Stocks in Focus on February 7, 2020: ADVANC and ESSO

Stocks in Focus on February 7, 2020: ADVANC (KGI Securities TP at ฿10.40/share) and ESSO (KGI Securities TP at ฿262.00/share).


Kaohoon Online has selected stocks with a potential of high growth for investors to consider on February 7, 2020.

 

KGI Securities (KGI) has given an “Outperform” rating on Advanced Info Service Public Company Limited (ADVANC) with a target price at ฿262.00/share.

KGI states that ADVANC has reported a 4Q19 net profit of Bt7.1bn (-20% QoQ, +1% YoY). The result was 15% below KGI’s estimate and 14% below the consensus. Full-year 2019 net profit was Bt31.2bn (+4% YoY).

Nevertheless, KGI maintains 2020-2021 net profit forecasts at Bt32.3bn (+4% YoY) and Bt33.2bn (+3% YoY), respectively.

KGI asserts that it foresees an upside from lower CAPEX in 2020 after the CAPEX in 2019 was lower than expected while there are also a minimal downside from larger amortization costs from acquiring the licenses for 2600 MHz. Still, ADVANC would have a solid earnings in 2020 and an attractive dividend yield of 3.7%.

 

KGI Securities (KGI) has given an “Outperform” rating on ESSO (Thailand) Public Company Limited (ESSO) with a target price at ฿10.40/share.

KGI expects ESSO to report a 4Q19 net loss of Bt2.3bn (+13% YoY, -80% QoQ). The increase YoY would be beneficial to better stock loss of Bt265mn in 4Q19, compared to a huge stock loss in 4Q18 after Dubai crude price declined from US$77/bbl in September 2018 to US$57/bbl in December 2018. The plunge QoQ would be mainly due to accounting GRM declining from US$2.8/bbl to -US$0.9/bbl in 4Q19.

In this regard. KGI has reiterated a rating of Outperform on the counter with an unchanged target price of Bt10.40, based on 6.0x EV/EBITDA while recommended investors to look past the poor performance in 4Q19 and start accumulating ESSO to speculate on better diesel spread in mid-1Q20 from the impact of IMO’s 0.5%-sulfur cap.

KGI asserts that ESSO remains its top pick in the Energy sector.

 

Back to top button