Asia Plus Securities (ASPS) forecast stocks in the plastic packaging (SCGP, TPLAS and EPG), hospital (BCH, CHG and BDMS) and game (AS) sectors to benefit from new Covid-19 restriction measures in 10 provinces starting June 28, 2021.
ASPS concluded that the government imposed restrictions on certain businesses in dark red zones, including construction and restaurants, affecting many industries, while economic stabilization measures such as Ying Chai Ying Dai and Kon La Krueng will be less effective. These restrictions have a negative sentiment on Thailand’s economy and SET Index, putting downward pressure on fund inflows going forward. Investors are suggested to actively monitor the Covid-19 situation in Thailand. The SET Index is likely to fall below a 1,580-point resistance area. ASPS recommends investing less in city reopening plays. Top picks are AS, BDMS, and BLA.
Plastic Packaging – Restaurant dine-in is banned while only take away services are available, ASPS expects this restrictions would benefit packaging manufacturers, e.g. SCG Packaging (SCGP) (TP: ฿65.00) that makes 4% of income from food packaging products as well as Thai Plastic Industrial (1994) (TPLAS) and Eastern Polymer Group (EPG) (not under ASPS coverage).
Healthcare – Healthcare plays will make more revenue from Covid-19 examination and treatment, e.g. Bangkok Chain Hospital (BCH), Chularat Hospital (CHG), and Bangkok Dusit Medical Services (BDMS).
Game – People stay at home more and thus play mobile and computer games more (especially young people), benefiting Asiasoft Corporation (AS) (TP: ฿15.0.). The online game industry (especially mobile games) is growing. AS’s profit will grow, especially in 2H21 after it launches new games.
Meanwhile, ASPS anticipates that the prohibition on restaurant dine-in and the earlier closing of department stores will have a negative effect on retail and shopping mall stocks such as CPN, SF, DOHOME, HMPRO, CRC, ILM, BJC, MAKRO, COM7, SPVI, and CPALL, but only a modest impact.