Analysts Recomm. “BUY” SCGP with a TP as High as Bt56, Seeing Brighter Outlook in 2021

Analysts Recomm. "BUY" SCGP with a TP as High as Bt56, Seeing Brighter Outlook in 2021.

In unison, analysts gave “BUY” recommendations on SCGP after the company reported a net profit of 6,457 million baht in 2020, increased 22.57% compared to a net profit of 5,268 million baht in 2019, coupled with a dividend payment of 0.45 baht per share.


KTB Securities (Thailand) (KTBST) has given a “BUY” recommendation on SCG Packaging Public Company Limited (SCGP) with a target price at ฿56.00/share on brighter 2021 earnings outlook.

The target price of Bt56.00 is pegged to 2021E PER of 30x, the commerce sectors 5-yr average level.

KTBST maintained 2021E core profit forecast at Bt7.9bn, which indicates a rise of +20%. Total revenue would increase +14% on the back of 1) acquisitions of SOVI and Go-Pak and 2) an increase of production capacity in Fajar, UPPC, and Prepack, which is set to come into stream in 2Q-3Q21E. Gross profit margin would widen to 21.5% from 21% in 2020.

SCGPs share price gained in three months and thereby outperformed the SET Index by 7% in response to the acquisitions of SOVI and Go-Pak. SCGP will likely continue to be an outperformer as 1) KTBST forecasted profit to grow +17% CAGR in 2020-22E and 2) there is an upside potential to our earnings forecast if the company succeeds in striking M&P deals.


DBS Vickers Securities (DBSVS) gave a “BUY” recommendation on SCGP with a target price at ฿52.50/share in an anticipation of a 16% and 17% growth in 2021-2022 core profit, respectively.

DBSVS expected the expansion of production capacity in Indonesia (0.4Mt/yr, COD 1Q21) and the Phillipine (0.22Mt/yr, COD 2Q21) and the increase production capacity of polymer films, expecting a COD in 3Q21 to drive SCGP’s profit in 2021 higher as core profit in 2021-2022 estimated at +16% and +17%, respectively.

The security company stated that the business has a positive trend in the long term due to being an integrated business, providing solution and packaging services that has potential growth along with E-commerce business. Meanwhile, demand for packaging products continues to increase in ASEAN market due to a shift in consumer’s behaviour and growing economy.


Maybank Kim Eng gave a “BUY” recommendation on SCGP with a target price at ฿51.00/share as the security company expected double-digit sales growth in 2021.

Maybank stated that SCGP’s core earnings in 4Q20 and 2020 grew on the back of domestic and international business expansion, integrated packaging solution strategies and integration within the value chain. For the 2021 outlook, the management sets a double-digit growth target and an investment outlay of THB20b.

In line with management’s guidance, Maybank revised up its estimates and raised the target price to THB51, based on the 2021PE target of 25.6x, weighted by the commerce sectors 5-year average forward PE (69%) and packaging (31%). On DCF-basis at 8% WACC, 2% G, SCGPs fair value is THB54.7, close to Maybank’s PE based TP metric. SCGP has announced a dividend payment for 2020 profit of THB0.45.