Daily Strategy for Investors on July 31, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on July 31, 2019, pointing out some of the must-know events in the equity market as follows:

1) Foreign market this morning opened in positive territory at first and gradually dropped at the last, especially Singapore, Japan, and South Korea. This was due to concerns about the failure of the trade war between the US and China negotiation.

2) The National Bureau of Statistics of China unveiled the manufacturing PMI in Jul at 49.7, up from Jun of 49.4. AWS suggests keeping watching the weakness of the global economy since the PMI index represents the contraction of the Chinese manufacturing sector even though the index increased but still lower than 50.

3) There are 15 listed securities that come to trade temporarily will be able to trade today for the last trading day.

4) The BDI index closed lastly at 1,899.00 points, down 23.00 points or -1.20%.

5) Keep an eye on prominent performance results of listed companies such as Commerce, while the inferior is the Electronics sector.

 

Investment Strategy: find a BUY opportunity once the index weakens. The SET range is expected to be around 1,695-1,715 points with recommended stocks like ORI (TP ฿11.50), GPSC (TP under review, recommending buy once the price drops at about ฿64.00-65.00 for receiving the capital increase rights and LT investment), and PTTEP (TP ฿162.0).

 

Pick of the day: ORI (closed BUY; AWS with a target price at ฿11.50/share)

AWS expects the earning in 2Q19 will drop YoY and QoQ due to in 1Q19, the firm has extra earning from selling Park Origin Rama 4 shares to JVs and in 2Q18, the firm also had the extra item from selling land to JVs.

However, AWS believes that the performance in 2H19 will outstanding from positive factors which are (1) They will transfer 5 new projects which will complete in 2H19 with total projects value over Bt10.0bn. (2) ORI will launch 14 new project worth of Bt20.0bn so it will enhance the presales this year to meet the target. (3) The firm will obtain recurring income from 2 hotels which will open in 4Q19.

Furthermore, AWS relives concerns in overseas market penetration after the firm pulling DWG Thailand to become an agent. As a result, AWS recommends “BUY” with target price Bt11.50 and dividend yield 6.2%

ORI is very strong in a full uptrend from the occurrence of Daily, Weekly and Monthly buy signal. Giving ORI, the preliminary target is Bt9.75, the next target is Bt10.80 and the main target is Bt11.80. The short term stop loss at Bt9.30. (Resistance: 9.45, 9.55, 9.70; Support: 9.30, 9.20, 9.05)