The world is moving farther away from owning things and closer towards using them as services like Airbnb and Uber grow.

But the halfway point between owning things and the temporary hire of purchase is still the most attractive option to many – especially in Asia.

With a huge potential market in Thailand and the rest of the ASEAN region, Group Lease (BKK:GL) attracts consumers who cannot afford large purchases yet would still like to own property.

Despite the government’s tax rebate programs for first car purchases, most Thais are still unable to afford (what is to them­) a luxury purchase.

They instead opt for cheaper means of transportation – typically motorbikes. Even when buying a motorcycle, data shows the majority of purchases made are hire purchase.

Thailand’s hire purchase industry for motorbikes is huge on its own. In fact, the industry is so large that one fourth of Thailand’s ever rising household debt, last recorded at 80% of the country’s GDP, is made up of auto loans.

Not only is the industry big, it’s rapidly growing too. A report by CIMB, one of the top international banks in Thailand, said the sector will grow at an annual rate of 4.2%.

This shouldn’t be a shock considering that hire purchase transactions account for about 60% of total motorcycle sales in Bangkok. This number is even higher in rural areas, where 80% of motorbikes are leased.

Growth in the motorcycle leashing sector doesn’t only apply to Thailand, but also neighboring countries. Many leading Thai financial institutions are now expanding their businesses across borders.

 

Group Lease Stock: An Innovative Financier 

Group Lease is the fastest growing motorcycle financing company in the world. They’ve been aggressively expanding to neighboring countries, capturing even more consumers.

Major profit contributors this year are from Indonesia and Laos. The company has operations in Cambodia and Vietnam too, underscoring a focus on consumers in the ASEAN region.

There are two main reasons to invest in Group Lease stock.

First, it’s growing at both a sustainable and rapid pace. Sales grew by nearly 20%, yet the company still managed to raise net profit margin by 50%. Group Lease has an ambitious goal of increasing net profit tenfold over five years.

Second, it has sound fundamentals. They show no signs of difficulty repaying debt with a current ratio above 3.

Group Lease stock is an investment to consider if you want to invest in Asia. It’s now selling at 29.75 Thai Baht with a P/E ratio of 65 to reflect rapid expansion.

Want to invest in Thai stocks? You might be interested in our analysis of VGI Global Media which is the nation’s biggest advertising firm.

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an accomplished stock trader and property investor in Thailand, Cambodia, and many other places. He's been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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