Stocks in Focus on November 17, 2020: STEC and NRF

Stocks in Focus on November 17, 2020: STEC (Maybank Kim Eng TP at ฿18.00/share) and NRF (Maybank Kim Eng TP at ฿8.00/share).

Kaohoon Online has selected stocks with a high-growth potential for investors to consider on November 17, 2020.

 

Maybank Kim Eng has given a “BUY” recommendation on Sino-Thai Engineering and Construction Public Company Limited (STEC) with a target price at ฿18.00/share.

Maybank stated that STEC posted 3Q20 earnings with a rebound profit of THB235m, (+30% QoQ, -14% YoY), but still at a low-profit base. In the meantime, construction revenue recognition for this quarter decelerated slightly by THB8.606b (-5% QoQ, -5% YoY), while gross margin recovered by 5.0% from 3.4% last quarter, slightly below 5.4% last year. SG&A expenses dropped QoQ to THB165m (-23% QoQ, +38% YoY).

 

Maybank Kim Eng has given a “BUY” recommendation on NR Instant Produce Public Company Limited (NRF) with a target price at ฿8.00/share.

Maybank stated that NRF reported a 3Q20 profit of THB74m (+68% YoY, +57% QoQ), a 21% better-than-expected due to better-than-expected sales growth, which is growing well in businesses with high GPMs such as RTE and the plant-based group. This has boosted the overall profit margin to expand, and profit grows significantly.

After the analyst meeting, Maybank had a positive view on the company’s medium to long-term growth outlook that gets clearer. It is expected to see an average annual growth of 44% CAGR over 2020-23 through both organic and tangible inorganic growth driven by customer demand. Maybank therefore raised NRF’s target price from the previous THB5.75, with 26x PER21, EPS21 of THB0.22 to better reflect the medium-long term growth at a new target price of THB8.30.