Daily Strategy for Investors on April 14, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on April 14, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

Investment overview today – Thai stock market has returned to be supported due to positive factors both domestic and abroad by issuing additional stimulus measures to help domestic play, including the factor of reducing the crude oil export price from Saudi Arabia that will cause the GRM to recover in the short-term (speculation of refinery). However, the stock market is still sensitive to the economic statistics report. Today (14 April), Chinese exports in March will be reported, the market is expected to decline by 15%YoY, including the world economic forecast of the IMF (7.30 p.m. in Thai time), which is expected to decrease significantly. AWS selects stocks with positive factors, such as GULF (PAR Bt1.00 trading on 16 April), speculate stocks in the refinery (TOP, SPRC, BCP, and PTTGC) as well as stocks in AWS theme investment which are slightly affected by COVID-19 and stocks that benefit from economic stimulus measures.

 

Technical view – AWS expects the SET Index to move in a range of 1,226 – 1,259 points (with support at 1,232 1,226 and 1,215 points and resistance at 1,242 1,248 and 1,259 points) with recommended stocks today are BGC, BANPU, THG, CPF, and PTG (follow in the Technical Express report).

 

1) Saudi Aramco announced a reduction in the price of exported Arab Light crude oil (including Arab Extra Light) to the Asian market in May 2020 by USD7.3 per barrel. This is the second time in a year after Saudi Aramco announced the price reduction of oil exports in April by USD3.1 a barrel. Arab Light’s Crude Premium (GRM cost) in the range of 2Q20 is at  USD-5.2 per barrel, decreased by USD8.63 from 1Q20 to USD3.43. AWS believes that these factors will make GRM recover in the short-term, but AWS sees it as a factor supporting GRM and only short-term investment in the refinery group, with TOP benefiting the most.  

2) The IMF’s world economic forecast report today (7:30 pm in Thai time) it will return as an investment pressure at the end of the week. The market expects a significant reduction of World GDP estimates from an estimate of 3.3% (latest in Jan 2020).

3) The government is ready to use more stimulus measures. Latest Private Business Consultant prepares to offer measures to help the labor sector through the state’s tax. It is expected to ask the cabinet within the next week. AWS sees it as supporting factors for the domestic play and stocks that are less affected by COVID-19 and those that benefit from the stimulus measures as in AWS Theme Investment (1) and (5).

 

GULF – notifies the SET about changing the PAR value of GULF’s shares to Bt1.00 (formerly Bt5.00), effective on 16 April 2020, which will increase the number of shares from 2,133.3 million shares to 10,666.5 million shares.

 

LPN (HOLD, TP Bt4.0) – AWS expects LPN’s net profit in 1Q20 to be at Bt213mn, down 65%QoQ because during 1Q20, only 1 new project has been completed so AWS expects revenue will decrease by 61%QoQ. Also, the impact of COVID-19 on presales in 2Q20 will start to be clear considering the number of project visitors that have decreased significantly due to the Emergency Decree and Social Distancing measures, fewer people are leaving the house. From this point, AWS has reduced net profit by 19% to Bt913mn to reflect the increased risk but AWS still recommends “HOLD”. LPN is still attractive from dividend yields. AWS expects the company to pay dividends by 2020 at Bt0.43 per share (Div.Yld. 10.8%).  

 

Theme Investment: 

1) Slightly affected stocks from COVID-19, AWS chooses TU, GFPT, CPF, TFG, BJC, CPALL, and TQM.

2) Down side limiting and strong cash flow, AWS chooses BGRIM, EGCO, GULF, GPSC, and RATCH.

3) Stocks which obtained the benefit from work from home measure, AWS chooses ADVANC, INTUCH, DTAC, TRUE, DIF, and COM7.

4) Stocks for long term investment (DCA), AWS chooses ADVANC, AOT, BDMS, and DIF. 

5) Economic stimulus measures and the accelerated disbursement of the government budget for the year 2020, AWS chooses CK, SEAFCO, WHA, KKP, AOT, CPALL, BEM, and HMPRO. 

6) SSFx target stock, AWS chooses PTT, PTTEP, BJC, CPALL, AOT, EGCO, INTUCH, ADVANC, BAM and BDMS.

7) Defensive and high dividend, AWS chooses KKP (Div.Yld. 15.9%) QH (Div.Yld. 9.3%) DIF*(Div.Yld 8.2%) TISCO (Div.Yld. 8.7%) INTUCH*(Div.Yld. 6.2%) TTW*(Div.Yld. 4.8%) and RATCH*(Div.Yld. 4.2%) *IAA Consensus