Daily Strategy for Investors on November 6, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 6, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) For the MPC meeting, it is expected that the interest rate might be cut by 0.25%, resulting avoiding Big-sized banks but choosing finance sector.

2) US stock market continues to make new highs in response to a progress in trade negotiations between the US and China.

3) Oil price revised up and is likely to drive stocks in oil sector (only PTT, PTTEP) and commodity sector. Therefore, we hope for freight rates (PSL only).

4) Thai baht has depreciated to Bt30.24 per USD which helps relaxing export shares but not much.

5) MTC reported the 3Q19 net profit of Bt1.08bn, up 11.9%YoY and 5.8%QoQ. We recommend BUY with the 2020 target price of Bt75.00 based on a 7.3x PBV.

6) GPSC reported the 3Q19 net profit of Bt893mn, or down by 1%YoY and by 17%QoQ. Full profit of GLOW was recognized with a capacity of 4,748 MW. This quarter, interest expenses increased by Bt300mn QoQ, resulting in lower-than-expected profit. We are revising GPSC’s target price which is expected to revise up from Bt79.00 to Bt97.00 if synergy and profit allocation from Xayaburi Project are included.

7) Expect today’s Thai stock market index to be 1,620 -1,635 points. Recommended stocks are AOT, MTC, GPSC, SYNEX and PTTEP.

 

Stock & Comment
AOT – TP ฿84.00/share.
MTC – TP ฿75.00/share.
GPSC – TP ฿97.00/share.
SYNEX – IAA Consensus ฿8.35/share.
PTTEP – IAA Consensus ฿151.00/share.

Pick of the day: AOT (BUY; AWS TP Bt84.00)

AWS expects normalized profit 4Q19F (Jul-Sep 19) to be at Bt5.6bn, increased by 8.3%YoY, due to strong aviation statistics.

Thai tourism outlook recovered from the Chinese tourists has come back strong since August, while early October is the long weekend of the week, celebrating the Chinese National Day (Golden week) and high season of tourism that will start from October. We have a positive view on tourism for the rest of the year 2019, which will be reflected in 1Q20 earnings (Oct-Dec 19).

AOT reported that the passenger movement during 1-27 October, increased by 5.5%YoY, with international tourists growing at 11.6%YoY . The aircraft movement increased by 8.6%YoY.

In this regard, AWS has a positive view on the aviation sector, with AOT get the most benefit. AOT is still very strong in the main uptrend due to the occurrence of both Daily, Weekly, & Monthly Buy Signal. When considering AOT, the main target of making a New High is 82.25 baht. AOT There is a short term Stop Loss at 76.00 baht. (Resistance: 80.00, 81.00, 81.75; Support: 78.50, 77.75, 76.75)