Stocks in Focus on October 7, 2019: TU and BA

Kaohoon Online has selected two stocks with a potential of high growth for investors to consider on October 7, 2019.

 

Maybank – TU

Maybank Kim Eng has made an analysis on Thai Union Group Public Company Limited (TU), expecting 3Q19 normalised profit to drop 4% QoQ and 12% YoY, due to lower sales from the strengthening baht. However, the gross margin is projected to increase, fuelled by lower tuna raw material costs. Given tuna price remains low, gross margin tend to remain healthy in 4Q19.

To list its subsidiary – TFM on the SET will unlock value of the feed business. TU’s share price may be pressured by the 3Q19 weaker-than-expected earnings. Thus, Maybank recommends BUY on weakness, with TP (PER) of ฿22.80/share.

KGI – BA
KGI Securities has made an analysis on Bangkok Airways Public Company Limited (BA), expecting BA to report a 3Q19 normalized loss of Bt65mn (improving from a normalized loss of Bt651mn in 2Q19, but down from a normalized profit of Bt96mn in 3Q18). Overall business looks better QoQ, supported by a stronger season.

Nonetheless, KGI expects the company’s performance to soften YoY, mainly due to weaker business environment (i.e. economic slowdown, stronger baht versus other currencies, intense competition). Thus, KGI maintains a Neutral rating with a 1H20 target price of ฿12.20/share (based on 0.8x P/BV).