VGI Invests in “JMART” to Help Boost Profit in 2021, MBKET Recomm. “BUY”
Following a 15% investment in JMART and 51% in Fanslink, MBKET raised a rating on VGI to “BUY” with a target price of 7.40 baht
Following a 15% investment in JMART and 51% in Fanslink, MBKET raised a rating on VGI to “BUY” with a target price of 7.40 baht
6 ก.ย. 2564

Maybank Kim Eng (Thailand) (MBKET) raised a rating on VGI Public Company Limited (VGI) to “BUY” from TRADING BUY, but slightly trimmed a target price by 3% to 7.40 baht after factoring in a 15% investment in JMART and 51% in Fanslink including PLANB’s latest earnings updated.
Early in July 2021, VGI Public Company Limited (VGI) through its subsidiary BSS Holdings Co., Ltd. has invested a 51% equity stake into Fanslink Communication Co., Ltd., a leading importer of Chinese electronics and e-Commerce enablers in order to broaden VGI’s ability to create new strategic opportunities across its core pillars: Advertising, Payment, Logistics, and newly added e-Commerce.
Later in August 2021, the Board of Directors’ Meeting of VGI resolved to approve the investment in Jay Mart Public Company Limited (JMART), acquiring 15% of total voting rights, to increase the variety of businesses of the company’s group.
VGI expected that the JMART Investment Transaction will create the benefits and enhance the current business ecosystem of the company such as the expansion of distribution channel of gadgets which are distributed by the group companies of the company through the retailing space of the company under JMART group, the expansion of pick-up counters and service points of JMART at the BTS stations, and the utilization of products transportation system of VGI group including the application of the modern financial technology together with the business ecosystem of the company’s group.
MBKET has a “positive” view on investing in JMART this year because it will instantly benefit from a net 124 million baht or 8.6% of the 2022/23 profit forecast and will also benefit from the long-term synergy. While Fanslink is a profitable company and another puzzle in this synergy, after everything settles down in 2022/23, VGI may hit a new record profit as well.
With a board seat, VGI would record JMART as an associate company. As a result, the income statement will record the share of profit from JMART every quarter. Recently, after the disclosure of this deal, MBKET’s analyst has revised up JMART’s 2022 earnings forecast by 16% to 1.93 billion baht. So, VGI will have a share of profit of 290 million baht. Consequently, VGI will have a net benefit of 124 million baht in 2022/23 (Apr. 22 -Mar. 23). In addition, VGI has also been allocated 25.3 million units of JMART-W6 for free. 
Furthermore, investing in JMART creates multiple synergies. First, VGI will let its new subsidiary Fanslink, the importer of famous Chinese electrical products online such as Xiaomi, Haier, Amazfit, etc., to be sold on the storefront (offline) at JMART stores, or even use advertising space in JMART group’s PR event as well. 
MBKET factored in the burden of interest expenses and share of profit from holding JMART into the projection for the year 2022/23 (Apr 22 –Mar 23) while Fanslink was included since Aug 21, reflecting the latest projection of PLANB in the form of dividend income. As a result, 2022/23 earnings increased by 15.7% to 1.448 billion baht (+232% YoY). For 2021/22, the COVID-19 epidemic hit harder than expected, causing us to downgrade MBKET forecast 42% to 435 million baht.