Stocks in Focus on November 3, 2020: ESSO and VGI

Stocks in Focus on November 3, 2020: ESSO (KGI Securities TP at ฿8.00/share) and VGI (Krungsri Securities TP at ฿8.60/share).

Kaohoon Online has selected stocks with a high-growth potential for investors to consider on November 3, 2020.

 

KGI Securities has given an “Outperform” rating on Esso Public Company Limited (ESSO) with a target price at ฿8.00/share.

KGI expected ESSO to report 3Q20 earnings of Bt449mn, improving YoY and QoQ from net losses of Bt1.3bn in 3Q19 and Bt2.5bn in 2Q20 mainly thanks to better accounting GRM from an anticipated stock gain for the quarter. ESSO’s accounting GRM is estimated to soar QoQ from -US$5.5/bbl to US$6.3/bbl as we forecast the company will book a stock gain of approximately Bt1.8bn in 3Q20.

KGI reiterated a rating of Outperform on the counter with a 2021 target price of Bt8.00, based on 6.0x EV/EBITDA thanks to anticipated earnings growth next year. However, KGI saw a downside risk to the diesel spread assumption of US$8.0/bbl in 2020 and US$10.0/bbl in 2021 as the spread YTD20 has been at US$5.9/bbl.

 

Krungsri Securities has given a “BUY” recommendation on VGI Public Company Limited (VGI) with a target price of ฿8.60/share.

KSS stated that the earnings recovery theme is intact and KETH listing will unlock value for VGI. KSS expected only Bt11m loss for 2QFY20 (Jul-Sep), recovering from Bt104m loss in 1QFY20. VGI should be profitable from here.