Published in Nikkei Asian Review, November 2018 Issue
The Philippine holding company is sustaining market leadership with its expanding interests in retail, property, and banking while bolstering growth with investments in high-potential sectors.
SM Investments Corporation (SM) is driving higher growth for the company with the strategic expansion of its core businesses and burgeoning portfolio of investments. Its three main businesses are leading market players with a sustained record of growth that — along with the country’s steady economic performance — creates opportunities for increased value.
Thanks to the robust performance of its core businesses, SM’s total assets grew by 11.4% to PHP960.1 billion ($19.04 billion) in 2017. The group sustained its growth trajectory in the first nine months of 2018 with a 10% increase in consolidated net income to PHP26.2 billion ($343.8 million) and by posting a 12% increase in consolidated revenues to PHP307.4 billion ($5.85 billion). “We intend to sustain this growth trajectory, capitalize on our strong business portfolio, capture new growth opportunities to deliver more value, and accelerate expansion for the group,” said SM President and CEO Frederic DyBuncio.
From its humble beginnings as a shoe store established 60 years ago by founder, Henry Sy, Sr., the group has evolved into one of the top conglomerates in the country. SM’s current retail portfolio encompasses food retail through the SM Markets and non-food retail through THE SM STORE and Specialty Stores. Its property arm, SM Prime Holdings has interests in offices, hotels and convention centers, and tourism-related property developments along with residences and malls in the Philippines and China. Also, SM is significantly invested in banking through BDO Unibank, the country’s largest bank in terms of total resources, loans, and deposits, and in China Bank, the country’s sixth largest bank.
In retail, SM continues to introduce innovative retailing concepts and exciting merchandise while pursuing a multi-format growth strategy to fuel its retail growth. “We recognize that the business landscape is rapidly changing and we are geared towards meeting the market’s evolving needs,” added DyBuncio.
For its property business, SM Prime’s continuous expansion in various developing cities in the country as well as its solid performance are driving double-digit growth across the group. In banking, BDO and China Bank are capitalizing on their strong business franchise and ramping up their expansion in high-growth areas and underserved segments to sustain their growth.
Aside from integrating more investments, SM in recent years has invested in complementary businesses that offer attractive financial returns. These include equity investments in Belle Corporation, an integrated resort development; 2GO Group, the Philippines’ largest end-to-end logistics solutions provider; and Philippines Urban Living Solutions (PULS), the developer and operator of co-living micro condos, MyTown.
These new investments are expected to fuel higher growth this year and should complement solid returns across the group. SM is well-capitalized to increase its nationwide presence, scale new opportunities over the medium-term and further support the growth and development agenda of the country through its solid investments.