RELATIVE VALUATION OF JMT NETWORK SERVICES PUBLIC COMPANY LIMITED

Abstract

This thematic paper applied the relative valuation approach to derive the target value of JMT Network Services Public Company Limited (JMT). The historical multiple bands are applied to identify whether the current price of the company is under or overvalued compared to its 5-year average. By using P/E and EV/EBITDA, JMT is currently overvalued. However, the company is undervalued based on the P/BV band. The peers group multiples are also applied together with financial ratios to check whether JMT has suitable peers. Even though JMT is similar to BAM and CHAYO in terms of the financial ratios, the most significant difference is due to their market capitalization and types of debts managed. Therefore, the historical valuation method is selected as the most appropriate approach for valuation of JMT. By using 5-year average multiples of JMT, it results in the target price of 54.10 baht for 2022 and 67.83 baht for 2023. These numbers show a downside of -29.28% and -11.33% accordingly compared to the current price on 3 August 2022 which is 76.5 baht. Therefore, JMT is recommended to “Sell” as the target price is lower than the current price for more than -10% in 2023 based on relative valuation. However, other factors such as business growth potential and strategy also have to be taken into consideration as well.