Stocks in Focus on 30 July 2019: SEAFCO and LIT

On July 30, 2019, Kaohoon Online has selected two stocks with a potential of high growth for investors to consider.

 

AIRA Securities stated that SEAFCO Public Company Limited (SEAFCO) has continued to acquire new projects in 1H2019 in a total value of THB 2,231 million (17 projects). As a result, a recent backlog has increased from THB 2,100 million to THB 4,000 million and expected to acquire new projects which earn approximately THB750 million/quarter.
AIRA expected SEAFCO to recognize the revenue as its target of THB 3,000 million in 2019 and maintain the backlog at THB 2,000 million until the end of the year. Additionally, AIRA has also expected the turnover of SEAFCO to grow continuously. Being a subcontractor of concrete piles and wall plates has made the opportunity for SEAFCO to acquire more projects, including high-speed rail project connected between the 3 airports and Rama III-Dao Khanong expressway which estimated earnings of THB 12,000 million and THB1,200 million, respectively.
Base on SEAFCO’s market share estimation, there was 25-30% opportunity for SEAFCO to acquire more projects in a total value of THB 3,000 million which AIRA expected the backlog to be more outstanding. Therefore, AIRA recommended “BUY” SEAFCO share with a 2019 target price of ฿11.50/share based on PE 20x (average past 5 years) due to outstanding performance and 4.0% of dividend yield.

Finansia Syrus Securities recommended “BUY” Lease IT Public Company Limited (LIT) share with the target price of ฿6.20/share. LIT has certainly benefited from government forming because LIT’s customer has been involved with the government sector, the government’s budget and a low-interest rate in the market. All of these have affected positively to a financial cost of LIT. A 1Q2019 profit was 21% which Finansia expected a whole year profit of LIT to grow 5% to THB 156 million. In 2Q2019, Finansia has expected the credit to recover and increase higher in the 2H2019. Although a profit has recovered lower than in the past, the share price was still undervalued.