Daily Strategy for Investors on October 1, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on October 1, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) Investors have lessened their concerns on trade dispute between the US and China after the White House officials denied the news report that the US is considering to limit investment in China.

2) Crude oil price plunged after a report that Saudi Aramco has restored its oil production

3) The market is pressured by concern that the slowdown of China’s economy and trade war may affect demand for oil in the world market.

4) 2 October 2019, India announces ban of 6 plastic containers.

5) 10-11 October 2019, the US-China trade negotiation at Washington.

6) Thai economy in August 2019 slowed down from July in all aspects except the government spending that grew slightly and tourism where the number of tourists was up by 7.4% YoY, while Chinese tourists grew 18.9% YoY.

7) The Chinese Golden Week during 1-7 October 2019 is expected to increase the number of Chinese tourists to Thailand MoM which is positive to AOT, ERW, MINT, CPALL, BIGC and others.

8) At the Medical Hub board meeting, it prepares to propose the Cabinet to give a green light for American and Japanese to be able to come to Thailand for a treatment without a visa – add more countries that allow to stay for a 10-year visa including South Korea, Belgium, Austria and New Zealand as well as introduce a new type of visa which is a Multiple Entry Medical Visa for not more than 1 year at a time. It benefits BDMS, BH, BCH and CHG.

9) Expect the market to reverse back to invest in retail, tourism and hospital sectors. Outstanding stocks for this week are CPALL, BDMS and AOT. It is expected that the energy sector that related to oil and petrochemical price will revise down in line with crude oil price

10) Today’s index range is expected to be 1,630-1,645 points which swing in a narrow frame. Recommended stocks are CPALL, BDMS and BCH.

 

Stock & Comment

CPALL – TP ฿94.00/share

BDMS – TP ฿27.50/share. BDMS is expected to be benefitted as Medical Hub prepares to propose to the Cabinet to give a green light to issue more foreign visas.

BCH – TP ฿20.60/share. BCH is expected to be benefitted as Medical Hub prepares to propose to the Cabinet to give a green light to issue more foreign visas.

 

Pick of the day: CPALL (BUY; AWS TP Bt94.00)

AWS expects CPALL to benefit from the government’s economic stimulus measures through the distribution of government welfare payments and “Taste Shop Spend” measure. The 3Q19 is a low season for 7 -Eleven but MAKRO has a good growth. It is coupled with a support from the launch of “Doraemon” stamps. We expect the 3Q19 performance of CPALL to grow both YoY and QoQ from the 3Q18 net profit of Bt5.2bn and the 2Q19 net profit of Bt4.8bn.

CPALL will benefit if minimum wage was up from Bt320 to Bt400-425 according to the campaign policy of the government. In addition, it is also benefited during the Golden Week  (1-7 October) when Chinese tourists come to visit Thailand. We recommend BUY with a target price of Bt94.00 based on 35x PER.

CPALL remains in the uptrend from the occurrence of Monthly Buy Signal; however, CPALL is still weak in both short and medium terms from the occurrence of Daily and Weekly Sell Signal. The main target price is Bt84.00. If it could successfully break by closing above Bt84.00, the first target to test an original high is at Bt90.00 and a target of making a new high is at Bt97.25, respectively (Resistance: 81.50, 81.75, 82.25; Support: 81.00, 80.50, 80.25).