Yoma Strategic Holdings
Price target: PhillipCapital “Buy” 46 cents PhillipCapital initiates coverage on Yoma with ‘buy’ on ‘stellar growth’ in financial services
PhillipCapital has initiated coverage on Myanmar-based investment company Yoma Strategic Holdings with a “buy” call and a target price of 46 cents. The call comes as the Myanmar conglomerate has its feet firmly placed in the country’s most attractive and fast-growing consumer segments — namely mobile finance, property, food and beverage (F&B) and motor vehicles.
Analyst Tan Jie Hui identifies five investment merits for Yoma: Attractive valuations, possession of a huge land bank of 20 million sq ft equivalent to 10 to 15 years of sales, stellar growth in the financial services, its status as the largest F&B operator in Myanmar and infrastructure improvements in the country. These merits could also benefit Yoma’s heavy equipment and motor segment. She expects Yoma’s revenue for FY2020 and FY2021 to reach $108.2 million and $113.3 million respectively.
Yoma currently generates its revenue through property, F&B, motors and financial services, with property development being the biggest contributor. However, Yoma is seen to drive more growth from its financial services and F&B business, says Tan.
For now, Yoma’s property arm Yoma Land boasts one of Myanmar’s largest land banks at 9.3 million sq ft and 20 million sq ft of gross floor area. It also has three strategically located flagship developments — StarCity, Yoma Central and The Peninsula Yangon and Pun Hlaing Estate. The land bank will be developed progressively over the next 10 to 15 years.
Yoma Financial Services oversees Yoma Fleet, one of Myanmar’s largest vehicle leasing and rental operators, and Wave Money, the country’s first and leading provider of mobile financial services (MFS) that is licensed to provide services such as money transfers, airtime top-ups and bill payments.
Yoma F&B — which is made up of the restaurants (including 45 KFC outlets), bottling and logistics segments — is the largest F&B platform in Myanmar. The company also has interests in food and vehicle distribution.
In March this year, Yoma Micro Power (YMP), one of its joint ventures finished building 250 micro solar-hybrid power plants which will help power rural Myanmar. Rural households can pay for their utilities via cash or Yoma’s Wave Money.
According to Tan’s sum-of-the-parts valuation, and upon applying a 20% conglomerate discount, she reached a target price of 46 cents for the stock.
In November 2019, Ayala Corporation — one of the largest conglomerates in the Philippines — acquired a 20% stake in Yoma at 45 cents a share, valuing the company at $1.06 billion. —