Daily Strategy for Investors on February 3, 2020

Daily Strategy for Investors on February 3, 2020.

Asia Wealth Securities (AWS) released an analysis for the trading session on February 3, 2020, indicating the essential events in the stock market as follows:


1) England officially withdrew from being a member of the European Union on Friday (31 Jan), with the European Parliament endorsing Brexit Withdrawal Agreement with a score of 621:49 votes. However, England will still be a member of the custom union and the single market during the transition period until the end of 2020.

2) Thai baht depreciated continuously, with the lasted at Bt31.2 per US dollar so in enhancing the investment theme of Thai baht and the global trade easing.

3) Follow the MPC meeting (5 Feb) which the Consensus expects to maintain a policy rate at 1.25%. (If the interest rate cuts, it will benefit for non-bank such as MTC, SAWAD, KKP and TISCO.)

4) Excise Department prepares to propose the Ministry of Finance to cut the fuel tax for 8 months (Currently collected at Bt4.7 per liter). AWS has positive looks on BAFS (TP Bt40.00)

5) Bird flu (H5N1) in China is coming back again, Chinese authorities began to eliminate to reduce the spread. AWS believes that this issue will be a positive factor for the selling price from falling chicken supply so AWS is optimistic about CPF (TP Bt33.00), GFPT (TP Bt14.00) and TFG (IAA Consensus Bt5.44).


Theme Investment 

1) Accelerate the disbursement of the government budget in 2020. AWS chooses CK (TP Bt22.00), SEAFCO (TP Bt7.30), CPALL (TP Bt94.00), KKP (TP Bt80.00).

2) Government stimulus measures, AOT (TP Bt84.00), CPALL (TP Bt94.00) and HMPRO (TP Bt19.00).

3) Global trade has eased and Thai baht depreciates. AWS chooses HANA (TP Bt39.00), TU (TP Bt18.40) and CPF (TP Bt33.00).

4) High dividend yield and defensive stock. AWS chooses KKP (TP Bt80.00) and GPSC (TP Bt97.00).


AWS estimates the SET’s target of 2020 at 1,578-1,675 points (Using PE at 16.58-17.6x). Also, AWS believe that the earning forecast will still have 5% downside risk from the EPS’ Bloomberg Consensus estimates which forecast the earning in 2020 at Bt100.16 per share, increase 18.9%YoY.

This week (3-7 Feb), AWS expects the SET to be within the frame of 1,482-1,539 points and today, AWS expects the SET will be within the frame of 1,491-1,526 points. (Support: 1,509, 1,503 and 1,491 points/ Resistance: 1,520, 1,526 and 1,538 points)

This week (3-7 Feb), the telecom sector will announce the financial statement: (5 Feb – THCOM / 6 Feb – ADVANC / 7 Feb – INTUCH).