Stocks in Focus on 10 July 2019: EKH and SYNEX

Finansia Syrus Securities expected a 2Q2019 profit of Ekachai Medical Care Public Company Limited (EKH) to rise in the opposite direction of the hospital sector from the support of IVF center. Thus, Finansia recommended “BUY” EKH share with the target price at THB8.40.
IVF center has commenced the operation since the beginning of the year 2018 and grown rapidly after opened another center at Rama9 at the end of 2018. Due to the growth of IVF center, Finansia expected EKH profit to rise THB29 million, increasing 30%YoY while the hospital sector is expected to decrease 1% YoY.
If a profit is the same as Finansia estimated, a 1H19 profit of EKH will be 50% of the whole year estimation of THB148 million, increasing 26% YoY (the highest in the sector is 6%). However, Finansia believed the Children’s (Pediatrics) Center that will be opened in 3Q2019 will not affect EKH’s performance due to a high season of EKH.
Currently, EKH has PE of 28x, lower than the group at 32x but there is ROE 17% higher than the group.

KTB Securities (Thailand) recommend “BUY” Synnex (Thailand) Public Company Limited (SYNEX) share with the target price at THB12 due to SYNEX benefited from strengthening of Thai Baht. Moreover, the pressure from trade tension between the U.S. and China has been relieved after the U.S. allowed the company in the U.S. to do business with Huawei, although the imposed 25% tariffs of imported goods have not been canceled. KTB sees a positive sentiment for the electronic sector.
In addition to the customer who bought Huawei mobile phones, SYNEX has guaranteed to the customer if they cannot use or update the applications, SYNEX is pleased to return the money. For the reason that SYNEX would like to build customer confidence and expected to increase the sale of Huawei. In terms of strengthening of Thai baht, it is positive to SYNEX as a leader of imported products and a worldwide technology distributor. The share price of SYNEX is not expensive, meanwhile, trading at PE of 11.5x lower than the past average at 15x.