Stocks in Focus on November 12, 2020: OSP and EGCO

Stocks in Focus on November 12, 2020: OSP (Maybank Kim Eng TP at ฿50.00/share) and EGCO (KGI Securities TP at ฿354.00/share).

Kaohoon Online has selected stocks with a high-growth potential for investors to consider on November 12, 2020.

 

Maybank Kim Eng has given a “BUY” recommendation on Osotspa Public Company Limited (OSP) with a target price at ฿50.00/share.

Maybank stated that OSP’s net profit rose 15% QoQ and 10% YoY to THB923m, in line with its expectations, but 7% better than the consensus. Energy drink sales rebounded from the lockdown and C-vitt recorded significant sales growth, thanks to capacity expansion since June and expanded sales channels. Gross margin increased 89 bps YoY to 35.5% on the back of cost savings, adjustments in product formula and increase operational efficiency. While expenses were down 2% YoY, accounting for 21.7% of sales, vs 23.1% in 3Q19.

As of 9M20, OSP has already reduced costs and expenses under the Fit Fast Firm programme to meet this year’s target at THB800m. In addition, the share of profits from associates jumped 52% YoY due to strong growth of C-vitt.

 

KGI Securities has given a “BUY” recommendation on Electricity Generating Public Company Limited (EGCO) with a target price at ฿354.00/share.

KGI stated that the 3Q20 result of Bt2.8bn (+7.2% YoY, +6.0% QoQ) in 3Q20 core profit was in line with its forecast. There was unrealized FX loss of Bt0.5bn leading to a 3Q20 net profit of Bt2.3bn (-19.7% YoY, -55.3% QoQ).

9M20 core profit was Bt7.7bn (-9.1% YoY), accounting for 86.7% of our full-year forecast. We foresee potential earnings upside of 12% in 2020 from XPCL and Paju (higher gas margin) and 40% in 2021 from Paju.

In addition, KGI maintained a rating of Outperform with a 2021 DCF-based target price of Bt354. The current share price is trading below book value and provides a dividend yield of 3.0% in 2020 – 2021.