KWM and the Magical Word “Hemp” to Get Investors on a Hype Train

K.W. Metal Work Public Company Limited (KWM) was one of the securities that is barely noticeable up until recent weeks, making the trade volume surged from a million to ten million baht a day to hundreds of millions of baht amid confusion in the market of what could transpire to cause such development.

 

The company produces and distributes agricultural equipment such as disc, disc plough, screw flight and front dozer blade.

 

KWM reported an outperforming results in 2020 operations with a net profit of 43 million baht, representing an increase of 60.21% from 27 million baht in 2019. The revenue slightly grew by 4.73% to 352 million baht. Meanwhile, the selling cost decreased by 1.39% to 259 million baht, the administration cost dropped 4.74% to 36 million baht and financial cost declined by 16.50% to 2 million baht.

 

Even with such performance in 2020, the share price could not surge this much. KWM was traded at ฿1.26/share a month ago, but the recent hikes pushed the share price to close over ฿5.00/share last week.

 

Speaking of last month, there was a major development in Thailand, and that is the approval of growing hemp and using or fusing hemp in food & beverage and cosmetics for those holding certificates.

The approval triggered a surge in cosmetics- and F&B-related stocks such as CBG, OSP, ICHI, DOD, and even RS also announced to introduce hemp-related products.

 

The joint venture between KWM and “JSP Pharma” to extract substances from hemp for medical usage and producing drugs could be the reason for the surge in share price.

 

KWM is specialized in producing Supercritical Fluid Co2 Extraction machines and Ultrasonic Extraction machines, while JSP Pharma is specialized in producing modern and traditional medicine with an International Organization for Standardization (ISO).

 

Moreover, KWM recently joined “N.E. Hemp,” a producer, distributor and importer of hemp’s seeds, owned by Mr. Chuwit Jungtanasomboon, Chief Executive Officer of North East Rubber Public Company Limited (NER).

 

KWM has gone full-throttle on the hemp business even though the approval has just been over a month and it would take a few months to go through other processes before starting the production.

 

What is certain is that anything related to hemp has turned into a magical word to get investors on a hype train in recent months.