Daily Strategy for Investors on July 23, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on July 22, 2019, pointing out some of the must-know events in the equity market as follows:

Thai Stock Market Today:
1) Listed companies gradually announce their performance. PTTEP will announce on 25 July, while SCC announces on 26 July.

2) There is a forecast (Preview) of listed companies’ performance. AWS sees the power plant and real estate sectors remain to have a strong performance. Outstanding stocks in 2Q19 according to the expectation of their good performance are SSP and ORI.  

3) The drought began to be mitigated with rainfall in many areas in the North, especially Chiang Rai and Phayao.

4) The cabinet proceeds to dismantle the expressway concession agreement and the MRT fare of which AWS expects to be a negative factor for a short period of time for BEM. The decline in stock is an opportunity to buy. 

5) The BDI Freight Index closes on the latest business day at 2,191.00 points, up by 21.00 points or + 0.97%.

6) Expect today’s index rage to be at 1,720-1,735 points. Recommended stocks are SSP, BEM, PTTEP, PSL, and THANI.

Stock Comment:
– BEM: AWS recommends the target price of ฿12.50/share, facing many pressuring factors but  AWS expects that it will eventually come out in the way that people will be benefitted. If the stock price became weak, it is an opportunity to buy. 

– PTTEP: AWS recommends the target price of ฿162.0/share, the crude oil price has risen to be a positive factor and expects the strongest 2Q19 net profit in the oil-related energy sector. 

– PSL: AWS recommends the target price of ฿13.00/share, the freight rate has revised up continuously.

– THANI: AWS recommends the target price of ฿8.30/share, the 2Q19 net profit growth is very good. The most outstanding one is hire purchase group which just recently announced its financial statement.

Pick of the day:
Sersang Power Corporation Public Company Limited (SSP): closed on 22 July 2019 at ฿8.65, AWS recommends “BUY” with the target price of ฿11.00/share.
SSP’s 2Q19 net profit estimate is expected to be THB 160 million, increasing 5% YoY, 29% QoQ), outstandingly grew driven by firstly, the high season of Solar Farm due to a long period of summer this year in Thailand and Japan, resulting in a better revenue recognition of Solar Farm and secondly, the revenue recognition of 49.6 MW Solar Farm in Vietnam from June 19.

In addition, AWS expects 3Q19 net profit to grow YoY and QoQ from the beginning to COD of 16.4 MW Solar Farm in Mongolia from 6 July 2019. As a result, the installed capacity of SSP has increased continuously every quarter from 90.4 MW to 140 MW in 2Q19, to 157 MW in 3Q19, to 196 MW in 2020, and to 232MW in 2021-2022. AWS recommend BUY with a target price of THB 11.00/share based on DCF method.

SSP is very strong in the uptrend from the occurrence of Daily, Weekly & Monthly Buy Signal. SSP has the next target at THB 8.70 and THB 9.15 respectively per share. The stop loss point is at THB 8.30. AWS sets a resistance line at THB 8.75, THB 8.90, THB 9.05 while setting a support line at THB 8.50, THB 8.35, THB8.20.

Foreign Market: US stock market
Dow was +17.70 points or +0.07%, while S&P500 was +8.42 points or +0.28%, and NASDAQ +57.65 points or +0.71%, driven by the rise in technology stocks led by Apple shares which rebounded more than 2% after Morgan Stanley increased the target price of Apple stock.

In addition, the market also receives positive factors from news that the White House and the Congress members nearly reach an agreement to expand the US debt ceiling for two years before the House will end the summer session on 26 July to avoid a new round of government agencies shutdown and a driving factor the expectation that the Federal Reserve (Fed) will cut interest rate at this month’s meeting.
Meanwhile, investors keep their eyes on the performance of major listed companies this week including Facebook, Alpha, and Amazon.Com.

Commodities:
– Crude oil prices: WTI for August delivery was up 59 cents, or 1.1%, to close at USD56.22/barrel; Brent for September delivery was up 79 cents, or 1.3%, to close at USD63.26/barrel amid concern on oil transportation in the Persian Gulf after the incident that Iran seized British tanker in the Hormuz Strait. Investors keep their eyes on the disclosure of the crude oil inventory report by the US Energy Information Agency (EIA) tomorrow.

– The BDI Freight Index closes at the last business day at 2,191.00 points which is up 21.00 points or + 0.97%.