Stocks in Focus on 16 August 2019: BJC and COM7

Stocks in Focus on 16 August 2019: BJC and COM7

Kaohoon Online has selected two stocks with a potential of high growth for investors to consider on August 16, 2019.

Maybank Kim Eng – BJC
Maybank Kim Eng has given a “BUY” recommendation of BJC with a target price (DCF) at ฿64.00/share after reviewing BJC’s financial statement in 2Q19.

BJC’s Net profit was THB1.53b (+2% QoQ, +9% YoY). Excluding employee benefit provisions of THB306m, normalised profit jumped 20% QoQ and 36% YoY to THB1.79b, much stronger than our estimates from declining taxes and rising gross margin by 120 bps YoY to 19.9%.

Maybank maintains its projections, expecting 2H19 earnings to be higher than 1H19 due to seasonal factors and the packaging business recovery. BJC announced a 1H19 dividend of THB0.18/share (XD 28 Aug), representing a half-year yield of 0.4%.

KTBST reiterates “BUY” rating on COM7 but raise the target price to ฿32.00/share, which implies 2020E PER of 27.0x, or +0.5 SD above 4-yr average PER, from Bt25.00 (PER of 25.0x, 4-yr average PER), being positive about COM7’s earnings outlook.

KTBST maintains 2019E net profit forecast at Bt1.19bn (+34% growth YoY) but raise 2020E forecast by 7%, expecting 3Q19E earnings to improve slightly before jumping in 4Q19E on the back of a launch of a new iPhone model, which will also boost sales of older iPhone models.

The forecast is based on assumptions that 1) revenue will grow +18% YoY along with a gradual introduction of new models of iPad, Apple Watch and iPhone, and a change in E-Quip and BPL?Y to gaming and IoT stores, and 2) gross profit margin will increase to 13.2% from 13.0% in 2018 on the back of higher sales of Android phones.