FSS Emphasizes JR’s Strong Backlog to Support 4Q20 Earnings, Recomm. BUY at Bt8.80

FSS Emphasizes JR’s Strong Backlog to Support 4Q20 Earnings, Recomm. BUY at Bt8.80

Finansia Syrus Securities (FSS) has given a “BUY” recommendation on J.R.W. Utility Public Company Limited (JR) with a target price at ฿8.80/share, expecting strong earnings in 4Q20 due to the recognition of a backlog along with a solid financial status.


FSS forecasted JR to report 4Q20 earnings at 23 million baht, decreased 31.7% QoQ, but increased 15.5% YoY. The decline, when compared to the previous quarter, was due to unusual revenue recognition in 3Q, creating a high base to compare to the 4Q that did not recognize such income.

When compared the earnings to its previous year, FSS expected to see a continuous growth from the recognition of its backlog worth 6,170 million baht on hand at the end of 3Q20 in which JR’s revenue is forecasted to expand 45.6%. However, JR’s gross margin could slow down to 17% in 4Q20, compared to 21.5% YoY, but increased 14% QoQ. If the forecast is in line with JR’s financial statement, the company would record a net profit of 87 million baht in 2020, an increase of 42.8%.


The company stated that it received four more projects in 4Q20 with a total value of 230 million baht, which would increase its backlog to 6,400 million baht. Moreover, the company has a strong “Net Cash” financial status, and without any burden from needing to pay an interest for its debt, allowing the company to be able to acquire more projects in the future.

More importantly, JR has the potential to acquire a project in the oil and refinery sector, which is a big market to support its growth in the future. FSS expected projects from the oil and refinery sector could support JR’s backlog to reach 10 billion baht in the future.