Management Discussion and Analysis
For the 3rd Quarter 2023 ended November 30, 2023
AEON Thana Sinsap (Thailand) Public Company Limited (“the Company”) has already submitted theconsolidated reviewed the 3Q/2023 financial statements as of November 30, 2023 which were reviewed 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 third quarter of 2023 expanded by 1.5%, decelerating from 1.8% in the second quarterof 2023 (%YoY) as a result of a slowdown in public investment and public consumption due to the delay of government’s
budget allocation, although the exports improved from the previous quarter continuously. Hence, the NESDB has cut
down its growth forecast for the Thai economy in 2023 to the range of 2.5% which is lower than the earlier expectation,in which the supporting factors still being the continuous recovery of the tourism sector, the private consumption and theprivate investment, while the headline inflation rate averaged of only 0.5%. The unemployment rate in 3Q/2023 wasslightly reduced down to 0.99% from the previous quarter. However, substance macroeconomic challenge is remained
as the level of household debt (seasonal adjusted) continued to increase from 90.7% in the 1Q/2023 of 2023 to 90.9 in
2Q/2023.
For the 3Q/2023, the Company has total new sales and credit card spending increased by 5% y-y, mainly due
to the continual increase in credit card spending and marketing with business partners. However, in regards to thecurrent economic situation which is in an improved trend but the risks to asset quality remained in concerns. TheCompany therefore remains cautious in expanding high-risk loans.
As of November 30, 2023, the Company had business distributions as below;
Number of Networks and Merchandise Partners

Feb 28, 2023

Aug 31, 2023

Nov 30, 2023

Branches
Bangkok
Province

104 branches
31%
69%

104 branches
30%
70%

102 branches
29%
71%

ATMs (machine)

146

141

137

Affiliated Dealers

5,846

5,646

5,524

Summary of Consolidated Financial Results
1. Operating Results
Profit and Loss Statement
Unit : Million Baht
Credit card income
Loan incomeHire-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)

2Q/23
1,968
2,554
248
907
5,676
2,070
1,949
574
1
4,594
1,082
218
842
3.37

3Q/23
1,989
2,411
249
755
5,405
2,114
1,899
511
(0.1)
4,524
881
171
706
2.82

Consolidated
%LQ
9M/22
1%
5,648(6%)
7,847
0.4%
774(17%)2,511(5%)
16,7802%
6,057(3%)
5,298(11%)
1,381(110%)2(2%)
12,739(19%)
4,401(22%)
815(16%)
3,122(16%)
12.49

9M/23
5,908
7,500
737
2,395
16,541
6,212
5,942
1,612
6
13,773
2,768
550
2,165
8.66

%LY
5%
(4%)
(5%)
(5%)
(1%)
3%
12%
17%
148%
8%
(31%)
(33%)
(31%)
(31%)

Revenues
For the 3Q/2023 and 9M/2023 financial results, the total consolidated revenues were 5,405 million baht and
16,541 million baht respectively, the total revenues for the 3Q/2023 reduced 5% from last quarter, because there is nosale of written-off receivables in this quarter. However, in comparison of the 9M/2023’s revenue to the same period lastyear, the revenue from credit card increased 5%, in line with continued growth in card spending. However, although theoverall economic growth rate of the country has a better outlook, it is lower than the situation prior to the Covid-19
pandemic, especially the export sector, although it has a better outlook in the third quarter. In additions, the household
debt rate remained high, the Company, therefore, implemented a more stringent credit lending policy in this quarter andfocus on specific customer groups to reduce the risk of asset quality by being conservative in personal loans and hirepurchase.

