Bangkok--14 Oct--APF
APF Group today announces its investment plans for 2009 with the main emphasis on investments in both non-bank financial institutions and real estate sectors that will yield good returns for stockholders regardless of the economic crisis around world, or even in Thailand. APF Group treats the current situation as a good opportunity for investment, with money ready to be invested in more than 10 projects. Between three and four projects are currently under negotiation. APF Group also reveals some of the main criteria for making an investment in any business which are the ability to adapt to the organizational culture, transparent management and apparent growth direction.
APF Group is fully supporting the newest company in the group, A.P.F. International Insurance Co., Ltd., while Group Lease Public Company Limited is showing excellent growth during the crisis situation. Furthermore, United Securities Plc. and United Asset Management Co., Ltd. are in the final phase of negotiations on International deals, and Zeavola Resort will definitely have positive cash flow this year. Wedge Holdings and Showa Rubber are negotiating further business in Thailand, Sanwa Tennis is preparing to open an Indoor Tennis Court and Sports Complex at the end of this year. The food industry business is the talk of the town amongst Thai and Japanese who love traditional Japanese recipes.
Mr. Mitsuji Konoshita, the Chairman of Asia Partnership Fund Group (APF Group), commenting on the investment direction of APF Group for 2009, said the investment policy of APF Group will still be based on mergers and acquisitions of potential businesses. The main sectors of interest are real estate and non-bank financial institutions, with some expansion to other interesting businesses. Nevertheless, the investment emphasis will be on businesses that will yield good returns for stockholders.
“APF still adheres to the same investment policy in becoming a main shareholder in the real estate and non- bank financial institution sectors.”
The global economic slowdown has resulted in many investors cutting back on their investments. In contrast APF Group sees this situation as an opportunity. With the right target and an effective management team that can operate the business for good returns, APF Group will carry on its investments, however those businesses must be a good synergy with the companies that have previously been taken over and invested.
“We are looking at the non-bank financial institutions too. There were some discussions, both in Thailand and Japan, including with a company that is registered on the stock market. We pay attention to businesses in Asia because there are currently investors who financially support APF Group in more than 10 projects. Of these projects between three and four are in the negotiation phase. We are ready for investment.”
So far, all of the businesses under APF Group have been successful because the group adheres to the organization culture with the same direction of thinking and transparent management. Therefore the main criteria when selecting any business is the transparency of management within the organization. For example, the company must abide by the rules, be of a suitable standardand follow the regulations of the Stock Exchange of Thailand. As well as the expected returns, the group also pays attention to the company’s direction of future growth. This is because each investment is planned for the long term. Presently, each of the businesses that APF Group has invested in is beginning to make a profit. Some businesses are actually earning more profit than expected, such as Group Lease Plc. which is showing an excellent growth trend.
“Currently we have three of four projects under negotiation. Some developments may occur rapidly but most of the time it depends on the seller, not on APF Group. The projects we will be investing in are in Thailand and overseas. The overseas project will be with a company that is registered on the stock market. We already have some initial discussions with two organizations and some deals may be done within this year. The businesses in Thailand are definitely non-bank and real estate businesses.
The investment portfolio of APF Group is currently around US$ 1 billion while the investment in Thailand is currently around US$ 100 million. The increasing investment portfolio is partially because of the increasing amount of assets and the increasing value of assets the company has invested in, not only from the purchase of assets.
Mr. Mitsuji talks about the company investment in some interested groups, such as APF International Insurance Co., Ltd. (APFII), the newest company in the group which is currently under readjustment in the organization chart. The Group will increase APFII’s capital amounting of Baht 50 million during October to support business expansion, and an increasing numbers of clients. This is due to an expected increase in sales volume in the final quarter of 2008, and the capital increase should be sufficient until March 2009. The Group also plans to increase APFII’s capital again during 2009.
“We have no problems increasing the capital for APFII. We are ready to add more if necessary. After this increase in capital, we will consider how much we have to increase for next year. Jobs from other companies in the group will partly increase the number of clients for APFII, especially the motor sector. There are also some ongoing discussions regarding expansion into other fields.”
The main function for United Securities Plc (US) is to undertake various deals for APF Group. On the business side, US will be growing constantly with a policy that emphasis low-cost management with high returns. There will also be some discussions to find additional alliances or increasing the number of clients in order to increase the trading activity.
For United Asset Management Co., Ltd. (UAM), the company is currently negotiating alliances in the Middle East, Japan and Singapore. The Middle East is considered to be an especially high potential market. The company has proposed investment channels in Thailand of the Exclusive Service type, which is a large market with high buying potential. After the deal is done, the number of client will increase and business expansion will be dramatically elevated. Moreover UAM has also expanded its business base to clients by managing the investment portfolio for the other group companies such as APFII.
“Concerning portfolio management for the insurance businesses, the initial stage investment will be between Baht 50 and 60 million, with emphasis on short term investments with high returns. Because the insurance against loss business requires liquidity for claims it is different from the life insurance business which is aimed more long term.”
Since APF Group has invested in Group Lease Plc (GL), the loan portfolio has growing by more than 60%. Recently, the board of directors approved an agreement to increase the registered capital from Baht 275 million to Baht 399 million. The increase will be achieved by issuing new common stock with a value of Baht 124 million, warranted to be offered to existing stockholders proportionately, and ESOP warrants to be allocated to GL directors and employees, including reserved shares for such warrants and ESOP warrants. .
“Issuing more security is done to keep the liability per investment ratio and to raise funds for liquidity for the business operation. This is a process to increase liquidity status, to strengthen the financial structure, and decrease long term risks which are unpredictable in the current economic climate. If we can maintain the quality of debtors and keep the NPL management to a low rate, it will be sufficient to maintain the current growth rate.”
APF took over the Zeavola Resort business in March 2008. Looking at the turnover rate, the month to month comparison is actually better than last year in every month. The company has launched new packages that are more interesting and accepted by tourists, such as wedding packages, and the pool villas which are expected to finish this month have also generated much interest. APF Group expects to see positive cash flow this year and anticipates more growth next year from plans to have more marketing to the Japanese market, while seeing the European and American market still growing well.
“We are able to generate profit from the business because we have an effective management on capital, such adjustments on the package to be more appropriate, and adjustments on the service fee. In addition we have improved the spa facilities and boutiques which has generated additional income. At the present time we are making further investments to provide our guests with an even better experience and make our operations more efficient.”
Regarding progress for businesses in Japan, such as Wedge Holdings Co.,Ltd. which operates a complete entertainment business, there have been adjustments to the organizational structure, and there are plans to expand the business into Thailand. Currently the company is in negotiations with a major company in the music industry and an animation production company in Thailand. The expectation is that by the end of this year or early next year everything will become much clearer.
Showa Rubber Co., Ltd., a major company in Japan that operates a complete business in rubber tree products, will soon have a meeting with some rubber trees plantation entrepreneurs with two possible resolutions. This will either involve importing more rubber trees from Thailand to Japan or investing in Thailand. At the moment things are under consideration regarding the investment appropriateness and economic conditions of both countries.
In the sports business the Sanwa Group, including Sanwa Tennis Academy, is now located on Sukhumvit 24. A new indoor tennis court is under construction and it is expected to be completed around the end of December 2008 with a Grand Opening later on. This business has acquired international standards and has achieved constant growth. “The court is expected to be completed around 20 December 2008. There will be a large clubhouse. This business has an excellent growth rate.
For more information please contact
Samorn Phooim (Oi) Mobile: 081-984-4814
Tipsukon Kaoborom (Kwan) Mobile: 081-635-5205