Stocks in Focus on 17 July 2019: TRUE and PYLON

KTB Securities (KTBST) recommended “BUY” True Corporation Public Company Limited (TRUE) share with the target price of THB6.80/sahre. KTBST stated that TRUE is a laggard stock in the communication sector which the share price should not be in a low level when compared to an increase of TRUE 23%YTD, ADVANC 25%YTD, and DTAC 29%YTD. At the end of 1Q19, TRUE had a continuously increasing market share of 29.50% by gaining  338,000 net subscribers and expanded its total subscriber base to 29.6 million.

KTBST expected a 2Q19 profit to increase continuously as normal but TRUE has to provide compensation for retired employees, an only one-time extraordinary item which made a net profit loss or lower than the first quarter. As a result, KTBST believed a share price of TRUE to decrease lower than the estimation in 2Q19 from the compensation for retired employees, so, it is an opportunity to accumulate TRUE share.

KGI Securities (KGI) recommended “BUY” Pylon Public Company Limited (PYLON) share with the target price of THB7.40/share and set a support line at THB6.35 while setting resistance at THB6.60. If PYLON’ share price could surpass the resistance line, KGI estimated that there is a chance to test a new resistance line at THB7.00 (stop loss THB6.05).

Moreover, KGI estimated PYLON as a laggard stock and to receive a positive sentiment from a new policy of the government. KGI expected a 2Q19 profit growth to grow 108% YoY to THB65 million (decreasing when compared to the previous quarter due to seasoning factor). KGI considered PYLON has a cheap valuation at PE 17.8x (the previous average was at 23x) and dividend yield 5%.