Jay Mart bullish after Singer deal

SET-listed Jay Mart Plc (JMART) has taken its first step towards becoming a fully fledged nanofinance service provider after buying a stake of almost 25% in Singer Thailand.

The move will provide the mobile phone distributor and debt collector with access to Singer’s high-interest loan networks nationwide.

Singer (Thailand) BV, the major shareholder in Thailand’s electrical distributor Singer Thailand, has sold its entire 108 million shares, equal to 40% of the company’s capital, to Jay Mart and a group of investors.

Jay Mart acquired a 24.99% stake in Singer for 945 million baht using its cash and financing.

The remaining 15.1% stake was acquired by a group of investors in mobile business.

Jay Mart chief executive Adisak Sukhumwittaya said he had made the deal through Asia Plus Securities after the brokerage told him that Singer BV wanted to sell its business in Thailand.

“The acquisition will help us to expand all our existing businesses rapidly, especially nanofinance and debt collection, through Singer’s distribution channels nationwide,” he said.

Singer has 200 distribution outlets nationwide, which will combine with 250 of Jay Mart’s distribution channels.

Mr Adisak said the acquisition would help Jay Mart to create a new revenue stream and offset declining core mobile handset sale business.

He said there would not be a change of executive management since the existing group of shareholders already had strong business experience.

Mr Adisak will serve as a board director as part of the new structure in which he has become the major shareholder in Singer Thailand.

Singer not only provides its core home appliance and commercial products. It also provides mobile airtime refill vending machines and petrol vending machines nationwide.

Mr Adisak acknowledged that Jay Mart’s main mobile retail business was seeing a slowdown, as the market had been saturated due to the country’s high mobile penetration rate.

Thailand’s smartphone sales saw flat growth overall in the first half of this year compared with normal double-digit growth, he said.

Jay Mart has revised its revenue growth down from an initial 15% projected earlier to 5-10% this year.

Jay Mart achieved consolidated revenue of 9.2 billion baht last year.

Mr Adisak also said Jay Mart was seeking approval from the Securities Exchange Commission to list its subsidiary JAS Asset on the SET.

Jay Mart intends to be the holding company in order to reduce risks of the parent firm being directly exposed to the functioning of only mobile sales.

Singer Thailand chief executive Boonyong Tansakul said there would be no change in the company after Jay Mart and a group of investors bought a 40% stake in the company.

“It’s a win-win situation for both Singer and Jay Mart,” he said.

Mr Boonyong said Singer BV had wanted to sell its investment for two years, as the Thai operation had a different business format from its other four countries — Pakistan, India, Sri Lanka and Bangladesh.

The other countries focus on retail sales, while Singer Thailand relies mainly on direct sales.

Jay Mart’s customers base is mainly in town, while Singer customers are upcountry.

JMART shares closed yesterday on the SET at 10.50 baht, up 70 satang, in trade worth 367 million baht.

SINGER shares closed at 14.30 baht, down 30 satang, in trade worth 414 million baht.