Stocks in Focus on November 27, 2020: PRM and MAJOR

Kaohoon Online has selected stocks with a high-growth potential for investors to consider on November 27, 2020.

 

KTB Securities (Thailand) (KTBST) has given a “BUY” recommendation on Prima Marine Public Company Limited (PRM) with a target price at ฿12.00/share.

KTBST stated that it has a neutral view of the company’s guidance at an analyst meeting on November 26. First, PRM has forecasted its FSU business will likely remain strong in 2021E in expectation of a still-strong demand. Second, the domestic oil trading business should continue to grow, as numerous airlines are expected to resume international flights by mid-2021E, which should significantly spur jet oil demand. Last, PRM is going to buy two FSU ships although the company has held off its purchase plan due to a higher price.

Thus, KTBST maintained its 2020-21E net profit forecast at Bt1.5bn (+48% YoY) and Bt1.7bn (+12%) on the back of a notable growth in the FSU business and a potential improvement in the domestic oil trading business in 2021E. Note that PRM has recently added one domestic oil trading ship to its fleet and will receive one FSU ship in 2021E.

PRMs share price declined in three months and thereby underperformed the SET Index by 20%. We believe downside risk from the current level will be limited, as KTBST foresaw a brighter earnings outlook in 4Q20-2021E should PRM receive one FSU ship in 2021E. KTBST saw a downside risk of Bt100mn to its 2021E net profit forecast, which however would grow 6-7% YoY, if PRM fails to receive the FSU ship.

 

KGI Securities has given an “Outperform” rating on Major Cineplex Group Public Company Limited (MAJOR) with a target price at ฿22.20/share.

KGI had a more positive outlook for MAJORs earnings in 4Q20 and 2021. The company’s 4Q20 core earnings should improve QoQ driven by successful Thai movies, particularly E-Rium Sing, which contributed over Bt100mn within one week on screens.

A strong recovery is expected in 2021 backed by stronger movies from Hollywood, a greater number of Thai movies and more events outside of theaters such as Movie On The Beach and Movie On The Hill.

KGI’s core forecasts are raised to core loss of Bt755mn in 2020 and core profit of Bt941mn in 2021. KGI’s target price was raised from Bt16.40 to Bt22.20 (PER 21.1x, -0.25 S.D), upgraded from “Neutral” to “Outperform”.