SET-listed furniture maker Modernform Group Plc (MODERN) has diversified into innovation and tech startups to balance out tepid revenue in the furniture business.
Chief executive Thaksa Busayapoka said the company recently acquired a 10% stake in FinStreet, a tech startup owned by a former chief of innovation at Siam Commercial Bank (SCB).
FinStreet is a financial advisory platform that helps people free themselves from debt in the most efficient way.
The data obtained is used to develop artificial intelligence chatbots that can deliver financial advice to borrowers in real time.
FinStreet's Facebook page has more than 160,000 followers.
Modernform's investment is meant to cash in on the digital policies promoted by the government, Mr Thaksa said, adding that the rich database of FinStreet customers will help the company develop products to suit customer demand.
"It is our company's policy to change our business model to rely on sales from investment in new potential business sectors after seeing less opportunity to grow in the furniture business, as the competition is fiercer every year due to the entry of new companies, resulting in more difficulty to make profit," Mr Thaksa said.
"The investment in the tech startup firm is part of our mission to grow business with innovation and make valuable products. We will no longer rely just on the furniture business, but we will explore more business opportunities via new methods to exchange information with partnerships and expand the customer base to extend our core business."
Some 70% of Modernform's revenue stems from furniture, while the rest is generated by investments in other businesses.
Mr Thaksa said the company will increase the investment role of Modernform Group to gain revenue from investment after the furniture market remained flat over the past two years.
He said the company expects the furniture industry, particularly office furniture, to improve this year, with Modernform forecasting revenue growth of 15% this year from 3 billion baht in 2017.
The company plans to shift the revenue mix from investment and the core business to 50:50 over the next 3-5 years.
Apart from the core furniture business, the company operates a health care and medical equipment business, Modernform Health Care Co, that generates annual revenue of 400-500 million baht.
Modernform Health Care is 95% held by Modernform Group.
Modernform aims to spin off Modernform Health Care and list it on the Market for Alternative Investment by the middle of this year.
Modernform Health Care is spending 500 million baht to build a specialty hospital on an eight-rai plot in Ubon Ratchathani province. Chiwamitra Hospital will open to treat cancer patients early next year.
If the business works as expected, the company plans to open more specialty hospitals in major cities in the future, said Modernform president Kitipat Nerngchamnong.
"We will stay focused on our expansion, both in furniture and healthcare businesses, but more on innovation," he said.
MODERN shares closed yesterday on the Stock Exchange of Thailand at 5.35 baht, down 10 satang, in trade worth 2.5 million baht.
