Stocks in Focus on February 18, 2021: STA and ESSO

Kaohoon Online has selected stocks with a potentially high growth for investors to consider on February 18, 2021.

 

Kasikorn Securities (KS) has given a “BUY” recommendation on Sri Trang Agro-Industry Public Company Limited (STA) with a target price at ฿55.00/share.

KS stated that STA’s 4Q20 normalized profit was Bt5.15n (+3,064% YoY, +122% QoQ), beating KS’ expectations by 11%, supported by higher-than-expected natural rubber (NR) sales and higher-than-expected average selling price. Due to this reason, GPM rose to 42.8% (+33.5 ppt YoY, +8.7 ppt QoQ), as the NR business has started to recover. KS believed the positive growth momentum will continue into 1Q21 on the recovering COVID-19 situation and the rebound in the auto industry.

 

KGI Securities has given an “Outperform” rating on Esso (Thailand) Public Company Limited (ESSO) with a target price at ฿9.90/share.

KGI estimated ESSO to post 4Q20 earnings of Bt388mn (improving YoY from a net loss of Bt1.9bn, -17% QoQ). The YoY turnaround would be thanks to crude run jumping 58% YoY in 4Q20 as a result of the refinery’s major planned shutdown for 60 days in September  October 2019. The slight decrease QoQ would be due to accounting GRM declining 25% QoQ to US$4.5/bbl as we estimate the company to book a stock gain of approximately Bt900mn in 4Q20, down 50% QoQ.

With KGI’s bullish view on the refinery market in 2021, we maintain a rating of Outperform on the counter with a twelve-month target price of Bt9.90, based on 6.5x EV/EBITDA and normalized EBITDA during 2021-22. ESSO remains one of KGI’s current Energy top picks for 2021.