SCGP Jumps 4%, Analyst Recomm. “BUY” on 2Q21 Earnings Record High

The shape price of SCG Packaging Public Company Limited (SCGP) rose ฿2.50/share or 3.86% to ฿67.25/share as of 11:04 local time in Thailand, with a trading value of 579 million baht.

Maybank Kim Eng Securities (Thailand) (MBKET) reiterates a “BUY” recommendation on SCGP with a target price of 72.00 baht as 2Q21 earnings have seen remarkable growth and set a new record, resulting in robust growth shall continue till 2022.

SCGP’s net profit hit a record high of 2.3 billion baht  (+6%QoQ, +19%YoY). Excluding extra items, normalised profit was 2.29 billion baht (+1%QoQ, +57%YoY), underpinned by strong revenue of 29.9 billion baht (+10%QoQ, +38%YoY) from both M&P business expansion (SOVI and Go-Pak) and continuous internal growth despite challenges in operations due to the pandemic. For 1H21, SCGP had sales of 57.148 billion baht, +24%YoY, and a net profit of 4.4 billion baht, +21% YoY, achieving 51% and 49% of MBKET full-year forecast,  respectively. 

SCGP has five ongoing capacity expansion projects to be completed this year and early next year. This will bring in annual sales of 11 billion baht, MBKET estimates, and 3 billion baht will be recognised this year. Adding the 2 billion baht revenues from Sovi (VN) and 3 billion baht from Go-Pak (VN), including M&P of three companies (Duy Tan, Intan and Deltalab) that will be realised in 2H21, annual sales should hit 13 billion baht. 

Overall, MBKET expects sales this year to grow 20% to 111.9 billion baht and normalised profit of 8.9 billion baht, +33%YoY. For 2022, sales are forecast to grow 16% to 129.7 billion baht and net profit to reach 10.6 billion, +19%YoY.