Analyst sees long-term risk for Thai firm after purchase of Miss Universe Organisation
An investment analyst on Thursday pointed to a potential “long-term risk” for Thai company JKN Global Group Plc after its purchase of the US-based Miss Universe Organisation (MUO).
Kitpon Praipaisarnkit, vice president of UOB Kay Hian Securities Thailand, said that MUO’s annual revenue is estimated at 1.3 billion to 1.4 billion baht, which is much higher than the 800 million baht spent to acquire the organisation. However, JKN’s business of media production is investment intensive, so the company requires more cash beyond its regular business revenue to pay for the acquisition, he added.
“There will be some risk in the long term. There may be a need to increase the capital and inject more cash,” the analyst said, implying that the purchase of MUO could raise JKN’s debt burden.
He noted that the price of JKN’s stock has seen a continuous decline since the latter half of last year, from 10 baht to a little over 4 baht.
“Capital is also an essential factor that should be taken into account,” he said, adding that JKN would later look for a domestic partner to promote the international beauty pageant.
The analyst said he was unsure if MUO was still making a big profit, which could explain why the previous owner sold it to JKN.
On Tuesday, JKN announced MUO’s acquisition after successful negotiations with the previous owner, IMG Worldwide, a subsidiary of Endeavor Group Holdings, for US$20 million (about 762 million baht).
Senior market analyst Padon Vannarat, who is a vice president at Yuanta Securities (Thailand), said on Thursday that JKN’s acquisition of MUO was a positive move, as its new business could generate more income for the company.
“We have to wait and see how much revenue and profit will be made and what their expectations are. Let’s wait for more details from the executives [of JKN],” the analyst said.
He expected the purchase of a famous business like MUO to help boost the price of JKN shares.
Meanwhile, JKN chief executive Jakkaphong “Anne” Jakrajutatip said that her company has set up its new subsidiary called JKN Metaverse Inc in the US to acquire five businesses owned by MUO — IMG Universe Llc, IMG Universe FranchCo Llc, Miss USA BR Production Llc, MUO Productions Llc, and Miss USA Productions OH Llc.
IMG in the company names will be replaced with JKN, according to Jakkaphong, who is a media tycoon and an advocate of transgender rights.
