The share price of SCG Ceramics Public Company Limited (COTTO) rose ฿0.06/share or 3.82% to ฿1.63/share as of 16:23 local time in Thailand, with a trading value of 129 million baht.
COTTO’s price increased after reporting 1Q21 net profit of 187.06 million baht, up 50% compared to a net profit of 124.82 million baht in 1Q20.
Tisco Securities upgraded a recommendation on COTTO from HOLD to “BUY” and a target price of ฿1.76/share with 12% upside. 2021-2023 earnings forecast has been revised up by 11%, 12.5% and 11%, respectively, which is in line with sales projection adjusted.
Tisco also updated gross margin projection between 2021-2023 to 28.5%,28.7% and 28.9% despite natural gas prices likely to increase this year due to efficiency increasing in management and operation. Average selling prices are expected to increase from 156.2 baht to 158 baht sq. m. Overall, 2021 net profit would expand 31% YoY as sales volume and margin increase.
However, demand for tile could be weaker than expected and the market competition would be more intense.