Smartkarma independent analyst Howard J Klein has issued a “buy” signal on stocks of Cambodian integrated resort operator NagaCorp ahead of its FY2020 earnings report, citing superior performance throughout the COVID-19 pandemic and an anticipated speedy recovery through 2021.
Hinting at overly cautious investor sentiment on NagaCorp stocks, which currently sit around HK$3 off their 52-week high of HK$12.40 at HK$9.18, Klein said the company remains in the midst of a recovery “buy” cycle after prices dropped by more than HK$5 when the COVID-19 pandemic hit.
In particular, the platform believes there could be positive earnings news upon the release of NagaCorp’s 2020 results.
“Our continuing view is that by most measures, the company has performed well during the pandemic and should be poised to resume its steady move north here,” he said Monday.
“In our view, the timing is right for getting off the sidelines and seeing the entry point here as potent.
“With the endgame of the pandemic in early stages, the price still off the 52-week high and the possibility of breakthrough news on the imminent earnings release, we see minimal downside risk vs a resumption of price appreciation from here forward.”
NagaCorp previously announced Adjusted EBITDA of US$88.7 million and profit of US$20.6 million for the first six months of 2020, despite closing its doors for three months from April to July.
It later noted that GGR had returned to 91% of pre-COVID levels by the end of the September 2020 quarter, although a second wave of COVID-19 in the latter stages of the year may have subdued momentum.
Nevertheless, Klein anticipates profit growth of around 12% year-on-year by 4Q21.
“Overall Nagacorp’s strong balance sheet will take it comfortably through to the end of the pandemic,” he said.