Stocks in Focus on 28 August 2019: PTTEP and TRUE

Kaohoon Online has selected two stocks with a potential of high growth for investors to consider on August 28, 2019.

AIRA Securities recommended “Speculate”  PTT Exploration and Production Public Company Limited (PTTEP) share in a short term following the oil price. Currently, Dubai Oil price is $57.00/barrel, increasing 1.75% after OPEC and Non-OPEC have lowered oil production in July. Previously, the group extended to decrease 1.2 billion barrels/day of oil production until 31 March 2020 and might consider decreasing more. AIRA expected that the oversupply of oil production will be eased and the lower production will have a positive effect on PTTEP in the short term.
PTTEP recorded a net profit in the second quarter of 2019 at THB 13,684 million, increased 9.7% QoQ, 281% YoY. An increase of PTTEP’s 2Q2019 profit was mainly due to the benefit from taxes as a result of bath appreciation and the profit of THB 13,684 million from the oil price hedging and extraordinary items. Moreover, PTTEP’s performance was better and an increased in 7.8% QoQ and 19% YoY of operating profit. Additionally, there was an outstanding EBITDA at 74%.
On 10 July 2019, PTTEP invested in Murphy Oil Corporation, Malaysia, which invested in the business of petroleum exploration and production. Currently, Murphy Oil holds 5 projects which 2 projects had started the operation. PTTEP expected that this investment would boost EBITDA to grow USD 500 – 600 million or approximately THB 17,400 million or calculating as 14% of EBITDA growth per year in the period of 2020-2021. AIRA said that PTTEP’s EBITDA will increase higher in 2022 after full production of Sabah H. AIRA expected that PTTEP will pay ฿5.92/share of dividend payment or 4.4% dividend yield in 2019.
Therefore, AIRA recommended “BUY” PTTEP with the target price of ฿164.0/share.

 

Kingsford Securities recommended “BUY” True Corporation Public Company Limited (TRUE) with the target price of ฿7.00/share. Kingsford expected that service revenue will continue to expand and outstanding in the 2H2019 because of the mobile phone business, supported by higher average revenue per user (ARPU), especially postpaid. The contract of Fix Speed Unlimited, a postpaid package, is gradually expiring which the customers have two choices after the package expired: firstly, add more money to continue the unlimited package and secondly, change the promotion to limited date (volume base). As a result, ARPU has risen.
Internet broadband business is still growing. Recently, TRUE has launched Gigatex Fiber Router 1 Gbps, a home internet which truly is the first leadership of Thailand to operate the fastest internet.  The Gigatex Fiber has a good response from the market and effect to an increase in the number of internet broadband customers.
Kingsford said that the direction of 3Q2019 profit will be outstanding which expected the profit to increase 320% YoY and 52% QoQ to THB 1.6 billion. In the 3Q2019, there will be additional revenue from selling the assets to DIF with the value of THB 14.3 billion.