Home » Economy » JMART group breaks the line – never stops growing A large capital synergies plan to support the winged business

JMART group breaks the line – never stops growing A large capital synergies plan to support the winged business

shine the kingdom “J Mart” of the group “Sukhumvitya” Growing more and more day by day after breaking the line of business and merging with major partners to invest Supporting earnings and share prices on the wings from the current 4 companies in the stock market already have a market cap of 191 billion baht. The brokerage “buy” JMART shares, giving a target price of 65-75 baht.

This is another business group with interesting growth for the “Jay Mart” group or Jay Mart Public Company Limited (JMART), which is a major shareholder of the family. “Sukhumvitya” With a combined shareholding of more than 46.59% because each business that decides to move forward has grown significantly for the future of the group, especially news of business cooperation with large commercial banks. and capital groups from the domestic market in business finance which many believe that this will be the key to the proportion of business revenue of JMART in the future will change from the present.

Initially, “J Mart” operated its first business, which was selling electrical appliances with installment payments in 1988 with an investment of 2 million baht. When entering the business of selling mobile phones in 1992, then expanding to establish JMT Network Services to manage debt and JAS Asset to penetrate the space management market. and real estate later

In 2009, the company was able to be listed on the Stock Exchange of Thailand. and become even stronger when taking a majority stake in Singer Thailand Public Company Limited (SINGER) in 2015, along with additional investments in other businesses leading to the announcement of the restructuring of the organization to be “Holding Company” in the following year

What is interesting for JMART should be defined as “continuous growth” because JMART is not the only company of the whole group that has grown to its potential. But the subsidiaries in many businesses have grown strongly. Until being able to raise funds on the stock exchange according to the previously successful Holding Company, whether it is JMT Network Services Public Company Limited (JMT), which is a service provider for tracking debts, both In terms of non-performing debt and debt collection services covering all types and JAS Asset Public Company Limited (J) operates the business of managing rental spaces in shopping centers in terms of mobile phones and technology products. Thus, at present, the “J Mart” group has 4 companies listed on the Stock Exchange of Thailand, with market caps. Total close to 200 billion baht (191 billion baht), divided into JMART at 78,786 million baht, followed by JMT with a market cap of 76,591 million baht, SINGER with a market cap of 31,204 million baht, and J has it. Market cap 4,515 million baht

JMART holds a majority stake in JMT with 53.91%, SINGER holds a majority 53.91% and J Company owns 66.07%. As for operating results in 2020, the company had a net profit of 798 million baht, an increase of 49% from 2019, the most since the establishment of the business. Even in the year of the COVID-19 pandemic, including the first half of 2021, net profit grew 113%.

A significant part comes from growth through a comprehensive Synergy strategy from having multiple businesses. Its complete retail, finance and technology portfolio allows the company to connect businesses to create more strength, such as the company’s mobile phone sales. Able to pay in installments in the form of personal loans through subsidiaries of the group

In addition, the company also attaches importance to investment in the transportation business. To expand market opportunities to reach more consumers and rely on synergy with other businesses of the company as well.

However, self-growth seems to be not popular enough, so the “J Mart” group has started a strategy to attract partners to join the business in order to grow the wings to fly even higher. by a big deal that many parties are unavoidable The deal between JMART and VGI Public Company Limited (VGI) and U City Public Company Limited (U), which is considered a large equity group such as BTS Holding, whether it is a train business. Joint management of BRT, U-Tapao Airport and the Nakhon Ratchasima motorway, including the MIX business that extends from the transportation system such as Kerry Express, VGI and PlanB with hotel-focused Match businesses. and real estate which the two major business groups Synergy together will help expand JMART’s business to grow in many channels.

For leading companies under the BTS group, they will invest in companies of the JMART group totaling 17,500 million baht, divided into “U City”, will invest 24.9% in SINGER to prepare for the transformation of business operations into business units. In addition, “U City” and VGI also invested in JMART totaling more than 10,400 million baht, with U holding 9.9% and VGI holding 15.0%.

And as a result of this deal, it is expected that SINGER will receive money from PP and RO in the total amount of 10,600 million baht to expand the growth base of the hire purchase loan portfolio. and car registration mortgage loans. In order to reduce interest costs, SINGER aims to increase its loan portfolio to 15 billion baht in 2022, while JMT announced an RO capital increase, raising funds of more than 10 billion baht to increase its capital base to expand the purchase of more non-performing debts. To push to be the number 1 non-performing debt management company in the country

Adisak Sukhumvitya, Chief Executive Officer of JMART comment This alliance with VGI and U City, companies in the BTS Group. This is a significant growth of the JMAR T group by the company. join forces with potential leaders in business operations Offline-to-Online (O2O) solutions with media business Payment service business and logistics business Combined with data analytics capabilities that allow companies to reach more customers. This alliance will help unlock more of the company’s capital base. and create growth through synergy together

In the next 3-5 years, the company aims to use the money through fundraising to expand the business. and reduce financial costs We are confident that JMART has sufficient funding to generate efficiency in growth. Despite experiencing challenging situations from the COVID-19 epidemic At present, the total market cap value of the group of companies is over 106,822 million baht, which is expected to grow no less than 3 times more.

Not only this, in addition to the business that has more opportunities to grow. This capital increase will strengthen the capital of the JMART group, with the lower cost of financing of SINGER and JMT reflecting back on JMART in terms of outstanding earnings, with JMART targeting an overall profit growth of no less than 50. % per annum for the next 3 years, which does not include alliances to expand additional new businesses

Meanwhile, previously there was news that JMT would joint venture with Kasikorn Bank Public Company Limited or KBANK to establish an asset management business (AMC), which both companies did not deny the issue. It is in the process of discussing with partners about the joint venture. But there is no official conclusion yet.

