Daily Strategy for Investors on November 11, 2019

Daily Strategy for Investors on November 11, 2019.

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 11, 2019, pointing out some of the must-know events in the equity market as follows:


Investment Ideas:

1) Trump announced the opposition plan to cancel import duties from China, expect the market somber.

2) Crude oil price driven by the data indicating that oil rig in the US decrease this week, but it is pressured by the concern of trade war between the US and China after President Donald Trump indicated he opposed plan to cancel import duties from China.

3) The performance of medium-sized listed companies has begun to see positive factors such as TASCO, CBG, MAJOR, MAKRO, etc.

4) MSCI announced stocks to weigh in MSCI, effective on 26 Nov 19 by calculating in Global Standard Index consisting of BGRIM, GPSC, OSP, and SAWAD. No stocks that are out of MSCI. Stocks that calculated in MSCI Global Small Cap Index are CENTEL, DOHOME, JMT, SPRC, STPI, TPIPP, TQM and stocks that are out are CBG, SAWAD, and TISCO.

5) Expect index range this week to be 1,613-1,652 points. Recommend stocks are GPSC and TASCO.

6) Expect today’s index range to be 1,625 -1,645 points. Recommend stocks are TASCO, CPALL, and GPSC.


Stock & Comment
TASCO – TP ฿26.00/share
CPALL – TP ฿94.00/share. Expect MAKRO profit to support in the 3Q19.
GPSC – TP ฿97.00/share


Pick of the day: TASCO (BUY; AWS TP Bt26.00)

TASCO reported the earning in 3Q19 at Bt712mn which more than AWS expected at Bt600mn. As of 3Q19, the frim sales asphalt at 620 thousand tons, divided into the domestic market of 106 thousand tons and oversea markets at 515 thousand tons so the firm had revenue in 3Q19 at Bt9.5bn which is another good quarter for TASCO although not in the high season. The domestic market has improved due to the strong asphalt price and the overseas market also grow very well, especially in Indonesia and Vietnam which enter the high season and the selling price of asphalt is at a good level, while the crude oil price decreased.

AWS expected that the performance in 4Q19 will continue growing from the end of October 2019, and the firm obtained the second part of insurance money from the insurance company which from the damage of crude oil tank in Malaysia since July 2019, in the amount of Bt146mn. However, it not include the damage from business interruption which is currently under negotiation.

AWS recommends “BUY” TASCO with a target price at Bt26.00 based on the following expectations: (1) stable or weak oil price will help asphalt spread better. (2) Strong demand from budget injection and develop countries of government in other countries in Asian such as Thailand, Indonesia, and Vietnam will inhibit economic slowdown and expect that there will be the approval of road construction. (3) Weak supply from IMO2020 measure that makes big refineries turn to produce more Light Oil Products and asphalt is expected to have fewer sellers.