Reuters: Hot Stocks: STOCKS NEWS THAILAND-Thai Airways falls on competition worries

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STOCKS NEWS THAILAND-Thai Airways falls on competition worries May 21st 2012, 09:21 Mon May 21, 2012 5:21am EDT Shares in the country's national carrier Thai Airways International Pcl fell 1.7 percent to their lowest in nearly four months on worries that increasing regional competition may subdue any restored profitability. The stock was down 1.3 percent at 22.8 baht, after touching a low of 22.7 in intra-day trading, its lowest since Jan. 26. The company had reported better-than-expected first quarter earnings of 3.6 billion baht ($114.9 million) on May 11. "Tempting as it may be to showcase Thai Airways as a turnaround play, we believe it is premature for a long-term position build-up as competitive pressures persist," broker CIMB Securities said in a research note. However, it expects upcoming quarters' performances to improve notably due to the low base in 2011 caused by an earthquake and tsunami in Japan and floods in Thailand. On May 18, Thai Airways said it might set up a new budget carrier to tap strong demand in the regional no-frills sector and the airline is on track to achieve its net profit target this year after a strong first quarter. The broker rated the shares "neutral" with target price at 27 baht. However, it said that its preference remained firmly with Airports of Thailand as "the airport operator should continue to enjoy busy air traffic without Thai Airways' price pressures and cost volatility". Shares in Airports of Thailand were down 1.3 percent at 57.75 baht, while the broader SET index fell 1.26 percent. 1607 (0907 GMT) (Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Gopakumar Warrier) (sinsiri.tiwutanond@thomsonreuters.com) ********************************************************** 1448 STOCKS NEWS THAILAND: KGI cuts Thai Oil target price to 73 baht KGI Securities (Thailand) cut its price target on Thai Oil Pcl to 73 baht ($2.33) from 85 baht ($2.71), partly reflecting the impact of weak oil market on earnings of the country's biggest refiner. The broker downgraded the stock to "neutral" from "outperform". Thai Oil shares fell 1.27 percent to 58.25 baht. At one point, they were at 58 baht, their lowest in more than six months. The stock has fallen 20 percent this quarter, underperforming the broader market's 4.9 percent loss. The price of oil has declined 13 percent quarter-to-date following uncertainties in the euro zone, KGI said in a report. "We expect Thai Oil's quarterly earnings to repeat the trend seen last year where they peak in the first quarter and drop in the subsequent quarters on the absence of stock gain. As such, the share price seems to have no short-term catalyst," the broker said. 1440 (0740 GMT) (Reporting by Viparat Jantraprap in Bangkok; Editing by Gopakumar Warrier) ************************************************************ STOCKS NEWS THAILAND: Kasikorn raises Thai Union Frozen; price at 9-day low Kasikorn Securities raised the target price for Thai Union Frozen Products Pcl TUF.BK to 64 baht from 60 baht with a neutral rating, on expectation that the firm's expansion plan will help boost its yearly revenue. Shares in Thai Union Frozen, the world's largest canned tuna producer, were trading at 71.75 baht, their lowest in nine days. The share price fell to 71.50 baht at one point. The main Thai index .SETI was down 1.12 percent. "We expect the company to grow its revenue by 13 percent to 3.7 billion dollars during 2012 from its continued expansion in sardine and mackerel products," Kasikorn said in a research note. The broker also said the company previously raised 9.6 billion baht($31.91 million)in capital from its rights offering subscription, which is likely to be used to buy other seafood brands to enlarge its position in the global seafood market. "We believe Thai Union Frozen wants to take advantage of the current slowdown in the European Union to acquire good assets," the broker added. However, Kasikorn said it maintains Charoen Pokphand Foods CPF.BK as its preference in the sector due to Thai Union Frozen's higher current trading price. Shares in rival Charoen Pokphand Foods were down 2.85 percent to 37.75 baht. 1112 (0412 GMT) (Reporting by Sinsiri Tiwutanond in Bangkok; sinsiri.tiwutanond@thomsonreuters.com) ($1 = 31.34 Baht) Link this Share this Digg this Email Reprints

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