Recently, JMART revealed through the Stock Exchange of Thailand (SET) that the Board of Directors meeting has approved the company to Make a preliminary memorandum of understanding with Gunkul Engineering Public Company Limited or GUNKUL and SINGER with the objective of establishing a joint venture company. to distribute electrical equipment and solar solutions through distribution networks and procurement of credit by business groups in the company’s affiliates across the country for electrical products and solar solutions, as well as to develop distribution channels for hemp products through the distribution network of the company’s affiliates including studying the possibility of making a cannabis hemp center for health

In addition, the joint investment is developed to invest in the installation of the Solar Rooftop system to save electricity costs. and the opportunity to sell electricity together under the Jay Mart Group and investment in EV Charging Station and study the possibility of Synergy in other areas including the study of Utility Token to be applied in the company’s products

In this joint venture, GUNKUL will hold 50% shares, while JMART holds 40.1% and SINGER holds 9.9%, with an initial investment of 1 million baht and establishing a joint venture company within the first quarter of 2022.

for the establishment of a joint venture company Initially, it will use a share swap method (share swap) between each other worth 500 million baht and in the next 6 months will exchange shares for another 500 million baht. this new business

“We see that Clean energy and hemp businesses are the world’s megatrends. supported by the government And in the interest of consumers, JMART and SINGER’s entry into this market is therefore an opportunity for business expansion and product extension, with GUNKUL being a strong partner. Join jigsaw puzzles to create added value. and move forward in business together through the establishment of a joint venture company with a vision of bringing technology to support and we will be the first to lead that can use digital tokens in the energy and hemp business Expect more clarity early next year.” Adisak said

An interesting thing is that JMART also plans to bring J Ventures Company Limited (JVC), an information technology service provider (a subsidiary of JMART), to be listed on the Thai stock market. to strengthen in the future Currently, JVC has a registered capital of nearly 200 million baht and plans to launch a Thai national NFT platform for the first time. JMART currently owns more than 60% of JVC and is expected to be able to trade in the Thai stock market in the next few years or around 2023-2024.

“The fact that JVC plans to launch the first NFT platform in Thailand soon. This is viewed by the company as a positive result. Because it helps to grow the business better. as well as help create Returns to JMART as a long-term shareholder base.” Mr. Adisak said

Brokers “Buy” JMART

Perspective on business direction Securities Company (Securities) Nomura Pattanasin It states that there is a positive view on Jay Mart Public Company Limited (JMART) from the announcement of approval for establishing a JV between JMT and KBANK in terms of both costs. and competition and is changing the business model from the original focusing on auction We have revised up our 65-23 projections by an average of 2% to 1.96 billion baht (+54% yy) and 2.6 billion baht (+32% yy) from the revised earnings forecast of JMT by an average of 4% per year based on the assumption of buy higher debt Meanwhile, the 4Q21 outlook shows remarkable growth from all business groups in the high season, revised up the FY22 base value to Bt60 from Bt53 from the Bt75 revised JMT and maintain the Trading Buy recommendation.

However, the trend of business growth Backed by capital with JMT as the dominant, while there is also upside risk from Synergy with BTS and GUNKUL, as well as response from JFIN Coin.

KGI Securities (Thailand) Stock analysis of Jay Mart or JMART. JMART, JMT and SINGER have successfully increased their capital. The whole group raised 3.3 billion baht (1.2 million baht for JMART, 11 billion baht for SINGER and 10 billion baht for JMT), enabling it to maintain a strong growth rate over the next 3 years, both from Strategic alliances (BTS group) to expand customer base, increase e-commerce platform, create new innovative technologies & develop cryptocurrencies in larger ecosystems, and find opportunities to find JV partners under JMT.

In addition, JMART has a plan to diversify its business lines in 2022 as follows: 1.) Establishing a new company “J-Elite” to manage the redemption of reward points through the use of Jfin coins as a discount/exchange for IT products of the JMART group and is expanding. to BTS’s group in the next year. 2.) Accelerate the expansion of digital credit business under KBJ, including allowing KBJ to make purchases at J-Mobile stores. We expect the investment to increase J-Mobile’s margins, with every 1% increase in J-Mobile’s margin increases JMART’s earnings by 4-5%.

Meanwhile, JMT’s growth will come from asset acquisitions and JV alliances with banks to generate extra returns from its AMC business, while J-Mobile’s growth potential will come from revenue. and margin increased. J-Mobile’s revenue grew 14% YoY in the 9M21 period, but its net profit grew >300% to Bt137mn due to the proportion of SG&A/revenue reduced to 12.5% ​​(from 14% in 2020) due to changing distribution channels Going forward, it is expected that the alliance with BTS will help improve J-mobile’s product sales and boost profits. We expect J-mobile’s net profit in 2021 to be Bt210 million and will increase to Bt320/430 million in 2022/2023.

Consequently, JMART estimates are revised to reflect revised estimates of JMT (60% of JMART’s total earnings) and J-mobile (17%). New business from J-Elite and fintech & cryptocurrency development is expected to Creates value for the company through an agile holding company structure, strong growth following alliance with BTS, accelerated JV business set up with Kookmin Bank (Korea), and new alliance JMT. We therefore revised our target price at Bt65 (from Bt48), reflecting a 3-year average growth of over 50% and maintaining a BUY rating on JMART.

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