4 Analysts Rate “BUY” on VGI with the Highest TP of ฿8 on Sign of Earnings Recovery
VGI has been assigned a “BUY” rating by four analysts on sign of earnings recovery in 1Q21 (April-June 2021).
VGI Global Media Public Company Limited (VGI) has been assigned a “BUY” rating by four analysts. Despite negative performance for 2020-21 as a result of the Covid-19 epidemic, VGI is predicted to rebound YoY in 1Q21 (April-June 2021). They anticipate VGI’s earnings to rise starting in 2Q21.
Krungsri Securities (KSS) stated in reference to VGI’s latest guidance implies earnings would be between 525 million baht and 1 billion baht in FY21. KSS’s forecast is at the lower end of guidance, implying minimal downside risk and it is conservative given the pandemic situation. Guidance for1Q21 revenue suggests it would be better than 1Q20 (when the pandemic started) by at least 20% because of successful efforts to manage the Covid-19 situation. This includes reasonable pricing for OOH packages and a no-postponement policy. Therefore, KSS maintained a “BUY” rating on VGI with a target price of 8.00 baht per share.
Maybank Kim Eng (Maybank) maintained its “TRADING BUY” call on VGI with SOTP-based target price was cut by 7% to 7.60 baht per share. Despite disappointing 2020-21 results due to Covid-19, Maybank learned that the management of VGI has carefully set the 2021-22 target. The 1Q21-22 (Apr-June) outlook started to recover YoY as customers and the company managed to adjust. Maybank believes the 1Q21-22 results should be the year’s bottom and normalized profit for 2021-22 to recover +310.4% YoY to 754 million baht, still below 25% in the pre-Covid level.
KGI Securities (KGI) expected VGI’s revenue of 3.1 billion baht as it foresees obstacles ahead in 1Q21-22 (April 2021 – June 2021) from the third wave of Covid-9 pressuring the OOH industry, including VGI’s media, while earnings are expected to climb from 2Q21-22 onward. The net profit forecasts are maintained at 561 million baht for 2021-22 and 868 million baht for 2022-23. KGI reiterated the rating of Outperform for VGI with a target price of 7.55 baht per share (SOTP) backed by a strong recovery in profit in 2021-22 from a low base in 2020-21, and potential upside from media expansion on BTS new lines and new business (personal loans).
DBS Vickers Securities (DBSVS) forecast a 20% increase in revenue year on year, primarily due to OOH Advertising revenue, as the number of BTS passengers is likely to recover following vaccination rollout. Together with the expansion of Rabbit Card services. Hence, DBSVS maintained its “BUY” rating on VGI with a target price of 7.48 baht per share. VGI’s strength is that it is projected to swiftly recover and emerge with a fully integrated advertising media business.
