Message from the Board of Directors

Dear Shareholders,

The Thai economy in the first half of 2017 remained sluggish due to the weak purchasing power and the lack of support measure from the government. In the second half of 2017, the economy moved into a positive direction, driven by the recovery of the export sector as contributed by trading partners’ economy, industrial expansion, and the tourism sector. As a result, the purchasing power of consumers in big cities increased. On the contrary, consumer spending in some provinces still decelerate in line with the low farm income during the first half of the year due to the low price of agricultural products. However, the government has been trying to stimulate the economy and revive consumer’s confidence by launching economic stimulus such as Shopping for the Nation campaign, which was held for the third consecutive year during November to early December.

Business Expansion

The company opened 1 HomePro store at Lotus Bangkae and opened 1 HomePro S at Gateway Ekamai. Also, 2 HomePro Living stores at The Paseo Ladkrabang and Terminal 21 Korat have been converted to HomePro S. For subsidiaries, the Company opened 1 Mega Home store in Chiang Rai and added 4 more HomePro Malaysia stores in Melaka, Penang, Ipoh, and Johor Bahru. At the end of the year, the Company had a total of 81 HomePro stores, 3 HomePro S stores, 12 Mega Home stores and 6 HomePro stores in Malaysia. The objective of continuous new store expansion is to achieve the economy of scale and to reach more customers in different areas.

In addition, the launch of a new business model (HomePro S) is designed to meet all customers’ demand e.g. easy access to HomePro shop under the concept of “Small” - a compact style, easier to make purchases, and located in shopping centers or community malls; “Select” - wide range of products to match the needs of customers for repair, improvement and replacement; and “Service” - home service by professional HomePro teams. For future plan, the Company still focuses on store expansion in Bangkok and other high-growth potential areas, along with renovation of existing stores to be more modern and to provide frictionless shopping experience, as well as leverage our merchandising assortment and new type of home services to create value and satisfy customer’s preferences. The Company will also continue to develop and manage stores to be more efficient and energy saving by implementing environmental friendly technologies.

Operating Performance

The performance of the Company and its subsidiaries continued to grow, recording total revenue and profit at baht 64,234.49 million and baht 4,886.39 million respectively. The increase of baht 3,090.41 million and baht 761.19 million from the previous year primarily reflected the sale of new stores opening during 2016 and 2017 and operational efficiency improvement. The operating results for the first half of the year did not reach the target due to the negative impacts of the economy and weak consumer purchasing power. However, in the second half of the year, the economy showed recovery signs both in tourism sector and export sector, as reflected by the improvement of store performance in the major cities and areas that benefit from tourism comparing to the previous period.

Management for Sustainability

The Company is committed to be a socially responsible organization and to focus on sustainable development. With the commitment and dedication of the executives, associates and all stakeholders, the Company has been selected to become a member of the Dow Jones Sustainability Index in the Emerging Market for the first time in 2017, as well as received other awards both nationally and internationally e.g. rated on the corporate governance report at an excellent level, being listed as a member of the MSCI Global Sustainability Index and the FTSE4Good Emerging Market. These rewards reflect a true sustainable development of the organization.

For other social and community development projects, the Company continues to provide ongoing support and adapt to the changes in context and environment. For example, Kids’ Toilet Campaign changed the name to Toilets for Society and expanded the user group to the elderly and the disabled other than the children alone.

On behalf of the Board of Directors, I would like to express my gratitude to the dedication, commitment and responsibility of our associates at all levels, as well as to thank for the opportunities, good intention and cooperation from all key stakeholders. The Company will continue to commit to the principles of good corporate governance, social accountability and environmental responsibility to grow sustainably onward into the future.

 

(Mr. Khunawut Thumpomkul)

Representative of the Board of Directors