Management Discussion and Analysis
Fiscal year ended February 28, 2023
AEON Thana Sinsap (Thailand) Public Company Limited (“the Company”) has already submitted theaudited financial statements for the year ended February 28, 2023 which were audited 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 4Q/2022 expanded by 1. 4% y-y, slower than the expansion of 4.6% y-y in theprevious quarter from the contraction of the industrial sector that reduced the production of industrial products
due to higher production costs, a lower domestic demand and lower demands from trading partners in relevantto their economic slowdown, despite the acceleration in agricultural production and service and tourism
industries, resulting in GDP in 2022 being 2.6%, lower than expectation. However, the economic expansion is still
subjected to the rising cost of living, in which the inflation rate in 4Q/2022 reached 5.8%, the household debt ratio
is considered high amid the increasing trend of interest burden but having a tendency to decline as the GDP isexpanding. Moreover, the number of unemployed in the 4Q/2022 amounted 4.62 hundred thousand people, oran unemployment rate of 1.2%, remained stable from the previous quarter. Although the numbers indicated abetter direction comparing to the previous year, but the current unemployment rate has not yet returned to thepre-Covid-19 level.
The company performance of the fiscal year of 2022, the Company has total sales (turnover) increaseby 23.4% y-y, with the focus on credit card business, as a result of new product launching in accordance to theDigitalization roadmap and marketing strategies such as AEON 30th Years Anniversary campaign, AEON ROP
World Mastercard campaign and acquisition of new customers, driving the loan portfolio to reach 93,937 million
baht, 3.2% growth y-y.
As of February 28, 2023, the Company had total cards and distribution networks as below;
Number of AEONTS Cards and Networks

February 28, 2022

February 28, 2023

Number of Credit Cards (million cards)
Number of Member Cards (million cards)
Branches
Bangkok
Province
ATMs (machine)

3.07
6.34101 branches
30%70%
389

2.96
6.51
104 branches
30%70%
146

6,328

5,846

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

4Q/22

Consolidated%QoQ FY21 FY22%YoY

Separated
FY21 FY22 %YoY

Credit card income
Loan income
Hire-purchase income
Other income

1,994
2,538
255
766

1.7%
-1.9%
0.4%
-24.6%

6,462
10,368
1,073
2,888

7,642
10,385
1,029
3,277

18.2%
0.2%
-4.1%
13.5%

6,370
10,209
309
2,829

7,488
10,274
246
3,108

17.6%
0.6%
-20.4%
9.9%

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)

5,553
2,060
1,965
523
96
4,644
909
180
692
2.77

-4.6%
1.0%
4.3%
10.0%
3,086%
5.6%
5.8%-36.0%-37.1%-37.3%

20,791
7,832
6,629
1,745
11
16,218
4,573
1,000
3,553
14.21

22,332
8,117
7,263
1,904
98
17,382
4,950
996
3,815
15.26

7.4%
3.6%
9.6%
9.1%
784%
7.2%
8.2%
-0.4%
7.4%
7.4%

19,717
7,029
5,771
1,826
10
14,636
5,081
947
4,133
16.53

21,116
7,387
7,070
1,970
96
16,524
4,591
881
3,711
14.84

7.1%
5.1%
22.5%
7.9%
860%
12.9%
-9.6%
-7.0%
-10.2%-10.2%

Revenues
In the fiscal year ended February 28, 2023, the total consolidated revenues were 22,332 million baht,
increasing of 1,541 million baht or 7.4% y-y. In 4Q/2022, the Company’s revenues were 5,553 million baht,decreasing of 266 million baht or decreasing 4.6% q-q. The increased in revenues was a result of growth inrevenue of the Company's core businesses, especially the credit card income which having 18.2% growth y-y.
Hence, the growth of revenue, especially credit cards, was mainly derived from marketing activities to stimulatecredit card spending and acquisition of new credit card customers.
In addition, our consolidated revenue from Personal Loan were 10,385 million baht, stable fromprevious year and consolidated hire-purchase income were 1,029 million baht, reduced by 44 million baht ordecreasing 4.1% y-y due to selective approach in credit judgement amid remaining high risky economic factors
in this year.
However, the Company has other income for fiscal year 2022 amounted 3,277 million baht, 13.5%
growth y-y. Details of each business can be described as follows:2

