Sai Ohn Myint on the new YSX: ‘Better than borrowing money from a bank’

The Great Hor Kham Public Company is one of first companies to be listed on the Yangon Stock Exchange, which opened on December 9. The company, based at Muse in Shan State, was established on December 12, 2012, and its nine-member board of directors are all ethnic Shan who have been friends since university, said the company’s managing director, Sai Ohn Myint. Great Hor Kham Public Company has 500 shareholders. Frontier asked Sai Ohn Myint about his company’s activities and the decision to list on the stock market.

In what activities is your company involved?

For this point, I want to explain that our company has two sectors – investment and project implementation as a contractor. Since we started the company, we implemented as the contractor for the Muse Central Business District project, which is funded by the New Star Light Company. The project area covers 300 acres. And we implemented the Muse border checkpoint so-called 105 mile gate’s extension project.

As an investor, we have invested in the Nant Paw hydropower project, which is six kilometers from Muse, since October 2013. We already did some steps in this project.

Do you have a parent company?

No, we are not under anyone, but we have three subsidiary companies, namely Hor Tech, Twin Industrial Limited and Muse Concrete Group of Company (MCGC). Hor Tech is technical company that drafts blueprints and has a laboratory for concrete, geotechnical and soil investigation. Twin Industrial Limited is a construction materials production company. MCGC is a concrete supplier company for our projects and it is jointly owned by GHKP, New Star Light Company and another one. We own 45 percent of MCGC.

But at YSX, we listed only GHKP, not the other two.

How much profit do you make?

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Before I talk about profit, I want to tell you how much income tax we pay. GHKP paid income tax to the government of more than K30 million in 2012-2013 fiscal year and K44 million in 2013-2014 fiscal year. In the 2014-2015 fiscal year, we paid K196 million in income tax. So, it means our net profit is three times our income tax. We are on the government list of the top 500 income tax payers.

What projects and future plans are outlined in your prospectus?

We showed the MoU-signed projects and already completed projects. We still have projects that we have not yet signed an MoU for, but we did not include them because it might be against business ethics. Nant Paw hydropower project is also a project in our prospectus. It is not finished. It will have 20 megawatts of installed capacity and will produce 83 million kilowatt hours a year. We have invested about US$50 million in this project. It is a BOT (build-operate-transfer) project.

And we have a plan for a real estate development on 100 acres near Mandalay. We are also interested in four hydropower projects but we have not signed an MoU for them yet and we cannot discuss them because of business ethics.

Why did you want to list on the YSX?

After President U Thein Sein said he welcomed public companies, I started exploring what the public companies are. I hired legal advisors and they advised me that we should list on the Yangon Stock Exchange. I learnt that a company can list on the stock exchange if it meets the criteria. And we think that it is better than borrowing money from a bank. We have prepared for listing since the company was established. We issued an annual report, paid a dividend each year and explained the company’s future plans at annual shareholders’ meetings. We aimed to establish a public company since we started.

What are the advantages of being listed on the YSX?

If we are not a listed company, we can sell the past projects’ shares. After being listed, we can sell shares in future projects to raise capital.

Tell me about the company’s board of directors.

There are nine members of the board of directors who are founders of the company. I am an engineer and after I graduated with a bachelor’s degree in civil engineering I worked for the Asia World company for 12 years until 2008. I was a project manager for Asia World and acquired experience in building infrastructure, such as roads, bridges and hydropower projects. I worked on the Shweli hydropower project for seven years. The other members of the board of directors are old friends from university but they are not engineers. They are traders and sellers of construction and electrical materials.

Why did you decide to list on the YSX and not on the stock markets in Thailand or Singapore?

Our company is very young, only three years old this month. It would be difficult to list abroad with our limited experience.

In Myanmar, dollarization is a problem for the economy. The YSX will trade in kyat. Some experts say investors might be more interested in saving dollars than buying shares in listed companies because they want to avoid inflation. How can you avoid this?

It is right, but we can’t solve it. Only the Central Bank and the government can solve it. We tried to borrow money from foreign countries. The problem is we have to borrow in foreign currencies but our projects are in the local currency, the kyat. And we would have to repay the money in foreign currency and we would be burdened by inflation. We are afraid of such a situation. As a listed company, we will trade in kyat, we will operate with kyat and we will pay back in kyat. It is okay for us. That’s why we listed the company.

How can you promise your investors that GHKP will continue to be profitable?

We are investing in sectors that will provide regular income, such as infrastructure. We are building hydropower projects. These are projects that are essential for the country and we can accurately predict when we will get the profit from these projects. This is why we can promise that our company will be continuously profitable in the future.

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