Shares in Ch Karnchang Pcl fell 1.4 percent to 6.9 baht during midday trade on concerns about the Thai construction company’s earnings visibility.
“Ch Karnchang’s poor earnings visibility due mainly to weak margins and a high interest burden needs to be addressed before it can become a sound infrastructure play. Bagging a new contract is unlikely to drive its share price very much,” CIMB Securities said in a research note.
CIMB maintained its “underperform” rating and target price of 7 baht on the stock.
The broker also said a possible delay on the Xayaburi dam project in Laos may cause costs to overrun and would not bode well for the company, after the Lao government said that construction would be halted until a full independent environmental impact study was completed.
The stock is “trading at almost double its net asset value. Without strong catalysts in sight, we expect Ch Karnchang to continue to underperform, especially when the market is concerned about its high gearing,” CIMB added.
1308 (0608 GMT) (Reporting by Sinsiri Tiwutanond in Bangkok; email@example.com)
12:22 STOCKS NEWS THAILAND-Central Pattana hits 8-day high
Thailand’s largest shopping mall developer Central Pattana Pcl rose 1.65 percent on Friday to its highest in eight days, as brokers remained positive about its growth outlook.
Shares in Central Pattana traded as high as 46.25 baht, while the main Thai index was down 0.31 percent.
Bualuang Securities rated the shares the top pick of the sector with a buy rating and target price of 58 baht, on hopes that the company will see average growth of 25.2 percent per year in the next three years.
“The strong growth in rent will likely help to increase its estates’ value at a faster rate than expected, in addition its new and planned projects will support this growth in the long-term,” Bualuang said in a research note.
Bualuang said it expects Central Pattana to achieve a record high in rent income after the company achieved 10.8 percent rent growth for its existing properties in the first quarter.
The broker added that the company planned to launch five new projects in 2013 and 2014.
1209 (0509 GMT) (Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Daniel Magnowski; firstname.lastname@example.org)