|Day's Range||1.18 - 1.19|
|52 Weeks' Range||1.15 - 1.50|
ZMICO's 2016 Performance
The Company’s financial result in 2016 has significantly improved over the previous year of 2015. The consolidated profit increased by almost 300% to 227.02 million baht. Higher profitability generated by the brokerage business and better return from its investments were the main contribution to the increase. The Company’s asset management companies faced more intense competition which hurt their financial performances. This year the Company exited one investment and added one new company in the beauty business. The Company also continues to utilize its liquidity to make better yields for its shareholders.
Summary of performance of ZMICO’s key businesses are as follows:
ZMICO’s brokerage joint venture with Krungthai Bank had its best performance since its inception several years ago. After starting the first five months very slow, the market activities picked up with higher trading volume and strong flow from international investors. The SET index finished the year at 1,543 which was 20% over the previous year closing of 1,288. The net buy from overseas was a strong 80 billion baht.
Although Thai stock brokerage business ended the year with 2.57% market share from a 2.80% in 2015, KT ZMICO still manage to maintain its average brokerage fee of 0.156% which is higher than the industry average of 0.12-0.13%. The significant drop in its market share also reflects its weak international brokerage flows due to the lack of dedicated international partner. KT ZMICO’s clients assets under management increased to 174 billion baht from 135 billion in 2015. KT ZMICO continues to see increased outbound investments by its clients especially into Vietnam stock market. Although its sister broker, KTZ Ruby Hill Securities Co., Ltd. (KTzRH), in Myanmar has fully operated, but the current law does not allow foreign investors to participate in the Yangoon Stock Exchange. The company hopes to see this change in year 2017.
The primary market activities witnessed tougher regulations in 2016. Consequently, many IPOs were delayed and KT ZMICO’s securities underwriting was down to 4,938 million baht from 7,390 million baht in 2015. Fortunately, KT ZMICO did close several advisory deals which helped lift its revenue to 235 million baht from 185 million baht in 2015. In addition, the company recorded profit of 160 million baht from its own investment portfolio which is becoming one of major source of income for all the brokerage industry. KT ZMICO ended the year 2016 with a consolidated profit of 378 million baht.
In 2016, Solaris post revenue of 105.55 million baht, decreasing by 4.04% from 110.20 million baht in 2015. And its profit also reduced to 11.94 million baht. Main factor was a decrease in size of high yield debt fund management business. Solaris has foreseen the trend and adopt conservative approach by reducing the size of this type of fund since earlier of 2016. The problem that some issuers default and not be able to redeem their bill of exchange has resulted in losing confidence from investors. Solaris’s Asset Under Management (AUM) at the end of 2016 stood at 23,352 million baht compared with 28,239 million baht at the end of 2015. Nevertheless, Solaris is currently exploring new type of fund management such as Private Equity Trust, Algorithm Trade Fund, etc. in order to generate new source of revenues.
2016 was a difficult year to bid for distressed assets. The company was unsuccessful in all its bids for banks NPLs due to aggressive pricing by competitors. Nevertheless, the company keeps the running costs for this business low and will scale up only when the company can successfully accumulate assets.
After Beacon Offshore Ltd went through the completion of business restructuring, and with the help of higher oil prices, the Company successfully exited from this loss making investment. Another investment, Advance Finance, has grown significantly in asset size and profitability, and has started to look at potential listing in the SET.
In 2016, ZMICO decided to invest in 4 additional companies which are mainly in life style and health industry. Scentimental Co., Ltd. is in beauty business with its own unique products utilizing famous actors and actresses, and sold through all major retailers including Seven Eleven in Thailand. It is also expanding into the ASEAN countries applying the same business model but utilizing local celebrities. The remaining investments are expected to be closed shortly in the first quarter of 2017.
ZMICO’s small investment in Finch & Partners Asia has helped the Company to gain big access into this life style and health industries. ZMICO will continue to actively explore new investment opportunities in these high growth sectors, including food and biotechnology. The Company’s investment objectives are to generate even more revenue streams against the swings from brokerage business, and to create more value to its shareholders when realizing full values from these investments.
GOOD CORPORATE GOVERNANCE AND CSR
The Company and its Board of Directors realize the importance of Good Corporate Governance and are committed to conducting all its businesses in compliance with good governance principles and guidelines. In 2016, the Company has won an “Excellent” rating for the AGM 2016 assessed by the Thai Investors Association. The Company also earned a “Very Good” rating for the Corporate Governance 2016 assessed by the Thai Institute of Director (IOD). ZMICO remain committed to keep the strong corporate value and to strive success in all its business units.
ZMICO and all its subsidiaries are highly focused on Corporate Social Responsibility throughout the year. In 2016, its activities include supporting the anti-corruption organization, providing financial support for the education and health of the under privileged, and promoting of meditation and well being.
The Company would like to express the sincere gratitude to all the hard working and dedicated employees and shareholders for supporting the Company. The Company looks forward to improving its successes in the near future and provides better returns to its shareholders.