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.

With a large potential market in Thailand and the rest of the ASEAN region, Group Lease has attracted consumers who cannot afford to pay for large purchases but 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. Instead, they are left to opt for cheaper means of transportation – typically motorbikes. Even when buying a motorcycle, data shows that 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, which was last recorded to be at 80% of the country’s GDP, is made up of auto loans. Not only is the industry big, it’s also rapidly growing. According to a report by CIMB, one of the top international banks in Thailand, the sector is expected to grow annually at a CAGR of 4.2%.

This does not come as a shock considering the fact that hire purchase transactions account for about 60% of the total motorbike sales in Bangkok and 80% in rural areas. And the growth does not only apply to Thailand, but also its neighboring countries. Many leading Thai financial institutions are expanding their businesses across borders.

 

Group Lease Stock: ASEAN’s Best Hire-Purchase Investment

Group Lease (BKK:GL) is the fastest growing motorcycle financing company in the world. It’s been aggressively expanding to neighboring countries, capturing even more consumers.

According to the executive board chairman, major profit contributors this year are from Indonesia and Laos. The company also has operations in Cambodia and Vietnam, underscoring its focus on consumers in the ASEAN region. Group Lease has an ambitious goal of increasing its net profit tenfold in the next 5 years.

There are two main reasons to invest in Group Lease stock. First, it’s growing at a sustainable yet rapid pace. Sales grew by nearly 20%, yet the company still managed to raise its net profit margin by 50%. Second, it has sound fundamentals. It shows no signs of difficulty repaying its debt with a current ratio of over 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 its rapid expansion.

Want to invest in Thai stocks? You might also be interested in our analysis of VGI Global Media.

About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's experienced with trading stocks and buying property in Thailand, Cambodia, and elsewhere. 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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