Daily Strategy for Investors on August 20, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on August 21, 2019, pointing out some of the must-know events in the equity market as follows:

1) The Cabinet meeting has approved the stimulus package of Bt163bn, while Visa on arrival was exempted until April 2020 for Chinese and Indian tourists. However, it has not approved a free visa as proposed by the Ministry of Finance which is unexpected and negatively affected AOT, ERW, CENTEL and MINT as they all have high hopes since Friday .

2) AWS weighs “Neutral” for the hospital sector even though it has approached the high season in 3Q19, the overall picture is expected to be affected by the slowdown global and Thai economy. It must be cautious of the slowing down of the growth in the hospital sector .

3) EA will commercially launch the 1GWh Energy Storage (Battery) project, Phase 1 worth the total of Bt5bn in 2Q20. It is considered as the first company in Thailand to operate this kind of business commercially. In addition, it will also launch 20 electric ferries in December 2020 and 5,000 electric vehicles in 1Q20. The highlight of EA is in the Battery business which is expected to expand into Phase 2 of 50 GWh for the next stage. This battery is produced by Amita Technology (Thailand) which EA holds 77.21%, while the rest is held by the management and the general public.

4) Today’s index range is expected to be 1,615 -1,635 points. Recommend stocks are ORI (TP ฿11.50), CPALL (TP ฿94.00), AOT (TP ฿84.00)and EPG (฿7.50).

 

Pick of the day: Recommend “BUY” ORI with a target price of ฿11.50/share.

AWS has positive view on ORI after the performance in 2Q19 better than expected due to the firm change strategy to avoid the impact from LTV measure by penetration in the affordable segment (Price Bt1.6-3.0mn), by using brand “The Origin”, which start in 6 locations and 6 projects to penetrate the Gen C customers (First Jobber and New Graduate) aged 23-27 years old, with demand for the first home.

In addition, ORI also obtains the benefit from the g overnment’s relaxation of LTV measure for co-borrowers. Park Origin which in the luxury segment is not much affected by LTV measure due to the projects have the design of decoration to meet the lifestyle of buyers and still have demand from buyers.

AWS forecasts that the performance in 2H19 will better than 1H19 due to ORI will launch more new projects and plan to transfer the new projects which will be completed in 2H19. Furthermore, in4Q19, the firm plan to soft opening 2 hotels which will enhance the recurring income. ORI will pay interim dividend Bt0.205/share and XD 28 Aug 19 or interim yield at 3.75% and expect the dividend yield in 2019 at 7.0%.

ORI has the main trend in the uptrend from Weekly & Monthly Buy Signal but currently, ORI still weak from Daily Sell Signal. If it is able to close above Bt8.30, it becomes full uptrend from Daily & Weekly & Monthly Buy Signal. The first target is at Bt8.45 and initial target is at Bt9.75, respectively. (Resistance: 8.40, 8.55, 8.65; Support: 8.20, 8.10, 7.95).