Bitcoin Mining Entry Triggers a 6,700% Surge in Thai Tech Stock?
A spike in the best stocks in the world by a Thai tech company after revealing an expansion in Bitcoin mining even surprised the company's president. Jasmine Technology Solution's participation in PCL has more than tripled since the plan was announced in late July, although the cryptocurrency project has not yet generated significant profits for the company. According to Bloomberg data, the increase in shares has been nearly 7,000% since the beginning of the year, especially for global tech companies with a market value of at least $2 billion.
“The strong response from investors exceeded our expectations,” President Soraj Asavaprapha said in an interview. “There is optimistic optimism about our new direction, although this is just the beginning.”
Jasmine Technology is just one of many Thai companies that are diversifying into the digital asset arena. Consumer equipment manufacturer AJ Advance Technology Plc. announced its first investment in bitcoin mining this month. Siam Commercial Bank Plc. and Kasikornbank Plc. have also taken over investments in cryptocurrency startups. Enthusiasm for crypto products, particularly among young investors, has pushed trading on locally licensed exchanges to a number of new all-time highs and prompted regulators to propose stricter rules.
“We still have little idea of the company's fundamentals, valuations and revenue forecasts, as this Bitcoin mining is very new in Thailand,” said Wilasinee Boonmasungsong, analyst at Globlex Securities Co., Bangkok. “It was very well received by investors as a pioneer in the country, but there is some regulatory risk involved.” The Bank of Thailand announced last month that regulators plan to adopt more detailed rules on digital assets to protect the financial system and investors. Sales on seven locally licensed cryptocurrency exchanges increased to 221 billion baht ($6.58 billion) in November, compared to 18 billion baht a year earlier, according to data from the Securities and Exchange Commission.
Local rules won't affect Jasmine Technology, Soraj said, as the company can sell digital tokens globally and the mining business will be profitable as long as the world's largest cryptocurrency is priced above $30,000. Bitcoin was recently trading at around $51,000.
Jasmine Technology's net profit increased 436% year-on-year to 150 million baht in the first nine months as sales of its traditional telecommunications businesses increased. The stock, which reached an all-time high earlier this month, is trading nearly 500 times its earnings over the past 12 months, Bloomberg data shows. The company's largest shareholder, with a 33% direct stake, is broadband provider Jasmine International Plc., whose president resigned in 2019 after the Thai SEC said it used insider trading with a subsidiary.
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