Asia Plus Securities (ASPS) said good 1Q21 earnings results of big-cap stocks reported this week and expected widespread vaccine distribution in 2H21 have boosted SET Index yesterday (April 28), in particular a strong rebound in commodity sector, while banking has previously reported a better-than-expected result as well.
The Covid-19 vaccination campaign situation in Thailand slightly improved after the cabinet unanimously approved a sweeping transfer of power from ministers to Prime Minister Prayut Chan-o-cha for effective control of the pandemic, the government has allowed the private sector to be part of vaccine procurement.
Therefore, ASPS recommended commodity play and top picks are The Siam Cement Public Company Limited (SCC), PTT Global Chemical Public Company Limited (PTTGC), Khon Kaen Sugar Industry Public Company Limited (KSL), TMT Steel Public Company Limited (TMT) and North East Rubber Public Company Limited (NER).
ASPS also believed the partnership with private sector for vaccination will have a positive sentiment on healthcare plays. Considering vaccine distribution based on bed proportions and provided net profit margin of 15% (the sector’s average in normal situations), this would benefit Bangkok Chain Hospital Public Company Limited (BCH), Bangkok Dusit Medical Services Public Company Limited (BDMS), and Chularat Hospital Public Company Limited (CHG) the most.
For the near term target, ASPS expected the SET could surpass 1,600 points, but it strongly depends on the Covid-19 situation. The whole year target is 1,670 points.