Sawasdee – September 10, 2024

Limited Short-Term Upside for SET: The SET index’s short-term upside is limited at resistance levels of 1435-1440 due to the slowing appreciation of the baht and reduced foreign buying. Support levels are at 1416 and 1406.
Today’s Highlights: Key events include the Vayupak Fund One opening for public subscription, the rise in the investor confidence index, and the acceleration of transportation projects by the Ministry of Transport.
Investment Strategy: Despite good momentum, caution is advised for short-term profit-taking. Recommended “Selective Buy” themes include stocks with technical reversal signals, those benefiting from lower interest rates, and those expected to gain from new government stimulus measures.

Limited short-term upside
Market today
Upside for the SET is limited at resistance between 1435-1440 as the baht appreciation starts to slow, thereby slowing foreign buys, as well as the earlier jump in the index which leads to a need to rest to reduce heat. Investors follow US CPI report tomorrow local time. Supports are seen to be firm at 1416 and 1406.
Today’s highlights
• Vayupak Fund One, valued at Bt100bn-150bn, will be open for public subscription September 16-20. It offers a guaranteed annual return of 3-9% for 10 years, with a "Small Lot First" allocation method. It is expected to start trading on the SET on October 7. • FETCO reports the three-month ahead investor confidence index at 132.51, rising to a "bullish" level. Confidence has been boosted by the formation of a new government, clearing the skies, and its economic stimulus measures that are hoped to lead to economic recovery. • The Minister of Transport plans to accelerate transportation projects, including pushing for the Bt20 flat-rate fare on all lines by Sep 2025. The project is estimated to cost Bt160bn over two years. • The Minister of Defense will send the digital wallet scheme to the cabinet on September 17. The earliest payout is expected by the end of September, starting with 14mn vulnerable individuals and disabled persons. Recipients can use the funds to purchase any goods from any store. • Apple launched the iPhone 16 yesterday, featuring AI functions. Pre-orders start on Sep 20. On the same day, Huawei launched the Meta XT Tri-fold, which has already received 3mn pre-orders. • Chinese customs have approved three more Thai poultry processing plants, bringing the total to 26. In 2023, Thailand exported Bt16.9bn worth of poultry products to China, with exports expected to reach Bt18bn next year. • REIC reports that in 2Q24, there were 140,725 pre-owned homes listed for sale, valued at Bt718bn. Single houses, townhouses, and condominiums were the most popular, reflecting a sluggish economy affecting mortgage affordability.
Strategy today
Although in the short term the SET still has good momentum as the political skies have cleared and new stimulus is expected in 3Q-4Q24, in the past month the index has risen by 10%MoM. Hence, be cautious of profit-taking around resistances of 1450-1460. Funds are expected to switch to flow out from banks, financial firms and ICT, and flow into petrochemicals, utilities, property development and healthcare. Externally, there is still the risk of recession, which is slowing inflation and is expected to lead to an interest rate cut by the Fed and ECB. Our strategy is "selective buy".
Trading today
Although the SET still has good momentum for the short term, be wary of profit-taking after the leap in the index over the past month. We recommend "Selective Buy" with four main themes: 1) Investors who want to speculate in stocks that have a signs of a turnaround and attractive valuation, trading at PER and PBV lower than -1SD - CPN, GPSC and TFFIF.2) Investors who want to speculate in stocks expected to benefit when the interest rate cycle starts down - leasing (MTC), commerce (CPALL and CPAXT), utilities (GULF) and REITs (LHHOTEL and DIF). 3) Stocks expected to benefit from short-term stimulus packages from the new government in September, particularly those related to consumer staples - CPALL, CPAXT, BJC, TNP and CBG. 4) Stocks expected to benefit from the Vayupak Fund. We highlight stocks in SET100 that have: 1) good dividend yield, minimum of 3.5%, 2) SETESG Ratings between A and AAA and 5-star CG and 3) strong financial position, with profit expected to grow in 2025 - KTB, BBL, BCP, ADVANC and HMPRO.
Daily top picks
DELTA: The company benefits from the weakening baht. 2H24 profit is expected to continue to grow on rising sales of AI-related products and upside from development and sale of power supply related to AI developed by DELTA Thailand, avoiding the technical fees paid to DELTA Taiwan. Recommend buy for trading at not higher than Bt103.00/share. MINT: Profit momentum is still strong. 3Q24 core profit is expected to grow YoY but slip QoQ due to seasonal factors. 2H24 core profit is expected to grow YoY and HoH from a strong hotel business in Europe with increasing ARR. The stock price is following the market up but is still -2.5%YTD, making valuation attractive (PBV -2SD).
Today’s reports
CPALL - 2H24F earnings looking strong

Limited short-term upside

Market today

Upside for the SET is limited at resistance between 1435-1440 as the baht appreciation starts to slow, thereby slowing foreign buys, as well as the earlier jump in the index which leads to a need to rest to reduce heat. Investors follow US CPI report tomorrow local time. Supports are seen to be firm at 1416 and 1406.

