Stocks in Focus on January 15, 2020: PLANB and KBANK

Stocks in Focus on January 15, 2020: PLANB (KTB Securities at ฿11.00/share) and KBANK (KGI Securities TP at ฿194.00/share).

Kaohoon Online has selected stocks with a potential of high growth for investors to consider on January 15, 2020.

 

KTB Securities (Thailand) (KTBST) has given a “BUY” recommendation on Plan B Media Public Company Limited (PLANB) with a target price at ฿11.00/share.

KTBST has reiterated its BUY rating on PLANB and a DCF-based target price of Bt11.00 with a positive view of PLANB’s earnings outlook after MACO’s shareholders yesterday approved to issue new shares to PLANB through private placement and to allow PLANB to manage its ad media, as well as investment in “Hello Bangkok” LED billboards.

The move should provide positive sentiment to PLANB’s share price in the short term, which has come under pressure from this overhanging issue recently. KTBST believes PLANB will also reap synergy benefit from MACO right after the PP. Based on MACO’s revenue from ad media of Bt850mn., KTBST estimates revenue/profit contribution at Bt127mn/Bt82mn in 2020, apart from dividend income. As for an illegal static billboard issue, MACO has reaffirmed to solve it within one year.  Thus, KTBST maintains PLANB’s 2019E/2020E net profit forecast of Bt760mn (+18.3%)/Bt1.09bn (+43.8%).

PLANB’s share price has slumped 13% in three months due to concern over MACO’s issue. KTBST views a decline as an opportunity to increase positions given the latest resolution of the MACO issue and bright 2020E earnings outlook (+48% YoY). Additionally, the stock’s valuation looks attractive, trading at PER of 26.1x, implying -2 SD below 5-yr average level of 47.2x.

 

KGI Securities (KGI) has given an “Outperform” rating on Kasikornbank Public Company Limited (KBANK) with a target price at ฿194.00/share.

KGI states that KBANK is looking at acquiring a 35% equity stake in Ayeyarwaddy Farmers Development Bank (A Bank). According to Bloomberg, A Bank is registered as a small bank with an asset size of US$190mn (around Bt5.7bn). Assuming capital structure 8:1 and acquisition pricing to settle at PBV at 2.0x, buying 35% equity stake would imply an investment value of around Bt500mn.

Currently, the combined operations from international business is insignificant to asset and revenue for KBANK. As such, KGI thinks this investment is just an increase in its footprint and exploring new opportunities for the longer term. With an undemanding valuation, KGI maintains a rating of Outperform with a target price of Bt194.