Jaymart Group has been underperforming most of the first half of this year, weighed by Singer Public Company Limited (SET: SINGER), its subsidiary, on high provisions in the quarter. However, the business is expected to turn around, led by JMT Network Services Public Company Limited (SET: JMT), which maintained its strong performance throughout the year.
Mr. Adisak Sukumvitaya, Chief Executive Officer of JMART, told “Kaohoon” that the group bottomed out in the second quarter as problems in SINGER that forced the company to set high provisions had been solved. The CEO expected SINGER to return to profit in the third quarter.
JMT is the only subsidiary within the JMART Group to see profits in the second quarter, recording 551.0 million baht, a 27% increase from the second quarter of 2022. The increase was mainly due to JMT’s cash collection ability and share of profit from joint venture JK AMC that has grown higher.
The stock is still overwhelmed with ‘BUY’ recommendations from analysts as five out of five brokerage firms have positive views on JMT, giving a consensus target price at THB62.17 per share, a 46% upside from the closing price of THB42.50 last week.
Kiatnakin Phatra Securities (KKPS) reiterated a ‘BUY’ recommendation on JMT due to a promising performance forecast in 2H23 with portfolio expansion to sustain strong profit growth in 2024, while having attractive valuations. However, KKPS rolled over its price objective to THB68, down from THB81 to reflect its de-rated PBV to 4.0x (from 4.8x) to price in the risk of economic growth in Thailand that may affect debt repayment ability. Still, share price catalysts are an uptrend in new NPL acquisitions and cash collection.