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Yoma Strategic FY2026 Success Was Led By Property & Food Growth · Investor Exchange

• 0:00
  Time for another Investor Exchange podcast.
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  Here are your hosts, Matt and Sally.
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  Imagine a single company processing financial transactions equal to over 10% of an entire
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  nation's gross domestic product, but actually doing so at a financial loss.
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  Yeah, it sounds completely backward, doesn't it?
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  It really does.
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  But today, we are getting straight to business for you all.
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  We're doing a deep dive into the financial year 2026 earnings results and the condensed
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  interim financial statements for Yoma Strategic Holdings Limited.
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  Because we want to figure out exactly how a sprawling conglomerate like this survives
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  and maybe even thrives in one of the most volatile emerging markets out there.
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  Exactly.
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  And our mission today for you, the listener, is to provide a really clear, balanced, and
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  completely objective analysis of these documents.
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  We're just going to look at what's actually happening under the hood.
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  I mean, when you're looking at a conglomerate of this scale, it's so complex.
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  It is.
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  I actually like to compare a conglomerate to a massive multi-engine cargo ship.
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  Ooh, that's a good way to look at it.
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  Right.
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  Because to understand the actual speed of that ship, you can't just glance at the whole
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  thing.
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  You really have to go down and look at how each individual engine is performing.
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  You do.
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  And to do that, we should probably set a baseline first, just to ground the conversation.
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  Let's do it.
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  So just looking at the top line numbers, the group revenue reached $233.2 million United
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  States dollars.
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  Which is a solid 13.7% increase.
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  Yeah, a great increase.
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  But the number that really jumps off the page for me is the net profit.
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  It literally surged by 75.7%, landing at $23.9 million United States dollars.
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  So on the surface, you're looking at this and thinking, wow, this ship is moving fast.
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  It looks that way.
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  We have to unpack the mechanics of those numbers a bit, because a massive profit surge like
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  that can be a little misleading if you don't know the why behind it.
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  Okay, so break that down for us.
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  What is actually driving that?
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  Well, investors usually look closely at the core earnings, specifically the earnings before
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  interest, taxes, depreciation, and amortization.
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  Because that strips away the accounting noise, right?
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  Exactly.
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  It shows you the actual cash the business generates.
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  And that metric only improved by 10.9%, getting to $49.0 million United States dollars.
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  Okay, wait.
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  If their core earnings only grew by about 11%, how on earth does their net profit jump
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  by nearly 76%?
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  I know.
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  It's a huge gap.
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  Where did that extra money come from?
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  So the margins remained highly stable at 21.0%.
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  But that massive profit surge was actually heavily supported by higher property valuations.
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  Oh, interesting.
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  Yeah, the real estate market conditions were stronger, so the paper value of their properties
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  went up.
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  Plus, they had lower currency translation losses compared to the previous year.
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  Got it.
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  So since property valuations were such a massive driver of that profit, the real estate segment
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  is definitely the logical first engine we should inspect.
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  Absolutely.
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  The real estate arm is Yomaland, and the numbers there are pretty staggering.
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  They really are.
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  I mean, looking at the documents, Yomaland saw a 17.1% revenue growth.
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  And what stands out to me are the actual communities they are building.
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  The scale is huge.
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  Yeah.
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  They have over 9,000 residents at Star City, and then over 1,300 residents at the Penlang
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  Estate.
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  And they're boasting an 82% residential occupancy rate across the board.
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  Right.
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  But here's the data point that I found wild.
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  They have a massive backlog of 90.3 million United States dollars in unrecognized revenue.
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  What's fascinating here is how that specific number acts as a massive signal to investors.
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  It's like observing a highly coveted restaurant, right, where the reservations are fully booked
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  for the next two years.
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  That is the perfect analogy.
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  The money is pretty much guaranteed.
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  They just haven't served the meal yet, so they can't put it on the books.
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  Exactly.
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  The properties are sold, but until construction finishes or the keys are handed over, the
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  accounting rules say you can't recognize it yet.
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  But for investors, it gives incredible long-term earnings visibility.
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  You know exactly what cash is coming down the pipe.
