Chailease Holding Co Ltd (中租控股) expects its expanded presence in Southeast Asia to sustain earnings growth this year, chairman Albert Chen (陳鳳龍) said last week.
Highlighting its focus on the region, the nation’s top leasing services provider this year began reporting on its new operations in Vietnam and Malaysia along with its more established business in Thailand.
The two markets are expected to provide stable profit contribution and the company has established a presence in five of 10 ASEAN countries, Chen told investors at an earnings conference in Taipei.
In addition, the company’s new operations in the Philippines are to begin in the next two to three months, Chen said.
The company is also studying the feasibility of expanding to Laos, Indonesia and Myanmar in the next one to two years, he added.
The company’s ASEAN operations last year saw net profit rise 7 percent annually to NT$758 million (US$24.8 million) and revenue grow 6 percent to NT$3.02 billion, the company’s latest financial statements released on Monday last week showed.
Its loan book for the region expanded 11 percent annually to NT$34.04 billion, with Chailease saying it aims for a 10 percent increase in lending there this year.
Overall, the company’s net income last year rose 6 percent to NT$7.24 billion, with total revenue rising 3 percent annually to NT$36.83 billion.
Its total loan portfolio last year rose 9 percent annually to NT$249.19 billion, primarily due to a 14 percent rise in Taiwan to NT$138.46 billion, while China saw lending slip 2 percent to NT$73.1 billion due to a weakening yuan, the company said.
While return on assets (ROA) last year declined slightly from 2.8 percent in 2015 to 2.7 percent, the firm maintained its return on equity (ROE) at 19 percent, Chailease said.
ROE and ROA are the two most frequently used benchmarks when comparing profitability among financial institutions.
As investors expect further improvement in Chailease’s asset quality to enhance its profitability, shares have rallied 30.67 percent so far this year, outranking the broader market’s 7.08 percent increase over the period, Taiwan Stock Exchange data showed.
Chailease shares closed at NT$72 in Taipei trading on Friday.
Capital Investment Management Corp (群益投顧) gave a positive outlook on Chailease’s business growth this year, as a recovery in capital demand takes hold at the firm’s main markets in Taiwan and China.
Taiwan, which contributed 62 percent to the company’s total profit last year, is projected to maintain a steady 8 to 10 percent annual expansion in loans this year as the nation’s economic growth momentum recovers, Capital said in a report on Wednesday last week.
China, representing 26 percent of Chailease’s profit last year, is expected to see loans rise by 7 to 9 percent following increasing capital demand from small and medium-sized businesses, the report said.
The Chinese market would also be helped by expectations that the yuan’s strength would be more stable this year, the report said.
Chailease’s Chinese operations would also see lower delinquency due to a more careful selection of borrowers, leading to a 5 percent reduction in general provisions beginning next quarter, Capital said.