17 minute read
Hypergrowth Hero
THE PROFILE THAILAND'S 50 RICHEST
Adisak Sukumvitaya parlayed Jay Mart from a single store into a tech-driven retailing and financial services group with a total market cap of $6.5 billion. And he's still dreaming big.
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BY NAAZNEEN KARMALI
PHOTOGRAPHS BY ANDRE MALERBA FOR FORBES ASIA
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When Thailand’s stock exchange recently rejigged its SET50 Index, an index of the biggest companies by market cap, Adisak Sukumvitaya emerged a winner. Admitted were his flagship company Jay Mart plus its debt collection and management unit JMT Network Services, both among the hottest Thai stocks in the past year—up 54% and 74%, respectively—while the index fell more than 3%. The double-entry was a seminal event for the Jay Mart founder and CEO, who opened his first shop, selling household appliances, in 1989.
“For me, it’ s a big reward in my entrepreneurial journey of 33 years, ” says Adisak, 66, at Jay House, his sprawling mansion in a gated enclave 30 kilometers from Bangkok’ s central business district. The walls are adorned with paintings by local artists. Displayed more discreetly are artworks by Adisak himself, who says he paints occasionally to relax.
From his retailing roots, Adisak has grown that single store into the Jaymart group, with the listed Jay Mart as its flagship holding company. Jay Mart has stakes in three publicly traded companies and a clutch of privately held firms. The company ’ s businesses largely fall into three main buckets: retail, finance and tech. They span the spectrum from distributing and retailing mobile phones, IT products and electrical appliances to debt management and collection, financial services, coffee shops and tech. Jaymart Mobile sells mobile phones through 200 stores across Thailand. Jay Mart’ s finance arms offer consumer loans and non-life insurance. Its tech unit J Ventures develops emerging tech such as AI, blockchain and big data and is building a metaverse platform.
Amid Thailand' s slow economic recovery, Jay Mart produced a record 2021 net profit of 2.5 billion baht ($71 million), a threefold rise from the previous year, on revenue of 12.3 billion baht. Jay Mart’ s soaring shares propelled Adisak—who with his wife Yuvadee Pong-Acha, is a major shareholder—into the ranks of the 50 richest with an estimated fortune of $835 million. Jay Mart and its associated companies—property developer JAS Asset, JMT Network and direct selling firm Singer Thailand—have a combined market cap of $6.5 billion.
“From small beginnings, Adisak has grown Jay Mart exponentially, building it through strategic acquisitions and partnerships, ” says veteran banker Kongkiat Opaswongkarn, CEO, Asia Plus Securities, the lead investment bank for the group ’ s three IPOs. The firm also orchestrated Jay Mart’ s 2015 acquisition of a 25% stake in Singer Thailand, the local unit of the storied American company whose founder invented the sewing machine in 1850.
Since the start of the pandemic, the tycoon has worked from home, doing board meetings on Zoom. Not only does that save him the commute to Jaymart Building, the corporate headquarters, but it has forced him, he says, to give senior executives more of a free hand. He ’ s now building an extension to his house with a conference room for meetings.
“Working remotely suits me, ” he declares.
Adisak has kept making connections throughout the pandemic. As Thailand’ s banks struggled with rising nonperforming loans, Adisak saw an
POWER POINT
Jay Mart’s net profit hit a record 2.5 billion baht last year.
Net profit Revenue
-1 0 1 2 3 4 5 6 7 8 9
(IN BAHT BILLIONS)
10 11 12 13
2018
2019
2020
2021
Source: Stock Exchange of Thailand
Adisak's passion for art is reflected in the numerous paintings by local artists displayed at Jay House, his sprawling mansion. opportunity to boost JMT Network’ s business and formed two joint ventures with Bangkokbased Kasikorn Bank for debt collection and asset management. He converted finance arm J Fintech into KB J Capital, a consumer finance joint venture with Korean credit card company KB Kookmin Card. Jay Mart’ s software unit J Ventures bagged an investment from Japanese IT firm TIS. Adisak has recently forayed into renewables with a partnership between listee Gunkul Dhumrongpiyawut’ s Gunkul Engineering, Jay Mart and Singer Thailand that plans to sell solar panels.
The biggest deal was with Skytrain billionaire Keeree Kanjapanas ’ s BTS Group, which invested 17.5 billion baht to acquire 25% of both Jay Mart and Singer Thailand. Adisak, friends with Keeree ’ s son Kavin for two decades, says they hope to benefit from cross-selling synergies as the two companies, between them, have 17 million customers. Jay Mart could set up shops for appliances and mobile phones at BTS train stations, which could also become a sales channel for Singer Thailand, says FSS International Investment Advisory Securities analyst Naruedom Mujjalinkool, who is based in Bangkok.
