Post on 17-Mar-2022
ed: CK/ sa: AS, PY, CS
COVID resurgence a key risk to recovery
• New COVID-19 cases soaring exponentially, semi-lockdown
measures in place to contain the virus
• Downside risks to our 2021 GDP and earnings growth
• Yet, some companies are less affected by the pandemic
• Top picks – BCH, KBANK, PTTEP, PTTGC, SCC, STGT, TQM & UTP
SET underperformed regional peers in April 2021. The Stock Exchange
of Thailand (SET) Index eased 0.3% in April 2021, trailing its regional
peers’ 2.9% gain. This was amid the third wave of the COVID-19
pandemic that saw the number of daily new infections surge to an
alarming 2k+ cases, which is a historical high. For 4M21, the Thai
market rose 9.2%, outperforming regional peers’ 5.0% gain.
Third wave of COVID-19 pandemic to delay the recovery process. The
number of new infections has risen sharply in April due to the more
contagious virus variants. This resulted in semi lockdowns in certain
provinces currently. This could present downside risks to our 2.9%
GDP growth forecast and our 85% earnings growth forecast for this
year.
Maintain end-2021 SET Index target of 1650. We prefer the Energy,
Food, and Healthcare sectors, as we anticipate better outlooks for
these sectors in 2021. We also like the Banking sector for its attractive
valuation at 0.7x P/BV, which is c.-2SD of its historical average. The
Banking sector’s 1Q21 results announced so far have trumped our and
market expectations, amid stronger-than-expected non-interest
income and lower-than-expected credit costs.
Our top picks based on three main themes are as follows:
(i) Core holdings. Our picks are Kasikornbank (KBANK) and Siam
Cement (SCC). Both are stocks with solid fundamentals, long track
record, while trading at attractive valuations.
(ii) COVID-19 plays. Our top picks are Bangkok Chain Hospital (BCH),
Sri Trang Gloves Thailand (STGT), and TQM Corporation (TQM).
These companies should see higher revenue amidst the COVID-19
pandemic.
(iii) Commodity plays. Here, we like PTT Exploration & Production
(PTTEP), PTT Global Chemicals (PTTGC), and United Paper (UTP).
These companies are enjoying the upcycle of their respective
industries and should be less affected by the resurgence of the
COVID-19 pandemic.
SET : 1,549.22
Analyst
Chanpen SIRITHANARATTANAKUL +662 857 7824
chanpens@th.dbs.com
Thailand Research Team +662 857 7824
research@th.dbs.com
Key Indices
Current % Chng
SET Index 1549.22 -2.14%
SET 100 Index 2117.45 -2.58%
SET 50 Index 929.63 -2.76%
Bt/US$ Exchange Rate 31.12 -0.29%
Daily Volume (m shrs) 40,513
Daily Turnover (US$m) 4,084
Daily Turnover (Btm) 127,109
Market Key Data
(%) EPS Gth Div Yield
2020 (54.5) 2.4
2021F 84.7 2.8
2022F 15.4 2.9
(x) PER EV/EBITDA
2020 40.2 12.3
2021F 21.8 9.9
2022F 18.9 9.0
Source of all data: Companies, SET, DBSVTH
Source: DBSVTH
DBS Group Research . Equity
DBS Group Research . Equity
6 May 2021
Thailand Market Focus
Monthly Strategy Refer to important disclosures at the end of this repor
STOCKS
12-mth
Price Mkt Cap Target Performance (%)
Bt US$m Bt 3 mth 12 mth Rating
Bangkok Chain Hospital PCL 18.20 1,455 23.00 24.0 32.1 BUY
KASIKORNBANK 126 9,571 195 0.8 53.0 BUY PTT Exploration & Production 118 14,955 145 11.2 40.8 BUY PTT Global Chemical 66.75 9,601 73.00 11.1 79.5 BUY
Siam Cement 462 17,774 496 20.6 33.5 BUY Sri Trang Gloves (Thailand) PCL 45.25 4,145 60.50 9.9 N.A BUY TQM Corporation 120 1,149 137 (2.0) 53.0 BUY
United Paper 22.40 467 25.00 9.4 131.3 BUY
Source: DBSVTH, Bloomberg Finance L.P.
Closing price as of 5 May 2021
Market Focus
COVID resurgence a key risk to
recovery
Page 2
Our top picks
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
BCH TB 1,448 18.10 23.00 27% 36.7 32.5 29.6 6.6 5.9 5.3 1.3 1.3 1.3 18.7 33.1 24.8 31.2
Given the new wave of COVID-19 outbreak, we see less downside risk for BCH’s
performance compared to premium hospitals due to the availability of a top-line cushion arising from COVID-19-related services, coupled with the fact that Social Security System will remain the revenue growth driver for BCH. We expect BCH’s earnings to grow 10%-13% in FY21-FY22. As we also roll over our DCF valuation to FY22F, our TP rises from Bt17.8 to Bt23.00. BCH is now trading at an FY22F price-to-earnings (PE) of 31.3x, lower than its 5-year average of 33.3x. We believe that its current share price offers a good entry point to take advantage of a recovery in international patients, surge in revenue related to COVID-19 services, and positive development in vaccine rollout plan.
