Friday, July 10, 2020

Sri Trang Agro Industry stocks perform best in first half this year

Jul 01. 2020
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By The Nation

Nine out of 19 stocks in the SET100 Index generated returns of more than 10 per cent, while 51 out of 81 stocks performed worse than expected in the first half of this year.

The stock that rose the highest was Sri Trang Agro Industry (STA), which spiked 167.5 per cent to Bt26.75 per share.

STA stocks did well after the company decided to list its subsidiary Sri Trang Gloves (STGT) in the Stock Exchange of Thailand (SET) in July.

Through the listing, STA will be able to raise approximately Bt15 billion to expand its production of rubber gloves worth about Bt11 billion, while STA will hold 50.7 per cent of STGT shares after launching initial public offerings.

Other stocks that did well were TQM Corporation (TQM) and Super Energy Corporation (SUPER), which rose by 104.55 and 66.07 per cent, respectively.

Investors were positive about these stocks as TQM’s net profits rose from Bt404 million in 2018 to Bt507 million in 2019 and Bt179 million in the first quarter of this year, while SUPER's net profit rose from Bt1.045 billion in 2018 to Bt2.137 billion in 2019 and Bt718 million in the first quarter of this year.

Meanwhile, the stock that fell the most was that of Banpu (BANPU), which dropped 49.16 per cent to Bt6.05 per share, followed by Thai Airways International (THAI) and Minor International (MINT), which dropped by 45.99 per cent and 45.28 per cent respectively due to the Covid-19 fallout.

Sornchai Pitthayaprug, a stock analyst at Capital Nomura Securities, said BANPU’s net profits dropped due to a decline in coal prices as many countries are opting for clean energy. The coal business accounts for approximately 70 per cent of BANPU’s earnings before interest, tax, depreciation, and amortisation (EBITDA).

“In the second half of this year, coal businesses may face oversupply as many countries are aiming to cut down on the consumption of coal,” he said, adding that BANPU’s move to invest in natural gas may also result in oversupply due to the economic slowdown and the Covid-19 impact.

“However, the price of BANPU stock is likely to rise because there is always a demand for natural gas, but it also depends on the world’s economy,” he said, adding that BANPU’s net profits in the first quarter rose to Bt1.7 billion from a loss of Bt552 million in 2019 thanks to Bt3.3 billion in profits from foreign exchange.

“We expect BANPU’s second-quarter performance to drop to its lowest this year,” he added.

Meanwhile, a stock analyst at Phillip Securities expects BANPU to make a loss of about Bt3.2 billion this year.

“However, we are advising investors to buy this stock at Bt8 per share as its price to book value ratio [P/BV] was 0.6 times,” the analyst said.

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