The share price of SCG Packaging Public Company Limited (SET: SCGP) rose THB3.75/share or 5.81% to THB68.25/share as of 15.06 hrs. local time in Thailand, with a trading value of THB3,378 million.
Land and Houses Securities (LHS) has given a “BUY” recommendation on SCGP with a target price at ฿70.00/share, anticipating that net profit in 4Q21 to recover from the previous quarter due to higher demand after an improved COVID-19 situation and the recognition from Deltalab. Meanwhile, LHS expected the company to have an inorganic growth due to a high amount of cash. In addition, LHS estimated outstanding growth for SCGP next year as the company will fully recognize the revenue from its M&A investment.
Meanwhile, Maybank Securities (Thailand) (MST) recommends “Accumulative-Buy” as the share is outperforming the market following the easing of COVID-19 fears and sentiment of traders boosted by Fed meeting.
MST anticipates that SCGP’s earnings would recover in 4Q21 as raw material costs continue to decline and demand begins to recover globally, notably in Vietnam. The years 2021-2022 are expected to see a high level of growth from both domestic and foreign businesses, as well as M&P (merger and partnership) (for example, the M&P of three companies, DuYtan, Intan, and Deltalab, in 2H21, which will raise annual revenue by around THB13 billion)
