambodia) Plc had credit card revenue in the first quarter of 2022 of 37
million baht, grew by 28% y-y.
- Loans
In the first quarter of 2022, loans shared 25% of total turnovers with the revenue of 2,628 million
baht, an increase of 17 million baht or 1% y-y and 48% of total revenues. Moreover, loan income from AEON
Specialized Bank (Cambodia) PLC of 57 million baht, dropped by 21% y-y and AEON Microfinance (Myanmar)
Company Limited of 1 million baht, decreasing by 97% y-y due to the impact of the political turmoil in Myanmar
as a result of temporarily suspended new loans to customers since February 1, 2021. However, AEON
Microfinance (Myanmar) Company Limited has resumed providing new loans to existing customers starting
January 22, 2022. The subsidiary has continuously reduced operation costs and continued pursuing debt
collection accordingly.
However, the Company has been expanding more online service channels to customers and reduced
the Company’s operation cost. As a result, the Cardless transactions currently accounted for 91% of total
personal loan sales.

3- Hire Purchase
For the first quarter of 2022, motorcycle and used car hire purchase in Thailand and electricalappliances, mobile phones in overseas business, with the revenues of 267 million baht, decreased by 6 million
baht or 2% y-y. In addition, hire purchase income from AEON Specialized Bank (Cambodia) Plc was 172 million
baht, increased by 8% y-y and AEON Leasing Service (Lao) Company Limited of 29 million baht, increased by
4% y-y.
- Others
For the first quarter of 2022, other incomes were 780 million baht or 14% of total revenues, showing an increaseof 173 million baht or 29% y-y. Other revenues consist of bad debt recovery, which was 385 million baht or 7%of total revenues, gain on sales of written-off receivables was 105 million baht, collection service income was56 million baht, insurance broker business income was 179 million baht, and others of 54 million baht
respectively. Other revenues was mainly from the continued growth of bad debt recovery that increased by
17% y-y caused by the increased of expedite the legal process and insurance broker business income grewby 19% y-y due to high operation through AEON THAI MOBILE Application and Big C counter.
Expenses
The Company’s expenses mainly consist of operating and administrative expenses, expected credit
loss and finance cost. For the first quarter of 2022, the Company had total consolidated expenses of 4,035
million baht, an increase of 433 million baht or 12% y-y. Details of expenses are shown as follows:- Operating and Administrative Expenses and other expenses
For the first quarter of 2022, the consolidated operating and administrative expense and otherexpenses were 2,035 million baht, increased by 112 million baht or 6% y-y due to increase of advertisingexpense 55% y-y. However, the Company still maintained effective operating cost control with cost to income
ratio at 37% of total revenues. Considering the Company’s separate financial statement, the operating andadministrative expenses as a percentage of revenues was 35%.
- Expected Credit Loss
The consolidated expected credit loss in the first quarter of 2022 amounted to 1,563 million
baht, increased by 338 million baht or 28% y-y but dropped by 3% q-q. This result from increasing of writtenoff receivables as well as the Company has also set management overlay for a hedge with probable forward
looking macroeconomics factors. Net credit cost was at 5.1% increased from 4.1% in the first quarter of 2021
but dropped from 5.8% in the last quarter.
- Finance Cost
The Company recorded consolidated finance cost in the first quarter of 2022 of 437 million
baht, decreased by 4% y-y, which the portion of finance cost in the first quarter of 2022 was 8% of total
revenues. The average funding cost in the first quarter of 2022 was at 2.48% decreased from 2.66% last year.

4Net Profit
In the first quarter of 2022, consolidated operating income was reported at 1,450 million baht, an
increase of 10 million baht or 1% y-y. The Company recorded net profit of 1,115 million baht, a decrease of 35
million baht or 3% y-y but increased by 22% q-q, earning per share was 4.46 baht.
2. Financial Status
Statement of Financial Position
Unit : Million Baht
Accounts Receivable
Total Assets
Total Borrowing
Total Liabilities
Total Equities
ROE
ROA
D/E Ratio

February 28, 2022 May 31, 2022
91,02890,46965,41870,205
20,264
19.2%
4.0%
3.5

92,72893,092
66,362
71,37921,713
21.7%
4.9%
3.3

Change%YoY
2%
3%
1%
2%
7%
13%
23%
-6%

Total Assets
As of May 31, 2022, consolidated total assets were 93,092 million baht, an increase of 2,623 million
baht or 3% from 90,469 million baht as of February 28, 2022 due to new sales in domestic increase by 41%
y-y. The main assets were attributed to the portfolio of net account receivables which shared 88% of total
assets.
- Accounts Receivable
The Company has accounts receivable of 92,728 million baht as of May 31, 2022, increased
by 2% from as of February 28, 2022 due to increase of number of credit cards and spending and relaxing
disease prevention of COVID-19. This can be categorized by business type as follows: credit card receivableof 40,807 million baht, increasing by 4% y-y; loans receivable of 46,194 million baht, increased by 1% y-y; hire
purchase receivable of 5,641 million baht, decreasing by 4% y-y and others receivable of 86 million baht
decreased by 27% from last year accordingly.
- Allowance for expected credit loss
As of May 31, 2022, the Company provided allowance for doubtful accounts of 10,772 million
baht or 12% of total accounts receivable, decreasing from 10,951 million baht or 12% of total accounts
receivable at the end of previous fiscal year. For default receivables in credit risk (NPL Stage 3) was 5.3%
close to the last quarter which decreasing from 5.7% y-y. The consolidated coverage ratio of allowance for
expected credit loss to NPL (NPL Coverage ratio) was at 219% decreased from 247% from fiscal year of 2021
and 225% from the previous year.
Liabilities

5

The consolidated liabilities of the Company as of May 31, 2022 totaling 71,379 million baht, an
increase of 1,174 million baht or 2% from 70,205 million baht at the end of previous year. There were both
short-term and long-term borrowings totally 66,362 million baht, increasing by 1% from the end of last year.
The portion of long-term borrowings was 38,857 million baht or represented 59% of total borrowings. To
manage risk that might occur from the fluctuation in currency. The Company has entered cross currencyinterest rate swap contracts to hedge its debt. In addition, the Company has unused unsecured revolving
credit facilities 11,340 million baht and 3,000 million baht unused committed facilities with various financial
institutions which is enough to drive the Company’s operation. 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 aworking capital to repay as scheduled. In addition, the resolution of the Annual General Meeting of
Shareholders for the year 2022 held on June 24, 2022 had approved the issuance and offering of debenturesin the amount of not more than 10 billion baht.
Shareholders’ Equity
As of May 31, 2022, total equity attributable to owners of the parent amounted to 21,294 million baht,an increase of 1,405 million baht or 7% from the end of fiscal year 2021, Book value as of May 31, 2022 was
85.2 baht per share, increased from that of 79.6 baht per share as of February 28, 2022.
Debt to Equity ratio as of May 31, 2022 was at 3.3 times decreased from 3.5 times at the end of 2021.
Return on Equity (ROE) and Return on Asset (ROA) for the first quarter of 2022 are 21.7% and 4.9%,respectively.
Key Financial Ratio

1Q21

FY21

1Q22Net Profit Margin (%)

22.8%

17.1%

20.3%

Interest Coverage ratio (Times)

4.2

3.6

4.3

Allowance for Expected Credit Loss/ Total Receivables (%)

12.8%

12.0%

11.6%

NPL Coverage Ratio (%)

225%

247%

219%

Cost to Income (%)

38.1%

37.7%

37.1%

Book Value per Share (Baht)

72.6

79.6

85.2

EPS (Baht)

4.60

14.21

4.466