Daily Strategy for Investors on September 4, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 4, 2019, pointing out some of the must-know events in the equity market as follows:

 

Thai Stock Market Today:

1) Investors were concerned about the uncertainty of the Brexit without any agreement.

2) Investors concern on the global economic expansion after the US released ISM manufacturing sector that revised down to 49.1 in August from 51.2 in July.

3) The cabinet meeting yesterday, there were no additional stimulus measures but only approval of the FY2020 budget expenditure of Bt3.2tn and the maintainability of VAT at 7%. The guarantee of rubber price did not pass the Cabinet’s resolution.

 

Investment Ideas:

1) Concern on the Brexit and global economic growth after the US ISM is weak.

2) Be cautious on the decline of large power plant stocks which play in a theme of “par splitting and does not affect fundamental”; EGCO Bt10  par; GULF Bt5 par; BGRIM Bt2 par.

3) The Baltic Dry Index was up to 2,501 points which was +59 points or +2.42%. Speculate on PSL

4) Recommend investor to “tighten the port”

5) Expect index this round to be 1,616-1,666 points.

6) Today’s index range is expected to be 1,628-1,650 points.

7) Recommended stocks are EGCO, AMATA, PSL and CKP.

 

Stock & Comment

EGCO – ฿295.0/share

AMATA    – ฿29.00/share

PSL – ฿13.00/share

CKP – ฿7.60/share

 

Pick of the day: EGCO (IAA Consensus Bt295.00)

2H19 earnings still have a positive factor from revenue recognition from two major projects that will start generating electricity in 4Q19, including XPCL Project (Laos) and SBPL Project (Philippines). In long-term, despite having fewer Megawatts growth than other companies, EGCO has a strong financial, lots of cash on hand and low debt to equity ratio. AWS expects to see investment expansion and additional M&A to increase production in the long term.

The company announces an interim dividend payment of Bt3.25. The company will post the XD on 5 September 2019 and pay a dividend on 16 September 2019. AWS looks EGCO as a defensive stock which is suitable for investment during the market to remain highly volatile.

EGCO is very strong in the main train which is a full uptrend from the occurrence of Daily, Weekly, & Monthly Buy Signal. Giving EGCO, it has a significant target to make a new high of Bt362.00. Short-term stop-loss points is at Bt327(Resistance: 350.00, 358.00, 366.00; Support: 335.00, 327.00, 319.00)