With the new partners and planned investments of 30 billion baht this year, Adisak asserts, “ we can now grow three times faster and reach the next level. ” His target is to grow Jay Mart’ s net profit 50% annually over the next three years. “The top line doesn ’t mean anything without profits. You can ’t keep standing for too long without profits, ” he asserts.
disak was born in Bangkok but moved to Yala, Thailand’ s southernmost province, where his father opened a shoe repair shop. At age 17, Adisak went to Iowa for a year as a high school exchange student. The year was a turning point in his life, he says. “It was such a different world. I started to dream in English. ”
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During his American stint, he took to sports— baseball, wrestling, golf—which became an abiding interest. On Saturdays he plays soccer with friends and company executives at a private, 1.2ha sports field he built next to his home. “When I was young, I had nowhere to play, ” he recounts.
After getting a degree in agricultural economics from Bangkok’ s Kasetsart University, Adisak wanted to return to the U.S. for graduate studies but couldn ’t afford it. So he enrolled in a master ’ s program at Kasetsart on a scholarship, supplementing it by working on campus doing market research. His first job in 1982 was in investment research at Thai securities firm Tisco, where he met his wife Yuvadee. A couple of years later, he shifted to consumer durables giant Philips as an assistant product manager.
Four years later, Adisak ventured out on his own.
“It was a risky move but I asked myself—do you want to remain poor or do you want to give a better life to your family?” he says. After studying the business model of Singer, which sold sewing machines and household appliances on a hirepurchase plan (also known as an installment plan), Adisak was confident that there was room for another player.
The couple pooled their combined savings of 2 million baht to set up Jay Mart, replicating the Singer model but selling other brands of electronics and appliances, such as Panasonic, Hitachi and Philips. The company ’ s name was inspired by Kmart, where Adisak shopped when in Iowa. “Jay ” came from the initials of their names, including daughter Juthamas. It’ s also the nickname of their son Ekachai, born the year the first Jay Mart store opened.
In 1992, Jay Mart added mobile phones, offering brands such as Nokia and Ericsson on an installment basis. Sales picked up but before long Adisak was blindsided by the entry of Japanese financial services company Aeon. Realizing he could not match Aeon ’ s low-interest loans, Adisak decided to start another business: debt collection. He figured that he could deploy Jay Mart’ s field staff, who were experienced in collecting installment payments, to collect unsecured consumer loans for other companies. Adisak says that seeing bigger mobile phone sellers shut down taught him to never depend on just one business.
But one of his bets went badly wrong after he invested 2 million baht in a venture set up by some friends to manufacture television sets. The business was mismanaged and within three years it was on the brink of closure, with a debt of 30 million baht. With his reputation in jeopardy, Adisak agreed to take on the entire debt and began looking urgently for ways to pay it off.
He approached Aeon, offering to structure a hire-purchase model for mobile phones with an undertaking to buy them back if customers defaulted. The 400 baht service fee Jay Mart received on every phone financed by Aeon earned the company 700 million baht over seven years. This paid off the debt and helped grow Jay Mart into one of Thailand’ s top mobile phone distributors.
Adisak says he ’ s looked for opportunities in every crisis. After the 1997-98 Asian financial
Jaymart Mobile
99%
Mobile phone distribution
Source: Jay Mart
NETWORK EFFECT
The listed Jay Mart holds stakes in a variety of businesses.
Beans & Brown
95%
Food and beverage
J Ventures
67%
Technology
JAS Asset*
66%
Property developer
JMT Network Services*
54%
Debt collection and management
KB J Capital
50%
Consumer loans
Singer Thailand*
25%
Home and commercial appliances
*Listed
Jay Mart is one of the country's largest mobile phone distributors with a network of 200 stores such as this one. crisis, when others hunkered down, he opened more stores. He approached retailing giant Central group, which offered to lease him a car park at one of its Big C hypermarkets. “In business, ” says Adisak, “I never say no. In fact, when others say
‘ no, ’ I say ‘ yes. ’”
He converted the car park into a mini mall of small shops for phone vendors. Tenants were initially hard to find and the business made a loss the first year. To kickstart it, he opened 20 mobile phone stores under different names, a ploy that created enough of a buzz to draw in tenants. This was expanded to 40 locations under IT Junction, a thriving division within Jay Mart, which in 2015 was spun off as property development arm JAS Asset.