Sales and Revenues Structure for the fiscal year 2022
Revenues

Turnovers
2%5%

15%
22%
5%

Turnovers

Total Revenues

100,145

22,332Million Baht

Million Baht

46%

34%
70%

Personal Loan

Credit Card

Hire Purchase

Others

Personal Loan

Credit Card

Hire Purchase

Others- Credit Card
For the fiscal year 2022, credit card sales accounted for 70% of total turnovers with revenue of 7,642
million baht, an increase of 1,180 million baht or 18.2% y-y. Although, for the fourth quarter of 2022, credit card
revenue was 1,994 million baht, an increase of 21.4% y-y and 1.73% q-q. For overseas business, AEON
Specialized Bank (Cambodia) Plc had credit card revenue in the fiscal year of 2022 of 154 million baht, grew by27.9% y-y.
- Loans
For the fiscal year 2022, loans shared 22% of total turnovers with the revenue of 10,385 million baht,
accounting of 46% of total revenues, stable from previous year. In the fourth quarter of 2022, loans revenue was2,538 million baht, stable from the same quarter of last year and decreasing 1.9% q-q. Moreover, loan income
from AEON Specialized Bank (Cambodia) PLC of 217 million baht, dropped by 17.2% y-y.
- Hire Purchase
For the fiscal year of 2 0 2 2, motorcycle and used car hire purchase in Thailand and electricalappliances, mobile phones in overseas business, with the revenues of 1,029 million baht, decreasing by 44 million
baht or 4.1% y-y. In addition, hire purchase income from AEON Specialized Bank (Cambodia) Plc was 681 million
baht, increasing by 4.4% y-y and AEON Leasing Service (Lao) Company Limited of 102 million baht, decreased
9.6% y-y.
- Other Incomes
For the fiscal year of 2022, other incomes were 3,277 million baht, accounting of 14.7% of total revenue,
showing an increase of 389 million baht or 13.5% y-y. Other revenues consist of bad debt recovery, which was1,696 million baht, 19.2% growth y-y, gain on sales of written-off receivables was 405 million baht, 26.5% growthy-y, collection service income was 226 million baht, 7.7% growth y-y, insurance brokerage commission income
was 689 million baht, stable from the previous year, and others of 262 million baht respectively. The growth of3other incomes revenue was contributed mainly from the continued growth of bad debt recovery and gain on saleof written-off receivables.
For the fourth quarter 2022, other income revenues were 766 million baht, and it did not have income
from bad debt recovery.
Expenses
The Company’s expenses mainly consist of operating and administrative expenses, expected credit
loss and finance cost. For the fiscal year of 2022, the Company had total consolidated expenses of 17,382 million
baht, an increase of 1,164 million baht or 7.2% y-y. For the fourth quarter of 2022, the consolidated expenses
were 4,644 million baht, increasing 5.6% q-q. Details of expenses are shown as follows:- Operating and Administrative Expenses and other expenses
For the fiscal year of 2022, the consolidated operating and administrative expense and other expenses
were 8,117 million baht, increasing by 285 million baht or 3.6% y-y. The increase in operating and administrative
expense was mainly from the increasing of marketing expense compared with the last year. For the fourth quarterof 2022, the consolidated operating and administrative expenses were 2,060 million baht, an increase of 1.0% qq. However, the Company still maintained effective operating cost control with cost to income ratio at 36.4% of
total revenues, reduced from 37.7% of previous year significantly. Considering the Company’s separate financialstatement, the operating and administrative expenses as a percentage of revenues was 35.0% in the fiscal yearof 2022.
- Expected Credit
The consolidated expected credit loss in the fiscal year of 2022 amounted to 7,263 million baht,increasing by 9.6% y-y.
- Finance Cost
In 2022, the results of the Monetary Policy Committee (MPC) meeting resolved to raise the policy
interest rate by 0.25% per, total 4 times in roll, resulting in the increment of policy rate of 1.00%, to 1.50% per year.
As at the end of fiscal year 2022, despite the gradual increase in the policy interest rate to cope with the pressure
from the high inflation rate in the country, the Company was still able to effectively manage its financial costs. The
Company recorded consolidated finance cost in the fiscal year of 2022 of 1,904 million baht, increasing by 9.1%
y-y, the average funding cost is 2.64%. For the fourth quarter of 2022, the finance cost was 523 million baht,increasing by 10.0% q-q.
Net Profit
For the fiscal year of 2022, consolidated operating income was reported at 3,815 million baht, an increase
262 million baht or 7.4% y-y or earning per share of 15.26 baht due to the growth of loan portfolio specially thecredit card business. Moreover, the operating cost has been managed with higher efficiency.

