Daily Strategy for Investors on January 23, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on January 23, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

The situation of the outbreak of new strain of coronavirus began to unwind after experts from the World Health Organization (WHO) travel to Wuhan in China, to examine the process of extracting the outbreak of new strain of coronary infections, including increased cooperation with China and provide relevant technical support.

AWS has a negative view on short-term crude oil prices after the IEA reported that the oil market still faces an oversupply of 1 million barrels per day during 1H19. AWS looks that it affects investment sentiment in the energy sector.  

Issues of the draft expenditure budget for 2020, 84 people of the opposition signed to submit to the President of the House of Representatives to send the matter to the Constitutional Court to decide under Section 148 (1) whether the draft Budget Act of 2020 is enacted with the Constitution or not. AWS sees it as only short-term negative factors for the theme investment.

To sum up, the banking sector’s  net profit in 4Q19 totaled at Bt41.00bn decreased 21.5%QoQ, up 5.1%YoY, with the strongest growth in 4Q19 are KKP and KTB, and in 2019, banking sector had the profit at Bt207bn, increased 8.2%YoY.

Investment theme: (1) Accelerate government budget disbursement in 2020, AWS chooses CK (TP Bt22.00) SEAFCO (TP Bt7.30) CPALL (TP Bt94.00) and KKP (TP Bt80.00) (2) Government stimulus measures, recommend AOT (TP Bt84.00) CPALL (TP Bt94.00) and HMPRO (TP Bt19.00) and Dividend Stock is GPSC (TP Bt97.00)

AWS expects the SET to be within the range of 1,568-1,587 points. (Support: 1,568 1,561 and 1,555/ Resistance: 1,581 1,587 and 1,594 points)  

   

Stock & Comment

KKP  TP Bt80.00

GPSC TP Bt97.00

TU   TP Bt18.40

 

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

AWS still likes KKP and pick as Top Pick of commercial bank sector. For the overall performance in 2020, loans are expected to continue to grow well. (We expect at 5%) driven by real estate loans and personal loans, while net interest margin (NIM) is likely to revise up from the downtrend of interest rate (expect at 4.5% compared to 4.2% in 2019). In addition, AWS expects revenue from capital market to remain strong according to the market share of Phatra Securities including the upcoming IB deals such as CRC ‘s  IPO.   

KKP has outstanding dividend. AWS expecst the bank’s performance of 2019 to pay a total dividend of Bt5.50 (announced to pay the 1H19 dividend of Bt1.50) and remains dividend for the 2H19 performance of Bt4 with 5.8% dividend yield, compared to the latest closing price.

 

Weekly outlook: the price fluctuated in the range of Bt66-73 and is currently forming to a Descending Triangle to wait for the breakout. Daily outlook: the price shows Buy Signal due to continuous Higher High and Higher Low with higher trading value as well. AWS sees the price to test the original high at Bt69.50. If it could stand, it is expected to continue to revise up to test the Gap resistance at Bt70.50. The stop loss point is at Bt66.25 (Resistance: 69.50 / 70.50 / 71.25; Support: 68.00 / 67.00).