SEAFCO Expects 2021 Revenue at ฿2Bn in Anticipation of Govt Mega-Projects in 2H

SEAFCO expects revenue in 2021 to remain at around 2,000 million baht as the construction market during the first half of this year has not yet recovered from the Covid-19 pandemic, but having hopes in the second half as the vaccination will be started. Also, SEAFCO expects the government to launch many megaprojects for bidding this year, such as the Orange Line project. 


Mr. Anek Sritubtim, the company secretary, revealed that Seafco Public Company Limited (SEAFCO) has estimated the revenue of approx. 2,000 million baht in 2021 as the construction market is still affected by the Covid-19 outbreak. He also said that SEAFCO will closely monitor the development of the coronavirus situation in Thailand in the second half of this year as the Covid-19 vaccine rollout will start from June onwards.


SEAFCO expected to join the bidding for MRT Pink Line Extension Project (Si Rat – Muang Thong Thani), the company stated that the possibility to win the bidding is high.


Currently, SEAFCO has a backlog of 2,043.39 million baht, while setting a budget of 9,336 million baht for 152 bidding projects. 


KGI Securities (KGI) expected intense competition to remain in 2021 due to i) weak private investment (slowdown in new launch supply from last year), and ii) delay in MRT Orange Line West bidding. Meanwhile, new sizable backlog from both private (2021 new launch supply expected to increase 11%) and public projects (high speed train project linking three airports, MRT Orange Line West) are expected to launch in 2022 which would lessen the degree of competition. In 1Q21, earnings are likely to turnaround from a net loss in 4Q20 due to i) absence of cost provision, ii) no gross margin adjustment, and iii) higher utilization rate. 


KGI cut the 2021/2022 earnings forecasts 43% and 23% after revised down gross margin and increased SG&A, but upgrading SEAFCO to Neutral, from Underperform, and roll the target price over to 2022 at ฿4.42/share based on long term PER of 16.0x. Positive short to medium term catalyst would be i) launch of Request for Proposal (RfP) on MRT Orange Line West, and ii) construction area handover of TH/CH high speed train and high speed train project linking three airports. KGI believed the positive catalyst from public projects would limit downside risk.

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