JMT Debt Purchase Expects to Accelerate in 2H23, Leading to 27% Growth in Bottom Line

FSS International Investment Advisory (FSSIA) expected 2023 to be JMT’s golden year for debt management business with a net profit growth nearly 30% by year’s end, making another record high for the company.

The analyst stated that JMT Network Services Public Company Limited (SET: JMT)’s debt purchases were below target in the first half of the year at 4.13 billion baht from a target of 10 to 15 billion baht. JMT normally delays debt purchases if it does not receive a desirable IRR return rate. It is believed that in the second half of this year there will be an acceleration of debt purchasing due to the increasing supply of many banks who want to reduce NPL or bad debt, which will increase the total purchase of debt this year to 11 billion baht.

The analyst expected Jaymart Insurance (JI)’s non-life insurers to see earnings growth from expansion and adoption of the TFRS17 financial standard, as well as adopting technology to help create more cost-effective insurance contracts, and increase the underwriting through various channels from JMART.

FSSIA estimated net profit growth at the end of 2023 at 27.6% year-over-year, with purchasing and debt collection in the first half starting in the second quarter of this year. The firm forecast that the growth would continue into next year and a year after that with a net profit growth of 22% and 22.6% in 2024 and 2025, respectively, from the debt acquisition business and a strong financial position with the potential to borrow additional money to expand the business further.

FSSIA saw JMT as the leader in asset management in the financial sector, especially in the area of ​​unsecured retail debt, and recommended buying JMT with a target price of 60 baht per share with a 5-year average P/BV of 3.3 times, a rate of return of 29.7% and a dividend yield of 3.2%.