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The ex-Goldman banker who quit to take over a Myanmar empire
[SINGAPORE] When Melvyn Pun agreed to take his former boss to Myanmar in 2012, little did he know that the trip would cause him to quit his high-profile job at Goldman Sachs Group.
Melvyn had wanted to stay as head of corporate sales for Asia excluding Japan at Goldman, rather than join his father Serge's empire - a sprawling conglomerate that runs businesses from real estate to the KFC chicken franchise in South-east Asia's poorest nation. But after three days of looking at the investment opportunities in Myanmar, the excitement of his ex-boss convinced him that he'd be mad not to go into the family business.
"I was a happy investment banker at Goldman Sachs for 12 years," Melvyn, now the chief executive officer of Yoma Strategic Holdings, said in an interview in Singapore. "But the last five years have proved me wrong and I probably should've done it a bit earlier."
The International Monetary Fund, for one, is positive about the country's prospects. In a November report, the IMF said Myanmar is "rebounding" thanks to a pickup in agriculture and exports. The fund projects 6.7 per cent growth this fiscal year, up from 5.9 per cent the year before. That's one of the fastest paces in South-east Asia.
Yoma Strategic is one of three publicly listed companies that have grown out of a business founded by the elder Pun in 1983, which is now one of the largest conglomerates in Myanmar. Yoma was listed on the Singapore Exchange in 2006. The second, First Myanmar Investment, was the Yangon Stock Exchange's inaugural listing in March 2016. Yoma spun off its Myanmar tourism assets this month.
Melvyn took the reins from his father in 2015. He aims to triple Yoma's market value within five years to at least S$3 billion by expanding each of the consumer, automotive and real estate units into S$1 billion businesses.
For some global investors, the Myanmar investment opportunity that the Pun family story highlights is being overshadowed by the Rohingya humanitarian crisis, which has seen hundreds of thousands of people displaced and drawn condemnation from world leaders. For locals like the Puns, even though they're sympathetic, business must go on.
It's "very unfortunate," Melvyn said. But "there's negative international sentiment that may discourage international companies from coming in and competing too aggressively," and the government is pushing harder to boost growth, he said.
The 39-year-old's life couldn't have been more different from his father's. Serge was the son of a Chinese banker who was forced to take his family from Myanmar in the 1960s when the country became less welcoming to foreigners after a military coup. They moved to China, and later Serge went to live in Hong Kong with almost no money. He started as a door-to-door salesman and eventually built a real estate empire. Today, his shareholdings in Yoma alone are worth more than S$300 million.
Melvyn grew up in Hong Kong, studied engineering at Cambridge University in the UK, and took a job at Goldman Sachs in 2000. These days, he divides his time between Hong Kong, Singapore and Myanmar.
"I never pushed," Serge said in an interview about Melvyn taking over. "When I told Melvyn in 2011 - I had heart problems in 2011- and I said, if you want to come back, this is the right time, and he said to me, 'I've thought about it, Dad, I don't think I'm coming back.'"
Seven years and a life-changing decision later, Melvyn says he's most excited about the consumer business. Yoma bought the KFC franchise in 2014 and now has 21 restaurants. It also has a 30 per cent stake in High Class Whisky, Myanmar's second-largest whisky brand.
Pun plans to open more eateries, both local and global names, to serve the country's growing middle class and large youth demographic. They tend to live with their parents, see eating out as a luxury, and can spend "more than 50 percent of their income" on food, he said.
Yoma's plan to structure its operations into three major business groups is a positive, yet "some concerns still linger," said Joseph Ng, an analyst at Oversea-Chinese Banking Corp who has a hold rating on the stock. The consumer business is still in its infancy and needs time to become efficient and profitable, he said.
Yoma got most of its operating income from its property business in the fiscal year ended March 2017, while the food and automotive units made operating losses, according to data compiled by Bloomberg. The stock climbed 1.9 per cent in early Singapore trading on Wednesday, while the Straits Times Index slipped 0.2 per cent.
But the younger Pun is unfazed, an aspect of his personality that his father says is one of the reasons he picked him - from among his four sons - to carry on his legacy. "Definitely, he's the most capable," Serge said.
Melvyn, meanwhile, recalls what his former boss helped him see about the country during those three days in 2012, which made him quit Goldman and follow his father into the business. For him, the people of Myanmar are hard workers with entrepreneurial tendencies and a "real desire to be someone." "It's an extremely exciting opportunity," the younger Pun said. "Intellectually it's very challenging, stimulating, but also we're impacting real lives."