CBG and DOD – Same Same but Different

On February 21, 2019, Carabao Group Public Company Limited (CBG) and DOD Biotech Public Company Limited (DOD) had announced their yearly financial statement 2018. The direction of these two shares went opposite ways after the announcements.

 

Surprisingly, CBG, from a starving buffalo, transformed into a red bull with wings instantly. The share went from the closing price at ฿43.25/share on February 20, 2019 to open at ฿47.50/share in the next morning. CBG made to ฿50.75/share for the highest of the day before edging lower to close at ฿50.25/share, gaining ฿7.00/share or 16.18%.

The stimulus was still kicking on February 25, 2019, though in a lower degree. CBG closed at ฿53.75/share.

The reason behind this rally was CBG’s financial statement that appeared to be better than expected when everyone had projected a huge plummet of revenue and profit.

CBG reported a net profit at THB 1,159 million, decreased 7% YoY. Its sales revenue was THB 14,463 million, increased 12.1% YoY. The higher in sales came from THB 7,928 million of domestic sales, increased 1.3% YoY, and THB 6,476 million of international sales, increased 28.9%. Thus, occurred a Buy on Fact on CBG’s shares.

 

On the other hand, DOD just went in the opposite way of CBG like a fallen angel. The share price opened ฿11.70/share on February 21, 2019, lower from the closing price at ฿12.20/share on the previous day, and slumped ฿0.50/share or 4.10% to close at ฿11.70/share.

The reason for this non-stop selloff was due to the lower-than-expected profit, even though the profit did increase more than 100%.

DOD was expected to book THB 325 million of profit in 2018, increased 128.4% YoY, and an increase of 81.2% YoY in sales revenue to THB 702 million. Turned out, DOD had THB 306.27 million of profit, increased 115.40% YoY from THB 142.19 million in 2017. Meanwhile, the revenue increased by 72.23% YoY from THB 388.56 million to THB 673.12 million, and gross profit margin increased by 1.53% to 61.51%.

 

What these two shares have in common is a short buy/sell as CBG is still at risk in long term profit with a tendency to slow down while DOD, the so-called share with strong fundamental, will definitely yield a satisfying profit in long term investment.