Sawasdee – October 09 , 2024

ประเด็นสำคัญ

• The Ministry of Finance is preparing to discuss economic stimulus measures for the end of this year and early next year with relevant agencies. The PM has instructed economic departments to expedite the consideration of details before presenting them to the committee.
• Toyota Motor Thailand reports total sales of vehicles in 8M24 of ~400,000 units, meaning the full-year sales target of 600,000 may be difficult to achieve, giving the lowest car sales in over ten years as buyers are unable to obtain loans and on the economic slowdown.
• The World Bank projects Thailand GDP growth at 2.4% this year, assuming support from budget spending, exports and tourism towards the end of the year. GDP growth next year is expected to reach 3%. The EEC is showcasing Thailand's investment potential at the Mini EEC Fair 2024.
• Reuters reports airlines, including Air France-KLM, Air India, Cathay Pacific and others have announced extended flight suspensions over Middle Eastern airspace due to rising tensions.
• The BoT postponed the selection of a new board chairman to verify qualifications and correctness on concerns of potential political interference. The next meeting will be in November.
• The Cabinet has approved an increase in flood relief payments to Bt9,000 per household for all cases, within the existing budget of Bt3.045bn. Bangkok has warned 16 communities outside the Chao Phraya River flood barriers to move belongings to higher ground during October 13-23 due to tidal effects and increased water discharge from the Chao Phraya dam.
• The SET has introduced 5 new DRs referencing European stocks: FERRARI80, HERMES80, LOREAL80, NOVOB80, and SANOFI80, which will start trading on October 9.

กลยุทธ์การลงทุน

In the short term the SET is expected to move sideways with limited upside as there are no new domestic catalysts; it is waiting for clarification of interest rate direction from BoT and stimulus from the government, which may be offset by short-term baht fluctuation. Global stock markets are in risk-off mode due to the Middle East tension, causing funds to flow out of the Thai capital market. Externally, US inflation does not significantly affect the money market on expectations the Fed’s interest rate direction for the rest of the year will be unchanged. Our strategy is “selective buy”.

ล็อกเป้าลงทุนประจำสัปดาห์

The SET is seen to have limited upside, with no new catalyst and rising Middle East tension. We recommend “Selective Buy” with four main themes:

• Earnings plays for mid-term investors who want strong fundamentals with strong 3Q24 profit momentum, with growth both YoY and QoQ – BEM, BCH, BDMS, GULF and TRUE.
• Stocks expected to benefit from the Vayupak Fund buying stocks in SET100 with the following characteristics: 1) minimum dividend yield of 3.5%, 2) high SETESG ratings from A to AAA and 5-star CG, and 3) strong financial position with profit growth expected in 2025 – KTB, BBL, BCP, ADVANC and HMPRO.
• Desire to speculate in stocks poised to benefit when the interest rate cycle starts down - Leasing (MTC TIDLOR), Property Development (AP SIRI), Commerce (CPALL), Utilities (GULF) and REITs (LHHOTEL and DIF).
• Rising Brent price on concerns of spreading of the Middle East conflict, setting expected price at US$75-85/bbl. Oil stocks are able to hedge the risk. For investors who can take risks, we recommend an upstream oil stock – PTTEP.

Daily top picks

CPALL: 3Q24 core profit is expected to grow 39%YoY, the lead performer in its sector, supported by higher sales and margin in CVS and CPAXT. 4Q24 is expected to be the best quarter in 2024 as it is high season; valuation is attractive, trading at 2024F PER of 25x (-2SD).

DELTA: 2H24 profit is expected to grow YoY and HoH from higher sales of more AI-related products. There is also upside from development and sale of AI-related power supply developed by DELTA Thailand, meaning it does not have to pay technical fees to DELTA Taiwan. Recommend to buy for trading at not higher than Bt108.50/share.