2Sales and Revenues Structure for the 9M/2023- Credit Card
For 9M/2023 financial results, credit card turnover accounted 68% of total turnovers with the 3Q/2023 credit
card revenue reported 1,989 million baht, making the 9M/2023 credit card revenue increased to 5,908 million baht or 5%
from the 9M/2022 and accounting of 36% of total revenues, as a result of an increase shopping spending such aspayment such as shopping with partner traders, hypermarts, hotel bookings platforms in regards to the recovery of thetourism sector and hospitals.
- Loans
For 9M/2023 financial results, loans turnovers shared 23% of total turnovers, while the income from loans in
the consolidated financial statements amount 2,411 million baht for the 3Q/2023 and amount 7,500 million baht for the9M/2023, which reduced by 4% from the 9M/2022. The income from loans has 38% 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 97% of the total personal loan sales as a result of success digitalization for the Company’s sustainability
development.
- Hire Purchase
For the 9M/2023 financial results, motorcycle and used car hire purchase in Thailand and electricalappliances, mobile phones and others in overseas business turnovers was 6% of total turnovers, resulted in theCompany’s incomes from hire purchase in the 3Q/2023 amounted 249 million baht, stable from the previous quarter andin the 9M/2023, the hire purchase income amounted 737 million baht and, increased 5% from the same period last year.
In addition, the Company has directions and policies for sustainable development and well aware of theESG impacts. Hence, in the second quarter of fiscal year 2023, the Company has initiated hire purchase loans forproducts that reducing environmental impact, such as electric motorcycles, which receiving good feedbacks from
customers since their consumption behavior has changed to place more importance to products that are environmentallyfriendly. The Company also has plans to expand to other products in the future.

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- Others
For the 3Q/2023 and 9M/2023 financial results, other incomes were 755 million baht and 2,395 million baht
respectively. It comprised of an increase in bad debt recovery income to 1,360 million baht or an increase of 13% fromthe same period last year and increased of 4% from the previous quarter, indicating a better efficiency in debt collection
continuously. However, in the 3Q/2023, there was no income from the gain on sale of written-off receivables.
Expenses
The Company’s expenses mainly consist of operating and administrative expenses, expected credit loss andfinance cost. For the 3Q/2023 and 9M/2023 financial results, the Company had total consolidated expenses of 4,524
million baht and 13,733 million baht respectively. Details of expenses are shown as follows:- Operating and Administrative Expenses and other expenses
The consolidated operating and administrative expense which including director and management
remuneration expense for the 3Q/2023 were 2,114 million baht, and for the 9M/2023 was 6,212 million, As a result, theexpense to income ratio (Cost-to-Income Ratio) this quarter increased to 39.1% from 36.5% in the previous quarter, due
to the deceleration of revenues. However, the Company can maintain its operating and administrative expenses wellthrough the Digitalization process, resulting in the 9M/2023’s Cost-to-Income Ratio maintained at 37.6% as expected.
The operating and administrative expenses accounted for 47% of total expenses.
- Expected Credit Loss
The consolidated expected credit loss in 9M/2023 amounted 5,942 million baht, remained higher incomparison to the same period in the previous year. However, for the 3Q/2023, the expected credit loss was reported
1,899 million baht, reduced continuously by 3% from the previous quarter by from the ability to control the quality ofassets in Stage 3 and better debt collection performance.
- Finance Cost
The Company recorded consolidated finance cost in the 3Q/2023 of 511 million baht, reduced by 11%
from last quarter in relating to the reduction of interest-bearing loans and in the 9M/2023, the financial cost reported 1,612
million baht, in which increased by 17% from the last year, with the 9M/2023 average funding cost 2.97%, increasingfrom 2.64% at the end of last year, due to the announcement of the Monetary Policy Committee (MPC) to increase thepolicy interest rate from 0.50% in 2022 to 2.50 as of November 2023.
Net Profit
In 9M/2023 financial results, the consolidated profit attributable to the owners of the parent for the period wasreported at 2,165 million baht, and earning per share was 8.66 Baht. And the profit attributable to the owners for theparent for the 3Q/2023 was 706 million baht, reducing 16% from the previous quarter, which equivalent to the earningper share of 2.82 baht. Moreover, the overseas subsidiaries in Cambodia, Myanmar and Laos generated revenues andnet profits for 9M/2023 ended 30 September 2023, totaled 5,883 million baht and 160 million baht respectively, in which
the net profit growth is 272% from the same period of previous year.

