Stocks in Focus on November 5, 2020: DCC and PTT

Stocks in Focus on November 5, 2020: DCC (Maybank Kim Eng TP at ฿3.18/share) and PTT (KGI Securities TP at ฿42.00/share).

Kaohoon Online has selected stocks with a high-growth potential for investors to consider on November 4, 2020.

 

Maybank Kim Eng has given a “BUY” recommendation on Dynasty Ceramic Public Company Limited (DCC) with a target price at ฿3.18/share.

DCC posted outstanding 3Q20 earnings of THB431m, a jump of +87% YoY, while slowdown 7% QoQ on seasonality. Maybank previously forecasted a profit of THB370m. Healthy earnings were driven by a sales growth of THB2.067b (-13% QoQ, +12% YoY) from marketing strategy that increased sales through 203 branches nationwide and new value-added products launched.

The gross margin improved to 43% from 41.8% last quarter and 39.1% last year on the back of a 25% YoY decrease in energy costs and increased production. SG&A expenses were well managed at THB394m (-10% QoQ, -6% YoY) due to a 16% YoY drop in logistics costs. 9M20 saw total sales of THB6.616b, up 7% YoY and a net profit of THB1.224b, a surge of 67% YoY.

 

KGI Securities has given an “Outperform” rating on PTT Public Company Limited (PTT) with a target price at ฿42.00/share.

KGI forecasted PTT to post 3Q20 earnings of Bt14.6bn (-28% YoY, +21% QoQ). Earnings would be pressured YoY by lower contribution from Gas BU of PTT alone, PTT Exploration and Production (PTTEP), and PTT Global Chemical (PTTGC) after Dubai crude price plunged 30% YoY to US$43/bbl due to the COVID-19 outbreak. Meanwhile, the increase QoQ would be mainly thanks to higher earnings from Gas BU and Oil BU of PTT alone.

KGI believed the share price will be supported by higher projected earnings in 3Q20 and the upcoming listing of PTT Oil and Retail Business Company Limited (PTTOR) on the SET, which KGI expected to be in 1Q21. Therefore, PTT remains KGI’s energy top pick.