Are AJ and PTL Overpriced?

A.J. Plast Public Company Limited (AJ) and Polyplex (Thailand) Public Company Limited (PTL) are back in the spotlight as both stocks were expected to book a skyrocket profit in 2Q20 amid the Covid-19 crisis.

 

The positive factors come from 1) cheaper price of resin, a main material, bringing a lower cost in production and 2) a business booming for food delivery during the pandemic, heightening a demand and order for plastic packaging and related product.

 

Resulting, the share price of AJ and PTL to rise for several consecutive days, although those equities were previously abandoned and even as worst as the average daily trading value was lower than a million baht. 

 

But since the Covid-19 outbreak began, AJ and PTL are back on track to trade more than a hundred million baht per day, particularly, PTL which has recorded a daily trading value over 1.4 billion baht, even better than stocks in the SET50 and SET100 list. 

 

PTL has booked a net loss of 123 million baht in 2016, but a year later making a turnaround to post a profit since then. In 2017, PTL’s net profit was at 1,366 million baht with a total revenue of 11,929 million baht. In 2018, the profit was at 1,169 million baht and in 2019, the net profit was as high as 2,324 million baht.

 

Meanwhile AJ in 2016 had a total income of 7,032 million baht with a net profit of 121 million baht. In 2017, was reported a net profit at 443 million baht, but had been stumbled in 2018 as the net profit was dropped dramatically to 17 million baht and rebound to book a profit of 236 million baht in 2019.

 

However, are AJ and PTL overpriced?

 

When looking back into each 1Q20 overall performances, PTL’s profit dropped by 22.54% to 1,803 million baht, while AJ has requested for approval to extend deadline in submission of financial statement to submit within August 14, 2020. 

 

Shall reconsidering carefully whether does a profit of AJ and PTL in 2Q20 truly perform well.

 

If their results are good as expected, quite sure that the share prices will continue rising, but if it is not, then whoever has AJ and PTL in portfolio could be broke just out of the blue.      

 

For those who interested in long-term investment, PTL’s dividend yield is at 3.14% and AJ is at 1.58%.