Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>We downgrade our rating to Neutral with a new fair value of Bt12.00 (from Outperform and Bt22.80).</li><li>The downward revision in the fair value reflects: i) a cut in the 2024-2027E earnings forecasts; and ii) a higher required return of 8.8% (up from 5.3%), based on new macroeconomic assumptions: a risk-free rate (Rf) of 2.07% and market risk premium (MRP) of 5.58% (previously 2.27% and 4.43%, respectively).</li><li>Long-term growth is expected to be below the industry average, with weak debt collection leading to higher provisions and a slow recovery in the gross margin</li></ul>

We downgrade our rating to Neutral with a new fair value of Bt12.00 (from Outperform and Bt22.80).The downward revision in the fair value reflects: i) a cut in the 2024-2027E earnings forecasts; and ii) a higher required return of 8.8% (up from 5.3%), based on new macroeconomic assumptions: a risk-free rate (Rf) of 2.07% and market risk premium (MRP) of 5.58% (previously 2.27% and 4.43%, respectively).Long-term growth is expected to be below the industry average, with weak debt collection leading to higher provisions and a slow recovery in the gross margin

JMT Network Services - Earnings Revised Down to Reflect Elevated Provisions and Expenses

<ul><li>We are in the process of reviewing our rating and revising the earnings forecasts, as the 1Q25 profit was weak amid an incomplete economic recovery.</li><li>This led to a decline in cash collection, prompting higher provisions and increased debt collection expenses.</li><li>JMT reported a 1Q25 net profit of Bt330mn (-21.1% YoY, -17.5% QoQ), pressured by weaker debt collection, declining revenue, a narrower gross margin, and a sharp increase in provisions.</li></ul>

We are in the process of reviewing our rating and revising the earnings forecasts, as the 1Q25 profit was weak amid an incomplete economic recovery.This led to a decline in cash collection, prompting higher provisions and increased debt collection expenses.JMT reported a 1Q25 net profit of Bt330mn (-21.1% YoY, -17.5% QoQ), pressured by weaker debt collection, declining revenue, a narrower gross margin, and a sharp increase in provisions.

Jmt Network Services - Soft 1Q25 Earnings in Almost All Dimensions

<ul><li>We maintain our Outperform rating with a buy recommendation based on the fundamentals, as the stock price has +62% upside to the fair value (FV) of Bt22.80 (based on a required return of 5.3%).</li><li>In addition, the downside risk is limited from the tactical perspective.</li><li>Profit for 2025-26E is expected to grow at an average of 16% per year, driven by a reduction in allowance expenses (ECL), although this growth remains below the industry average.</li></ul>

We maintain our Outperform rating with a buy recommendation based on the fundamentals, as the stock price has +62% upside to the fair value (FV) of Bt22.80 (based on a required return of 5.3%).In addition, the downside risk is limited from the tactical perspective.Profit for 2025-26E is expected to grow at an average of 16% per year, driven by a reduction in allowance expenses (ECL), although this growth remains below the industry average.

JMT Network Services - Cash Collection Improved QoQ, but Expenses Pressured Earnings

<ul><li>We maintain our Outperform rating with a new fair value (FV) of Bt20.00 (previously Bt13.75), representing an increase of approximately 45%.</li><li>Of this increase, 20% is due to an upward revision of the profit estimates, 13% from adjusting the required rate of return to 6.0% (previously 6.8%), and 11% from a rolling adjustment of the FV.</li><li>The valuation metrics indicate limited upside of 7% for the stock price, following a roughly 90% increase since our report released on August 2024.</li></ul>

We maintain our Outperform rating with a new fair value (FV) of Bt20.00 (previously Bt13.75), representing an increase of approximately 45%.Of this increase, 20% is due to an upward revision of the profit estimates, 13% from adjusting the required rate of return to 6.0% (previously 6.8%), and 11% from a rolling adjustment of the FV.The valuation metrics indicate limited upside of 7% for the stock price, following a roughly 90% increase since our report released on August 2024.

Jmt Network Services - Revise Earnings Projections to Reflect Lower Provision Outlook

<ul><li>We have put our estimates, recommendation, and fair value under review vs. the previous Outperform rating with a 12M fair value of Bt13.75.</li><li>The improving cash collection trend, driven by accelerated debt collection and legal processes, presents upside to ECL provisioning, positively impacting the profit estimates for 2024-26E.</li><li>We will revisit our earnings estimates, fair value, and rating after meeting with management this afternoon.</li></ul>

We have put our estimates, recommendation, and fair value under review vs. the previous Outperform rating with a 12M fair value of Bt13.75.The improving cash collection trend, driven by accelerated debt collection and legal processes, presents upside to ECL provisioning, positively impacting the profit estimates for 2024-26E.We will revisit our earnings estimates, fair value, and rating after meeting with management this afternoon.

Jmt Network Services - Cash Collections Recovered QoQ in 3Q24

Thailand

JMT Network Services PCL is involved in the debt collection business in Thailand.

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JMT Network Services (JMT TB)

JMT Network Services - Earnings Revised Down to Reflect Elevated Provisions and Expenses

Long-term growth is expected to be below the industry average, with weak debt collection leading to higher provisions and a slow recovery in the...

Krungthai XSpring

Jmt Network Services - Soft 1Q25 Earnings in Almost All Dimensions

We are in the process of reviewing our rating and revising the earnings forecasts, as the 1Q25 profit was weak amid an incomplete economic recovery.

Krungthai XSpring

JMT Network Services - Cash Collection Improved QoQ, but Expenses Pressured Earnings

We maintain our Outperform rating with a buy recommendation based on the fundamentals, as the stock price has +62% upside to the fair value (FV) of...

Krungthai XSpring

Jmt Network Services - Revise Earnings Projections to Reflect Lower Provision Outlook

We maintain our Outperform rating with a new fair value (FV) of Bt20.00 (previously Bt13.75), representing an increase of approximately 45%.

Krungthai XSpring

Jmt Network Services - Cash Collections Recovered QoQ in 3Q24

We have put our estimates, recommendation, and fair value under review vs. the previous Outperform rating with a 12M fair value of Bt13.75.

Krungthai XSpring

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