Daily Strategy for Investors on December 17, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on December 17, 2019, pointing out some of the must-know events in the equity market as follows:

 

1) TCAP announces to pay a special dividend payment of Bt4.00 per share with an XD date on 27 December 2019. Recommend BUY to receive dividend at a target price of Bt61.00.

2) Positive foreign stock markets reflect strong US economic data in which US manufacturing and service PMI have revised up to 52.2 in December or the highest level in five months.

3) The US-China has reached a trade agreement.

4) Bank of Korea meeting on 31 December 2019, the current policy interest rate of South Korea is at 1.25%.

5) Waiting for the MPC meeting, which held on 18 December 2019. AWS still expects the BOT to cut policy interest rate by 0.25% from 1.25% to 1.00%. AWS expects Thai inflation to be at very low level with too strong baht.

6) HDPE SE Asia’s latest spot price is USD800 per tonne, while the 4Q19 average price is USD842 per tonne, down 11.5%QoQ and 30%YoY. It still poses negative factors to SCC, PTTGC and IRPC but poses a positive factor for EPG.

7) Today’s investment strategy: pick laggard but still attractive shares.

8) Today’s index range is expected to be 1,542 -1,557 points. Recommended stocks are JKN, TCAP and EPG.

 

Stock & Comment
JKN – TP ฿8.60/share
TCAP – TP ฿61.00/share (Recommend BUY to receive a special dividend payment.)
EPG – TP ฿9.20/share (Recommend BUY to wait for a weak HDPE price and bright US economy.)

 

Pick of the day: JKN (BUY; Target price Bt8.60)

JKN has successfully launched copyright content sales overseas. It has recently participated in Asia TV Forum & Market 2019 (ATF 2019) in Singapore which has been well received.

In 2020, the company plans to sell five Thai dramas in the Philippines and penetrates into new markets such as Malaysia and South Korea in the 1Q19. It is expected the proportion of overseas revenue this year to 30% aiming to increase next year to 50%. It sets the 2020 target to grow by 15% driven by the proportion of overseas revenue.

Since the beginning of 2019, the company has been able to open the market internationally and successfully sells copyrighted Indian and Philippine series content to TV operators for more than 1,000 hours in order to continuously broadcast in CLMV especially Vietnam where revenue is greatly more than last year. In addition, Indonesian market is beginning to pay attention to Thai drama that is the content of Channel 3 of in which JKN is responsible for marketing and distributing content.

JKN’s share price has heavily slumped 50% in the 2H19 although the expected net profit and JKN’s opportunity is very good for being an Asian Content Provider which a large and high-growth market for the Digital Economy. AWS sees the future of JKN to go brighter than Network Provider business. AWS believes that “Content is the king” is still true in the current state. Recommend BUY with a target price of Bt8.60.

JKN is likely to be in the downtrend from the occurrence of Weekly and Monthly Sell Signal. However, it has resumed its strength in the short term with the occurrence of new Daily Buy Signal. JKN has the first target of Bt7.55 and the next target of Bt9.50 with a short-term stop-loss point at Bt4.54 (Resistance: 5.05, 5.15, 5.25; Support: 4.92, 4.84, 4.74).