Stocks in Focus on December 17, 2020: STEC and RBF

Stocks in Focus on December 17, 2020: STEC (KGI Securities TP at ฿16.60/share) and RBF (Finansia Syrus Securities TP at ฿12.00/share).

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

 

KGI Securities has upgraded its recommendation on Sino-Thai Engineering & Construction Public Company Limited (STEC) from “Neutral” to “Outperform” with a target price at ฿16.60/share.

KGI stated that STEC’s gross margin is likely to hover in the range of 4-5% from a low of 3.4% in 2Q20 due to i) ramping up progress on power plant projects, and ii) decline in revenue recognition from the government parliament building project and full-year revenue recognition.

KGI upgraded 2020 – 2021 earnings forecasts by 45% and 30% on increased gross margin and lower SG&A assumptions. STEC has a current backlog of Bt108bn which would sustain it for the next three years. New projects (double-track rail phase II (Denchai- – Chiang Rai – Chiang Khong), MRT Orange Line West) would be future potential upsides to the companys backlogs.

KGI expected STECs 4Q20 earnings to grow QoQ due to i) divestment gain of Bt130mn from Mo Chit Land, and ii) revaluation gain.

 

Finansia Syrus Securities (FSS) has given a “BUY” recommendation on R&B Food Supply Public Company Limited (RBF) with a target price at ฿12.00/share.

FSS expected RBF’s momentum to continue in 4Q20 due to its high season, while the company would receive an indirect benefit from the government’s stimulus measures such as the 50-50 scheme and Shop Dee Mee Kuen scheme.

The company has been operating its factory in Vietnam, which would support its transportation costs. The profit this year is expected to grow 46% from last year.