Stocks in Focus on 9 August 2019: CBG and STEC

Stocks in Focus on 9 August 2019: CBG and STEC

Kaohoon Online has selected two stocks with a potential of high growth for investors to consider on August 9, 2019.

Kasikorn Securities (KS) stated that Carabao Group Public Company Limited (CBG) reported its 2Q2019 profit to increase THB 552 million, increased 163% YoY, 32% QoQ. A rise of CBG’s profit was higher than Bloomberg consensus had estimated by 7.5% due to a higher gross profit (GPM) which was higher than the market expected.
KS said an increase of the 2Q2019 profit when compared to the previous year mainly due to a high GPM and low expenses. Additionally, GPM has also buoyed CBG’s profit growth due to a rise in the utilization rate of CBG’s ACM aluminum can manufacturing and its high season. As a result, 1H2019 profit was accounted at 54% of KS’s estimation for a profit of THB 1.79 billion in 2019.
KS expected a 2H2019 profit of CBG to increase HoH and YoY but the growth might slow down in terms of YoY due to a high margin in 4Q2018 and a weak revenue growth in the domestic and CLMV markets.
However, KS still recommended “BUY” CBG with the target price of ฿48.00/share because KS believed that the value of CBG’s current price is too expensive based on PER 2019 at 40x.

Kingsford Securities recommended “BUY” Sino-Thai Engineering & Construction Public Company Limited. (STEC) share with the target price of ฿28.00/share. Furthermore, Kingsford expected a 2Q2019 profit of STEC to increase THB 499 million, increasing 63.61% YoY and 45.49% QoQ in support of MRT Orange Line and Yellow line project which could operate early. While STEC has a strong backlog of THB98 billion, resulting in a low risk of discontinuing of work when compared to other companies. Additionally, at the end of the year, the government has a bidding project. If the project is MRT Orange Line (Western Line), Kingsford expected that STEC might have a chance to acquire the project. For the 2H2019 outlook, Kingsford believed the profit to increase continuously, therefore, Kingdord recommended “BUY’ STEC share with the target price of ฿28.00/share.