Bitcoin Mining Entry Triggers 6700% Increase in Thai Tech Stock

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(Bloomberg) – A global equity rally by a Thai tech company after it exposed an expansion in Bitcoin mining surprised even the president of the company.

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Jasmine Technology Solution Pcl’s share has more than tripled since the plan was announced in late July, although the cryptocurrency project has yet to generate significant revenue for the company. Since the start of the year, stocks have risen nearly 7,000%, most among global tech companies with a market value of at least $ 2 billion, according to data compiled by Bloomberg.

“The strong response from investors has exceeded our expectations,” President Soraj Asavaprapha said in an interview. “There is an upbeat optimism towards our new leadership, even if this is only the beginning. “

Jasmine Technology is just one of many Thai companies that are diversifying into the digital asset arena. Consumer device maker AJ Advance Technology Pcl announced its first investment in Bitcoin mining this month. Siam Commercial Bank Pcl and Kasikornbank Pcl have also taken stakes in cryptocurrency startups.

The enthusiasm for crypto products, especially among young investors, has driven trading on locally licensed exchanges to a series of new records, prompting regulators to come up with stricter rules.

Jasmine Technology has only generated eight Bitcoins from its 325 mining machines since it began operations a few months ago. Soraj expects next year to be much more active, driven by plans to invest around 3.3 billion baht ($ 98 million) in up to 7,000 new devices. Revenue from the mining business will account for around 80% of the company’s total revenue by the end of 2022, he said.

“We still have little idea on the fundamentals, valuations and revenue projections of the company as this Bitcoin mining is very new in Thailand,” said Wilasinee Boonmasungsong, analyst at Globlex Securities Co. in Bangkok. “It has been well received by investors for being the pioneer in the country, but there is regulatory risk.”

The Bank of Thailand said last month that regulators plan to release more detailed rules governing digital assets to protect the financial system and investors. Revenue from seven locally licensed crypto exchanges reached 221 billion baht ($ 6.58 billion) in November, up from 18 billion baht a year earlier, according to data from the Securities and Exchange Commission.

Local rules will not affect Jasmine Technology, Soraj said, because the company can sell digital tokens around the world and the mining business will be profitable as long as the price of the world’s largest cryptocurrency exceeds $ 30,000. . Bitcoin recently traded at around $ 51,000.

Jasmine Technology’s net profit in the first nine months jumped 436% from a year earlier to reach 150 million baht as sales from its traditional telecommunications-related businesses increased. The stock, which hit a record high earlier this month, is trading nearly 500 times its 12-month earnings, according to data compiled by Bloomberg.

The company’s largest shareholder with a 33% working interest is broadband provider Jasmine International Pcl, whose chairman resigned in 2019 after Thailand’s SEC said it used inside information to trade at a subsidiary.

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