HomePro mulls CLMV investment
Slowing down Bangkok focus
SET-listed Home Product Center Plc (HMPRO) is considering expanding to neighbouring countries with a total investment budget of 6-7 billion baht, says Rakpong Aroonwatdhana, HomePro's head of investor relations.
The new investment will come from two sources, 2-3 billion baht from its own cash flow of and the rest will come from loans.
HomePro operates two branches in Malaysia, where it plans to open two or three branches in the near future. It is also exploring Cambodia, Laos, Myanmar and Vietnam (CLMV).
"HomePro is also is looking at expanding its business into CLMV within the next year or two," Mr Rakpong said.
Locally, it is considering opening only a few branches in Bangkok, and may invest in 3-4 branches of the Mega Home concept store in major provincial cities.
"Thailand's economy is relatively slow compared with other countries, so we would rather slow down domestically and strengthen our presence in new markets in Asean," Mr Rakpong said.
This year the company projects revenue growth between 8-12%.
Malaysia's retail business still has room to grow, Mr Rakpong said.
According to Bualuang Securities' research, HomePro, the country's leading home products and hardware retailer, will see a rise of 10% in sales revenue this year from 2016, with a net profit increase of 17%.
The key driver of revenue growth is Mega Home stores in upcountry provinces of Thailand and its stores in Malaysia.
The research also said HomePro's investment in CMLV will commence with Cambodia in 2018. The research agrees that the slow expansion in Bangkok is a good strategy to cope with the economic slowdown, while revenue growth still needs to be maintained.
Since Mega Home stores in provincial area have experienced strong growth, the research indicated HomePro should expand further into those areas.
HomePro reported total revenue for 2016 of 61.1 billion baht, up 8.7%, and a net profit of 4.13 billion baht, up 17.9%.
HMPRO shares closed yesterday on the Stock Exchange of Thailand at 9.70 baht, down five satang, in trade worth 129 million baht.