Stocks in Focus on November 14, 2019: JMT and ERW

Stocks in Focus on November 14, 2019: JMT (Maybank Kim Eng TP ฿21.60/share) and ERW (KTB Securities TP ฿7.10/share).

Kaohoon Online has selected stocks with a potential of high growth for investors to consider on November 14, 2019.

 

Maybank Kim Eng has recommended JMT Network Services Public Company Limited (JMT) with a target price at ฿21.60/share.

JMT’s 3Q19 net profit was THB190m (+26%QoQ,+37%YoY), 12% higher than forecast. All businesses tend to further growing; i) Revenue from debt collecting business grew +13% YoY, ii) Debt management business saw debt collection of THB859m in cash, a 18% higher than forecast, iii) insurance business posted revenue growth of 19%QoQ, thanks to improving products. Thus, Maybank has a positive view on growth momentum will continue to make new record high in 4Q19.

 

KTB Securities (Thailand) (KTBST) has raised the recommendation on The Erawan Group Public Company Limited (ERW) from “HOLD” to “BUY” with a target price, raised from ฿6.00/share to ฿7.10/share.

KTBST raises its rating on ERW to BUY from HOLD while increasing its target price to Bt7.10 from Bt6.00 as KTBST rolls forward the valuation to 2020E base, but maintain multiplier at 31.5x PER.

KTBST is increasingly positive toward ERW’s earnings outlook after its RevPar returned to a low single-digit growth in October, unlike its peers, according to the company’s guidance at an analyst meeting yesterday. The company has shifted focus to Indian tourists, which have trended up recently, to offset the impact from falling Chinese visitors.

Additionally, its 2020E earnings outlook appears likely bright, while the upcoming two hotels Mercure and ibis hotels at Sukhumvit 24 are expected to break even within nine months after an opening on Dec. 1.

ERW’s share price has gained 13% over the past three months, recovering some of an early loss of 17% over the past 12 months. KTBST sees the stock rising further given ERW’s stronger 3Q19 earnings performance than its peers and as 4Q19E/2020E earnings are expected to continue to grow amid rising tourist arrivals.