Jasmine Technology Solution Public Company Limited (SET: JTS) is the company that sees its share price soars at a pace unheard of in the past year after a consolidation of a telecom network and service business known as JASTEL from its parent company Jasmine International Public Company Limited (SET: JAS) in March 2021, followed by the decision to enter crypto mining business.
The share price of JTS skyrocketed from THB2.96 on 1 March 2021 to reach its record high at THB594 in just a little over a year on 27 April 2022, representing an increase by 19,967% or nearly 200 fold increase in share price.
Let’s say an individual invests THB30,000 to acquire 10,000 shares of JTS around THB3.00 per share and sells all of them when the share price reach THB500 when it first breached the THB500 level in April 2022 or even when the share price was on a downtrend breaking the THB500 level a month later. The amount of return that this individual will receive is THB5 million. A huge load of money from an investment in one year.
But of course, only a few could foresee this kind of movement in the stock market, considering this unusual behavior of JTS.
Since its record high in April, the share price of JTS started to plunge at a same pace as when it rose, falling 470% within two months as the share price hit slightly above THB100 in late June.
The share price of JTS had been trading around THB1 – 3 per share since its first trading day in the Thai stock market in September 2006. The sudden surge in price occurred after the acquisition of JASTEL, which had a significantly higher revenue and earnings than JTS around 5-6 times.
JASTEL recorded a revenue of THB1,600 million, and a net profit of THB300 million in 2020. On the other hand, JTS’ revenue was in a range of hundred million baht and a net profit in a range of ten million baht.
At the end of 2021 after the acquisition of JASTEL, revenue of JTS rose from THB300 to THB1,876 million, while net profit jumped from THB44 million to THB221 million.
By acquiring a much bigger asset, it would surely contribute greatly to the acquirer, but not to the point of nearly 20,000% rise in share price.
Even Bitcoin took two years to rise from $7,000 in late 2019 to its record high of around $64,000 in November 2021. And that was only an 800% price increase.
The entry into the transaction between JTS and JASTEL was expected to create business synergies between JTS and JASTEL and increase the opportunities and readiness for the enhancement of the data center and cloud service businesses of JTS in the future.
Later, JTS announced that it would invest in bitcoin mining, and had purchased a mining machine for this purpose, showing its commitment to the cryptocurrency industry that was surging at the time.
As the company turns to focus on cryptocurrency plus the hype from investors during the prime time of crypto era, the fall is surely hard for JTS. The share price started to decline sharply in May and continued to do so in June amid volatility in the crypto market that led to several exchange platforms halting withdrawal. Some well-known lending platforms went bankrupt due to defaults of its debtors after facing wild movement in the crypto market.
The plummet in crypto markets seems to stop (for now), but the after effect that it left has continued to pressure JTS.
The share price is now trading lower than the THB100 level. Is this a fair value for JTS?