Board & Managements

Message from the Management

For the 2021 fiscal year, businesses have been continuously faced with volatility and uncertainties resulting from the COVID-19 situation from the previous year, which has directly and indirectly impacted the people’s socio-economic well-being. However, this situation has rapidly changed customer’s behavior and lifestyles by facilitating smartphones and contactless technology via online communication and payment transaction which has become a part of daily life. The company has also improved its operations and services in line with the challenges of the digital era.

The Thai economy in the fiscal year 2021 expanded by 1.6% (y-y), recovering from a contraction of 6.2% from previous year, due to an increase of export and private consumption, as well as an expansion of government investment. In addition, the domestic tourism sector also improved due largely to the fact that the government continued to relax its disease prevention and control measures. However, in December 2021, Thailand faced a new wave of the COVID-19 epidemic and the Russia-Ukraine conflict occurred in early March, 2022 that brought about a surge in oil prices along with the rise of global inflation.

In terms of Thai retail finance, the credit card business continued to face the impact from the pandemic resulting in a decrease of card spending in the first half of 2021. However, the Company has shifted its strategies through online channels in order to encourage credit card spending, and has introduced marketing campaigns with its business partners by providing appropriate products and digitizing the services with the customers’ convenience, rapidity and safety in mind.

In the fiscal year of 2021, the Company’s consolidated revenues were 20,791 million baht, decreased by 2% from the previous year. The decreased revenues due to the COVID-19 and politics in Myanmar as well as the Bank of Thailand cut the ceiling rates of interest rates on credit card from 18% to 16% per annum and personal loan from 28% to 25% per annum since August last year. In addition, the trading volume increased by 5% and the Company also has revenues from bad debt recovery continued growing by 16% y-y. In 2021, The Company reported consolidated net profit of 3,553 million baht, decreased by 4% y-y or EPS of 14.21 baht per share. For separate net profit of 4,133 million baht increased by 8% y-y respectively. In addition, the operating and administrative expenses and other expenses were 7,844 million baht, decreasing by 6% y-y. The decreased operating and administrative expenses were mainly from the reduction of personal expense by 3%, transportation expense by 30%, marketing expense by 14% and premises’ expenses by 11% respectively, The company average financial cost also decreased from last year to 2.41% while the expected credit loss (ECL) increased by 7% due to loans portfolio expansion by 4% from the last fiscal year, resulted in a ROE at 19.2% and ROA at 4.0%.

We are continuously improving the efficiency of internal workflows in our organization to increase efficiency and reduce operation costs as follows.

1. Collaborating back office operations through the Shared Service Center in Human Resource and Administration Departments to improve operational efficiency and integrated resources within the AEON group.
2. Shifting offline service platforms to E-service systems such as electronic know-your-customer (e-KYC) function, electronic payment invoice receipt service (E-statement) and credit card applications through AEON THAI MOBILE Application to reduce operation costs and become paperless.
3. Integrating a debt collection system process in the second phase and developing our Data Centralization. The new collection platform will improve efficiency and flexibility of debt management which reduces the ratio of delinquent receivables as well as supporting online operation platforms during the COVID-19 pandemic.
4. Implementing Artificial Intelligence (AI) on scoring models and offering promotions to increase customer engagement.

In terms of marketing strategies, we have focused on expanding our customer base to all target groups and providing appropriate products and digitizing our services to serve customers’ daily lifestyles:

• Transferring the insurance brokerage business from AEON Insurance service (Thailand) Co., Ltd. to AEON Thana Sinsap (Thailand) Public Company Limited to improve efficiency and reduce operation costs by cross-selling on a digitalization platform.
• Entering into a Joint Venture Agreement with BSS Holding Company Limited and Humanica Public Company Limited under “Rabbit Cash Company Limited”, to penetrate the digital lending market, with the Company holding 18% of the total shares
• Launching the “Cardless Transfer via PromptPay”, this cash loans service facilitates customers by transferring their credit limit to PromptPay accounts through the AEON THAI MOBILE Application.
• Launching “Happy Loan”, a Digital Lending service and installment payment which utilizes alternative data of customers without the need of salary slips for approval of loans.
• Launching “AEON Wellness Platinum Card”, a card that elevates life and health balance together with exclusive privileges of up to 15% discount at participated Hospitals and Pharmacy.

We have maintained our focus on the expansion of businesses in the Mekong Region (CLM) but the CLM has continued to be affected by the COVID-19 situation and political turmoil in Myanmar. Total revenues from overseas subsidiaries were 1,281 million baht, representing 6% of the Company’s total revenues.

Business Plan for 2022

The fiscal year 2022 marks the thirtieth year since the establishment of AEON Thana Sinsap (Thailand) PLC. We are facing several challenges from both internal and external factors such as the global economy, inflation, conflict in Eastern Europe and several waves of COVID-19 infections in Thailand.

However, our long experience and the fact that we have fostered organizational strength and complied with the standards of corporate governance have proven to be beneficial. Our management policy aims to achieve sustainable business growth and shareholder returns toward value chain transformation and new network platforms.

• With specific focus on Sustainable Development Goals “SDGs”, we conduct our business fully realizing the importance of social responsibility and environmental impacts with the goal of reducing environmental impacts and using resources efficiently. One example is in transforming plastic cards to electronic cards and becoming paperless. In addition, office spaces have been renovated to be clean, safe, and flexible as well as to increase work efficiency.
• Plan to launch a new credit card with a leading commerce platform, to increase more online platform for customers and expand our customer base
• Develop electronic know-your-customer function or (e-KYC) function via the AEON THAI MOBILE Application and AEON branches to increase the efficiency rate of credit approval.
• Digitalize operation platform on AEON virtual card via AEON mobile app to facilitate the customer lifestyles.
• Comply with the standard of Personal Data Protection Act 2019 (PDPA), the regulation of personal data protection included in the organization, internal and external data which will be effective on May 31, 2022,
• Conduct risk management to ascertain business risk and build a corporate structure to respond to unforeseen circumstances such as natural disasters, pandemics and IT risks.

With our commitment to sustain business development, we recognize the importance of ethical business operations and responsibilities to society and environment. The Board of Directors has reviewed our corporate governance principles and risk issues on a regular basis including other policies such as corruption prevention policy, no gift policy, anti-money laundering and counter financing of terrorism policy. These policies have been communicated across the board, from directors to management and all staff. Our emphasis is based firmly on integrity, business ethics and transparency in our business operations in order to achieve a long term and sustainable growth.

Finally, we wish to offer our sincere thanks and appreciation to our shareholders, customers, business partners, employees and all stakeholders for their continued support. We continue to be fully committed to the standards of corporate governance in order to achieve sustainable growth this year and in the years to come.