Equity Analysis /
Thailand

JMT Network Services PCL: Strong cash collection; heavier debt-stock acquisition ahead

  • Question 1: Will JMT achieve its cash collection target?

  • Question 2: Will JMT achieve its debtstock acquisition target?

  • Question 3: What follows JMT’s first JV AMC?

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

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Bualuang Securities
30 September 2022

In this report, we have compiled a checklist to answer the question: “Is JMT still a growth stock?” We expect 41% YoY profit expansion for 2022 (despite higher inflation), led by rising cash collection and settlement of acquired debtstock. JMT still has major scope for further growth, augmented by JV AMCs with other commercial banks (JKAMC is a non-exclusive JV).

Question 1: Will JMT achieve its cash collection target?

Management maintains its 2022 cash collection target of Bt5.0bn (1H22 cash collection was Bt2.8bn, equal to 56% of its full-year target). We expect cash collection of Bt3.2bn in 2H22 (significantly higher than JMT’s target of Bt2.2bn). The drivers are ongoing economic recovery from COVID-19 effects, rising debtstock acquisition for settlement (even though we expect higher inflation to squeeze debtors’ debt-servicing capacity), and the seasonality of the asset management industry (2H22 cash collection should be—at least—equal to the 1H22 number).