Kaohoon Online has selected stocks with a high-growth potential for investors to consider on October 16, 2020.
KGI Securities has given an “Outperform” rating on Thai Oil Public Company Limited (TOP) with a target price of ฿52.00/share.
KGI estimated TOP to post 3Q20F earnings of Bt542mn, improving YoY from a net loss of Bt683mn in 3Q19 but declining 78% QoQ. The YoY increase should be driven by a higher net stock gain (including NRV loss) of Bt3.4bn, up from a net stock loss of Bt1.7bn in 3Q19. The QoQ decrease should be due to materially lower base GRM of -US$1.0/bbl in 3Q20. However, KGI maintained a rating of Outperform on the counter with a 2021 target price of Bt52.00, based on 6.5x EV/EBITDA. Although the share price would be pressured by the first-time quarterly negative base GRM in 3Q20, KGI expected the refinery margin to improve QoQ in 4Q20 as well as recover next year.
KTB Securities (Thailand) (KTBST) has upgraded the recommendation on Tisco Financial Group Public Company Limited (TISCO) from “Hold” to “Buy” and revised the target price up from ฿76.00/share to ฿80.00/share.
KTBST stated that it had an increasing optimism about TISCOs earnings outlook because 1) loan-loss provision looks likely to increase at a slower rate than the sector, and 2) NIM is estimated to remain elevated in 2021E. TISCO reported 3Q20 earnings results that exceeded the Bloomberg consensus forecast by 19%.
Net profit dropped -14% YoY but rose +21% QoQ to Bt1.6bn as 1) NIM surged rapidly to 4.7% compared to 4.3% in 2Q20 because of the mobilization of low-cost deposits, a maturity of its long-term debt, and a lower loan-loss provision, and 2) NPL ratio contracted to 2.63% from 3.28% in 2Q20 TISCO made asset classification ahead of the Bank of Thailand’s moratorium scheme. With 9M20 net profit accounting for 78% of KTBST’s earlier full-year forecast, KTBST upgraded 2020E net profit forecast by 5%, and revised up NIM assumption.
KTBST asserted that it did not concern much over NPL ratio, although the security company foresaw a gradual increase in 4Q20E due to an ending of the moratorium program, as TISCO has the highest coverage ratio of 196% in the sector.