MEGA Gains 5%, Eight Analysts Rate “BUY” on Brighter Outlook in 2H21

Eight analysts recommend a “BUY” rating on MEGA, citing the potential to continue gaining momentum in 2H21 on the back of strong demand for nutraceutical and over-the-counter products.

Eight analysts recommend a “BUY” rating on Mega Lifesciences Public Company Limited (MEGA) with the highest target price of 56.00 baht, citing the company’s potential to continue gaining momentum in the second half of the year on the back of strong demand for nutraceutical and over-the-counter products, which would boost revenue growth for Mega WeCare branded products in 4Q21 during the peak season.

Their estimates for MEGA’s earnings for the year 2021 have likewise been revised upwards to about 1,681-1,700 million baht, as 2Q21 results above market expectations. MEGA reported net profit of 503 million baht in 2Q21 which is up by 67.3% year-on-year and 835 million baht in 1H21 up by 34.4% year-on-year, which is supported by robust sales from its business segments Mega WeCare, MaxxCare Distribution and OEM business, higher margin and FX gain of 35 million baht.

The share price of MEGA as of 15:33 local time in Thailand, rose ฿2.25/share or 5.00% to ฿47.25/share, with a trading value of 818 million baht.

KTBST Securities (KTBST) holds a “BUY” rating on MEGA but raises its target price to 53.00 baht from 49.00 baht while maintaining PER multiples at 27.7x, or +0.7 SD above its 5-yr average. Following a stronger-than-expected 2Q21 earnings performance, KTBST upgraded the 2021E/2022E net profit forecast by 8% to 1.68 billion baht (+21% YoY)/1.88 billion baht (+12%). KTBST sees revenue momentum strengthening in the foreseeable future as health awareness will likely continue to trend due to the COVID-19 pandemic.

Kasikorn Securities (KS) recommends “outperform” status on MEGA with a target price of 47.00 baht, with an upside of 17.50%. The investment thesis is based on strong demand for over-the-counter medicines due to higher consciousness about health amid Covid-19 pandemic. Although downside risk remains for distribution business in Myanmar due to political instability. However, the management reported usual operations of its logistics. New products line traditional herbal medicines including hemp based products are expected to be introduced in the future which would further expand its market opportunity. 

Analysts Rating Target Price
Finansia Syrus Securities BUY 56.00 Baht
KTBST Securities BUY 53.00 Baht
Capital Nomura Securities BUY 50.00 Baht
Country Group Securities BUY 49.00 Baht
CGS-CIMB (Thailand) Securities BUY 49.00 Baht
Kasikorn Securities BUY 47.00 Baht
DBS Vickers (Thailand) Securities BUY 45.00 Baht
UOB KayHian (Thailand) Securities BUY 45.00 Baht

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