สวัสดีตอนเช้า - 23 เม.ย. 2567 กรอบบนยังถูกจำกัด

The SET recovered cautiously after last week’s plunge after tension in the ME did not escalate. The market may thus continue to move up. However, negative technical indicators mean upside is small with resistances of 1360 and 1370, while supports are at 1340 and 1330. A fall below support is a negative signal.

In the short-term the Thai capital market is fragile and volatile in response to concerns about the tension in the Middle East and the Fed’s probable delay in cutting interest rate. 1Q24 earnings announcement season is approaching and profits are expected to grow, though slowly, despite the signs of recovery in the US manufacturing index. Our strategy is “Selective Buy”.

Thai capital market is still fragile on concerns about the tension in the Middle East and worries the Fed will delay an interest rate cut longer than expected. We recommend “Selective Buy” in four main themes:
1) Stocks more resistant to fluctuation and risk from the conflict in the Middle East given the uncertainty of Israel’s response to Iran’s attack. For high-risk-takers, choose the upstream stock PTTEP, which directly benefits from higher oil price and refinery stocks who benefitting from higher inventory gain – BCP and TOP for trading. An escalation into a full-scale war may push oil price up to above US$100/bbl in the short term as supply from Iran, which has 3-4% of the world’s supply, would be affected. In the worst case, the situation may affect oil exports in the Straits of Hormuz, 17% of the world supply. This is negative for oil retailing (lower marketing margin) and aviation (higher cost).
2) For risk-averse investors, look for defensive stocks with strong fundamentals whose profit is less exposed to economic fluctuations – healthcare (BCH and BDMS), land transport (BEM), commerce (CPALL and CPAXT), telecommunication (ADVANC) and high-dividend property (AP).
3) Stocks whose 1Q24 operating results are expected to grow YoY and QoQ, expecting to announce in the next two week – SCGP and HMPRO.
4) For high-risk-taker investors wanting to speculate in stocks that have fallen sharply since the Israel-Iran attacks but whose fundamentals have not changed – GPSC, GULF, SPRC, CRC and MTC.

KTB: 2024 profit is expected to grow 5.4%YoY, with loan growth of 3%, a 9bps-decrease in NIM, a 13bps-decrease in credit cost, a 5bps increase in non-NII and a slight increase in cost to income ratio. Valuation is not expensive and it is expected to pay a dividend on 2024 operations of Bt0.97/share, yield of 6%.
HANA: It benefits from a weaker baht and 1Q24 core profit is expected at Bt310mn, growth of 11.9%YoY. Growth is also expected in 2Q24 profit, supported by a smartphone replacement cycle with a switch to AI smartphones stimulating demand. The risk/reward is interesting after a 31% YTD fall in stock price, already discounting the negatives.

Today’s reports

KBANK – 1Q24: Beat on lower-than-expected ECL
OSP – Preview 1Q24F: Up YoY and QoQ
SPALI – Preview 1Q24F: To fall both YoY and QoQ