Stocks in Focus on June 1, 2020: TCAP and TKN

Stocks in Focus on June 1, 2020: TCAP (KGI Securities TP at ฿57.00/share) and TKN (KTB Securities TP at ฿11.00/share).

Kaohoon Online has selected stocks with a potential of high growth for investors to consider on June 1, 2020.

 

KGI Securities has given an “Outperform” rating on Thanachart Capital Public Company Limited (TCAP) with a target price at ฿57.00/share.

KGI stated that guidance from TCAP’s management indicated some policy change on investment and more flexibility in looking for alternative investment choices during COVID-19, which has pushed down the values of some businesses.

The company has substantial cash on hand of Bt15bn with a low D/E of 0.6x, giving it room for new investment at attractive return in the future. Although management guided for weak earnings contributions from several companies under holding, this guidance is already in KGI’s forecast.

 

KTB Securities (Thailand) (KTBST) has given a “BUY” recommendation on Taokaenoi Food & Marketing Public Company Limited (TKN) with a target price at ฿11.00/share.

KTBST had an increase positive view toward TKN’s guidance at an analyst meeting on Friday, May 29th. First, TKN estimated 2020E net profit to grow as the cost of raw materials is expected to decline further and the US-based business is expected to become profitable. Second, the company, however, maintained total revenue target, which is expected to remain flat YoY, as Chinese and US sales are likely to grow, but domestic sales would decline. Last, the company forecasts a U-shape growth in the domestic market, as it will introduce a new non-seaweed product in 7-Eleven in 3Q20, which has joined hand with the Taiwan milk tea “Bubble Lee”.

Thus, KTBST maintained the 2020E net profit forecast at Bt382mn, which indicates a growth of +4%, in expectation of 1) total revenue growth of +11% YoY from both domestic and overseas sales and 2) a wider gross profit margin on higher capacity utilization. KTNST forecasted 2021E net profit to jump +43% YoY.