NRF Jumps 3%, Analyst Recomm. “BUY” with TP of ฿11 as Long-Term Fundamentals Remain Solid

The share price of NR Instant Produce Public Company Limited (NRF) rose ฿0.25/share or 2.84% to ฿9.05/share as of 15:14 local time in Thailand, with a trading value of 199 million baht.

 

Maybank Kim Eng (Maybank) has given a “BUY” recommendation on NRF with a target price of ฿11.00/share, despite facing negative factors in the short term, NRF is expected, the medium-long term, to have upside risk waiting along the way, whether it is (1) M&A deal, at least 2 deals with third-party ecommerce companies (2) hemp business, from upstream to downstream, (3) launching of NRF’s own brand of Plant-based products.

 

NRF may face two negative factors in the short term: (1) expect a 1Q21 profit of THB31m (+55% YoY, -11% QoQ), a contraction QoQ from what the market had expected to see an All Time High in 1Q-2Q21, hit by transport impacts and (2) plant-based plants in the UK, there is a chance of 1-3 months delay in orders from COVID-19 as an obstacle to the certification audit. 

 

However, such negative factors simply make the revenue recognition “just postpone, not over” while mid to long-term fundamentals remain intact and the impact on Maybank’s earnings estimates is limited. If the stock price drops because of such factors, Maybank sees it as an opportunity to accumulate stocks.