Today’s highlights

• Vayupak Fund One, valued at Bt100bn-150bn, will be open for public subscription September 16-20. It offers a guaranteed annual return of 3-9% for 10 years, with a "Small Lot First" allocation method. It is expected to start trading on the SET on October 7.
• FETCO reports the three-month ahead investor confidence index at 132.51, rising to a "bullish" level. Confidence has been boosted by the formation of a new government, clearing the skies, and its economic stimulus measures that are hoped to lead to economic recovery.
• The Minister of Transport plans to accelerate transportation projects, including pushing for the Bt20 flat-rate fare on all lines by Sep 2025. The project is estimated to cost Bt160bn over two years.
• The Minister of Defense will send the digital wallet scheme to the cabinet on September 17. The earliest payout is expected by the end of September, starting with 14mn vulnerable individuals and disabled persons. Recipients can use the funds to purchase any goods from any store.
• Apple launched the iPhone 16 yesterday, featuring AI functions. Pre-orders start on Sep 20. On the same day, Huawei launched the Meta XT Tri-fold, which has already received 3mn pre-orders.
• Chinese customs have approved three more Thai poultry processing plants, bringing the total to 26. In 2023, Thailand exported Bt16.9bn worth of poultry products to China, with exports expected to reach Bt18bn next year.
• REIC reports that in 2Q24, there were 140,725 pre-owned homes listed for sale, valued at Bt718bn. Single houses, townhouses, and condominiums were the most popular, reflecting a sluggish economy affecting mortgage affordability.

Strategy today

Although in the short term the SET still has good momentum as the political skies have cleared and new stimulus is expected in 3Q-4Q24, in the past month the index has risen by 10%MoM. Hence, be cautious of profit-taking around resistances of 1450-1460. Funds are expected to switch to flow out from banks, financial firms and ICT, and flow into petrochemicals, utilities, property development and healthcare. Externally, there is still the risk of recession, which is slowing inflation and is expected to lead to an interest rate cut by the Fed and ECB. Our strategy is "selective buy".

Trading today

Although the SET still has good momentum for the short term, be wary of profit-taking after the leap in the index over the past month. We recommend "Selective Buy" with four main themes:

1) Investors who want to speculate in stocks that have a signs of a turnaround and attractive valuation, trading at PER and PBV lower than -1SD - CPN, GPSC and TFFIF.2) Investors who want to speculate in stocks expected to benefit when the interest rate cycle starts down - leasing (MTC), commerce (CPALL and CPAXT), utilities (GULF) and REITs (LHHOTEL and DIF).
3) Stocks expected to benefit from short-term stimulus packages from the new government in September, particularly those related to consumer staples - CPALL, CPAXT, BJC, TNP and CBG.
4) Stocks expected to benefit from the Vayupak Fund. We highlight stocks in SET100 that have: 1) good dividend yield, minimum of 3.5%, 2) SETESG Ratings between A and AAA and 5-star CG and 3) strong financial position, with profit expected to grow in 2025 - KTB, BBL, BCP, ADVANC and HMPRO.

Daily top picks

DELTA: The company benefits from the weakening baht. 2H24 profit is expected to continue to grow on rising sales of AI-related products and upside from development and sale of power supply related to AI developed by DELTA Thailand, avoiding the technical fees paid to DELTA Taiwan. Recommend buy for trading at not higher than Bt103.00/share.

MINT: Profit momentum is still strong. 3Q24 core profit is expected to grow YoY but slip QoQ due to seasonal factors. 2H24 core profit is expected to grow YoY and HoH from a strong hotel business in Europe with increasing ARR. The stock price is following the market up but is still -2.5%YTD, making valuation attractive (PBV -2SD).

Today’s reports

CPALL - 2H24F earnings looking strong