JKN to Get High with Hemp, Analyst Recomm. “BUY” with TP of ฿12.5

It is expected that JKN Global Media Public Company Limited (JKN) would have positive factors from the cooperation with DOD Biotech Public Company Limited (DOD) to jointly develop hemp-infused supplementary products as Siam Herbal Tech, a subsidiary of DOD, is the first listed company to receive a license for import hemp seeds, sending JKN a chance to be first mover among the hemp-based producers. 

 

KTBST Securities (KTBST) foresaw JKN’s total revenue from sales of products, excluding hemp-related products, such as C-TRIA, Olig Fiber and Fish Cap, is 150 million baht with a 20% NPM, which means for each 100 million baht of revenue the company earns 20 million baht in net profit.

 

For the renting airtime on New 18 channel, KTBST had a positive view towards this issue as it will broaden the distribution channel of JKN contents and products besides an online platform, as well as boosting the advertising income.

 

KTBST maintained 2021 net profit at 375 million baht, an increase of 20% YoY, which reflects 1) total revenue to ramp up by 22% YoY due to an increase of revenue from program rights by 12% YoY and an increase of sales revenue to 150 million baht, and 2) gross profit margin (GPM) to expand YoY.

 

As of 2020, JKN reported an improving net profit of 312.47 million baht (EPS 0.51 baht per share), mainly due to the total expenses for the year decreased 11.91% from the last year, especially the drop of cost of content. Moreover, the Thai Baht value depreciated against the US Dollar during the first-half of 2020, resulting in gain on exchange rate. 

 

In addition, KTBST has given a “BUY” recommendation on JKN with a target price of ฿12.50/share, expecting the earnings growth to continue in 2021-2022 at the rate 18%, along with an upside from selling hemp-based products.