JMT-BAM Gain Advantage from Higher NPLs, Analyst Expects CHAYO to Book a New High in 2Q

Analysts indicated an asset management companies (AMCs) to gain advantage from higher NPLs, expecting JMT-BAM-CHAYO to report higher profit in 2Q20.   

 

According to report, yesterday (July 20, 2020) the share prices of JMT-BAM-CHAYO were closed higher. JMT Network Services Public Company Limited (JMT) surged ฿1.50/share or +5.50% to close at ฿28.75/share with a trading value of 527.2 million baht. Analyst foresaw JMT to post 2Q20 profit of 205 million baht (+38% YoY). 

 

Bangkok Commercial Asset Management Public Company Limited (BAM) rose ฿0.90/share or +3.78% to close at ฿24.70/share with a trading value of 1,962.2 million baht.

 

Chayo Group Public Company Limited (CHAYO) increased ฿1.00/share or +14.93% to close at ฿7.70/share with a trading value of 464.3 million baht. Analyst expected to post a new high in 2Q20, anticipating a core profit to hit 52 million baht (+55% YoY).

 

KGI Securities stated that AMCs sector will be benefited from a higher NPLs as it would result in higher growth potential. Also saw high growth potential for JMT as more than 90% of its business is in debt collection services and distressed asset management, which are set to benefit from the weak economic outlook. The company saw revenue growth of 35% from these segments over the past two years. 

 

JMT’s debt collection services generate a recurring revenue stream that contributes 15% of the company’s revenue with 3-year CAGR growth of around 25%. In 2019, financial institutions awarded JMT 43 billion baht in collections of bad debt, and its growth potential should be maintained in 2020 as there are more NPLs in the financial system.

 

Trinity Securities expected JMT core profit in 2Q to come in at 205 million baht (+38% YoY), supported by an improvement of debt collection services.

 

Meanwhile foresaw CHAYO’s 2Q20 to post a new high of 52 million baht (+55% YoY, +40% QoQ) due to the sales of NPAs and personal loans. 

 

Asia Plus Securities (ASP) had a positive view toward AMCs as believed that the Covid-19 pandemic will provide an opportunity to purchase additional NPLs to their portfolio and would recognise the revenue from 2021.