By 2002, Adisak was eyeing a public listing for his flagship to grow more quickly. But Jay Mart’ s IPO application was rejected that year and again in 2005 as the company then couldn ’t meet the regulatory requirements. Adisak says his wife, who has been working with him since 1994, advised him to forget it, but he refused. “I knew that if I surrendered, I would have no future, ” he recalls. He succeeded in 2009, raising 133 million baht through an IPO that valued Jay Mart at 540 million baht, a valuation that has since soared to 79 billion baht.
The IPO funds were used to pay off loans and to expand the debt collection unit, which he took public in 2012. JMT’ s IPO raised 333 million baht and valued the company at 3.6 billion baht. In the past decade, JMT’ s market cap has grown 30 times to 107 billion baht. Three years later, Jay Mart spun off JAS Asset and listed it at a valuation of 1 billion baht.
In 2015, Jay Mart made a landmark acquisition, paying 950 million baht for a 25% stake in Singer Thailand, a company Adisak had long admired and whose business model he had successfully replicated. “Our CFO said we had no money, but I couldn ’t let it go, ” he recalls. He raised funds through a mix of bank loans and selling part of Jay Mart’ s stake in JMT. “Singer has been in Thailand for 133 years. It’ s exactly a century older than Jay Mart, ” says Adisak, adding that he ’ s now preparing to list its finance arm SG Capital.
Five years ago, Adisak expanded into fintech, establishing J Ventures under Jay Mart. In 2018, it launched the country ’ s first initial coin offering by a public company, selling 100 million JFinCoins within three days. Adisak sees himself as Thailand’ s crypto pioneer and is confident that the country ’ s recent regulation banning cryptocurrencies will be temporary.
Adisak had initially planned to retire this year, but after the capital injection from BTS, he says that plan was postponed for a couple of years. He ’ s grooming his U.S. -educated son Ekachai, who ’ s been working with him for eight years and is Jay Mart’ s deputy CEO, to succeed him. “He ’ s the right guy at the right time, ” he avers.
At present, Adisak is focused on delivering his growth goal and making every business a market leader in its segment. “I don ’t believe in eating dust, but making dust, ” he says, a reference to a car race on a dirt track where the vehicle in the lead creates a dust storm.
Challenges abound. Naruedom of FSS points out that while JMT Network is already one of the biggest players in debt collection, the emergence of more competitors bidding aggressively for nonperforming loans could chip away at profits. Moreover, an economic slowdown could impact sales of household appliances. Adisak says the crises he ’ s weathered in the past have taught him never to underestimate any situation.
While wealth allows him to indulge in such passions as collecting fine wines, Adisak says he hasn ’t forgotten his roots; he prefers street food to fine dining. With two of his biggest companies in the SET 50, Adisak is aware that he ’ s now in the ring with the big boys: “But it’ s only the first step. I want to step up and win. ”
—Additional reporting by Anuradha Raghunathan
Leading the Green Finance Revolution in Thailand
HSBC is helping its Thai private banking clients kickstart their sustainability journey.
As the net zero transition becomes top of mind for business leaders and policymakers around the world, affluent investors in Asia are gradually recognising the importance of incorporating sustainable solutions into their portfolios.
In Thailand, high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals and their families are beginning to incorporate ESG (Environmental, Social and Governance) factors into their investment decisions, says Saranya Arunsilp, Countr y Head, Thailand, Global Private Banking and Wealth Management at HSBC.
However, as the bank ramps up its efforts to educate clients on the importance of sustainable finance, awareness of ESG is growing.
“ESG investments are gaining popularity among Thai investors as HSBC has been educating our clients and offering them relevant sustainable finance solutions, ” explains Arunsilp.
“Our clients are starting to understand that sustainability is important for growing their business and investments, but it will take some time before they see the performance associated with sustainable products. ”
A more conducive regulatory environment is also expec ted to fuel demand for sustainable investments. Earlier this year, the Stock Exchange of Thailand introduced a Sustainability Reporting Guide for listed companies, together with ESG metrics for each industry group.
HSBC is well-positioned to capture a big slice of this growing green market as it has established an enviable track record of completing sustainable finance deals in Thailand. The bank recently supported a prominent global petrochemical company in issuing its debut THB10 billion (US$283 million) Sustainability-Linked Bond (SLB). This deal was the largest THB SLB issuance in Thailand.
HSBC was also the Joint Lead Manager and Joint Bookrunner for the first green bond issued by a Thai policy institution, the Bank for Agriculture and Agricultural Cooperatives. The proceeds were then used to fund forestry and environmental conservation projects.
