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Siam Wellness targets 20% growth, plans IPO

AIMING to become the first publicly listed spa company in Thailand by the end of this year, Siam Wellness Group has weathered the Kingdom's tourism slowdown and expects to post 20-per-cent revenue growth this year.

President Wiboon Utsahajit said Siam Wellness submitted its listing application to the stock-market authorities on June 12 and expected to launch an initial public offering by year-end. The company plans to float 170 million newly issued shares or 29.82 per cent of the total shares after the IPO on the Market for Alternative Investment, the stock-trading exchange for small companies.

After establishing its first Let's Relax spa in Chiang Mai 16 years ago, Siam Wellness now has 11 spas in Bangkok and resort towns, three of which are under the five-star RarinJinda Wellness Spa brand, seven under the four-star Let's Relax brand and one under Sabaii by Let's Relax.

The spa business contributed 78 per cent of Siam Wellness' total revenue last year, while RarinJinda Wellness Spa & Onsen Resort, a 35-room teakwood boutique hotel in Chiang Mai, bestowed 16 per cent, and the spa-products business provided the rest. The group booked net profit of Bt54 million last year.

Wiboon said Siam Wellness mainly competed against high-end spas run under the wings of five-star hotels, through offering the same luxurious atmosphere at about half of its rivals' prices. Although 80 per cent of its customers are foreign travellers, the group has been only lightly affected by the political turmoil, with income during the first half nearly equal to the same period last year.

"This is because we have several branches around the country," he said. Only four of its spas are in Bangkok, while the rest are in Chiang Mai, Pattaya, Phuket and Samui.

The company recently opened a new branch at Siam Square One in Bangkok, and will open another one in Hua Hin this month, and another at the new five-star Grande Centre Point Ploenchit hotel in the fourth quarter. It will be running 14 spas by year-end.

Wiboon said Siam Wellness was discussing with its financial advisers ACAP Corporate Services and Globlex Securities how to price the company, since it would be the first spa on Thailand's stock market. He said spa business usually generated higher return than hotel companies because each spa room can accommodate many customers a day, while each hotel room will normally be occupied an entire day by only one or two customers.

The Utsahajit family, who also run Banlue Group, a leading printing house and publisher of Thai cartoon classic "Kai Hua Roh", hold 70 per cent of Siam Wellness, and the Jirawannasathit family hold the rest.

Siam Wellness will use the IPO proceeds for working capital and for expanding its business. Wiboon said the company would initially expand to cover more large cities. Siam Wellness' debt-to-equity ratio is currently less than 1:1, since it is a cash-earning business and does not have to carry inventory, Wiboon said.


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