April 16, 2015
Investment Strategy
Stocks with high returns after Songkran are still advisable, especially VNG([email protected]),
ADVANC(FV@B285), SCCC(FV@B455), and SAMART(FV@B41). Since Howe Robinson Index rose further
by 4%wow, top pick is RCL(FV@B 13.10).
SET Index
Change
Market cap (Bm)
Net buy and sell by investor type (Bm)
Foreign
Proprietary Trading
Institution
Retail
1,547.83
2.72
28,153.07
-251.45
337.29
593.53
-679.37
SET Index Sensitivity
(x)7)
(456
14.0x
14.5x
15.0x
15.5x
16.0x
16.5x
17x
18x
A48.9.
pr 15E
58E May
:.;. 15E
58E
1,196
1,239
1,281
1,324
1,367
1,409
1,495
1,580
1,227
1,271
1,315
1,359
1,403
1,447
1,534
1,622
Jun
8<.9.15E
58E
Sep
=.9.15E
58E
Dec
>.;. 15E
58E
1,258
1,303
1,348
1,393
1,438
1,483
1,573
1,662
1,352
1,400
1,448
1,497
1,545
1,593
1,690
1,786
1,446
1,497
1,549
1,601
1,652
1,704
1,807
1,910
Post-Songkran plays: VNG, ADVANC, WORK
The stock market has been opened again after Songkran long holiday. Investors are probably taking a break and there are
only two working days, so the market would be dull this week. Still, SET Index is likely to stay in an uptrend for the
remainder of April despite negative political and economic factors mentioned last Friday.
According to our quantitative analysis (2010-2014), the SET had 100% probability of granting return at the average of 3%
after Songkran for the remainder of April, and the following sectors had 80-100% probability of outperforming the market:
ICT The ICT sector has 100% probability of granting the average return of 7.58%. ADVANC(Buy:FV@B285) has
100% probability of granting 5.79% average return, while JAS(Sell:[email protected]), SAMART(Buy:[email protected]),
DTAC(Hold:[email protected]), and SAMTEL(Hold:[email protected]) have 80% probability of granting the average returns of
14.66%, 6%, 5.95%, and 5.95%, respectively, likely to outperform the market.
Porranee Thongyen, CISA
License No: 004146
[email protected]
Therdsak Thaveeteeratham
License No: 004132
Commerce The commerce sector has 80% probability of granting the average return of 6.99%.
MAKRO(Hold:[email protected]) has 100% probability of granting 10.66% average return, while BJC(Hold:[email protected])
and ROBINS(Buy:[email protected]) have 80% probability of granting the average returns of 5.21% and 5.12%,
respectively, likely to outperform the market. Top pick is ROBINS for the largest upside.
IMM The IMM sector has 100% probability of granting the average return of 6.59%. SNC(Buy:[email protected]) is
likely to outperform the market, with 100% probability of granting the average return of 5.44%.
[email protected]
Pobchai Phatrawit
License No: 052647
[email protected]
Assistant Analysts
Maraporn Kiwiriyakun
English research reports are a rough translation of our Thai-language
research products. It is produced primarily with time efficiency in mind, so
that English-reading clients can see what the main recommendations are
from our Thai-language research team. Given that this is a rough-and-ready
translation, Asia Plus Securities pcl cannot be held responsible for
translation inaccuracies.
The Thai language research reports and information contained therein
are compiled from public data sources and our analysts' interviews
with executives of listed companies. They are presented for
informational purposes only and not to be deemed as solicitations to
buy or sell any securities. Best attempts have been made to verify
information from these vast sources, but we cannot guarantee their
accuracy, adequacy, completeness and timeliness. The analyses and
comments presented herein are opinions of our analysts and do not
necessarily reflect the views of Asia Plus Securities.
Tourism The tourism sector has 80% probability of granting the average return of 6.16%. Only
CENTEL(Buy:[email protected]) is likely to outperform the market, with 80% probability of granting the average return of
4.58%
Transportation The transportation sector has 80% probability of granting the average return of 5.94%.
AOT(Hold:[email protected]) and BMCL(Sell:[email protected]) are likely to outperform the market, with 80% probability of
granting the average returns of 5.13% and 4.52%, respectively. Since BMCL's share price has already absorbed
the BMCL-BECL merger, only AOT is advisable.
Property The property sector has 100% probability of granting the average return of 5.54%.
