Daily Strategy for Investors on December 20, 2019

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

Investment Ideas:

1) The US Treasury Department confirmed to sign the first phase of the trade agreement with China in early January 2020.

2) The US House of Representatives agrees to impeach President Donald Trump from his presidency. The next step is a trial in the Senate using two-thirds of senators to impeach. There is less than 0.1% chance to happen as the Republicans dominate the majority of the Senate. AWS considers that there is no implication to the stock market.

3) The ICT sector has a positive factor. The 5G spectrum will be opened for auction in February 2020. It is expected to have three operators with a bidding price of only Bt11.60bn per operator which is much lower than the 4G auction. AWS recommends BUY and pick ADVANC as its Top Pick.

4) Waiting to hear the result of the medical fee increase from the Social Security customers which just hold a meeting on 17 December. It is a positive factor for those hospitals with high revenue proportion from social security, including BCH (AWS TP Bt20.60) and CHG (AWS TP Bt2.80).

5) Today’s index range is expected to be 1,550 -1,590 points. AWS recommends ADVANC, PLANB, BCH and CHG.

 

Stock & Comment
ADVANC – TP ฿250.00/share
PLANB – IAA Consensus ฿10.50/share
BCH – TP ฿20.60/share
CHG – TP ฿2.80/share

 

Pick of the day: ADVANC (BUY; AWS TP Bt250.00)

There are three important issues that must be monitored for ADVANC in 2020, including (1) the 5G spectrum auction, (2) the price war situation in mobile phone business whether it will be more violent or not, and (3) fierce competition in broadband business with expectation that ADVANC will be the Winner.

“5G transforms the Thai economy” as an important step leading ADVANC to the new S-Curve. AWS asserts that the price war in the mobile phone business has weakened. There is only a small war for Prepaid which is not a big concern for ADVANC.

ADVANC is a disruptor in the broadband business. It is expected to increase market share in this business significantly from the current level of 8%. Recommend BUY with a target price of Bt250.00.