Daily Strategy for Investors on November 25, 2019

Daily Strategy for Investors on November 25, 2019.

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 25, 2019, pointing out some of the must-know events in the equity market as follows:


Investment Ideas:

1) The US and China are nearly reaching the first phase of trade agreements before 15 December 2019.

2) The US initial manufacturing and service PMI were up to 51.9 in November which is the highest in 4 months after reaching 50.9 in October.

3) Crude oil price was down by a concern that Russia may not cut oil production further at the OPEC and allied countries meeting on 5-6 December 2019. Crude oil price in 2020 is likely to revise down YoY.

4) AWS expects Dubai crude oil price in 2020 to be at USD60.00 per barrel compared to USD63.00 per barrel in 2019.

5) In the Fed meeting on 10-11 December, the Fed is expected to no longer cut interest rate further.

6) In Thai MPC meeting on 18 December, it is expected to maintain policy interest rate at 1.25%.

7) This week’s index range is expected to be 1,585 -1,620 points. Recommended stocks are KTC, TCAP, KKP, TASCO and EPG.

8) Today’s index range is expected to be 1,595 -1,605 points. Recommended stocks are KTC, TCAP, TASCO and EPG.


Stock & Comment
KTC – TP ฿53.00/share
TCAP – TP ฿61.00/share
TASCO – TP ฿32.00/share
EPG – TP ฿9.20/share


Pick of the day: KTC (BUY; AWS TP Bt53.00)

KTC aims to increase credit card spending in 2020 to grow by 15% YoY from 10 – 11% YoY in 2019; while in the 9M19, it grew by 10.4% YoY. In 2020, the company will begin to expand “KTC Pee Berm” (Vehicle Hire Purchase), including Pico Finance after starting to provide services for small groups this year. However, the company will still maintain the ratio of non-performing loans (NPL) in 2020 at 1.1%, even though debt collection becomes more difficult with worse quality which is in accordance with the overall economic slowdown. It remains confident to be able to control NPL. As for the new accounting standards (TFRS9) which will be effective in early 2020, the company will continue to reserve at a high level and will not focus on saving as profit as economic conditions remain highly uncertain. AWS forecasts the net income in 2020 at Bt6.8bn, up 22%YoY.

Expect personal loans in the 4Q19 to grow better than that of the 3Q19 due to the high season which requires more money and entrepreneurs want to get more loans. Recommend “BUY” KTC with a target price of Bt53.00. KTC has currently traded at 19x, lower than the industry average that traded at 21x.