Daily Strategy for Investors on November 27, 2019

Asia Wealth Securities (AWS) has made an analysis for the trading session on November 27, 2019, pointing out some of the must-know events in the equity market as follows:

 

Investment Ideas:

1) The cabinet has approved economic stimulus measures at the final period of 2019. One of the 3 projects that can generate lots of interest is “Baan Dee Mee Down” that will give cash back at the amount of Bt50.00bn per person. Registration can start from 11 December 2019 – 31 March 2020. It will benefit to SPALI, ANAN, ORI and AP as there are ready-to-transfer stocks at high proportion.

2) The US is in the final stages of trade agreements with China. Foreign market is expected to be bright.

3) The Fed’s Chair expressed his positive view on the US economy. The US stock market is expected to remain bright.

4) The construction industry is at risk of being disrupted since the Chinese contractors start to bid at the lowest price. The final obstacle is the government has not yet awarded the work to any contractors in Rama 3-Dao Khanong Expressway project.

5) Thai stock market index range is expected to be 1,600-1,630 points. Recommended stocks are BEM, SPALI and ORI.

 

Stock & Comment
BEM – TP ฿12.50/share
SPALI – TP ฿20.00/share
ORI – TP ฿10.00/share

 

Pick of the day: BEM (BUY; AWS TP Bt12.50)

BEM reported statistics for October 2019 continuously growing. The Metro business have the number of passengers of 3.75 hundred thousand people per day, up 16.9%YoY, and the average daily income is Bt10mn, up 23.3%YoY, while the expressway business volume of Bt1.24 million traffics, up 1.3%YoY, with a revenue per day, which increased by 2.1%YoY to Bt28.2mn.

In 3Q19, BEM reported a net profit of Bt937mn, decreased both QoQ and YoY due to no special profit like 3Q18 and 2Q19. Earnings 3Q19 are in line with expectations, with normalized profit growing both QoQ and YoY based on the number of cars and passengers during the 3Q19 period which continues to grow.

The company stated that the number of passengers has started to grow in accordance with the framework that AWS has estimated, giving us a positive view on 4Q19 and 2020 earnings.

In this regard, AWS expects normalize profit in 2020 about Bt5.2bn, up 46%YoY. AWS expects strong net profit growth for 2019 – 2021 with 17% CAGRs.

BEM is still the main trend in the upward trend due to both daily and monthly buying signals. BEM is still in the medium-term for concern as the weekly sell signals. When considering the price pattern, BEM have short-term stop-loss points at Bt10.50. (Resistance: 10.80, 10.90, 11.00; Support: 10.60, 10.50, 10.40)