MAI-listed Siam Wellness Group Plc (SPA) expects its 2016 revenue will reach 680 million baht, a 30% increase from this year, thanks to its business expansion at home and abroad.
The company just awarded a spa franchise contract to Kunming Tailai Spa Management Co to use its Let's Relax brand in Yunnan, Chongqing and Sichuan in China.
"We hope royalty fees from the opening of spas in China will increase not only our revenue but also the bottom line," said chief executive Wiboon Utshajit.
The first spa in China will open in December. If the first branch receives a warm welcome from Chinese clients, then more spas are planned for Yunnan, Chongqing, and Sichuan. Each province has the potential to have 10 branches.
Siam Wellness is confident in its partner Kunming Tailai Spa Management as it has experience in the spa and hotel business.
Some 70% of customers at Let's Relax spas in Thailand are foreigners, and over half of those are Chinese.
"We are confident Let's Relax will be as successful in China as in Thailand", he said. Masseuses will be sent to China for training and to periodically check on service standards.
Next year the company plans to sign at least two franchise deals in Cambodia, Laos, Myanmar or Vietnam.
For local expansion, it set a budget of over 200 million baht to open six new spas, with three in Bangkok and three in the provinces. The plan is expected to raise revenue by 30% next year to 680 million baht.
The company is drafting a three-year strategic plan due to be completed next month. Overseas business expansion will be a focus because it expects the revenue contribution from overseas will account for at least 10% over the next three years.
Siam Wellness plans to develop spa products, which it now displays and sells only at its outlets, because clients have shown keen demand. The company is studying increasing its products and opening a flagship store in the second half of 2016.
It has 19 spas under three brands: Rarinjinda Wellness Spa, Let's Relax and Baan Suan Massage.
SPA shares closed yesterday unchanged on the MAI at 8.80 baht in trade worth 20.9 million baht.