Daily Strategy for Investors on September 26, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on September 26, 2019, pointing out some of the must-know events in the equity market as follows:

1) The MPC has a consensus (7: 0) to maintain Thailand policy interest rate at 1.50%. However, other economic figures were downgraded.

2) In the short term, there is no more negative sentiment to affect the banking sector. It is expected that the next interest rate cut would be at the end of 2019.

3) “Taste, Shop, Spend” measure is expected to pose a positive impact on domestic retail, hotel, and tourism industries.

4) President Donald Trump has expressed his confidence that the US will be able to conclude a trade agreement with China sooner than expected.

5) Be cautious of political fluctuation in the US after the Speaker of the US House of Representatives announced the start of formal Impeachment Inquiry for President Donald Trump to remove him from the office which may increase uncertainty to the global economy as well as the likelihood of trade negotiation between the US and China next month.

6) Investors are still interested in the issue of British withdrawal from the European Union (Brexit)

7) VIX was at 15.96 points, or -6.36%, and gold price heavily revised down as much as USD27 per ounce, indicating no concern of investors on the stock market in the short term.

8) Today’s index range is expected to be 1,620-1,640 points. There is a signal that many stocks with good fundamentals are likely to reach their turning points such as SCB, CPALL, CPF, CPN, KKP and ORI.

9) Today’s recommended stocks are WHAUP, CPALL, CPN and SCB.

 

Stock & Comment

WHAUP – TP ฿8.00/share

CPALL – TP ฿94.00/share

CPN – TP ฿85.00/share

SCB – TP ฿159.00/share

 

Pick of the day: WHAUP (BUY, AWS TP Bt8.00)

WHAUP grows in the water production and distribution business in WHA’s industrial estate which from now on will expand according to the EEC. Water production capacity in Thailand is 105 million cu.m. per year. In addition, WHAUP holds a 34% stake in Duang River Surface Water Plant, which has been granted a concession to produce tap water in Hanoi, Vietnam. The total capacity of Phase 1 (beginning in the 1Q19) and Phase 2 (beginning in the 4Q19) is 110 million cu.m. per year. Hanoi still has a great amount of demand for tap water.

It is expected to increase production capacity to 330 million cu.m. per year according to its future plan. For electricity business, currently, there is a production capacity of 554 MW and will increase revenue from solar rooftop business of which 30 MW are currently on hand. It is expected to increase to 100 MW in around 2022.

 

AWS sees WHAUP as an interesting utility stock with a good potential to expand especially the growth in Vietnam which is fast growing as there are a large number of working-age population. Currently, WHAUP has a low PER of just 11x with around 3.7% yield.

WHAUP remains in the uptrend from the occurrence of Weekly & Monthly Buy Signal. WHAUP only has a short-term weakness from the occurrence of Daily Sell Signal. The significant target price is Bt7.15. If it could break by successfully closing above Bt7.15, the main target would be at Bt7.65. (Resistance: 6.95, 7.00, 7.10; Support: 6.85, 6.80, 6.70)