Consensus Rates “BUY” on HMPRO over Strong Growth Forecast in 2Q amid Covid-19

Analysts recommended a "BUY" rating on HMPRO following the company's better-than-expected results in the first quarter of this year, which was attributed to tighter cost management and a revenue recovery.

Analysts recommended a “BUY” rating on Home Product Center Public Company Limited (HMPRO) following the company’s better-than-expected results in the first quarter of this year, which was attributed to tighter cost management and a revenue recovery. Furthermore, revenue from online channels increased significantly and is likely to continue growing, according to the diversification of services such as after-sales support, installation, and home repair.


Overall, HMPRO remains on the growth path due to continued strong demand for home repair and decoration business units. HMPRO is forecasted to expand strongly in 2Q21 due to the fact that all stores can keep operational during the third wave of the COVID-19 epidemic.


Additionally, analysts stated that HMPRO’s share price remains a laggard, as it has moved at a slower pace than its covenants, DOHOME and GLOBAL. Analysts recommended “BUY” on HMPRO for the investment theme, but be cautious of the risks involved with the ongoing Covid-19 pandemic, as only around 3% of the total Thai population has received at least one dose of the vaccine.


KGI Securities (KGI) estimated  HMPRO’s 2Q21 earnings to grow YoY on the back of the low base and the company’s adaptability. The new wave of Covid-19 could delay the timeline for the country’s reopening and the recovery in economic conditions. However, the 2021 earnings forecast of  5.7 billion baht should have limited downside risk as 1Q21 earnings accounted for 24%. Hence, KGI maintained the 2021 earnings forecast, as well as a rating of Outperform on the long-term recovery theme of the country’s reopening with an end-2022  target price of ฿17.80 based on PER 36.0x. 


Krungsri Securities (KSS) maintained BUY rating with a target price of ฿19.00 to capture recovery in tourist arrivals in 2022. The SSSg assumptions are conservative at 5% for 2Q21F and 4% for the full year. KSS remained optimistic that HMPRO has flexibility (cost-management, omni-channel  strategy) to manage operations and earnings in the rapidly changing environment. KSS expected a strong recovery in SSSg in 2022 with the return of tourists.


Capital Nomura Securities (CNS) stated HMPRO’s profit should rise in line with market demand, but the outlook for the second half is highly dependent on the Covid-19 situation. Government’s measures to relieve damage resulting from Covid-19 and vaccination campaigns may not have a direct positive impact on HMPRO. However, if vaccines are distributed rapidly, that will boost buying power. This will not only benefit HMPRO, but it will also support domestic consumers. 

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