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2 Things That Investors Should Know About Yoma Strategic Holdings Ltd’s Different Businesses

Yoma Strategic Holdings Ltd  (SGX: Z59) is a business that is involved in a wide array of businesses including real estate development, agriculture, construction, tourism, automobiles, and even retail. The conglomerate’s businesses are mainly focused in Myanmar.

The company recently reported its 2018 third quarter (3Q FY18) earnings update. Given the complexity of its business structure, I thought it would be useful that investors pay attention to its businesses separately.

In this article, I will look at two aspects of its businesses, namely, financial performance and business outlook.

Financial performance 

Source:  Yoma Strategic FY18 Q3 Results Announcement

The above is a table showing the revenue contribution from four separate parts of the group.

Overall, we can see that all segments (with the exception of sales of residences and LDRs) grew revenue on a year-on-year basis.

The biggest growth came from the automotive & heavy equipment segment, mainly due to higher sales of New Holland tractors and stronger Yoma Fleet business. Similarly, the consumer business grew strongly mainly due to the growth in KFC stores in the financial year.

On the other hand, the weaker performance in sales of residences and LDRs was mainly due to the change in sales strategies.

Business outlook 

For the real estate business, Yoma is looking to start selling the Peninsula Residences in the coming months. Moving on to the automotive and heavy equipment business, it said:

“The Group is currently fulfilling an additional order of 500 New Holland tractors organized by the government’s Agriculture Mechanisation Department with revenue expected to be recognised progressively in the coming months.

At the same time, the Group is also seeing traction with its JCB construction equipment business and currently has five Yoma JCB branches with two more branches expected to open in 4Q2018.”

For the consumer business, it mentioned:       

“The KFC store expansion outside of Yangon has been progressing well. Subsequent to 3Q2018, the Group opened three more KFC stores in Yangon and two KFC stores in Bago, bringing the total number of KFC stores nationally up to 21. The performance of existing KFC stores and new KFC stores is expected to continue to drive revenue growth.

KFC continues to be the leading quick service restaurant brand in Myanmar and aims to operate at least 32 KFC stores nationwide by the end of March 2019. As the consumer market in Myanmar continues to record a healthy growth, the Group intends to explore other opportunities in this space.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.