Daily Strategy for Investors on November 20, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 20, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) President Donald Trump threatens to increase import duties from China if the US and China are unable to reach a trade agreement.

2) It is likely that Present Donald Trump will continue to increase import duties from China on 15 Dec if both parties are unable to reach a trade agreement.

3) Crude oil price dropped by more than 3% which is a negative factor to the Thai stock market today.

4) GRM was USD-0.1barrel due to fuel oil has dropped by USD-29barrel. However, it has a small impact and different impact to refinery business in Thailand. AWS further recommends to avoid investing in refinery business and petrochemical.

5) Today’s index range is to be 1,590 -1,615 points. Recommended stocks are KKP, EPG, ADVANC.

 

Stock & Comment
KKP – ฿TP 80.00/share
EPG – ฿TP 9.20/share
ADVANC – ฿TP 250/share

 

Pick of the day: KKP (BUY; AWS TP Bt80.00)

Even the 4Q19 performance is likely to drop on a YoY and QoQ basis due to recognizing the effect of lower interest rate fully quarter, resulting in lower NIM by 2-5 bps, however, such issue will post a positive sentiment to KKP as main revenue proportion comes from hire purchase business (about 65% of total revenues). Additionally, KKP has its own strength from an expectation that IB business might generate higher revenues to the bank. The IB deals that could come shortly are the merger of TBANK and TMB, etc.

The bank gives a high dividend yield of about 8.3% per year compared to the industry that gives only 4.5% dividend yield per year.

AWS recommends BUY with a target price of Bt80.00 based on a 1.20x Prospective PBV.