Message form the Chairman
Dr. Chumpol Phornprapha
Chairman
Dear Shareholders,
Thai economy in 2023 expanded for three consecutive years after Thailand and every country around the world faced the once-in-a-century global pandemic. The global situation has improved as all countries adapted to the new normal of living and re-opened up their countries. As a result, the world economy has begun to recover once again after being stagnant during the shutdown due to COVID-19, especially in the aviation and tourism sector which is one of the most important factors for Thailand’s economic growth. The new government has policies to stimulate the economy (as the Thai government and the Chinese government already approved free visas for both countries’ citizens from March 1st, 2024, which will facilitate and stimulate tourism sector.) Thailand held an election on May 14th, 2023 and the new government was formed in August 2023.The Thai economy in 2023 has expanded by 1.9%, decreasing after expanded by 2.5% in 2022. Thailand's exports contracted by 1.5% after expanded at 5.5% in 2022. In addition, 28 million foreign tourists returned to Thailand compared to the previous record high of 39 million in 2019, which has a positive effect on the improvement of the tourism sector. The economic expansion of Thailand, the United States, and the European Union, including China, which have fully opened their countries, has exponentially increased the demand for major of products and commodity. This caused global inflation in 2022 and 2023 to reach 8.7% and 6.9%, the highest in 10 years for 2 consecutive years. (Source: International Monetary Fund (IMF)) Moreover, the war between Russia and Ukraine continued to rage on since February 24th, 2022 to the end of 2023 or 676 days, and showed no signs of ceasing in the near future. Both countries are major suppliers of major commodity for the world, such as energy (oil and gas), aluminum, fertilizer, and food, which caused production and transportation issues around the world, while the Israel-Palestine conflict, which started since October 7th, 2023 until the end of 2023 or 86 days, was still on going. As for world crude oil prices, BRENT average price in 2023 was USD 82.14 per barrel, down 18.38% from 2022, and WTI average price was USD 77.77 per barrel, down 17.01% from 2022. Gas prices in Europe (Dutch TTF Natural Gas) spiked up to USD 84.15 per MMBTU in August 2022, or 10 times increase compared to January 2022, and were averaging USD 10.49 per MMBTU at the end of 2023. As a result, the Federal Reserve (Fed) raised policy interest rates from its lowest rate in history at 0.00-0.25%; it has risen to 5.25-5.50% at the end of 2023, which was the 11th consecutive increase and the highest point in 22 years since August 2007. The European Central Bank raised the benchmark interest rate 10 times consecutively from its lowest of -0.50% to 4.00-4.50%, to the highest in 24 years, and many central banks around the world were raising policy interest rates to maintain the stability of their currencies. The Bank of Thailand has also raised its policy interest rate 8 times from 0.5% to 2.50% at the end of 2023.
The Thai economy in 2023 has expanded by 1.9%, decreasing after expanded by 2.5% in 2022. Thailand's exports contracted by 1.5% after expanded at 5.5% in 2022. In addition, 28 million foreign tourists returned to Thailand compared to the previous record high of 39 million in 2019, which has a positive effect on the improvement of the tourism sector. The economic expansion of Thailand, the United States, and the European Union, including China, which have fully opened their countries, has exponentially increased the demand for major of products and commodity. This caused global inflation in 2022 and 2023 to reach 8.7% and 6.9%, the highest in 10 years for 2 consecutive years. (Source: International Monetary Fund (IMF)) Moreover, the war between Russia and Ukraine continued to rage on since February 24th, 2022 to the end of 2023 or 676 days, and showed no signs of ceasing in the near future. Both countries are major suppliers of major commodity for the world, such as energy (oil and gas), aluminum, fertilizer, and food, which caused production and transportation issues around the world, while the Israel-Palestine conflict, which started since October 7th, 2023 until the end of 2023 or 86 days, was still on going. As for world crude oil prices, BRENT average price in 2023 was USD 82.14 per barrel, down 18.38% from 2022, and WTI average price was USD 77.77 per barrel, down 17.01% from 2022. Gas prices in Europe (Dutch TTF Natural Gas) spiked up to USD 84.15 per MMBTU in August 2022, or 10 times increase compared to January 2022, and were averaging USD 10.49 per MMBTU at the end of 2023. As a result, the Federal Reserve (Fed) raised policy interest rates from its lowest rate in history at 0.00-0.25%; it has risen to 5.25-5.50% at the end of 2023, which was the 11th consecutive increase and the highest point in 22 years since August 2007. The European Central Bank raised the benchmark interest rate 10 times consecutively from its lowest of -0.50% to 4.00-4.50%, to the highest in 24 years, and many central banks around the world were raising policy interest rates to maintain the stability of their currencies. The Bank of Thailand has also raised its policy interest rate 8 times from 0.5% to 2.50% at the end of 2023.
In 2023, motorcycle market sales were 1,878,655 units, or a 4.26% increase and expanded for three consecutive years; on the other hand, automobile market sales were 775,780 units, or an 8.7% decrease, contracted after expanding for two consecutive years. The Company has adopted more stringent lending policies to be in line with the COVID-19 outbreak and the record-breaking high-level household debt issue. Furthermore, the Office of the Consumer Protection Board (OCPB) issued the announcement regarding the provision of hire-purchase businesses for automobiles and motorcycles to be contract-controlled businesses B.E. 2022, effective January 10th, 2023, and the draft royal decree for the Bank of Thailand to supervise hire-purchase of automobile and motorcycle leasing businesses, which is expected to be effective in early 2024 or responsible lending and measures to solve household debt problems in a sustainable way, which is effective in early 2024 as well. With these factors, the hire purchase and loan receivables net of the TK group were Baht 3,658.8 million decreased by 12.0%. The domestic motorcycle hire purchase receivables were Baht 2,081.4 million decreased by 23.2% and automobile hire purchase receivables were Baht 206.3 million decreased by 1.0% while hire purchase receivables in the Lao People's Democratic Republic and Kingdom of Cambodia were Baht 1,255.6 million or increased by 4.4% which accounted for 34.3% of the group hire purchase and loan net receivables. At the end of 2023, the Company Group had more than Baht 1,314.5 million in cash, or equivalent to 20.5% of a total asset with a D/E ratio of 0.15 X; in addition, the Company Group is ready with liquidity and can confront the rising interest rate without any problems.
Finally, I would like to take this opportunity to express our sincerest thanks to customers, business partners, investors, financial institutions, Securities and Exchange Commission, The Securities Exchange of Thailand, and shareholders for your trust and unwavering support. The dedication and experience of the management and all employees significantly contributing to the Company’s continued success and being Thailand’s leading motorcycle hire-purchase business for over 50 years. We will continue our expansion for targeting to become an industry-leading company in ASEAN countries. I am very confident that Thitikorn Group with financial stability will definitely be able to get through the crisis Lastly, I would like to wish everyone stay healthy.