Daily Strategy for Investors on January 24, 2020

Asia Wealth Securities (AWS) released an analysis for the trading session on January 24, 2020, indicating the essential events in the stock market as follows:

 

Investment Ideas:

The World Health Organization (WHO) stated that the epidemic of the new strain of the coronavirus is not yet critical and it’s too early to announce a new strain of coronavirus is an international public health emergency. However, the latest information about people infected from the Chinese National Health Commission, there are 634 people and die 17 people in Hubei Province, while China now closed the city of Huanggang (With a population of around 6 million people) which is the second city after Wuhan.

Crude oil prices are still negative for investment in the energy sector, despite lower crude oil reserves. Oil markets are still worried about the spread of a new strain of coronavirus and worries about oil demand growth after the IMF cut its GDP estimate.

Keep an eye on the new US stimulus measures focusing on lowering the tax rate for the middle class (currently at 21%). It is expected to be positive with the investment overview.

The European Central Bank (ECB) meeting has resolved the policy rate (Refinance interest rate) at 0%, which is the lowest ever and maintain the deposit interest rate of commercial banks deposited with the ECB at -0.50% and the loan interest rate at 0.25%.

BREXIT passes the draft law to withdraw from the European Union after Her Majesty Queen Elizabeth 2 officially signed the draft law to withdraw from the European Union of England. England will be separated from the European Union by 31 January 2020 as scheduled.

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, recommends AOT (TP Bt84.00) CPALL (TP Bt94.00) and HMPRO (TP Bt19.00) and (3) Dividend Stock GPSC (TP Bt97.00)

AWS expects the SET to be within the range of 1,563-1,583 points (Support: 1,568, 1,563 and 1,558 points/ Resistance: 1,578, 1,583 and 1,589 points)

 

Stock & Comment

HANA   TP Bt39.00

BEM     TP Bt12.50

KBANK  TP Bt166.00

EA       TP Bt52.50

TASCO TP Bt26.00

 

Pick of the day: HANA (BUY; TP Bt39.00)

Thai Baht compared to US dollars is likely to depreciate by the end of 2019, with the baht depreciating by more than 0.96%, a positive factor for HANA.

The arrival of 5G networks in various countries, especially China, will help boost smartphone sales. Data from IDC expects smartphone sales to resume growth in 2020 after continuing to contract for 3 years and the global smartphone market will grow by 1.5%YoY in 2020. Also, 5G smartphones will sell around 190 million units. During 3Q19, the proportion of telecom products was at 32% of total revenue while Auto product was 17%,RFID (Radio Frequency Identification) was at 12% and others were 39%.

Recommend BUY with a target price of Bt 39.00 , based on the PER of the industry in the past 5 years at 17.00 x.

Weekly outlook: The price is still standing above the 5-week average, while the daily price is still within the uptrend, despite the strong sell-off at the beginning of the week, but AWS looks at the price to swing in this frame, not falling out of Bt 35.00 and expecting to return above the resistance of Bt 36.50  if unable to stand, beware of profit taking and stop loss point is at Bt32.75 (Resistance: 36.50 / 37.50 ; Support: 35.25 / 34.25).