Asia Wealth Securities (AWS) has made an analysis for the trading session on December 4, 2019, pointing out some of the must-know events in the equity market as follows:
1) President Donald Trump signaled that the conclusion of trade agreements between the US and China may be delayed until the US Presidential Election in November 2020.
2) In the OPEC meeting on 5-6 December 2019, it is expected a further cut in oil production to freeze crude oil prices to be no longer weakened.
3) The domestic economy is continuously weak; while politics, the stability of the government remains worrisome.
4) 1-Month Outstanding Foreign Net Buy: ADVANC, AMATA, KCE, BGRIM.
5) Recommended stocks to buy once prices are weak at the moment: ADVANC, AMATA, AOT, GPSC, EPG, TASCO.
6) Today’s index range is expected to be the same as yesterday at 1,560-1,575 points. Today’s recommended stocks are GPSC, ORI and ADVANC.
Stock & Comment
GPSC – TP ฿97.00/share
ORI – TP ฿10.00/share
ADVANC – TP ฿250.00/share
Pick of the day: GPSC (BUY; AWS TP Bt97.00)
GPSC is expected to reduce finance costs by as much as Bt590mn in the 4Q19 compared to the 3Q19. We, therefore, expect GPSC’s net profit in the 4Q19 to be Bt1.48bn or up by 205%YoY and 66%QoQ.
In addition, it is outstanding in terms of net profit in 2020 which is expected to reach Bt10.5bn or grow around 139%YoY from reducing debt YoY for another Bt2.60bn. We recommend “BUY” GPSC with a target price of Bt97.00 based on DCF method.
GPSC is likely to be in an uptrend from the occurrence of Monthly Buy Signal. However, GPSC is currently still weak in both short and medium terms from the occurrence of Daily & Weekly Sell Signal.
GPSC has improved short-term price from Higher High and if today it could at least hit Higher High at Bt84.00, a short-term price rebound is expected to continue with a target of Bt95.00 (Resistance: 84.00, 84.75, 85.75; Support: 83.25, 82.50, 81.50).