KTB Securities recommended “BUY” North East Rubber Public Company Limited (NER) share at the target price of ฿3.40/share implies 2019E PER of 9.5x, which is well below its five-year forward PER of 11x. KTB expects a 2Q2019 net profit of NER to recover again and continuously grow onward due to the low production cost and the high price of rubber consists of the new production RSS-Mixture, which will increase the production capacity 60,000 ton/year, increase 26% YoY. The analyst estimates a net profit in 2Q2019 is ฿1.29 million, growing by 173% YoY and 28% QoQ.
Moreover, The gross profit margin has increased by 9.5% when compared to the 1Q2018 which was 8.2%. NER’s share price has decreased due to unsteady of the business which has high volatility, however, the share price has been increasing after increasing the production capacity of high-value products such as RSS-mixture as well as having effective cost management.
Finansia Syrus Securities recommended “BUY” AMATA Corporation Public Company Limited (AMATA) share at the target price of ฿28.00/share.
Finansia stated AMATA has benefited from an ongoing project of EEC, making foreign investors to feel more confident to invest as the project is supported by the government. Thai baht appreciation is also another factor of AMATA business.
Moreover, moving the production base to Thailand of many factories could be a benefit for AMATA which the management sets the target to sell 950 rai despite in 1Q2019 AMATA sold the land totally 127 rai. AMATA is not only selling water, electricity and rental fees but also increases its income by joining the investment with Japan to construct 250 rooms of Hotel Nikko Amata City, Chonburi, which AMATA holds 51% shares, revenue recognition will be started in 2021. Additionally, AMATA is moving forward on the Smart City project and preparing to construct Amata University.
Therefore, Finansia estimates profit in 2019 to grow by 38% to THB1.68 billion.