Jul 3, 2013

Myanmar Mints Its First Millionaire Tycoon

As Asia’s forgotten last frontier Myanmar opens up, after 50 years of military rule, Serge Pun stands out as its poster boy. Shares of his Singapore-listed, property-to-farming company are up 160% in the last one year, making Yoma Strategic Holding the most valuable private company in Myanmar with a market cap just shy of a billion dollars ($870 million).

Pun’s Yoma recently posted 105% increase in full year earnings to $12.3 million in FY 2013. Revenue from the real estate division rose 60% from $37 million last year to $55.9 million this year. Net profit was up 140%. Last month, when global markets went into a funk, Yoma’s share held steady at $ 0.95 cents a pop, reaffirming investor confidence in Myanmar’s future and Pun’s ability to harness it. Interestingly, Myanmar does not even have a stock exchange as yet!

Pun began his investing career in Hong Kong real estate, expanding into Malaysia, China, Thailand and Taiwan, building residential and office towers, retail complexes and golf courses. In 1991, he returned home to Myanmar and set up the SPA Group. Today the group has 30 operating companies, 4000 employees and half a dozen lines of business that operate under two companies – First Myanmar and Yoma Strategic.

Pun is a man in a hurry. He’s invested heavily into traditional businesses like real estate and farming (60% people of Myanmar have a rural livelihood). He farms Jatropha Curcas to make valuable bio-fuels and commercial crops like rubber, eucalyptus etc. His real estate holdings include the country’s first gated community MTI City, a golf course in Yangon, mixed-use apartment and retail complexes. With Dongfeng Automobile Company of China for import of light trucks and plans to have an assembly line for Chinese trucks in Myanmar. And with Mitsubishi Motors , he runs an after-sales service joint venture.

As Myanmar opens up with tourists wanting a peek into lost generation, Pun wants a piece of the action. Together with listed Hongkong and Shanghai Hotels (HSH), he is redeveloping the heritage Burma Railway Company building in Yangon into a five-star Peninsula Hotel. He is also bidding for a telecom license with support from George Soros.

It is not often in history that one witnesses the transition of a country’s politics and economics as dramatically as Myanmar’s. Investment Gurus like Marc Faber warn of execution risks in the country but like, he said, recently of Pun, “…he is an ideal man to operate in difficult environments.”

Well, Pun may or may not be the ‘right’ man in Myanmar, but he surely is in the right place at the right time.

Source: Forbes