In another milestone, the bank introduced the first Green Deposits in the country for two large Thai corporates. The Green Deposit aims to encourage Thai companies to fulfill their sustainability objectives by investing their surplus cash balances with HSBC, which will then be allocated to eligible businesses and projects.
Furthermore, HSBC completed a trio of firsts for a Thai client by executing their inaugural Sustainabilit y-Linked Loan, Sustainability-Linked Supply Chain Financing Solution and Sustainability-Linked Hedge.
Saranya Arunsilp, Country Head, Thailand, Global Private Banking and Wealth Management at HSBC
A Deeper Presence on the Ground
To more effectively service its HNW and UHNW clients, HSBC opened a new private banking business in Thailand last year. The move is timely as rising affluence in the country is driving demand for wealth planning, investment diversification and international banking.
The expected rebound in intra-regional trade and activity is also expected to lead to the creation of private wealth in Thailand as businesses expand. Against this backdrop, international banks like HSBC—with a global footprint and full range of capabilities to serve the fast-changing needs of affluent clients both onshore and offshore—will have a competitive edge in the country.
In recent years, The Bank of Thailand has also introduced a series of measures to relax foreign exchange regulation and encourage greater flexibility in the financial markets under the Capital Account Liberalisation Master Plan, opening up opportunities for selective offshore investments.
The new private bank is HSBC’ s second onshore business in Southeast Asia after Singapore, and will provide Thai clients with access to international capital markets by leveraging its existing infrastructure of advisory, investment methodologies, controls and systems in Asia. The Thailandbased team will cover client management and advisory services, while clients ’ assets will be booked in HSBC Global Private Banking in Singapore, a preferred wealth management hub for Southeast Asian HNW individuals.
“We successfully launched our onshore private banking business in Thailand last year, and second onshore private banking business in ASEAN, to offer a distinctive, onshore experience to ser ve growing wealth needs in Thailand. Our team is able to leverage the HSBC Group ’ s expertise and global network to serve our Thai friends better, ” says Arunsilp.
As private banking is ver y much a people-centric business, Arunsilp believes that it is important to have a dedicated team on the ground to develop a more intimate relationship with clients, and better understand their unique wealth needs.
The expansion of the private banking business in Thailand is part of HSBC’ s broader strategy to grow its wealth management footprint in Southeast Asia and invest in its wealth capabilities as it aims to provide
Giorgio Gamba, CEO of HSBC Thailand and Saranya Arunsilp, Country Head, Thailand, Global Private Banking and Wealth Management at HSBC
best-in-class products and services for clients, and deliver on its ambition to become the leading wealth manager in Asia.
Achieving Net Zero
HSBC’ s Thai businesses will also play their part in helping the bank achieve its target of transforming its operations and supply chain to net zero by 2030, and to do the same for financed emissions in the portfolios of its clients by 2050 or earlier.
This transition will involve an investment of between US$750 billion and US$1 trillion over the next 10 years. Financing of coalfired power and thermal coal mining will also be phased out by 2030 in markets under the European Union and Organisation for Economic Co-operation and Development (OECD), and in other markets by 2040.
“Achieving net zero requires significant changes. The financial services industry has an important role in ensuring that capital is allocated to support projects and investments needed to fulfill these goals, ” says Giorgio Gamba, CEO of HSBC Thailand.
“The transition to a net zero economy is the key to unlocking long-term sustainable growth, protecting the financial system from climate risk and safeguarding society, ” he adds.
HSBC’ s sustainability strategy can be boiled down to three key components: becoming a net zero bank; supporting customers in their transition journey; and unlocking new climate solutions. In doing so, the bank also wants to help transform sustainable infrastructure into a global asset class through the development of a pipeline of bankable projects.
HSBC views collaboration with its clients and other stakeholders as key to achieving its sustainability objectives. Says Gamba: “In partnership with our clients, we will help develop de-carbonisation plans starting with high transition risk sectors. This will allow us to understand how they are incorporating climate change into their business and to identify how we can support their transition. ”
Giorgio Gamba, CEO of HSBC Thailand privatebanking.hsbc.com
Disclaimer The information contained in this article has not been reviewed in the light of your individual circumstances and is for information purposes only. It does not purport to provide legal, taxation or other advice and should not be taken as such. No client or other reader should act or refrain from acting on the basis of the content of this article without seeking specific professional advice. Issued by The Hongkong and Shanghai Banking Corporation Limited.
