AOT – 4QFY66: กำไรต่ำกว่า INVX คาด, ตามตลาดคาด Expect to break through 1,422 |
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Market today | The SET rested under resistance of 1,422. However, it is expected to break through the resistance today, supported by positive sentiment from US markets, with the next resistance at 1,432. Supports are at 1,410 and 1,400, which are expected to stand firm. | Today’s highlights | • WTI crude price surged over 2%, breaking through US$77/bbl on expectations OPEC+ will further reduce oil production capacity at its meeting on Nov 26.
• Chinese regulatory authorities are drafting a list of 50 real estate development companies eligible for various forms of funding, in its latest effort to alleviate the real estate crisis.
• NESDC reported Thai GDP growth in 3Q23 of 1.5%, lower than expected due to sluggish exports. GDP is projected to grow 2.5% this year and 3.2% next year, with exports expected to recover. GDP estimates do not yet take into account the impact of the digital wallet, pending a legal opinion.
• The BoT said Thailand’s financial system is stable and secure, with high levels of fund reserves and liquidity. In 3Q23, overall lending contracted by 0.9%YoY, as businesses repaid debt after expanding to bolster liquidity during the COVID-19 period.
• The BMA is preparing to collect fares for the second phase of the Green Line extension of the skytrain at a rate of Bt15 starting early next year. Currently, this extension is not collecting fares. The revenue will be used for project management, pending a formal response from the Ministry of Transport.
• AIMC announced it was ready to launch new funds under TESG fund conditions and will apply for approval from SEC within the next two weeks, in time for sales starting on Dec 1. It expects to attract investment of Bt10bn, aligning with the Treasury's targets.
• The SEC has asked the SET to exert increased control over short-selling and trading programs and expects the SET board to take appropriate corrective actions. The SEC is preparing to inspect transactions involving naked short selling on the SET to enhance confidence. | Strategy today | The SET is expected to see a steady recovery, backed by positive sentiment from an expected Bt10bn in funds flowing into TESG by the end of the year. In addition, US manufacturing figures are expected to be strong although there is some indication of a slowdown. Our strategy is selective buy. | Trading today | Weekly portfolio: Although the Thai stock market is still facing high volatility, in the short term the SET may recover, though upside is limited. We recommend “selective buy” in themes with specific drivers:
1) Big-cap stocks in SET50 expected to be selected as investment targets for the TESG fund being set up for long-term stimulus. We select stocks in SETESG with factors of interest: 1) ESG Rating of “AAA” or “AA” and 2) prices have declined more than the SET YTD – SCGP, OR, CPALL, BEM, GULF, CRC and HMPRO
2) Earnings plays whose 4Q23 earnings are expected to grow YoY, making it the year’s best quarter – ERW, AOT and AP.
In the medium term we recommend being cautious on stocks that are expected to be affected by El Nino, which will erode purchasing power in the agricultural sector: Finance (MTC, SAWAD), Automotive (SAT, STANLY), Food & Agriculture (CPF GFPT and GFPT) and Beverages (CBG has high sugar cost). | Daily top picks | GULF: GULF is included in the SETESG index with an “AA” SET ESG rating. We continue to see strong profit momentum. 4Q23 profit is expected to grow, backed by an IPP unit (GPD) that came online in Oct and increasing contribution from Jackson Generation.
KCE: Profit has already passed bottom and is expected to recover in 4Q23, backed by restocking. Revenue is expected to grow 3-4%QoQ despite being in low season, with a further boost from lower copper cost and an expected reduction in electricity cost. | Today’s reports | AOT – 4QFY23: Below INVX, in line with market. |
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