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 28, 2023

November 30, 2023

Change%YTD

93,937
95,207
66,13971,85922,821
17.9%
4.1%
3.1

93,894
94,33364,88370,01423,705
12.4%
3.0%
2.9

(0.05%)(0.9%)(2%)(3%)
4%-Total Assets
As of November 30, 2023, consolidated total assets were 94,333 million baht, stable from 95,207 million baht asof February 28, 2023. The main assets were attributed to the portfolio of net account receivables which shared 99.5% of
total assets.
- Account Receivables
The Company has account receivables of 93,894 million baht as of November 30, 2023, maintained
from February 28, 2023 due to the conservative approach in lending policy although the credit card sales continued togrow. The account receivables are consisting credit card receivable of 43,496 million baht, stable from end of last year;
loan receivable of 43,975 million baht, decreased by 2% from end of last year; hire purchase receivable of 6,343 million
baht, increasing by 15% from end of last year and others receivable of 81 million baht increased by 10% from end of lastyear.
- Allowance for expected credit loss
As of November 30, 2023, the Company provided allowance for doubtful accounts of 9,488 million baht,
where the default receivables in credit risk (NPL Stage 3) in accordance to TFRS9 was 6.23% slightly increasing from
6.18% last quarter although the default receivables in credit risk (Stage 3) is stable from the previous quarter, however,
due to the contraction of total account receivables, as a result, the NPL ratio still has not decreased immediately. The
consolidated coverage ratio of allowance for expected credit loss to NPL (NPL Coverage ratio) was at 162%, decreased
from 174% from the last quarter but being at appropriate level.

5Liabilities
The consolidated liabilities of the Company as of November 30, 2023 totaling 70,014 million baht, a decrease of
3% from as of February 28, 2023. There were both short-term and long-term borrowings totaled 64,883 million baht,
decreasing by 2% from the end of last year. The portion of long-term borrowings was 42,142 million baht or represented
65% of total borrowings. However, in order to manage risk that might occur from the fluctuation in foreign currencies,
the Company has entered cross currency interest rate swap contracts to fully hedge its debt.
Debentures, Solvency and Liquidity Management
As of November 30, 2023, the Company has outstanding long-term debentures, representing unsubordinatedand unsecured debentures, amount 8,562 million baht, reduced from the outstanding of 9,580 million baht as of February
28, 2023, with the interest rate ranged between 0.65%-3.18% (debenture details can be referred to the Financial
Statement’s notes). However, the Company can maintain financial ratios and other requirements according to theconditions as specified in the agreement and does not have any debentures maturity due within 12 months. As ofNovember 30, 2023, the interest bearing debt to equity ratio is 2.52 times, while the interest coverage ratio is 2.72 times.
In addition, the Company has unused unsecured revolving credit facilities of 8,100 million baht, 3,000 million
baht unused committed facilities with various financial institutions and cash and cash equivalent 3,159 million baht, which
is sufficient for the Company’s operation and debt payment.
Credit Ratings
The Company has received credit ratings and have them reviewed annually by accredited credit rating agencies
such as Japan Credit Rating Agency and Fitch Rating. The credit rating details as of November 30, 2023 are as follows:
Credit Ratings

Credit Rating Agency
Fitch Ratings

A-/Stable

Japan Credit Rating Agency

A/Stable6Shareholders’ Equity
As of November 30, 2023, total equity attributable to owners of the parent amounted to 23,705 million baht, anincrease of 883 million baht or 4% from the end of fiscal year 2022, Book value (attributable to the owners of the parent)
as of November 30, 2023 was 94.8 baht per share, increased from that of 91.3 baht per share as of February 28, 2023.
Debt to Equity ratio as of November 30, 2023 was at 2.9 times decreased from 3.1 times as of February 28,2023. Return on Equity (attributable to the owners of the parent) (ROE) and Return on Asset (ROA) for 9M/2023 are 12.4%
and 3.0%, respectively.
Key Financial Ratio
Ended 30 November

3Q/22

3Q/23

9M/22

9M/23

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

19.0%
3.3
35.0%
4.42

13.1%
2.9
39.1%
2.82

18.6%
3.3
36.1%
12.49

13.1%
2.9
37.6%
8.66

30 November,
2022
11.0%
196%

28 February,
2023
10.8%
190%

30 November,
2023
10.1%
162%

87.0

91.3

94.8

Key Financial Ratio

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

Sustainability Development
The Company operates the business with awareness of environmental, social and governance and bring the
Sustainable 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 2050
The Company has implemented environmental development through strategic plans. Digitalization Roadmap since2017 and implementation of resource management in business operations, which are;7

1. Reducing the use of paper and plastic;
2. Waste management; and3. Management of electrical energy, water, and energy.
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, 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 loanservices 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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