Stocks in Focus on December 19, 2019: BANPU and SPALI

Kaohoon Online has selected stocks with a potential of high growth for investors to consider on December 19, 2019.

 

Asia Wealth Securities (AWS) has given a “Buy” recommendation on Banpu Public Company Limited (BANPU) with a target price at ฿18.10/share.

AWS states that it is still difficult to evaluate the performance and the appropriate value to increase from the acquisition of Barnett shale with an investment of 23 billion baht to acquire 89% stake.

The acquisition is expected to increase EBITDA to BANPU by $100 – 150 million per year in proportion to its shareholding. However, operations still require additional investment. Especially, drilling exploration wells for additional production 15-20 pits per year (investment of approximately $ 6-7 million per well) to maintain production at 500 million cubic feet per day. (Total production wells of more than 4,200 wells).

The project has a proven natural gas reserve (1P), based on an investment proportion of approximately 3.5 trillion cubic feet. Although Henry Hub’s gas price is currently down due to oversupply problems in the United States, the acquisition during this period considered appropriate and we have a long-term positive view on BANPU for diversifying investment into the gas business. Reduce the proportion of revenue recognition from the highly volatile coal business.

 

Kasikorn Securities (KS) has given a recommendation on Supalai Public Company Limited (SPALI) with a target price at ฿18.10/share.

KS states that a beneficiary of fresh property stimulus measures will boost inventory sales of SPALI. Meanwhile, SPALI is trading at 12-month forward PER of 6.34x, compared to its past average of 6.85x. In this regard, KS expects a dividend yield of 5.43%.