How Does Yoma Strategic Holdings Ltd Earn Money?
Yoma Strategic Holdings Ltd (SGX: Z59) is a conglomerate that focuses on Myanmar. It has business interests in a wide variety of sectors in the country, such as real estate development, agriculture, tourism, vehicle distribution, and food and beverage retail.
Given the above, investors may think that Yoma Strategic could be a good proxy for exposure to Myanmar’s potential economic growth. In this article, I want to give an overview of Yoma Strategic’s revenue composition as it is important for investors to understanding how a company earns money.
Here’s a chart showing a breakdown of Yoma Strategic’s revenue by sectors:
Source: Yoma Strategic annual report
There are two important observations from the chart.
Firstly, Yoma Strategic’s businesses are categorized into three groups: Sales of Residences and Land Development Rights; Real Estate Rental & Services; and Non-Real Estate Business.
The first category is mainly related to property development and the sale of land rights from the company’s existing landbank. The second category is involved with the provision of project management, design, estate management, and property-leasing services. Both categories can be further grouped under Real Estate-Related businesses.
The third category is Non-Real Estate Business, and there are a wide variety of business activities. This includes automotive and heavy equipment sales and leasing businesses, consumer-related businesses such as KFC restaurants, and others.
Secondly, we can see that Yoma Strategic’s revenue composition has shifted over the years. In FY2014 (fiscal year ended 31 March 2014), the lion’s share of its revenue was derived from the Sales of Residences and Land Development Rights category. Over time, however, the other two categories have grown in importance. In fact, Yoma Strategic’s target is for its Non-Real Estate business to account for 50% of its total revenue by 2020. If the company manages to do so, it will become a more diversified company.