Daily Strategy for Investors on August 13, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on August 13, 2019, pointing out some of the must-know events in the equity market as follows:

1) The trade war between the US and China remains tangled since President Donald Trump threatened to impose additional tax from Chinese goods by 10% worth US$300bn on 1 Sep.

2) China let the Yuan to be weakened to hope that China may receive trade advantages. At present, the Bank of China sets the Yuan target at the level of 7.0211 yuan per US dollar, resulting Thailand has a severe trade disadvantage. Suggest avoiding Export business, especially rubber and electronics exporters.

3) Hong Kong protests are likely to be severe. AWS suggests to escape from the aviation sector.

4) Investment strategy; Play Save and seek an investment opportunity once stocks’ price becomes weak. The recommended core port stocks are AOT, CPALL, ADVANC, GPSC, and BEM.

5) The weekly SET target is predicted to be 1,620-1,672 points with recommend stocks of BEM, CPALL, and AOT.

6) Today SET target is predicted to be 1,630-1,660 points with recommend stocks of BEM (TP at ฿12.50/share) and CPALL (TP at ฿89.00/share). AWS sees that despite lower-than-expected earnings of CPALL due to higher one-time expenses from employee benefits, accounting for 29% of total booked SG&A expense, normalized profit still came out impressively.

 

Pick of the day: Recommend “BUY” at ฿12.50/share.

AWS has a positive view on BEM after the company reported the continuous increase in traffic volume and ridership, driven by (1) Expressway business with an average traffic volume of 1.22 million vehicles per day, increased by 1.5%YoY, and an average toll revenue per day of Bt27.9mn, increased by 2.2%YoY, and (2) The Metro business have the average ridership per day of 3.19 billion trips, up 5.8%YoY, and the average farebox revenue per day is Bt7.97mn, increased by 4.8%YoY. Strong growth statistics is a factor supporting earnings growth.

BEM is still strong in the main uptrend from the occurrence of both Daily & Monthly Buy Signal. If BEM can close the weekly market above Bt11.00, BEM will return to the new Weekly Buy Signal, causing BEM to return to the main fully uptrend. When considering BEM, the main target is Bt11.60. If the BEM can break with the closing of the market above Bt11.60, the target of the new high will be at Bt14.80. The short-term stop loss point for BEM is Bt10.30.