Daily Strategy for Investors on September 25, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 25, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) Chim-Shop-Chai measure expects to be effective both 2 bags. The first bag is giving away 1,000 baht through the application, there are fully registered every day since the beginning of the project. The second bag is 15% cashback, expecting to achieve the target. It shows positive sentiment to CPALL, BJC, CPF, OSP, HMPRO, ILM, M, ERW, CENTEL, MINT, etc.

2) African Swine Fever spreads out in large areas in Japan and South Korea. This disease spread a little at the border of Thailand, but can control it. This shows positive sentiment to chicken business GFPT and CPF, expecting that chicken orders from these two countries will be increased.

3) India government announced the decrease of corporate income tax which shows positive sentiment to Thai business based in India CPF, TU, IVL, EPG, MAKRO, CPALL, etc.

4) Today’s index range is expected to be 1,620 -1,645 points. Recommended stocks are KBANK, CPALL, CPF, EPG.

 

Stock & Comment

KBANK – TP 240.00/share

CPALL – TP 94.00/share, benefited from “Chim -ShopChai” measure and Indian corporate tax cut through MAKRO

CPF – TP 31.00/share, benefited from “Chim -ShopChai” measure and Indian corporate tax cut through MAKRO

EPG – TP 7.50/share after HDPE price dropped below USD900 per ton so it will positive factor which reduce production cost. Moreover, the share price has 11% upside from the target price

 

Pick of the day: KBANK (BUY; AWS TP Bt240)

1) Currently, the 8M19 loans are growing 4.5% YoY. AWS expects loans in 2019 to successfully reach the 6% target as AWS has set (KBANK sets a target growth of around 5-7%)

2) Non-interest income is expected to gradually improve due to the impact of the waive of online transaction fees has gradually decreased. Noninterest income expected to be less negative (Currently, non-interest income has shrunk by 16% YoY).

3) AWS has a positive view on KBANK as non-interest income gradually improves. In addition, Digital Platform strategy and strategy with partners such as LINE will help increase Penetration Rate and Net NIM in the future.

4) The share price has revised down attractively. AWS sees as an opportunity to perform an accumulate buy. KBANK currently is traded at 0.98x PBV which is lower than 1.09x of the average of commercial banks.

5) KBANK remains in the downtrend from the occurrence of Weekly and Monthly Sell Signal. There is only a short-term strength from the occurrence of Daily Buy Signal with a target at Bt169 and Bt184, respectively. The short-term stop loss is at Bt160 (Resistance: 164.00, 166.00, 168.50; Support: 160.00, 157.50, 155.50).