Mr. Megumu Motohisa, Executive Chairman of GMO-Z com Securities (Thailand) Public Company Limited (Z) ("Company"), revealed that the investment direction in the stock market in 2022 is still in a volatile condition due to factors relating to the new wave of COVID-19 pandemic, the on-going conflict between Russia and Ukraine which affects the economy both directly and indirectly causing the hike in the prices of alternative assets such as gold and energy, adding to the pressure on economic recovery. Also significant is the higher level of inflation, while the revenue from tourism will take some time to recover to the pre-COVID-19 level. Therefore, this presents an opportunity for investors to invest in certain assets appropriate to the level of risk acceptable to them, or an opportunity for new investors to invest in the stock market. This is because, today, investors can have unlimited access to information on the Internet, while being able to avail of various processes that can be executed without having to leave home. These factors are likely to help promote the expansion of the capital market.
The Company is one of Thailand's online brokerage operators, and has registered as a member of the Stock Exchange of Thailand, holding "No. 10" under the securities brokerage license that offers just two types of securities trading accounts, namely: 1) Cash Balance Account, and; 2) Credit Balance Account, with the focus on online securities brokerage business mainly under the designation "Z", with a wealth of experience and possessing a strong source of funding, due to the majority shareholder of the Company being "GMO Financial Holdings Inc. ("GMOFHD")", a subsidiary of "GMO Internet". Both companies are listed on the Tokyo Stock Exchange (TSE) in Japan. GMOFHD operates as a holding company, focusing on financial services business, such as Securities Trading, Foreign Exchange Trading, and Digital Assets Trading, with services covering four countries: Japan, United Kingdom, Hong Kong Special Administrative Region and Thailand. The Company shareholders' capability and expertise in the business operations, are the major factors that help to bolster confidence among all sectors while augmenting the competitiveness of the Company.
Mr. Prakrit Thanwalai, Chief Executive Officer of GMO-Z com Securities (Thailand) Plc., said the Company is determined to provide services in the securities brokerage business in the Stock Exchange of Thailand, although there are currently as many as 38 listed securities brokerage firms providing for a highly competitive environment. While many brokers have employed the strategy of offering aggressive commission rates, the Company is well aware of such risks, and therefore has focused mainly on loans for securities purchase services under the Z.com brand, with knowhow transfer from GMOFHD to be adapted and applied to suit the securities business operations in Thailand. So much so that, the adaptation has developed into the "Initial Margin Methodology" technology system that can perfectly meet the needs of investors. The Company is able to calculate the grade of stocks to reflect the quality of the securities appropriately and efficiently according to the daily situation, and with a large number of securities on-hand that can be purchased and/or placed as collateral. As a result, at present, the Company's main revenue is derived from interest on loans to purchase securities, which has shown a continuous growth rate. Therefore, the Company is confident that it will definitely become a leader in the leading business to purchase securities in Thailand.
"Even though we are a securities company, the Company can clearly be differentiated from other securities businesses that put the emphasis on earning from commissions. The Company mainly concentrates on earning revenue from interest on loans for the purchase of securities which is our main source of income. This is significant because regardless of the amount of trading volume, or the closure of the stock exchange over long holidays, they do not affect the company, because interest on loans for the purchase of securities continues to generate income for the Company every day," Mr. Prakrit said.
The CEO of GMO-Z com Securities (Thailand) Plc. added that the Company has set the goal to become the No.1 company in the loans for the purchase of securities business in Thailand, and to become one of the leaders in the securities business in this country, by applying the following strategies: 1.) Strategy involving a diversification of securities that can be purchased and placed as collateral, with the focus mainly on the business of providing loans to purchase securities (Credit Balance). The Company also possesses the information technology system, a knowhow transferred from Japan that can be adapted and applied to securities business operations in Thailand; 2.) Fee rate strategy, to attract customers to use the brokerage services with the commission rate of only 0.065 percent*, which is a fee lower than those of most competitors in the market. This is possible because the Company expects the customers to make transactions by themselves mainly via the Internet. As a result, the Company has a lower overhead cost compared to other securities companies; 3) Marketing channel strategy, to focus on marketing plans through online advertising to attract customers who regularly use the Internet. There is also a marketing plan through offline channels, such as at exhibitions, seminars, and advertising through newspapers, etc.; and 4) Targeted customer group strategy, to concentrate on customers who are the Company's target groups who are tech-savvy investors with investment knowledge. Most of these customers are in the Generation X bracket (age 41-55 years) with high investment experience. Presently, the Company plans to expand the customer groups to cover those in the Generation Y bracket (25-40 years old), whose members use the Internet regularly, and who search for investment information by themselves. The Company believes that it can increase the number of customers from this bracket who will become the main customer group of the Company well into the future.
Ms. Praweena Mairaksa, Section Head of CEO Office Group of GMO-Z com Securities (Thailand) Plc., said the Company operates its businesses under the vision "Being a leader in loans for securities purchases in Thailand through the offering of products and services that are different and of high quality, with the readiness to drive the business towards sustainable growth and to take care of all stakeholders in a balanced manner" through experience, expertise and strong financial standing. This is reflected in the operating performance in the 2019 to 2021 period, when the Company posted total revenues of 251.53 million baht, 398.15 million baht and 719.80 million baht, respectively. For the first six-month period of 2022, the Company posted a total revenue of 469.69 million baht, or a growth of about 50.16 percent compared to the same period of the previous year. This was the result of an increase in income from interest derived from the outstanding loan receivables for securities purchases, which continued to grow. As of June 30, 2022, the Company's outstanding loans for securities purchases stood at 13.769 billion baht, or a growth of 40.76 percent compared to the same period of the previous year.
As for the revenue portfolio from interest on loans that has continued to increase in the 2019 to 2021 period, when the Company posted revenues from interest to the amounts of 206.11 million baht, 335.33 million baht and 639.63 million baht, respectively, or 81.94 percent, 84.22 percent and 88.86 percent of the total revenues, respectively. This has resulted in the Company's revenue from interest on loans for securities purchases in 2021 becoming the highest among all companies that offer loan for securities purchase services in Thailand. For the first 6-month period of 2022, the Company posted revenue from interest on loans for securities purchases of 430.38 million baht, or 91.64 percent of total income.
Meanwhile, the net profits in the 2019-2021 are 7 million baht, 45 million baht and 261 million baht, respectively. And for the first six-month period of 2022, the Company posted a net profit of 182 million baht, an increase of 18 percent compared to the same period of the previous year. This has resulted in the Company posting the net profit margins of 2.69 percent in 2019, 11.22 percent in 2020, 36.30 percent in 2021 and 38.70 percent for the first six-month period of 2022. The Company managed to achieve a high net profit margin due to the increase in revenue from interest on loans for securities purchases, effective control of expenses and the management of financial costs.
*Note: The above brokerage fee does not include SET fee, settlement and securities delivery fee, regulatory fee, and 7-percent VAT
Source: MT Multimedia