The share price of Thoresen Thai Agencies Public Company Limited (TTA) rose ฿1.40/share or 8.43% to ฿18.00/share in the morning session on May 10, with a trading value of 879 million baht.
KTBST Securities (KTBST) reiterated a “BUY” rating on TTA but raised a target price to ฿19.00 from ฿13.00 and 2021E PER multiples from 31.5x to 45x (+3 SD above its 4-yr average), which is equivalent to 2x PBV, as freight rate is expected to remain high in the long term given rising BSI.
1Q21E net profit would stand at 224 million baht, recovering from a net loss of 459 million baht in 1Q20 and up +103% QoQ. Total revenue is projected to increase +9% YoY, +8% QoQ as revenue from freight charges is expected to surge +36% YoY, +41% QoQ, assuming that 1) TCE rate will be an average of USD13,645/day, and 2) voyage day will increase +1% QoQ, +9% YoY following an addition of one ship to its fleet.
2021E net profit is forecast at 752 million baht as 1) total revenue is forecasted to grow +21.5% YoY to 15.6 billion baht based on an average TCE rate of USD13,324/day (USD9,517 in 2020), and 2) blended gross profit margin is expected to widen to 20.0% (13.2% in 2020) given rising freight rate and the offshore business hitting its breakeven.