ROJNA(Hold:[email protected]),
AP(Buy:[email protected]),
HEMRAJ(Buy:[email protected]),
SF(Buy:[email protected]),
SPALI(Buy:[email protected]),
BLAND(n.a.:[email protected].),
SENA(Buy:[email protected]),
QH(Buy:[email protected]),
and
PF(Hold:[email protected]) are likely to outperform the market, with 100% probability of granting the average returns of
7.43%, 6.67%, 6.38%, 5.97%, 5.06%, 4.98%, 4.77%, 4.63%, and 4.33%, respectively. However, since most of
them have a limited upside, top pick is SPALI.
Media The media sector has 100% probability of granting the average return of 5.33%. WORK(Buy:[email protected])
and MAJOR(Buy:[email protected]) are likely to outperform the market, with 100% probability of granting the average
returns of 15.24% and 4.02%, respectively, while RS(Hold:[email protected]) has 80% probability of granting the average
returns of 10.22%. Since RS has a limited upside, top pick is WORK.
Healthcare The healthcare sector has 80% probability of granting the average return of 4.68%. Only VIBHA and
BDMS(Hold:[email protected]) are likely to outperform the market, with 100% probability of granting the average returns
of 8.2% and 4.56%, respectively.
Construction material The construction material sector has 100% probability of granting the average return of
4.21%. VNG(Buy:[email protected]) and SCC(Buy:[email protected]) are likely to outperform the market, with 100%
probability of granting the average returns of 5.45% and 4.79%, while DRT(Hold:[email protected]),
SCCC(Buy:[email protected]) and TASCO(Hold:[email protected]) have 80% probability of granting the average returns of
4.43%, 3.98%, and 3.98%, respectively. However, since most of them have a limited upside, top pick is SCCC for
over 20% upside.
Although some sectors did not tend to grant positive average returns, some single stocks have over 80% of granting positive
returns: SYNTEC(buy:[email protected]) with 80% of granting 6.5% average return, CPF(Buy:[email protected]) with 80% of granting 6%
average return, MCS (Buy:[email protected]) with 100% of granting 3.8% average return, and CENTEL with 80% of granting 4.6%
average return.
We choose VNG([email protected]), ADVANC(FV@B285), SCCC(FV@B455), and SAMART(FV@B41) as top picks for their high
upside, low P/E ratio, and high dividend yield.
IMF maintain world GDP growth but revise up Thailand's
After a down revision in January 2015, the IMF maintained world FY2015 GDP growth forecast at 3.5% but revised up
FY2016 GDP growth forecast from 3.7% to 3.8%. The IMF saw that the worldwide economy would continue decelerating but
recover gradually. While the economy of emerging countries and oil producers have been affected by the oil prices plunge,
developed countries' economy would rebound. Thus, FY2015 GDP growth forecast is maintained at 3.5%.
GDP growth forecasts of Eurozone, Japan, India, and Thailand have been revised up. The IMF believed that household
spending and investment in Thailand would rebound thanks to lower oil prices, but export is projected to fall for the third
2
consecutive year by 2.2% due to the global economic deceleration (lower than other economists' projection). Meanwhile, the
US, the UK, Canada, and Russia's GDP growth forecasts are revised down, whereas China's GDP growth projection is
maintained, as shown below:
Countries
World
Developed Countries
Revised Up
Eurozone
Germany
France
Italy
Spain
Japan
India
Thai
Revised Down
US
UK
Canada
Developing countries
Russia
Maintained
China
2015
Old
New
3.5
3.5
2.4
2.4
2016
Old
New
3.7
3.8
2.4
2.4
1.2
1.3
0.9
0.4
2
0.6
6.3
3.5
1.5
1.6
1.2
0.5
2.5
1
7.5
3.7
1.4
1.5
1.3
0.8
1.8
0.8
6.5
-
1.6
1.7
1.5
1.1
2
1.2
7.5
4
3.6
2.7
2.3
4.3
-3
3.1
2.7
2.2
4.3
-3.8
3.3
2.4
2.1
4.7
-1
3.1
2.3
2
4.7
-1.1
6.8
6.8
6.3
6.3
The IMF's new GDP growth forecast is not surprising because the market has already absorbed this factor. The forecast
may be revised down in the future as long as no solid recovery is seen, especially in the world's largest economies like the
US and China. The IMF's GDP growth forecast for Thailand is higher than other economists' projections which have been
revised down already. We are currently working on our new GDP growth projection (probably revised down to 2.5% in
2015); further detail will be given in the near future.
Foreign fund flowing out from TIP countries
Last Friday, foreign investors possessed a net buy position in Asian stock markets at US$362m yesterday, with net buy and
sell in some countries; Thailand was sold at US$7.73m (B251.45m) on the last working day before Songkran. While
Thailand's stock market was closed for three days, foreigners bought net in Asia for the 13th and 14th consecutive days at
US$319m and US$228m, respectively, and then reversed to sell net at US$466m yesterday. Taiwan faced the largest net
sell in over one year of US$708m.
