Daily Strategy for Investors on August 8, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on August 8, 2019, pointing out some of the must-know events in the equity market as follows:

1) Entering the season of performance announcement for the 2Q19. The stocks with outstanding performances are WHAUP and WHA. Stocks with moderate performance are BCPG and BCP, while one with quite disappointing performance are CKP, ANAN, IVL and PTTGC.

2) Foreign factors begin to lessen approaching to tailwinds period.

3) Baht appreciation and the preparation to raise the minimum wage remain to put pressure on the export industry. It is expected to be a driving force for those manufacturers who are preparing to relocate their production bases.

4) Thailand Focus will be held on 28-30 August 2019. This is expected to focus on EEC and new industrial groups.

5) Today’s index range is expected to be 1,660 -1,680 points with a prevail uptrend as yesterday Thai stock market revised down against other markets around the world. Recommended stocks are:

5.1 GPSC (TP ฿79.00) pick of the day.

5.2 WHA (TP ฿5.00) and WHAUP (฿8.00).The 2Q19 performance came out with good surprise as a result of far more better-than-expected performance of WAUP

5.3 WHAUP    (TP ฿8.00) The 2Q19 performance was much better than expected, mainly due to better financial cost reduction and the profit from the associated company, GHECO-One, that has resumed its normal production. Therefore, it could far better allocate the profit share.

 

Pick of the day: Recommend “BUY” GPSC at the target price of ฿79.00/share.

GPSC announced 2Q19 net profit of Bt1.08bn which was +3% YoY or +15% QoQ. The increased profit QoQ was generated from the first full-quarter profit recognition of GLOW and higher profit recognition of the IPP and SPP power plants of GPSC itself. The 2H19 outlook, it is expected to grow well despite a higher financial cost. However, the launching of new shares to increase capital will help reduce the debt to a certain extent. AWS sees the merger with GLOW will generate synergy and create a valuation for GPSC shares by around Bt5-11.00. AWS recommends BUY with a target price of Bt79.00.

GPSC remains strong in the main trend which is the uptrend from the occurrence of Daily & Monthly Buy Signal. If it could close above Bt70.75 at a weekly market, GPSC will resume a new Weekly Buy Signal and enable GPSC to return to the main trend which is a full uptrend once again. Giving GPSC, the significant target is at Bt73.75 and short-term stop-loss point is at Bt67.50 (Resistance: 72.75, 74.00, 76.50; Support: 70.50 , 69.25, 66.75).)