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  Right.
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  And beyond that, Yolmoland is making a really smart shift toward recurring revenue.
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  Which is the holy grail, isn't it?
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  It really is.
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  Yeah.
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  Estate operations revenue actually grew 6.8% just through higher management fees and amenities.
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  So they just keep making money off the residents long after the houses are sold.
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  Exactly.
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  And when you combine that with the net fair value gains on their investment properties,
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  which rose to 31.2 million United States dollars for the year, it's a very solid engine.
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  So the real estate engine is purring, but let's connect that down to daily life.
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  How is the everyday consumer holding up in all this?
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  That's always the big question, isn't it?
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  The broader economic environment has been really tough.
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  Which brings us to the food and beverage segment.
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  And honestly, I have to push back on these numbers a bit.
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  What caught your eye?
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  Well, the segment hit record sales of 38.4 million United States dollars, and they saw
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  a 50% surge in net profit across their 84 restaurants.
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  Which includes the Yankin Kia Group of Companies Limited and Kentucky Fried Chicken.
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  Yeah, exactly.
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  But wait, in a challenging macroeconomic environment, how is a company achieving 20% same store
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  sales growth?
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  It sounds impossible, right?
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  It does.
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  Are people really eating out that much more when everyone is tightening their belts?
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  It's a totally fair question.
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  And the answer is a mix of things.
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  It's partially resilient consumer demand, but it's also heavily driven by necessary
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  pricing revisions.
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  Oh, I see.
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  So they just raise the prices on the menus.
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  Exactly.
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  They had to offset serious inflationary cost pressures.
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  The ingredients cost more, the energy costs more, so the bucket of chicken has to cost
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  more.
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  So the revenue goes up, but it's inflation driven, not necessarily volume driven.
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  Precisely.
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  And they did expand and renovate, which helped.
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  But you have to look at the expenses, too.
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  The higher core earnings from those price hikes were actually offset a little bit by
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  higher depreciation expenses.
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  Because of the new store opening?
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  Yeah.
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  And the renovations.
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  Building new restaurants means buying new equipment, which depreciates over time and
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  hits the balance sheet.
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  Okay.
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  So we're moving from physical cash registers at these restaurants to digital wallets.
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  Because the next engine we need to look at is WaveMoney, their mobile financial services
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  segment.
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  This is where the financial picture gets really interesting, and honestly, completely different.
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  Very different.
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  Because unlike the restaurants or the real estate, the revenue here actually declined,
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  and the segment posted a net loss.
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  Right.
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  A net loss.
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  Yet, and this is the crazy part, transaction volumes skyrocketed by 48%.
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  They hit 48.9 trillion Myanmar kyat.
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  Which is just a massive number.
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  It is greater than 10% of the entire nation's gross domestic product.
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  So my question is, how does volume go up that much while revenue goes down?
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  It's all about the strategic why.
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  The company is intentionally changing their entire business model here.
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  Okay.
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  How so?
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  Historically, they made a lot of money on over-the-counter remittance fees.
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  Someone hands over physical cash to an agent, pays a high fee, and sends it somewhere else.
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  High revenue per transaction.
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  Ah, I see.
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  But they are intentionally transitioning away from that.
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  They want to build a broader digital financial platform.
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  Where people just keep money on their phones.
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  Exactly.
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  And those digital transactions, like scanning a quick response code, generate much lower
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  direct fees.
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  So volume explodes, but direct revenue drops.
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  Okay.
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  That explains the revenue drop.
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  But what about the loss?
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  Why did they lose money?
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  The net loss was heavily impacted by a $1.5 million United States dollar non-cash goodwill
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  impairment charge.
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  Right.
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  I saw that in the documents.
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  Yeah.
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  It's essentially an accounting adjustment.
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  Because they changed their business plan to accelerate the digital platform buildup, the
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  short-term profit expectations dropped.
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  So they had to write down the value on paper.
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  Exactly.
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  It incurs higher costs initially, but it builds a much larger ecosystem.
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  And it's working.
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  They now have 7.2 million unique users.
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  Wow.
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  7.2 million.
