KTBST Securities (KTBST) has given a “BUY” recommendation on RS Public Company Limited (RS) and a target price of ฿27.00/share, which is pegged to 2021 PER of 33.0x, or -0.5 SD below its 3-year average, in anticipation of a outlook brighter in 2021 on potential M&A and hemp products.
Following RS’s 4Q20 earnings results, KTBST forecasted 1Q21 earnings to improve QoQ as 1) the commerce business is expected to introduce new products and to expand its distribution network, while foreseeing upside potential since RS has a plan to produce hemp products, which is expected to see a concrete development in 2H21. KTBST maintained the 2021 net profit forecast at 803 million baht, which represents a growth of 52% YoY.
RS’s share price outperformed the SET Index by 17% in three months. The stock currently trades at an undemanding 2021 PER of 30.6x, which is -0.75 SD below its 3-year average, while KTBST forecasted net profit to grow at 37% CAGR in 2020-22.