JMART Jumps 4%, Analyst Expects 305% Profit Growth in 1Q, Recomm. “BUY” with TP of ฿44.5

The share price of Jay Mart Public Company Limited (JMART) rose ฿1.75/share or 4.27% to ฿42.75/share with a trading value of 397 million baht. 

 

The increase in share price was due to the speculation prior to the Ex-dividend date on April 20, 2021. JMART has approved a dividend payment for the second half of 2020 results of ฿0.24/share and the dividend will be paid on May 7, 2021. 

 

Maybank Kim Eng saw 1Q21 as a good start for JMART this year. Excluding extra items that bolster short-term speculation, every business can make a profit and have a better outlook even though the external factors like Covid-19 look harsh again. This reflects the competitiveness of the group, especially SINGER-KBJ that will be a rising star. Not to mention the potential of new business that would not start from scratch. This may cause the share price to outperform the market in the high volatile market like this. 

 

Maybank estimated 1Q21 net profit of 425 million baht (+305% YoY) from extra items from KBJ, while normalised profit is 265 million baht (-2% QoQ, +152% YoY). If classified by business, it is expected that I) profits from JMT-SINGER should be around 200 million baht. ii) Mobile business turnaround to profit YoY, but slowdown QoQ from less product launches. iii) J expects flat QoQ earnings of 50 million baht. Gradually recognise the backlog from properties in hand. iv) KBJ began to release mobile loans in Jan – Feb, growing MOM before Kashjoy personal loans releasing late quartet. It expects to record extra profits from the KBJ valuation after reducing the shareholding to KB Kookmin Card after tax of about 140 million baht. Net profit grows significantly. 

 

Earnings forecast for 2021-22 has been raised by 2-4% to 1.217 billion baht / 1.635 billion baht, +52/+34% YoY. Maybank maintained a “BUY” recommendation on JMART. The SOTP-based TP for 2021 is raised by 6% to ฿44.50/share based on SINGER’s appropriate value, which increases in proportion that is held. if the current P/E is 34x, still lower than the average profit growth in the next 2 years (2yr-cAGR) at 43% or equal to 0.8x PEG.