Analyst Upgrades SQ TP to ฿5.10/Share with 30% Upside after Booking Backlogs Worth ฿35bn

Asia Wealth Securities (AWS) recommended “BUY” Sahakol Equipment Public Company Limited (SQ) share the new target price of ฿5.10/share from the previous target price of ฿3.20/share with an upside of 30%.

SQ has signed MoU agreement with a joint venture, namely Golden Lake (GL), for receiving the rights to mining coal in Mai Khot Mine in Myanmar with a concession period of 28 years. SQ holds 70% in this joint venture. This deal made SQ turn their doing business from contractors to coal mining concessionaire. This mine boost SQ’s backlog from THB 30 billion to THB 35 billion, up by THB 5.0 billion, resulting in an increase in SQ’s value by THB 0.5 per share (from 3.20 to THB 3.80).
Meanwhile, AWS valued the Mai Khot coal business phase one separately. AWS forecasts conservatively coal sales to reach 300,000 tonnes per year with a heating value of 4,200 kcal/kg throughout the concession period. This will boost the company’s value by Bt1.30. As a result, the new target should be Bt5.10, up from Bt3.20. AWS recommended BUY call.