The share price of KCE Electronics Public Company Limited (KCE) dropped ฿1.25/share or 2.24% to ฿54.50/share with a trading value of 441 million baht.
KGI Securities downgraded KCE’s rating to Underperform from Neutral with a target price of ฿43.00/share despite solid average earnings growth of 25% over the next two years. KCE’s share price has a rich valuation with PER 50x (based on 2021 earnings). The positive outlook on sales (from automotive recovery) is likely to be outweighed by risks from the baht strengthening and rising copper price.
KGI trimmed 2021F sales by 4% but raised 2022F sales by 5%, and also cut 2021F GPM by 0.5 ppts but raised 2022F GPM by 0.7ppts (mainly due to better utilization rate on higher sales). Consequently, KGI trimmed 2021 earnings by 12% but revised up 2022F earnings by 7%.