Jay Mart to float 75 million shares in June IPO

STOCKS

The mobile phone distributor Jay Mart will float 75 million shares in its initial public offering later this month.

Sixty million shares will be offered to retail and general investors, with another 15 million offered to business sponsors and employees.

Prices are projected to be set within a range of 1.60 to 1.80 baht.

Subscription for the offering will be from June 16-18, with trading to begin on June 25. Asia Plus Securities is the underwriter and adviser for the offering. Co-underwriters include KTB Securities, Ayudhya Securities, Kasikorn Securities, CIMB, Syrus and Country Group Securities.

The deal will be the second for the Stock Exchange of Thailand this year, after engineering company Toyo-Thai.

JMART will list a total of 300 million shares at par value of one baht per share.

Adisak Sukumvitaya, the firm's chief executive officer, said the company expected to use the 130 million baht in funds raised from the offering to restructure its debt.

The debt-to-equity ratio for the company will fall to 0.7 times from 1.2 at the end of March.

"We aim to be the largest mobile phone retailer in the country by the end of the year. Our house brand, J-Fone, has an 8.5% market share, fourth in the industry at the end of March," he said.

"Our goal is to boost our brand's market share to 40% by the end of the year."

JMART is projecting unit sales of 1.2 to 1.5 million phones this year, up sharply from 800,000 last year. Its average selling price is also expected to rise to 4,700 baht per handset from 4,400 last year.

Mr Adisak said JMART expected net profits this year to exceed the 98 million baht reported in 2008, thanks to lower interest expenses after the IPO and higher profit margins from higher sales of the company's house brand handsets.

The company has a 25% gross profit margin for its J-Fone handsets, compared with an average industry margin of 15%.

JMART, which also operates a growing debt collection business, plans to purchase 4.5 billion baht worth of receivables this year instead of focusing on contracting services. Debt collections and management are expected to contribute more than 10% to the firm's profit margin this year, compared with just 2% of net profit margins last year.

Revenues of 6.6 billion baht are expected, up from 5.52 billion last year.