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  Yeah.
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  And over 200,000 merchants.
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  So they are taking a short-term hit to become the digital financial backbone for millions
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  of people.
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  That's the play.
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  Exactly.
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  All right.
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  So connecting this idea of a turnaround and investment in the digital space, let's look
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  at a very physical sector that had an incredible rebound.
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  Ah, yes.
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  The motors and leasing segment.
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  Yoma Motors.
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  I mean, the data drop here is just fantastic.
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  Revenue in the motors segment more than doubled.
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  It's an incredible recovery.
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  A 109.1% increase, hitting $16.1 million United States dollars.
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  Passenger vehicle sales grew nearly ninefold.
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  They sold 152 units.
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  And on the commercial side, they moved 98 heavy Hyno trucks.
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  That sparked this massive return to profitability.
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  It really comes down to the resumption of bank financing for heavy equipment, like tractors.
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  So credit just freed up.
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  Exactly.
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  When banks started offering loans again, the pent-up demand just unleashed.
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  Combine that with continued strong demand for commercial vehicles, and the dealership
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  side roared back.
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  What about the leasing arm?
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  Well, the leasing arm, Yoma Fleet, was a bit different.
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  It remained highly stable.
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  Fleet utilization was at 87%.
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  That's pretty solid.
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  It is.
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  It's $4.5 million United States dollars in third-party assets under management.
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  Okay.
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  So it's steady.
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  Very steady.
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  But earnings were slightly impacted by higher operating costs, and they didn't have the
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  prior year disposal gains, you know, from selling off old vehicles.
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  Makes sense.
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  So we've looked at the engines, but investors drive by looking through the windshield, not
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  the rearview mirror.
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  Right.
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  We have to look ahead.
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  Exactly.
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  So what does this all mean?
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  When I look at the future outlook in these documents, there are some serious risks.
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  Definitely.
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  The macro environment is still incredibly challenging.
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  The Asian Development Bank forecasts a mere 2.4% gross domestic product growth for Myanmar
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  in 2026.
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  Which is very, very low.
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  And the documents explicitly call out global energy market volatility, import restrictions,
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  and labor shortages.
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  How is the company planning to navigate this?
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  They have a two-pronged strategy, defensive and offensive.
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  Defensively, they are aggressively strengthening the balance sheet.
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  They are targeting a long-term gearing ratio in the low to mid-teens.
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  Which keeps their debt levels manageable.
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  Exactly.
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  But the biggest defensive move is currency.
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  They are strategically replacing their United States dollar debt with Myanmar kyat facilities.
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  Oh, wow.
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  So they are insulating themselves against currency shocks.
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  Precisely.
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  If the local currency drops, having debt in United States dollars is lethal.
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  So they are eliminating that mismatch entirely.
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  That is a massive move.
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  What about the offensive strategy?
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  Where is the growth coming from in a 2.4% growth economy?
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  Offensively, they are targeting a phased restart of the Yoma Central project for the financial
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  year 2027.
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  The massive real estate development.
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  Right.
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  That's a huge internal catalyst.
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  And externally, there's an emerging opportunity to actually increase their stake in the Mandalay
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  Airport business.
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  Oh, infrastructure.
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  Exactly.
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  That could unlock significant long-term recurring revenue for them.
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  Which brings me to a final sort of provocative thought I want to leave you, the listener,
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  with today.
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  I love a good provocative thought.
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  Think about everything we just discussed.
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  They are intentionally transitioning their debt to local currency.
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  They are shifting their financial services to a massive digital ecosystem they control.
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  They are building the homes and leasing the trucks.
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  They are everywhere.
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  Right.
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  They are effectively building a localized fortress.
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  I want you to consider whether this strategy, this deep domestic integration, is actually
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  the ultimate blueprint for conglomerates.
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  It's a fascinating question.
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  Is this how you survive and thrive in highly volatile emerging markets?
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  It's definitely something to mull over as we watch their next moves.
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  This content is intended to serve strictly and only as an informational, independent,
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  objective summary of recent events and should in no way be interpreted, construed, or relied
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  upon by any party as inside information or financial advice.