Stocks in Focus on January 7, 2020: BGRIM and MAKRO

Kaohoon Online has selected stocks with a potential of high growth for investors to consider on January 7, 2020.

 

Asia Wealth Securities (AWS) has given a “BUY” recommendation on B.Grimm Power Public Company Limited (BGRIM) with a target price at ฿59.00/share.

Yesterday, the Thai bond yield in many maturities ranges hit the lowest record. The 2-year and 10-year bonds declined to 1.10% and 1.36%, respectively, due to tensions in the Middle East, resulting in posting a positive impact on the power plant sector, which, in turn, causes an opportunity to reduce the financial cost of original and new projects.

BGRIM has a total capacity of 2,896 MW, ending the year 2019, with 46 plants. In 2020, the capacity might increase to hit the level of 2,951 MW, totaling 49 plants by adding 16 MW Bo Thong 1 & 2 and 39 MW solar farm in Cambodia, while the year 2021 and 2022, the number might rise to 3,191 MW and 3,372 MW, respectively, mainly from the replacement program.

CGS-CIMB Securities (Thailand) has given a “BUY” recommendation on Siam Makro Public Company Limited (MAKRO) with a target price at ฿45.25/share.

CGS-CIMB states that MAKRO’s business is starting to recover with a new business platform which will be MAKRO’s main driver for its business growth in the future. Meanwhile, the business slow down of MAKRO tends to cease not before long, and its growth will start to strengthen in 2H20.

In this regard, CGS-CIMB has reiterated its “BUY” recommendation with a DCF target price at 45.25/share (WACC: 7.7%,TG 2%) in which the negativity has been priced-in in the target price while the opportunity for further growth has yet to be included.