On Friday at 10:55 AM (Bangkok time), the share price of KCE Electronics Public Company Limited (SET: KCE) jumped by 5.17% or THB 2.25 to THB 45.75, with a trading value of THB 656.85 million.
Maybank Securities (Thailand) projects that KCE will experience an earnings rebound in the second quarter of 2024, benefitting from delayed revenue recognition in the first quarter. The company’s profit is anticipated to rise due to decreased costs, a weaker baht, and potential expansion in the following quarter driven by seasonal factors. Meanwhile, the firm’s consensus anticipated KCE’s 2024 earnings to grow by 23% YoY.
Furthermore, the analyst predicts a positive short-term impact on KCE from the EU’s tariff increase on the Chinese EV industry, potentially allowing KCE to enlarge its European client base, which currently represents 40% of KCE’s clients.
Despite these positive outlooks, KCE has been labeled a laggard stock, with a mere 1.2% increase in share price compared to DELTA (+12.2%) and HANA (+14.2%) in the previous month. This underperformance may be linked to investor concerns over KCE being removed from the SET50 index during the 2H24 rebalance, which concluded on June 28, 2024. The analyst gave a target price of THB 46.00 per share for KCE.
Liberator Securities foresees KCE’s earnings in the second quarter of 2024 to reach THB 634 million, marking a substantial 68.6% year-over-year increase and a 23% quarter-over-quarter growth.
Though the company bears a modest 2.3% sales uptick compared to the previous quarter, it is poised to benefit from an expected gross profit margin improvement of +1.5-2.0% and a favorable outlook on new investments, offering tax benefits for a month.
Additionally, KCE is expected to generate extra profit from divesting KCE International and capitalizing on foreign exchange rates. The analyst set a target price of THB 51.00 per share for KCE.
