ASPS Recommends BBL-CENTEL-MAJOR as Stocks Benefiting from Economic Recovery

Due to the lack of a new catalyst to drive the market, the SET Index has been moving sideways recently. However, Asia Plus Securities (ASPS) believes the government’s stimulus package could boost Thailand’s economy, recommending stocks benefiting from economic recovery and lockdown easing (especially service plays).

 

ASPS stated that currently, about 280 billion baht budget from the one-trillion baht borrowing is still available for further economic stimulus, perhaps it could allocate to Half-Half co-payment (Kon La Krueng) scheme or We Travel Together (Rao Tiew Duay Kan) campaign phase 3 or the government could boost public spending with high purchasing power, e.g. Shop and Pay Back (Shop Dee Mee Kuen) campaign, but the conclusion is not made yet. 

 

As the results, ASPS recommended stocks that will rebound in line with economic recovery and have stronger financial position than peers. Top picks are BBL, CENTEL, and MAJOR.

 

Bangkok Bank Public Company Limited (BBL) expected 2021 loan growth at 3-4% YoY, while Expected credit loss (ECL) is projected to decrease to 22 billion baht in 2021, reflecting a rebound from now on as the economy is recovering. End-2021 NPL ratio is expected not higher than 4.5%, versus 3.9% at end-2020. 

2021 net profit is expected to rebound from a weak base in 2020, but is still far laggard from SETBANK and other bank stocks. Therefore, ASPS has given a “BUY” recommendation on BBL with a target price of ฿154.00/share. 

 

Central Plaza Hotel Public Company Limited (CENTEL), as the government aims to reopen Thailand’s borders within October 2021 after COVID-19 vaccine is distributed, it will benefit CENTEL’s hotels in Thailand, while hotels in Maldives are recovering well.

ASPS stated that CENTEL has lower capital risk than peers with interest-bearing debt to equity ratio (IBD/E) only 1.12x, thus recommended “BUY” with a target price of ฿40.00/share.

Major Cineplex Group Public Company Limited (MAJOR), following the film industry globally is rebounding, MAJOR could benefit from this positive factor, the ticket sales and relevant businesses are expected to rebound from March on, driven by blockbuster films (e.g. Gozilla VS Kong, Black Widow, and Fast and Furious 9), so 2Q21 profit is expected to grow greatly both QoQ and YoY. ASPS maintained a “BUY” recommendation on MAJOR with a target