42. Financial Status
Statement of Financial Position
Unit : Million Baht
Accounts Receivable

28 February 2021

28 February 2022

%YoY

91,02890,46965,41870,20519,889
19.2%
4.0%
3.5

93,937
95,20766,055
71,85922,821
17.9%
4.1%
3.1

3.2

Total Assets
Total Borrowing
Total Liabilities
Equity Attributed to Owners of the Parent
ROEROAD/E Ratio

5.2
1.0
2.4
14.7
-Remark: ROE = Profit (Loss) Attributable to Owners of the Parent/Equity Attributed to Owners of the Parent

Total Assets
As of February 28, 2023, consolidated total assets were 95,207 million baht, an increase of 4,738
million baht or 5.2% from last year. The majority of assets is loan portfolio account receivable, which accountingof 88.0% of total assets.
- Account Receivable
As of 28 February, 2023, the Company has accounts receivable of 93,937 million baht, increased by
3.2% from last year, in which consisting of domestic loan book amounted 88,861 million baht, 4.0% growth y-y,which can be classified by loan types as; number of credit cards receivable 43,474 million baht, 10.6% y-y; loans
receivable of 44,878 million baht, decreased by 1.8% y-y; hire purchase receivable of 5,511 million baht,decreasing by 6.5% y-y and others receivable of 73 million baht decreased by 37.6% from last year respectively.
- Allowance for expected credit loss
As of February 28, 2023, the Company provided allowance for doubtful accounts of 10,125 million baht
or 10.8% of total accounts receivable, decreasing from 10,951 million baht or 12.0% of total accounts receivable
at the end of previous fiscal year due to the business is returning to normal situation. The consolidated delinquentaccount receivables for 3 months and up was 5.5%. For default receivables in credit risk (NPL Stage 3) was 5.7%.
The separated delinquent account receivables for 3 months and up was 5.2% and the default receivables in credit
risk (NPL Stage 3) was 5.4%. As at 28 February, 2023, the consolidated coverage ratio of allowance for expectedcredit loss to NPL (NPL Coverage ratio) was at 190%.
Liabilities
The consolidated liabilities of the Company as of February 28, 2023 totaling 71,859 million baht, an increaseof 1,654 million baht or 2.4% y-y from 70,205 million baht at the end of previous fiscal year. There were both shortterm and long-term borrowings totally 66,055 million baht, increasing by 1.0% from the end of last year. The portionof long-term borrowings was 48,733 million baht or represented 74% of total borrowings, increased/decreased from5the previous year to manage risk that might occur from the fluctuation in interest rate. However, for the risk ofcurrency, the Company has entered cross currency interest rate swap contracts to hedge its debt. In addition, theCompany has unused unsecured revolving credit facilities 12 ,370 million baht and 3,000 million baht unused
committed facilities with various financial institutions which is sufficient to support the Company’s operation andbusiness expansion. The Company also does not have the debentures that will mature within 12 months. The
company's credit rating by Fitch Rating remains at A-(tha)/Stable Outlook.
Shareholders’ Equity
As of February 28, 2023, total shareholders’ equity attributed to owners of the parent amounted to 22,821
million baht, an increase of 2,932 million baht or 14.7% y-y, Book value as of February 28, 2023 was 91.3 baht pershare, increased from 79.6 baht per share as of February 28, 2022.
Debt to Equity ratio as of February 28, 2023 was at 3.1 times, continued decreasing from 3.5 times ofprevious year. Return on Equity (ROE) and Return on Asset (ROA) for the fiscal year of 2022 are 17.9% and 4.1%,
respectively.
Key Financial Ratio

4Q/2021

4Q/2022

FY2021

FY2022

Net Profit Margin (%)

17.5%

12.5%

17.1%

17.1%

Interest Coverage Ratio (Times)

3.8

3.1

3.5

3.1

Cost to Income (%)

38.3%

37.1%

37.7%

36.4%

EPS (Baht)

3.641.72

14.21

15.26

Key Financial Ratio

As of
28 February 2022

As of
28 February 2023

Allowance for Expected Credit Loss/Total Receivables (%)

12.0%

10.8%

NPL Coverage Ratio (%)

247%

190%

Book Value per Share (Baht)

79.6

91.3

6