Despite Covid-19 pandemic having grave impacts on the Thai economy, it somehow has brought moments of opportunity. DBS Vickers Securities recommended 3 best Covid-19 stocks to buy this week including BCH, SCGP, and STGT.
BCH : “BUY” rating and target price of ฿18.50/share with 5% upside
The third wave of Covid-19 has significantly pushed the number of Covid-19 tests from 600 daily cases in 4Q20 to 1,333 daily cases in 1Q21 and the number rose to 4,000-5,000 per day in April.
Thus, Bangkok Chain Hospital Public Company Limited (BCH)’s earnings in 2021 are expected to grow by 10-12% vs. 8% growth in 2020. Currently, BCH has about 2,200 rooms that have been converted to hospitel.
SCGP : “BUY” rating and target price of ฿52.50/share with 7% upside
SCG Packaging Public Company Limited (SCGP) always continues its development for sustainable and earth-friendly packaging products. At present, the revenue from paper-based packaging products account for 70% of total company revenue, followed by food and beverages packaging products (20%) and polymer-based products (10%).
DBSVS expected the core profit between 2021-2022 to expand 16% and 17%, respectively as demand for the packaging is rising in line with E-commerce momentum and widen economic activities especially in Asean market.
STGT : “BUY” rating and target price of ฿60.50/share with 37% upside
DBSVS estimated Sri Trang Gloves (Thailand) Public Company Limited (STGT)’s net profit and revenue in 1Q to grow both YoY and QoQ underpinned by continued rising demand for medical gloves and selling price surged by 20% QoQ.
Earnings in 1Q would be a new record high driven by U.S. ban on glove imports from world’s largest rubber glove maker Top Glove.
As the net profit in 2021 could reach the company’s all-time high, DBSVS expected STGT’s dividend yield of more than 10%, compared to the current price.
However, there are some risks from oversupply for rubber gloves after 2 giant Chinese companies are ramping up their production capacity, which is gradually drugging selling price and the 2020-2023 margin.