Daily Strategy for Investors on January 14, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on January 14, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Positive factors supporting investment come from clear world trade. The signing Phase One of trade agreement has progress, while the US is preparing to arrange the signing ceremony for Phase One of trade agreement with China at the White House on Wednesday  (15 January) at 11.30 a.m. in US time (11.30 p.m. in Thai time).

 

The world began to calm, which supported the overall investment after the US is more compromising after preparing to remove China from the list of countries that distort currency, including showing an attitude to avoid confrontation with Iran and using economic sanctions to respond.

 

The investment strategy is still focusing on selective buy strategy with unique positive factors.

 

Theme Investment – (1) The benefits from unwind trade war and the beginning of baht depreciation. AWS favors HANA (AWS TP ฿39.00). (2) Relieving the LTV measure. AWS chooses AP (AWS TP ฿8.20) and ORI (AWS TP ฿10.00). (3) Receiving benefits from the declining Treasury bond. AWS recommends GPSC (AWS TP ฿97.00). (4) New stimulus package for tourism and upcoming Chinese New Year event. AWS likes AOT (AWS TP ฿84.00) and lastly, (5) An expectation that the government policy “Taste Shop Spend” measures Phase 4 might be offered to the cabinet on 14 Jan. AWS chooses CPALL (AWS TP ฿94.00) and HMPRO (AWS TP ฿19.00). (**AWS removes BGRIM out from the theme investment as its price is fully target price.)

 

Announcing the TISCO’s financial statement today. The analyst of AWS expects the 4Q19 net profit to be at ฿1.9bn, up by 3.2%QoQ and up by 12.3%YoY.

 

New stimulus package for tourism (free visa for Chinese and Indian tourists) is expected to propose to the cabinet in late January 2020 to support the theme investment on tourism.

 

AWS expect the SET to move in the range of 1,581 – 1,599 points (support 1,585, 1,581 and 1,576 / resistance 1,590, 1,594 and 1,599).

     

 

Stock & Comment

KKP   – TP ฿80.00         

TU      – TP ฿18.40

HANA – TP ฿39.00

GPSC – TP ฿97.00

 

Pick of the day: KKP (BUY; AWS TP ฿80.00)

Expect the 4Q19 net profit to increase by 21.6%YoY and 7.8%QoQ to ฿1.7bn driven by revenue recognition from investment banking businesses and increased interest income. 

KKP is expected to report loan growth at 5.0% which is higher than the industry average of 1.3%. In addition, the downtrend interest rate is expected to drive NIM to increase from 4.6% in the 3Q19 to 4.7% in the 4Q19.

 

Expected the 2019 dividend yield to be up to ฿5.50 per share or equivalent to 8.0% per year.

 

Recommend “BUY” at the target price of 2020 at ฿80.00 based on 1.5x PBV.

 

Weekly outlook: the price is still swinging sideways and is currently forming to descending triangle pattern with a major resistance at ฿71.00. For the daily outlook, the price just broke out the downtrend line and closed above the 200-day average line. Be careful with selling force around ฿69.00-69.50. Recommend to wait for a price to be at the support level of ฿68.00. Stop loss point is set at ฿66.75 (Resistance: 69.50, 71.00; Support: 68.00, 67.00).