Sawasdee – September 11, 2024

SET Index Movement: The SET index is expected to fluctuate between 1418-1435 points, with energy stocks pressuring the index due to a sharp drop in oil prices. Investors are awaiting the US inflation data before the Fed meeting on September 17-18.
Today’s Highlights: Thai household debt in 2024 is at a 16-year high, the Ministry of Transport is pushing for a flat-rate fare on all train lines by September 2025, and FETCO sees continued fund inflows into Thai stocks if government policies are effectively implemented.
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.

Range-bound, wait for US CPI
Market today
The SET is expected to be range-bound at 1418-1435, although Energy will pressure after a dip in crude oil price. The lower bound is a support that is expected to stand, while the upper bound is limited. Investors are waiting for US CPI ahead of next week’s FOMC meeting on Sep 17-18.
Today’s highlights
• UTCC reports household debt in Thailand in 2024 is at a 16-year high, averaging Bt606,378 per household, up 8.4%YoY. This is due to an economic slowdown, high cost of living, and insufficient income. Most debt is from credit cards. • The Minister of Transport has announced plans for a flat Bt20 fare for all train lines by Sep 2025. The land bridge project is also moving forward, with preliminary studies underway and construction expected to begin in late 2030. • FETCO expects continued fund inflows into Thai stocks if the government follows through on its policies. It is working with the SEC and new SET manager to attract investment in tech and startup sectors. • Thailand's digital industry grew 3.88% in 2023, reaching a value of over Bt2bn. The software industry showed the highest growth at 12%, exceeding Bt200bn, with three years of growth expected. It has warned exporters to adapt to new technology. • The Energy Minister has reported progress on new energy laws that will reflect true costs rather than referencing foreign prices, potentially lowering energy prices. Oil traders will be limited to changing prices once a month. • The US National Hurricane Center says a hurricane may hit Louisiana's coast today, potentially affecting oil production and refining in the Gulf Coast, which accounts for 50% of US refining capacity.
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 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
GPSC: A short-term positive is lower natural gas cost. 2024 core profit is expected to be Bt4.58bn, growing 33.8%, and expected to continue growing 16.3% in 2025, supported by greater contribution from RE business overseas from higher capacity in India and Taiwan. Recommend buy for trading at not higher than Bt45.50/share. BCH: 3Q24 profit is expected to grow YoY and QoQ due to seasonal factors. Although 2024 profit is expected to be stable, 2025 profit is expected to grow an outstanding 18.7%. The stock price has fallen by 24%YTD to currently trade at 2025 PER of 21x or -2SD of historical PER, which already reflects the negatives.
Today’s reports
Petrochemicals - Falling oil price sparks concerns BH - Phuket addition adds LT value but hurts ST

Range-bound, wait for US CPI

Market today

The SET is expected to be range-bound at 1418-1435, although Energy will pressure after a dip in crude oil price. The lower bound is a support that is expected to stand, while the upper bound is limited. Investors are waiting for US CPI ahead of next week’s FOMC meeting on Sep 17-18.

Today’s highlights

• UTCC reports household debt in Thailand in 2024 is at a 16-year high, averaging Bt606,378 per household, up 8.4%YoY. This is due to an economic slowdown, high cost of living, and insufficient income. Most debt is from credit cards.
• The Minister of Transport has announced plans for a flat Bt20 fare for all train lines by Sep 2025. The land bridge project is also moving forward, with preliminary studies underway and construction expected to begin in late 2030.
• FETCO expects continued fund inflows into Thai stocks if the government follows through on its policies. It is working with the SEC and new SET manager to attract investment in tech and startup sectors.
• Thailand's digital industry grew 3.88% in 2023, reaching a value of over Bt2bn. The software industry showed the highest growth at 12%, exceeding Bt200bn, with three years of growth expected. It has warned exporters to adapt to new technology.
• The Energy Minister has reported progress on new energy laws that will reflect true costs rather than referencing foreign prices, potentially lowering energy prices. Oil traders will be limited to changing prices once a month.
• The US National Hurricane Center says a hurricane may hit Louisiana's coast today, potentially affecting oil production and refining in the Gulf Coast, which accounts for 50% of US refining capacity.

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 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

GPSC: A short-term positive is lower natural gas cost. 2024 core profit is expected to be Bt4.58bn, growing 33.8%, and expected to continue growing 16.3% in 2025, supported by greater contribution from RE business overseas from higher capacity in India and Taiwan. Recommend buy for trading at not higher than Bt45.50/share.

BCH: 3Q24 profit is expected to grow YoY and QoQ due to seasonal factors. Although 2024 profit is expected to be stable, 2025 profit is expected to grow an outstanding 18.7%. The stock price has fallen by 24%YTD to currently trade at 2025 PER of 21x or -2SD of historical PER, which already reflects the negatives.

Today’s reports

Petrochemicals - Falling oil price sparks concerns
BH - Phuket addition adds LT value but hurts ST