Daily Strategy for Investors on January 13, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on January 13, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

AWS sees this week as the investment week after the unrest in the Middle East has resolved. Supporting factors also came from (1) the US-China trade negotiation which is expected to be signed Phase One of trade agreement this week (13 – 15 Jan 2020). (2) domestic political activities not much affected investment and (3) the 4Q19 financial results announcement of the banking sector (14 January for TISCO / 17 January for KKP, KBANK, and SCB)

 

Foreign issues that still need to be monitored will be the issues related to geopolitics in the world as follow: (1) the situation in the Middle East is resolved, but AWS looks at it as a short term. It still has to follow the attitude of the US and Iran, including the attitude of superpowers like China and Russia. (2) the case of the dismissal of the US leaders and (3) the case of Brexit is possible that England will leave the European Union unconditionally.

 

Investment strategy is still emphasized selective investments in stocks with specific positive factors.

 

Theme Investment – (1) The benefits from unwind trade war and the beginning of baht depreciation. AWS favors HANA (AWS TP ฿39.00). (2) Granting positive outcomes from relieving the LTV measure. AWS chooses AP (AWS TP ฿8.20) and ORI (AWS TP ฿10.00). (3) Receiving benefits from the declining Treasury bond. We recommend electricity sector like BGRIM (AWS TP ฿59.00) and GPSC (AWS TP ฿97.00). (4) The recovery of tourism and upcoming event like Chinese New Year. AWS likes AOT (AWS TP ฿84.00) and BAFS (AWS TP ฿41.00) and lastly, (5) an expectation that the government policy “Taste Shop Spend” measures Phase 4 might be offered to the cabinet on 14 Jan. AWS chooses CPALL (AWS TP ฿94.00) and HMPRO (AWS TP ฿19.00).

 

The movement of the SET this week has support and resistance at 1,555 – 1,605 points.  

 

AWS expect the SET to move within the support frame at 1,575 points (with the next support at 1,565 – 1,570 points) while the resistance frame is at 1,589 points (with the next resistance at 1,595 points).

 

Stock & Comment

ADVANC   – TP ฿250.00/share

ORI  – TP ฿10.00/share

HANA – TP ฿39.00/share  

TISCO – TP ฿115.00/share

 

Pick of the day: ADVANC (BUY; AWS TP ฿250.00)

The 4Q19 performance is expected to recover YoY as the package war has lessened compared to the 4Q18 including higher broadband income, however, the performance slowed down QoQ as the package competition in the Prepaid system has revived (begins to see a sign of prepaid package becomes lessened in the 1Q20) coupled with SG&A that is higher due to seasonal effect.

AWS expects ADVANC to participate in the bidding for the upcoming 5G spectrum on 16 February 2020. It is expected that the company will be interested in bidding for 2600MHz and 26GHz spectrums with good price and payment terms. In addition, AWS sees that despite the opportunity of TOT and CAT to participate in the auction, it, however, will be an auction to be integrated with government works which will not affect the commercial competition.  

 

The broadband business has 1 million users at the end of 2019 (+ 37%YoY) which is in line with the compan y’s target. The company aims to reach 2 million users by 2021 which will enable the company’s market share to be the 3 rd  in broadband business and will help increase the proportion of broadband revenue compared with total revenue to 5-10 % from the current 3%.

 

Weekly outlook: the price remains sideways in the range of ฿200-220, while daily outlook on Friday, the price dropped to stand above the average 200-day line. AWS hopes the price to rebound to swing up to test the next resistance level at ฿217. (Resistance: 217.00, 224.00; Support: 211.00, 208.00)