Daily Strategy: CNS Recommends Picking Disappointed 3Q-Earnings Stocks

CNS recommended picking up stocks that missed 3Q earnings expectations, but have potential to recover in 4Q.

Major stock markets in Asia traded lower on Thursday, October 28, 2021, after a huge drop in oil prices last night and continued to fall on Thursday.


Thailand’s SET Index opened at 1,625.66 points, decreased 1.95 points or 0.12%.

As of 10:15 local time in Thailand, Nikkei fell 0.94%, Shanghai Composite dropped 0.86%, Hang Seng Index slipped 0.25%, ASX200 dipped 0.53% and IDX Composite plunged 0.44%.


Brent crude is currently trading at $82.47 a barrel, fell 2.49%. WTI dropped 2.21% to trade at $80.83 a barrel. Brent crude rose as much as $86 earlier this week and WTI hit $85. The fall came after oil prices fell on Wednesday after industry data showed crude oil stockpiles rose 2.3 million barrels in the week ending October 22, which was higher than the expectations for a 1.9 million barrel gain.


Mr. Koraphat Vorachet, a strategist at Capital Nomura Securities (CNS), through “Kaohoon Jor Talad Program” on October 28, 2021, stated that the Thai stock market lacked positive sentiment as earnings of major stocks such as SCC, DELTA and HMPRO came out lower than forecast, while reopening stocks started to slow down.

The analyst expected SET Index to fluctuate, giving a support level at 1,620-1,611 points and a resistance level at 1,637 points, and cautioned that if the market faced a huge selloff from the energy sector, the index could drop lower than 1,620 points after a plummet of oil prices last night.

In addition, Mr. Vorachet gave an investment strategy to focus on stocks with missing 3Q earnings expectations, but have a positive outlook for recovery in 4Q such as HMPRO, saying a retreat after earnings announcement could be the entry point to accumulate. Meanwhile, CNS expected GUNKUL and ILM to post positive earnings in 3Q, giving a target price at Bt6.00 and Bt17.70 per share, respectively.

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