Daily Strategy for Investors on January 3, 2020

Asia Wealth Securities (AWS) has made an analysis for the trading session on January 3, 2020, pointing out some of the must-know events in the equity market as follows:

 

1) Buying power from global stock markets rebounded and net buy of funds was up to Bt5.1bn yesterday driving Thai stocks by 15.98 points (+1.01%), while foreign countries were bright at more than 1% in the US, China, Hong Kong, South Korea. Outstanding ones are energy, petrochemical and real estate sectors.

2) Positive factors responded from the news that the Central Bank of China announced an easing monetary policy by lowering the reserve requirement ratio of financial institutions (RRR) by 0.50% which will take effect from 6 January onwards.

3) President Donald Trump confirms that he will sign Phase One of trade agreements with Chinese trade officials at the White House on 15 January before traveling to Beijing to begin Phase Two of trade negotiations.

4) Thai inflation in December revised up 0.87% which resulting in the average inflation rate in 2019 to be 0.71% which is still one of the lowest levels in the world.

5) BDI decreased by 10.46% or 114 points to be 976 points.

6) Today’s index range is expected to be 1,580 -1,608 points. Recommended stocks are ORI, BBL and PTT.

 

Stock & Comment
ORI – TP ฿10.00/share
BBL – TP ฿223.00/share
PTT – TP ฿52.00/share

 

Pick of the day: ORI (BUY; AWS TP Bt10.00)

AWS sees ORI to reach turnaround point. The key factor is that the 2020 dividend yield is as high as 8.5% with a low PER of only 5.69x. ORI has benefitted from government promotion measures including the reduction of transfer fees and mortgages including Ban Dee Mee Down which helps to accelerate project in stocks in the 4Q19-1Q20. The company has more than Bt10bn of stock of which 40% is less than Bt3mn.

In addition, the company has avoided the impact of LTV measures by focusing on launching projects to penetrate those consumers who want to buy condominiums and houses for the first time. This is considered quite a success, reflecting by take-up rate in the 9M19 which was as high as 70-80% or the highest in the industry.

The 4Q19 performance is expected to be the highest quarter of 2019, driving by the backlog that will be recognized by approximately Bt5.50bn from the transfer of Knights Bridge Prime Sathorn of around Bt2.50bn which will drive a full revenue in 2019 of Bt15.00-16.00bn.

In the 1Q20, the company will start operating 2 hotels (Staybridge Suites Thonglor and Holiday Inn & Suites Sriracha) which will drive recurring income of approximately Bt400mn per year.

ORI is likely to be in the downtrend from Weekly & Monthly Sell Signal but the price has already resumed a new Daily Buy Signal. If it could close above Bt7.00, it would come back to strengthen in the medium term from Weekly Buy Signal with the first target of Bt8.45 and the next target of Bt9.75. The stop loss point is at Bt6.75 (Resistance: 7.25, 7.35, 7.55; Support: 7.10, 7.00, 6.80).