The Siam Makro business group structure of Siam Makro Public Company Limited or MAKRO merged with Lotus Group (LOTUS’s) is almost complete. On October 12, there will be a shareholders’ meeting via the system. online To approve the transfer of Lotus’s business both in Thailand and in Malaysia from CP Retail Holding Company Limited (CPRH).
MAKRO dart SET50
“Suchada Itthicharukul” Chief Executive Officer Siam Makro Business Group revealed that if 7% of minority shareholders voted for approval It is expected that within 3 weeks from the date of the shareholders’ meeting. Or around October 25, the business transfer process will be completed.
After that, the company prepares to seek approval from the Office of the Securities and Exchange Commission (SEC) for an initial public offering (PO) of more than 1.3 billion shares, which will increase the registered capital of the company to more than 5 billion. share
by the filing process The SEC should complete it within the second week of November 2021 and by the fourth quarter of this year, the company will be able to recognize revenue from Lotus.
“After this IPO This will allow Makro to increase its share distribution to minority shareholders (free float) to 15% from the current 7%, which will boost the flexibility of trading in the Thai stock market and support MAKRO. Listed in the SET50 index as well as a basket of major world stock indices.”
Double increase in total income
“Suchada” said that after the merger Makro will have doubled sales. From the current sales of more than 200 billion baht, but if compared in terms of total assets. The Lotus will have a larger size. because there is a proportion of rental income as well
“This is the strength of Lotus. that will help develop more rental space for Makro in the future and will cause Makro’s revenue portfolio structure to change from the original.”
Send “Lotus” to penetrate the community
by Makro itself There is also a plan to expand branches in Thailand to 144 branches by the end of 2021. From the current total of 139 branches, 5 more branches will be opened, which will focus on opening small to medium-sized branches with an area of 1,000-3,000 square meters to penetrate the food service market. This is the main roadmap for the next 3-5 years.
“While Lotus after rebranding There is a small downgrade to go fresh, focusing on selling fresh food close to home, so Lotus, with 1,600 branches, will gradually upgrade to go fresh and complete all branches next year.”
Put the flag of the ASEAN O2O retail leader
In addition, from the strengths in B2B (business to business) and B2C (business to customer) businesses, both companies have good background and long experience.
Makro has been in B2B business in Thailand for more than 32 years, while Lotus has been in B2C business for more than 27 years.
which after this Aims to be the leader in providing services to entrepreneurs and general customers through the leading O2O (online to offline) platform in Southeast Asia.
5 years, invest 1.3 billion
For the next five-year plan (2021-2025), the company has prepared approximately 130 billion baht in investments for Makro and Lotus businesses.
by developing distribution channels both domestically and internationally especially investment in branch expansion and digital Bringing more technology to the store Divided into investment of Makro about 60 billion baht and Lotus about 70,000 million baht.
“The benefit that the two companies will share is economy of scale, which results in a substantial reduction in costs. Because we will be using the same system. both back-end systems and database management programs This will make it work better and faster without adding more people.”
Carpeting to expand overseas branches
In addition, Makro has expanded its branches in more than 4 countries, totaling about 7 branches.
Consisting of 1. Cambodia 2 branches 2. Myanmar 1 branch 3. India 3 branches and 4. China 1 branch (Guangzhou) revenue accounted for about 5% of total revenue.
It aims to increase the proportion of foreign revenue to at least 10% of total revenue within the next 5 years from the recognition of revenue from branches in Malaysia and from the branch expansion plans of both companies.
“Now we have set up a team of foreign consultants. Study major countries in Southeast Asia such as Vietnam, Philippines, Indonesia, including the locations of countries that have already invested more. May be able to do business in both B2B and B2C form of self-investment or joint stocks with others This will depend on the rules in each country.” said Makro CEO
Positive factor “MAKRO” to large stocks
side “Threethip Wongsangpaiboon” senior director Kasikorn Securities Public Company Limited said that MAKRO shares will be more attractive. Because from the merger, many restrictions have been solved, such as increased free float, market capitalization. (market cap) after merging the opportunity to enter the SET50 list and have higher trading liquidity
However, MAKRO’s share price has responded to these issues quite well, so we need to keep an eye on the new share price offered to general investors through book building to see how the selling price will reflect the company’s future trends. which depends on the purchasing needs of investors
“The number of shares increased In the short term, earnings per share (EPS) will be diluted. Estimated in 2021, EPS will be at 1.16 baht per share, decreasing from the previous year at 1.37 baht per share. In 2022, EPS is expected to remain stable at 1.16-1.17 baht per share and will return to growth in 2023 at 1.50 baht per share, depending on incoming funds, share payments and interest expenses.”
In this regard, it is estimated that in 2021 MAKRO will have total revenue of 257,000 million baht, profit of 6,600 million baht (including Lotus revenue since Nov 2021), similar to the previous year, but in 2022 it is expected to reach 13 billion baht, a 99% growth. Revenue increased to 473,000 million baht.
“This year, the proportion of revenue and profit is still low. Because there is pressure from purchasing power and rental income that has not recovered. With an valuation of MAKRO’s 2022 share price target of Bt50, we recommend investors “HOLD” because the share price has already reflected some expectations for the future and factors have been diluted in the short term, but in the long term, they are optimistic.” senior director Kasikorn Securities said
