On Friday, Suwatchai Pitakwongsaporn, Managing Director of ATLAS Energy Public Company Limited (ATLAS), shared the company’s business model ahead of its listing in the Stock Exchange of Thailand (SET) during the Kaohoon program. ATLAS is a subsidiary of PTG Energy Public Company Limited (SET: PTG).
ATLAS’ revenue stream came from its four key business including:
- Providing LPG for automobile, household, and industrial customers.
- Distributing PTG’s oil in 177 out of approximately 240 ATLAS service stations.
- Revenue from advertisement in its service station and partners.
- Other incomes such as membership fee and rental fee.
Advertisements (Ads) form the bulk of ATLAS’s net profit, contributing more than 60% of its net earnings due to its robust gross profit margin (GPM). In revenue, LPG sales contributed 83% of the company total income, with 9% from PTG’s oil sales, while the remaining 8% came from other business, including Ads.
ATLAS is currently Thailand’s leading LPG distributor for automobiles with a market share of 31%. However, the company did not prioritize market presence in its strategy, instead, the company is focusing on providing returns for its investors.
ATLAS conducts its business in a COCO (company-owned, company-operates) manner, selling its products in retail format—where 80% of the company operations are in-house—to maximize GPM at 14-15% (industry’s average are around 7-8%). This format also allowed the company to control its services and products, and create an ATLAS business ecosystem.
A firmer control over its assets also allows ATLAS to generate revenue from Ads. Originally, the company Ads. segment came amid the Covid-19 pandemic, which the company used as an opportunity to expand its influence and gather crucial data from its partners and stakeholders, such as restaurants and taxis, through public relation programs and relief efforts.
The data ATLAS gathered during the pandemic have led to a combustion-to-hybrid program for taxis, where the company would offer an installation of an LPG tank for a discount, in exchange, the company will gain an Ads space on the taxi. This transformed taxis into one of the company’s key assets, and was a catalyst for its Ads segment.
Later, ATLAS has expanded its Ads business into service stations, where the existing touchpoints (a point where customers engage in the station’s services) has transformed into Ads space. ATLAS’ large pool of service stations has also created a lot of touchpoints that can be used for Ads.
The cost of Ads business is also miniscule thanks to ATLAS’ integrated ecosystem, even if some Ads generated lesser revenue, the sheer amount of Ads allowed the company to maintain higher GPM in this segment.
Funds from IPO and investors will be used to enhance ATLAS’ existing business including:
- Expand and renovate existing service stations, which also include the combustion-to-hybrid transform program for taxis and private cars.
- Create LPG loading hub and distribution center in ATLAS’ station to reduce logistic costs.
- After-sales service for household LPG users, focus on repairing and upgrading LPG tanks, as well as building warehouses for household LPG business.
ATLAS is aiming for long-term growth for its business, styling itself as a growth stock, with substantial returns can be expected by at least 2027. Although the IPO funding is only planned to be utilized in the coming year.
