Rating: Outperform

Securities house: KGI Securities (Thailand)

The expected signing of the Bt22.1-billion Namngum 2 Hydroelectric Dam project will bring Ch Karnchang's total backlog value after deducting first-quarter revenue realisation to Bt34.7 billion. Once signed, the company will realise at least 18 per cent of the contract's value, or Bt2.9 billion, this year.

Secured recurring income from power sold to Egat will stabilise Ch Karnchang's revenue stream, especially during economic downturns. The constructor's net profit this year will jump significantly to Bt1.4 billion due to huge capital gains before tax of Bt1.04 billion from the sale of Thai Tap Water Supply shares. Excluding this huge gain, normalised profit will still be outstanding with a growth rate of 36 per cent to Bt640 million this year, thanks to its solid construction-revenue growth and higher equity earnings from its various investments. The brokerage's target price for the stock is Bt14.80 a share.

Stock: Tisco Bank (TISCO)

Rating: Neutral

Securities house: Phatra Securities

First-quarter net profit was Bt545 million, up 44.6 per cent quarter on quarter and 5.4 per cent year on year, on the back of a cyclical recovery of securities income. The bank's organic growth was slow given its policy of slow growth due to rising interest rates and tightening liquidity. First-quarter net interest income rose 6.4 per cent from the previous quarter and 2.2 per cent year on year due to substantial growth in liquid assets and a still-positive gap between funding costs and money-market rates. Non-interest income rebounded sharply on higher securities-business income, including proprietary trading income, and brokerage fees and commissions. The brokerage does not, however, expect market activity to significantly improve soon due to rising political and economic uncertainty.

oranan@nationgroup.com