Daily Strategy for Investors on October 3, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on October 3, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) US stock market including stock markets around the world dropped sharply due to a concern on a new round of trade war between the US and Europe after the WTO voted in favor of US request to impose an import tariff on European of USD7.5bn. It negatively affects the global stock market and Thai stock market especially the Thai electronics export sector. KCE (AWS TP Bt15.80) is mostly affected.

2) The fall of US bond yields generates from concerns on the sluggish economy in the US. The 10-year US bond yield dropped for two consecutive days from 1.7% to 1.59%.

3) VIX revised up to 20.56 points or +10.78%.

4) Investors in the stock market are in a panic stage turning the investment into the bond market and gold which is Safe Heaven again. Therefore, bond-like stocks have good recurring income and good dividends. AWS recommends “BUY” on ADVANC, BGRIM, GPSC and WHAUP, etc.

5) IVL expects the Indian postponement to ban single-use plastic packaging from 2 October would be an only temporarily suspend a negative sentiment. Recommend to lower the investment in this stock as the industrial trend has changed drastically. Recommend to change investment to EPG (AWS TP Bt7.50).

6) For shares in the property sector, AWS recommends waiting for an opportunity to buy LH from the good revenue recognition from Property Fund.

7) Today’s theme: Return to Safe Heaven Mode again. Mainly pick electricity stocks and stocks that have a clear base of revenue.

8) Thai stock market index range is expected to be 1,600-1,625 points. Recommended shares are ADVANC, BGRIM and WHAUP.

 

Stock & Comment

ADVANC – TP ฿250.00/share

BGRIM – TP ฿46.00/share

WHAUP – TP ฿8.00/share

 

Pick of the day: ADVANC (BUY; AWS TP Bt250.00)

1) ARPU is expected to continuously improve in the 3Q19 from the 2Q19 after the company has removed a Fixed Speed Unlimited package which is a low level-price one and existing packages in the system that begin to expire.

2) The company has entered into a dispute settlement with TOT for the 2G case which helped the company to save about Bt2bn per year.

3) Broadband internet business has grown by leaps and bounds. It is expected to reach 1 million users by the end of 2019 (currently, there are 850,000 users). It is supported by the “Power 4 Maxx” package which includes both mobile phone and home internet usage.

4) It is expected that the company will participate in the auction for the remaining 5G spectrum in the 1H20. The license price for this round is likely to be more reasonable than the previous auction.

5) Suggest BUY with a target price of Bt250.00 with a 3.4% dividend rate.

6) ADVANC is in a full uptrend from the occurrence of Daily, Weekly, and Monthly Buy Signal. When considering ADVANC, the significant resistance is at Bt220. If ADVANC is strong enough by successfully closing above Bt220, the significant target would be Bt241. ADVANC has a short-term stop-loss point at Bt214 (Resistance: 221, 223, 225; Support: 218, 216, 214).