Reuters: Hot Stocks: STOCKS NEWS THAILAND-Stanley up on auto sector recovery

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STOCKS NEWS THAILAND-Stanley up on auto sector recovery May 22nd 2012, 04:38 Tue May 22, 2012 12:38am EDT Shares in auto-parts manufacturer Thai Stanley Electric Pcl hit a one-week high on expectation of a recovery in auto production which was hit by floods in Thailand late last year. Stanley shares were up 1.6 percent at 191 baht ($6.09), climbing at one point to 193 baht ($6.16), the highest since May 14, outpacing a 0.8 percent gain of the auto subindex and a 0.3 percent rise of the benchmark SET index. Four out of six analysts tracking the company rate it a buy or strong buy, one rate it a hold and one gives it a sell rating. Broker Phillip Securities pegged the stock's target price at 210 baht ($6.70), reflecting an earnings upgrade partly due to a resumption of production at Honda, one of Stanley's major clients, and its capacity expansion. "To reflect a faster-than-expected earnings recovery in the fourth quarter, a resumption of production at Honda in early May 2012 and new orders for eco-cars from Mitsubishi and Suzuki, we raise our fiscal year 2013 sales projection by 3 percent," the broker said in a report. "Even though the daily minimum wage hike effective in April 2012 would erode Stanley's profitability ... the impact could be offset by corporate income tax cuts and economies of scale," it said. (Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com; Editing by Robert Birsel)

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