Stocks in Focus on June 10, 2020: KKP and IVL

Stocks in Focus on June 10, 2020: KKP (KGI Securities TP at ฿64.00/share) and IVL (Trinity Securities TP at ฿41.00/share).

Kaohoon Online has selected stocks with a potential of high growth for investors to consider on June 10, 2020.

 

KGI Securities has raised Kiatnakin Bank Public Company Limited (KKP) rating from “Neutral” to “Outperform” with a target price at ฿64.00/share.

KGI stated that the security company saw signs of revenue related to the capital market recovering strongly after the equity market rallied sharply over the past 5-6 weeks. Revenue related to capital markets i.e. brokerage fees, AM fees, and gain on investment will drive revenue growth, which would more than offset the higher loss from hire-purchase business. Recovery in the capital market will reduce the risk of capital reduction and the risk of a dividend cut.

At this level, KGI raised KKP’s 2020/2021 earnings by 7%/6% to reflect more revenue from the capital markets. KKP is currently trading at an undemanding valuation of PE <10x, and PBV 0.95x or at around -1SD to long-term mean.

 

Trinity Securities has given a “BUY” recommendation on Indorama Ventures Public Company Limited (IVL) with a target price at ฿41.00/share.

Trinity expected IVL’s 2020E spread to remain strong as the cost of paraxylene was lowered after the refineries started their operations again. IVL currently traded at +1SD at 11.2x, but the 2021E EV/EBITDA is at 8x, which is lower than the average at 9.5x.

Moreover, the potential of 2Q20E revenue is expected to have an outstanding recovery from higher demand in PET and higher spread than 1Q20. Trinity forecasted IVL’s 2020E normalize profit (excluding stock gain/loss) at 2,500-3,000 million baht.