STGT-BCH Stand High during Covid-19 Resurgence, while MAJOR Takes Most Impact

KTBST chose BCH and STGT as its top picks during Covid-19 resurgence due to higher more test fee and higher rubber glove demand.

The Bangkok Metropolitan Administration imposed 14-day restrictions on many Covid-19 hotspots such as the closure of movie theaters, internet cafes, amusement parks, etc. while adjusting the operating hours of department stores to 11 a.m. – 8 p.m. to curb the spread of the Covid-19 virus.

 

KTBST Securities (KTBST) viewed the measure as a negative sentiment to the market as it raised concerns over how severe the situation in Thailand was, and if the spread got worse, there could be more restrictions coming.

The security company expected securities related to hospitals, rubber gloves and vitamin products to outperform the market in a short-term period from the resurgence of Covid-19 with more than 2,500 patients per day and 7,000-8,000 people coming in for Covid-19 tests every day.

 

KTBST raised Bangkok Chain Hospital Public Company Limited (BCH) as top picks on the highest potency for Covid-19 test providers among private hospitals, giving a target price at Bt20.20 per share.

Meanwhile, the rising domestic and global coronavirus reflected higher demand for rubber gloves, resulting in a positive to Sri Trang Gloves (Thailand) Public Company Limited (STGT). KTBST recommended “BUY” at a target price of Bt58.00 per share.

As for vitamin producers, KTBST recommended Mega Lifesciences Public Company Limited (MEGA) due to an increase in vitamin consumption to create immunity.

 

On the other hand, KTBST saw that Major Cineplex Public Company Limited (MAJOR) took the most damage from the new restrictions. The company has a total of 36 theaters in Bangkok and metropolitan areas, representing 41-44% of its total revenue.

The second-most impacted company would be Siam Wellness Group Public Company Limited (SPA) with 38 branches located in Bangkok. In the assumption of 14-day closure, KTBST expected SPA’s 2Q21 earnings to decrease by 8%, compared to around 80 million baht during the new normal lifestyle in 3Q20-4Q20. The impact to SPA’s revenue would be 18% if the restriction extended to one month.

Lastly, restaurant operators such as AU, ZEN, M, OISHI, SNP, CENTEL and MINT would have an impact as well due to the measures that indicate wider social distancing between tables.

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