Recommendation: Buy

Securities house: Thanachart Securities

The brokerage has lowered its recurring profit forecasts for Oishi for 2006, 2007 and 2008 by 19 per cent, 13 per cent and 7 per cent, respectively.

For the same years, it cut its market-growth projections for green tea by 10 per cent, 5 per cent and 5 per cent, respectively.

Market size for green tea is estimated to be Bt6.4 billion this year, B6.7 billion next year and Bt7 billion in 2008. The brokerage predicts that Amino OK will contribute Bt335 million in sales, down from Bt702 million in the previous estimate, given the slow economic environment.

Although Amino OK vaulted into the lead with a 69-per-cent share only a short time after its unofficial launch last October, the market for so-called "functional" drinks in Thailand remains small, while Amino OK is popular only among limited groups.

Amino OK is expected to contribute 6 per cent of Oishi's sales this year.

Despite cutting earnings projections, the broker still believes that Oishi is an attractive long-term investment. This is supported by the company having quickly regained its market share, the synergetic cost savings enjoyed in the procurement of raw materials, better plant efficiency from having liquor tycoon Charoen Sirivadhanabhakdi as a strategic partner and the introduction of new drinks and a new product line.

Stock: Sino-Thai Engineering and Construction Plc (STEC)

Recommendation: Buy

Securities house: Tisco Securities

The management of Sino-Thai Engineering and Construction has revealed that payments for some of its public-sector projects have been slightly delayed, due to the political situation.

However, with proceeds from its recent private placement, the company's cash flow remains strong. The brokerage expects the situation to return to normal soon and reiterates its "buy" rating for the stock.

The current political limbo could put off bidding for public works until this year's third quarter (which marks the end of the fiscal year), assuming that a new government is formed during this quarter.

The brokerage expects further delays in mass-transit projects and that contractors will not see earnings from them until 2008. Bids for power and petrochemical jobs should be decided in the third quarter.

Sino-Thai and its consortium have submitted bids for the North Bangkok and Bang Pakong power plants, and results are expected in the third quarter. The outcome of tenders for petrochemical projects worth Bt9 billion that the constructor is bidding for should also be known in the third quarter.

Given its expertise in this type of work, chances are good the company will be awarded some of these projects. The broker has set a 12-month target price for the stock at Bt12.90 per share.

Stock: Siam City Bank (SCIB)

Recommendation: Buy

Securities house: Ayudhya Securities

Siam City Bank's first-quarter net profit fell 24 per cent year on year and 25 per cent quarter on quarter to Bt1.26 billion. The lower net profit can be ascribed to the bank's resumption of corporate income tax payments.

However, its quarterly profit before tax was up 9 per cent year on year, thanks to a 15-per-cent year-on-year increase in non-interest income and an 8-per-cent year-on-year rise in interest income.

Although the bank jacked up its lending rates three times during the first quarter to a combination of 75 basis points, its net interest margin was narrowed by 4 basis points from the previous quarter, to 2.67 per cent.

However, the bank's net interest margin for all of this year is expected to recover by 10 basis points, because the bank can receive higher returns from proceeds arising from redemption of a Bt67-billion AMC note in late June.

The broker maintains its earnings forecast for Siam City Bank of Bt5.07 billion for this year, assuming that the bank's lending grows Bt30 billion, which is less than the bank's own target growth of Bt40 billion for this year.

oranan@nationgroup.com