Daily Strategy for Investors on September 9, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 9, 2019, pointing out some of the must-know events in the equity market as follows:

 

Thai Stock Market This week

1) The ECB meeting on 12 Sep is expected to have stimulus measures.

2) The Brexit deal will enter into the parliament, it has the opportunity to issue positive results.

3) Global investors still expect the Fed to cut interest rates on 19 Sep 2019.

4) Results of the Thai Economic Cabinet meeting on Sep 6, show less attractive than expected. The focus on the BOI is to increase benefits for new investment promotion. There are no significant measures.

5) China Central Bank cuts RRR by 0.50%, effective on 16 Sep 2019, expected to attract commodity speculation.

6) Baltic Dry Index dropped by 2 working days, reducing intense heat but remaining at the high level of 2,462 points.

7) A crude oil price this week is expected to increase due to the supply cut, PTT has become attractive both in terms of oil prices, is stable and likely to improve. It is also expected to benefit in the future from the latest stimulus measures through the BOI in the EEC area; PTT has a resistance of Bt46.50-47.50.

8) Forecast this week’s index at 1,650-1,695 points. Weekly top picks are OSP, WHAUP, BAFS, AOT, and PTT.

9) Forecast of today’s index at 1,660-1,680 points. Daily top picks are OSP, WHAUP, M, and PTT.

 

Stock & Comment

OSP – TP ฿45.00/share

WHAUP – TP ฿8.00/share

M – IAA Consensus ฿82.94/share

PTT – TP ฿50 .00/share

 

Pick of the day: OSP (BUY; AWS TP Bt45.00)

OSP’s domestic beverage sales in the 2Q19 grew by 7.3%, while personal care sales in the 2Q19 soared by 23.7% which were in contrast with an outlook of both industries. The main reason for new launching products to be very well received by consumers is a clear turnaround of three main brands which are Shark, Babi Mind, and Twelve Plus.

The growth in foreign countries is quite interesting. Currently, OSP owns only 16% of overseas sales of which 68% are in Myanmar. By the end of this year, the company will open production plants in Myanmar at the Thilawa Industrial Estate. It is expected to help driving better sales. In addition, the company has a strong agent in Vietnam and prepares to penetrate the market in Vietnam in the 4Q19.

AWS sees that OSP still has the growth potential for both domestic and international markets. As a new sugar tax base will be implemented on October 2019, OSP has prepared for this issue by reducing sugar and calories. It is expected to receive a good response from consumers. AWS recommends BUY on OSP with a target price of Bt45.00 based on 35x PER of 2020.

OSP returned to a main full uptrend from the occurrence of Daily, Weekly, & Monthly Buy Signal. When considering OSP, the main target for new high is Bt41.00. The short-term stop-loss point is at Bt36.75 (Resistance: 38.50, 38.75, 39.25; Support: 38.00, 37.50, 37.25