Daily Strategy for Investors on August 22, 2019

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

1) After the figure of exports in Jul improved to the positive territory by 4.28%YoY, better than the expectation to be  -2.05%YoY, this was due to a 406.9% sharp increase in gold exports, a 28.2% rise in jewelry and accessories, and a 1.4% growth in agriculture goods. Overall, the exports are considering in not a good level. AWS suggests making a profit from selling exports sector.

2) It is expected to be bolstered by the FED from the 0.5% lower interest rate for stimulating the inflation rate to be reached the FED’s target, plus this might delay the impacts of a trade dispute that happened in global.

3) The electricity sector is still bright, thanks to the policy from a new energy minister. It is probably that the develop power plant in Thailand will be more opened, especially Renewable energy. In addition, the drop in debt and interest rate will be the main factor to drive the performances. AWS recommends on GPSC, EA, BGRIM, and WHAUP. GPSC and WHAUP have the most upside in three stocks.

4) The SET today is expected to be around 1,625-1,650 points with recommending stocks of WHA (TP ฿5.00), WHAUP (TP ฿8.00), and GPSC (฿79.00).

 

Pick of the day: Recommend “BUY” WHA with a target price at ฿5.00/share.

AWS has a positive view of WHA after there was an analyst meeting. AWS expects that the performance in 2H19 will better than 1H19 due to (1) entering into high season of the industrial estate (2) obtaining the rental income from Alibaba’s 130,000 sq.m. warehouse (3) gaining the benefit from a prolonged trade war between the US and China (4) recognition of profit-sharing from power plants business that will return to a strong level after Gheco-I power plant maintenance shutdown in 1Q19.

Moreover, the firm has a lower cost of fund from the rollover method of debentures. AWS recommends buying with a target price Bt5.00. Meanwhile, the target price excludes the revenue in case that Alibaba exercises the right to buy a warehouse which forecasts the revenue from this deal at Bt3.0bn.

WHA remains in the uptrend from the occurrence of Daily and monthly Buy Signal. WHA just waited for the return of strength in medium-term from Weekly Buy Signal which will return to the full main uptrend, as long as it can at least close in weekly above Bt4.74. WHA is expected to have a chance to create the new high at Bt4.98. A short-term stop-loss points is at Bt4.58 (Resistance: 4.62, 4.56, 4.52; Support: 4.70, 4.74, 4.80).