JMART Soars 12% to Bt44 with 5-Y Plan of 50% CAGR, Analyst Recomm. “BUY” at a TP of Bt51

The share price of Jay Mart Public Company Limited (JMART) jumped ฿4.75/share or 12.10% to ฿44.00/share as of 10:38 local time in Thailand with a trading value of 1,318 million baht. The highest share price up to this point was ฿44.00/share and the lowest was ฿40.00/share.

 

Mr. Adisak Sukumvitaya, Chief Executive Officer of JMART, revealed that the company expected a 50% CAGR in the next five years, while affirming with confidence that JMART’s earnings will continue to make an all-time high this year.

 

KGI Securities has given an “Outperform” rating on JMART with a target price as high as ฿51.00/share from future growth potential.

KGI stated that JMART has positioned itself as a holding company and its forward 2-year earnings growth is secured by solid contributions from the holding of 60% in JMT Network Services Public Company Limited (JMT), 15% from Singer Thailand (SINGER), and the rest from J-Mobile, JAS Asset, and KBJ.

Moreover, JMART recently formed two new partnerships: i) sold its 49% equity stake in J-Fintech to Kookmin Bank (largest consumer bank in Korea) to grow consumer lending through the digital platform and cross-selling among JMARTs customer base, ii) sold 16% equity stake in J-Venture to a new strategic partner TIS Intec (fourth largest IT system developer, shareholder of Grab Financial), hastening the company’s digitization transformation and enabling the company to access TIS Intecs customer base in Grab Financial.

Going forward, KGI saw a potential business leapfrog with the digitization transformation of J-Venture and its partner (TIS) by building business synergy among JMART and its subsidiaries.

 

Selling the equity stake in J-Fintech (currently renamed KBJ) will reduce JMARTs debt burden by around Bt1.8bn, and book capital gain of around Bt100mn in 1Q21, while selling the 16% equity stake in J-Venture will raise JMARTs cash on hand by around Bt200mn, and mark-to-market unrealized investment by around Bt800mn through equity.

As a result, its balance sheet should strengthen to D/E 1.8x in 2021-2022 (D/E ceiling at 3x) and allow JMART to raise its dividend payout ratio.