Notably, foreign fund has started flowing out from Indonesia and the Philippines. Foreigners have sold net Indonesian stocks
for five days in a row totaling US$176m (after six-day net buy of US$218m) and sold net in the Philippines for five
consecutive days at the total of US$77m (previously buying for 12 out of 13 days totaling US$217m). Foreign fund has flown
to Eastern Asian countries recently, resulting in Hong Kong, China, Japan, and South Korea's stock indices making new
highs. Thailand is likely to face a net sell, but selling pressure would be limited since Thailand is still with YTD accumulated
foreign net sell of B7.2bn.
3
ytd
mtd
-5d
-1d
5000
4000
3000
2000
0
708
33
51
0
326
1000
-1000
-2000
Indonesia
Philippines
S. Korea
Taiwan
Thailand
HRCI rising despite low oil prices, benefiting RCL
Howe Robinson Index (HRCI) has risen for the 15th consecutive week by 3.98%wow and made the highest level in three
years and seven months of 714.1 pts. YTD average HRCI of 604.9 pts is 14.67% higher than the full-year 2014 average
HRCI of 527.5, showing a solid rebound in the container shipping industry. Meanwhile, YTD average oil price has declined
by 49.5%yoy, and 1Q15 average oil price has plunged over 50%yoy. With low fuel cost (comprising around 20% of total
cost) and only 25% hedging, RCL will significantly benefit from low oil prices, and the company's earnings would grow
significantly in 1Q15 as well as 2Q15 (high season for the container shipping industry). Compared with other world-class
container shipping stocks, expected PBV in 2015 of RCL is almost the lowest among peers at 0.8x, while its 2015 ROE is
6.5%, close to the sectorJs average; RCL is a very inexpensive container shipping stocks. FY2015 fair value (1.1x PBV,
lower than the industry's worldwide average of 1.41x) is B13.10, implying 36.5% upside. We recommend BUY and choose
RCL([email protected]) as top pick.
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Stocks Recommended in Market Talk
Price
Start
Stocks
Date
Fair Value
Start
Last
Accumula
ted Return
PER
2015F
PBV
2015F
Dividend
Yield
Strategist Comment
30-Min Chart
Inexpensive laggard stock with high dividend.
SPALI
05-Jan-15
31.96
23.43
22.10
-5.7%
6.91
1.81
5.86
AIT
05-Jan-15
53.00
38.25
40.50
5.9%
10.64
2.74
5.07
STPI
05-Jan-15
23.64
16.96
16.50
-2.7%
8.38
2.55
4.55
other projects too, but share price has not risen yet.
PTT
08-Jan-15
398.00
341.06
334.00
-2.1%
8.93
1.29
4.19
LPG price float benefiting PTT.
PTTEP
03-Feb-15
134.00
115.03
114.00
-0.9%
10.75
1.13
3.95
VNG
09-Apr-15
10.25
7.70
7.80
1.3%
9.51
1.65
4.21
ASK
12-Mar-15
30.10
22.50
19.50
-13.3%
8.15
1.57
8.59
RCL
25-Mar-15
13.10
9.10
9.60
5.5%
22.12
0.80
2.26
low fuel cost promotes earnings growth.
GUNKUL
25-Mar-15
38.75
36.25
35.75
-1.4%
58.04
5.88
0.60
switching to stocks with high returns after Songkran.
Backlog making up 80% of FY2015 income target.
Paying B1.10 dividend; XD date is April 21.
Benefiting from Digital Economy policy.
Potential winner of EPC Contractor bid. Likely to win
Rebounding crude oil price,
Crude oil oversupply subsides.
Benefiting petroleum business.
Growing demand, lower cost, high margin,
growing profit, developing new products with attractive
growth story.
Benefiting from policy rate cut.
Low P/E ratio, high dividend yield.
HRCI rising countinuously,
Temporarily excluded from portfolio,
Accumulated returns since our recommendation
ASK
-13.3%
SPALI
-5.7%
STPI
-2.7%
PTT
-2.1%
GUNKUL
-1.4%
PTTEP
-0.9%
VNG
1.3%
RCL
5.5%
AIT
-15%
5.9%
-10%
-5%
0%
5%
10%
Note: In calculating returns from a stock we recommended, we use the average price on the day of our recommendation as cost and compare it with the
recent closing price. This will result in accumulative returns until the day we recommend closing the position to take profit or cut loss.
5