Analysis consensus facing downgrade

Analysis consensus facing downgrade

Securities analysts have stated that analysis consensus for listed companies may be downgraded this year if the second-quarter operating results drop.

Therdsak Thaveeteeratham, senior executive vice-president of Asia Plus Securities (ASPS), says the consensus from a Bloomberg survey currently stands at 83.6 baht per share, which is quite high since many brokers gradually upgraded their earnings per share (EPS) forecasts used in the calculation after listed companies showed better performance in the first quarter.

Mr Therdsak said most brokers made EPS forecasts at above 80 baht, based on the operating results and the pandemic situation in the first quarter when daily new infections averaged 2,000 cases a day.

He said the domestic situation is expected to cause annual profits of the construction sector to drop 10%. The growth of hire-purchase lending and shopping complex businesses is also expected to see poor performance in the third quarter.

Meanwhile, global economic recovery may also cause rubber and rubber gloves companies' annual profits to decline by 10%-15% in the third quarter.

In addition, banking, retail and transportation shares will face some pressure from the loan loss provisions and economic recovery.

On the contrary, electronic and mobile phone devices and IT network businesses will benefit. The negative impact on energy shares is also expected to be limited.

At present, ASPS has made an EPS forecast for this year at 71.2 baht per share which is quite far from the consensus. The revised EPS is expected to be close to about 70 baht per share.

Meanwhile, Kasikorn Securities (KS) has made an EPS forecast of 84 baht for 2021 and 95 baht per share for 2022.

Sunthorn Thongthip, a strategist at Kasikorn Securities, said the company has just downgraded the multiplier in the estimate.

KS will revise overall estimates after listed companies announce second-quarter operating results around mid-August.

"The revision will have both upsides for businesses related to exports and downsides for businesses related to local consumption. However, the overall outlook for the Thai economy is negative," Mr Sunthorn said.

Sukit Udomsirikul, a managing director of research at SCB Securities (SCBS), gave the same outlook, saying although there is an opportunity due to reopening, the downside risks still remain.

Mr Sukit said businesses related to healthcare, exports, food (except restaurants), and communication are likely to be less affected.

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