ANALYSTS SAY: Buy, Sell, Hold (22 Oct)

Thai Beverage (THBEV SP)

Cheers To Thailand’s Reopening

Thailand’s government plans to reopen the country’s international borders to 10 countries in a bid to revitalise its battered tourism sector. The authorities are also considering lifting Thailand’s ongoing alcohol ban in restaurants. With the arrival of vaccinated tourists, we think this would help boost alcohol consumption and volume in Thailand. In our view, this remains largely underappreciated by the market given ThaiBev’s attractive valuation. Maintain BUY with a target price of S$0.92.

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 Banking – Singapore 3Q21 Results Preview:

Resilient Earnings; Stable Asset Quality

We expect banks to report resilient earnings. We see a pick-up in loan growth partially offset by NIM compression. With asset quality stabilising, we expect DBS to benefit from write-back in general provisions and OCBC to see moderation in credit costs. We forecast DBS and OCBC to achieve net profit of S$1,622m (+25% yoy and -5% qoq) and S$1,163m (+13% yoy and flat qoq) respectively for 3Q21. BUY DBS (Target: S$35.80) and OCBC (Target: S$15.65). Maintain OVERWEIGHT.

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CGS CIMB

 KGI 

Kossan Rubber Industries

Attractive valuations at current levels

■ 9M21 core net profit of RM2.7bn (+398% yoy) is at 85% of our full-year forecast. We deem it within expectations, as we expect a weaker 4Q21F.

■ While we expect weaker earnings in FY22F/23F, valuations are appealing, given Kossan’s strong balance sheet and inelastic global glove demand.

■ Reiterate Add, with a lower TP of RM3.00 (16x CY23F P/E). Its net cash of RM2.5bn as at end-3Q21 is equivalent to 43% of its current market cap.

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ThaiBev (THBEV SP): Reopening play 

• BUY Entry – 0.70 Target – 0.80 Stop Loss – 0.65
  
  
• ThaiBev is Thailand’s largest and one of Southeast Asia’s largest beverage companies. THBEV has a 28.5% stake in SGX-listed Fraser & Neave Ltd (FNN SP) and a 28.3% stake in Frasers Property Limited (FPL SP). It also has a 53.6% stake in Saigon Beer-Alcohol-Beverage Corporation (SABECO), Vietnam’s largest beer company. ThaiBev has a 90% market share of Thailand’s spirit market. 
  
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