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Time for picking up stocks with potential at lower prices, say analysts

Feb 28. 2020
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By The Nation

Declining share prices amid sell-off in the Stock Exchange of Thailand, triggered by the Covid-19 outbreak, offers a good opportunity for investors to pick up stocks with rise potential at cheaper prices, say market analysts.

Kuntra Ladavalya Na Ayudhya, executive director of Finansia Syrus Securities, said at the seminar hosted by Krungthepturakij newspaper on Thursday (February 27) that share sell-off by investors due to mounting concerns of the Covid-19 outbreak , had led to the SET index falling 13 to 14 per cent from early this year to about 1,366 on February 26 - its lowest level in five years ago. Investors should start buying stocks with potential to rise, he suggested. The government is expected to launch a new economic stimulus package after the censure debate.

“If we look at 10-year statistic, whenever the index fell more than 8 per cent in 10 days, it made a v-shape rebound," he said.  Kuntra advises buy of SISB share at Bt 12 per share. The SISB international school operator is expected to make a profit of B284 million this year, up from 220 million last year due to rising numbers of students and it is less impacted by the coronavirus epidemic. The expansion of school facility in Thonburi could accommodate another 4,000 students. He also suggested buy of RBF at Bt 5.50 a share which largely depends on domestic sales of food additives, and CHG at Bt3 a share as it will benefit from rising number of patients with Thais making up the majority.

MTC price at Bt65 a share is also recommended as it will benefit from lower financial cost after the central bank cut its policy rate while EA, a clean energy operator, is also a good buy at Bt 60 a share.

Padermpob Songkroh, authorised director at Yuanta Securities (Thailand), suggested share of BAM at a fair price of Bt30 as the asset management firm may buy assets at lower prices during the coronavirus outbreak. When the coronavirus outbreak is contained, investors should look at TOP with fair price at Bt62 and KCE at Bt26. STEC will benefit from government infrastructure projects and budget disbursement which is expected to start in April after several months of delay. TASCO will benefit from government projects, decreasing oil prices and its fair price should be Bt27, he added.

Kavee Chukitkasem, deputy managing director at Kasikorn Securities said he had not recommended any stocks to investors in the past two years, due to weak economic fundamentals,lower investment, weak consumption, ageing society and low competitiveness of Thai industries. But when the index is down 20 per cent from the previous high of 1,850, prices are cheap and present a good chance to buy. Investment is expected to yield positive returns in the next three years. Investors should look at firms with strong fundamentals. He suggested BDMS at Bt28 a share. BDMS' acquisition of BH hospital will increase the number its internal patients, given BH's client base. Next is MINT,a hotel chain at Bt45 a share as it is expected to rebound in the

long term. He also likes AOT, the state airports operator, at a fair price of Bt 75 a share, due to expected growth in tourist arrivals . CPALL at Bt80/share is an attractive buy due to its network of convenient stores and large number of warehouses and well-managed logistics. The company has a large cash flow, and if it could win the bid for Tesco, its cash flow will rise but in short run, it will be under pressure from borrowing cost, he said. Next is ADVANCE with fair price at Bt226, because the mobile phone operator needs not to invest much in 5G network, it will have more cash for dividend payment , he added.

Pichai Lertsupongkit, senior vice president at Thanachart Securities, said short sell and forced sell had sent the market down sharply . He predicted that the Bank of Thailand will cut benchmark rate again on March 25 when the Monetary Policy Committee convenes and the government will implement more economic stimulus package.

If the Covid-19 outbreak persists, investors should look at SEAFCO with fair price at Bt8 a piece. It will benefit from government project, offer high dividend payment and low P/E at 10 times. He recommended COM7 at Bt32 a share as it will benefit from 5G projects and it has not yet impacted by the coronavirus. He also suggested PTTEP with fair price at Bt 152 a share, it will benefits from rising oil prices and its share had dropped sharply. AOT at Bt80 will benefit from tourism growth and MINT at Bt42 a share as lower interest rate will cut its financial cost, he added.

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