Maybank Recommends “Accumulate” Stocks with Positive Outlook in 2Q21, Top Pick: IVL, MTC

Maybank Kim Eng (Maybank) said that despite the market performing better than anticipated in the first quarter of this year, it is likely to slow down in the second quarter due to the new wave of Covid-19 outbreaks. Therefore, Maybank maintained the SET Index at 1,600 points at the end of 2021. Accumulation is recommended during market corrections, especially in stocks that appear to have a positive outlook for 2Q21, such as ASK, BCH, MTC, IVL, and WICE.

In 1Q21, market earnings increased by 129% year-on-year to 265 billion baht in combined net profit (+46% QoQ). Over 80% of listed companies posted better-than-expected operating results, especially in Global Play sectors such as energy, petrochemicals, construction material, property development, finance and non-banking, agriculture, insurance, steel, packaging, electronics, automotive, construction, and media. 

On the other hand, firms in industries such as tourism, logistics, retail, healthcare, and wealth management continued to underperform both quarterly and year over year.

Covid-19 pandemic remains a significant variable on economic recovery in Thailand, particularly businesses rely heavily on tourism and foreign visitors.

Maybank maintained its 1,600-point forecast for the SET Index as of the end of this year, based on PE at 19x. Despite the market’s excellent results in 1Q21, Thailand is currently experiencing a serious Covid-19 outbreak, which could put profit margins underneath pressure in 2Q21. However, we will see a year-over-year rebound.

This year, listed companies are forecast to earn 920 billion baht in net income, or equivalent to SET EPS of ฿84 per share. Maybank believes that the majority of companies in the stock market have the potential for growth in 2Q21 and recommends investors to accumulate ASK, BCH, MTC, IVL, and WICE.