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
KBANK TB 10,031 132.00 195.00 48% 10.6 9.3 9.9 0.7 0.7 0.6 3.0 3.8 1.9 7.0 16.8 3.9 73.1
KASIKORNBANK’s (KBANK) competitive strength in digital banking and its relentless investments in its information technology (IT) systems will sustain the bank’s No.1 position in digital banking and its leading position in the banking industry. In FY21F, we expect its earnings to rebound strongly by 13.7% y-o-y (vs. peers’ 2.4% y-o-y). Meanwhile, the Bank of Thailand’s newly announced COVID-relief measures for SMEs should be positive to KBANK’s asset-quality outlook. Valuation-wise, KBANK is still trading near its 20-year low at 0.7x P/BV, i.e. 2SD below its long-term average P/BV
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
PTTEP TB 15,152 119.00 145.00 22% 20.8 13.7 11.1 1.3 1.2 1.1 4.2 5.0 3.6 6.4 21.1 15.0 51.1
We like PTTEP due to i) strong oil prices, thanks to the improving demand and supply imbalance, ii) significant drawdown of crude inventory, iii) improving sentiment on anticipated vaccine deployment, iv) additional revenue recognition from 20% stake acquisition of Oman Block 61 in 2Q21F, and v) long-term catalyst from 600MW integrated gas-to-power project in Myanmar (FID by end-2022).
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
PTTGC TB 9,749 67.75 73.00 8% 7.6 7.6 7.6 1.1 1.0 1.0 5.9 3.0 1.5 0.1 15.8 14.8 69.4
We like PTTGC for i) the improving sentiment in the oil market, ii) expectations of strong performance for its polymer business on the back of high demand for homecare and healthcare packaged products, iii) additional polyethylene (PE) capacity from the Olefins Reconfiguration Project (ORP) project, and iv) uptrend for refinery margins.
Source: Company, DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 3
Our top picks – PE bands
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
SCC TB 17,781 462.00 496.00 7% 16.2 12.0 12.5 1.7 1.6 1.5 3.9 3.0 3.0 11.4 22.2 22.2 36.7
We expect its performance in 2Q21F to be supported by i) the fact that chemical margins are now on an uptrend with HDPE/PP margins breaching US$700/860 per tonne respectively, ii) expectations of no planned shutdown at its olefin plant, where there was c.120ktonnes of ethylene volume lost in 4Q20 due to planned shutdowns, iii) the commercialisation of MOC debottlenecking project by 0.35mtpa, iv) cement and building material demand recovery in the commercial and residential sectors, and v) resilient packaging demand.
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
STGT TB 2,028 44.25 60.50 37% 4.4 5.3 11.1 2.0 2.9 2.6 6.1 0.0 7.4 79.0 16.4 11.3 -3.3
Our BUY rating is underpinned by i) its large capacity of 32.6bn pieces p.a. at end-2020 (as the world’s 3rd largest glove producer), ii) its expansion plan for 11 facilities to reach an annual capacity of 103bn pieces by 2026F (+214% vs. 2020), iii) its secured backlogs until mid-2023F and we expect its ASP to grow +40% y-o-y in FY21F, iv) strong market demand (amid an undersupplied market), v) its solid competitive advantages arising from cost, tax and loan benefits, and vi) its strong balance sheet with net cash position. We believe STGT could remain a competitive major player in the long term.
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
TQM TB 1,159 120.50 137.00 14% 51.5 43.3 37.7 15.1 13.6 12.3 0.2 1.5 1.8 29.6 -10.4 0.4 2.1
TQM Corporation (TQM) is No.1 insurance broker in Thailand. By collaborating with various partners, including insurance companies, hospitals, and selling channels, TQM differentiates itself from other brokers and is gaining market share. Besides, with its omni-channel insurance sales and services and well-established online platform, TQM is able to acquire new customers and sell small premium products at low costs. As an insurance broker, TQM does not bear any risk of insurance claims. Currently, TQM has some M&A deals in the pipeline. The completion of these M&A deals should present upside to our premium sales forecasts.
Bloomberg Mkt Cap Price (Bt) Target % PE (x) PBV (x) Div Yield (%) ROE (x) % Share Price
Code (US$m) 30 Apr (Bt) Upside 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A YTD 3M 6M
UTP TB 463 22.20 25.00 13% 14.3 13.3 11.3 4.2 3.6 3.0 2.7 3.0 3.6 30.6 70.8 12.1 64.4
Our BUY rating is underpinned by i) its ability to maintain a high level of EBITDA margin from healthy product spreads, ii) expectations of an industry upcycle going forward, thanks to the Chinese government’s stricter polices on the environment, iii) its already secure customer base, vi) robust e-commerce trend, v) its valuation discount relative to peers, vi) its attractive dividend yield of 4.3%-5.0% in FY21F-FY22F, and vii) healthy balance sheet with net cash position.
Source: Company, DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 4
Stock picks
Bloomberg Mkt
Cap
Price
(Bt)
Targe
t %
EPS Growth
(%) PE (x) PBV (x) Div Yield (%)
ROE
(%)
Code (US$m) 30 Apr (Bt) Upside 21A 22F 20A 21F 22F 20A 21F 22F 20A 21F 22F 20A
BCH TB 1,448 18.10 23.00 27% 13.0 9.8 36.7 32.5 29.6 6.6 5.9 5.3 1.3 1.5 1.7 18.7
KBANK TB 10,031 132.00 195.00 48% 13.7 (5.3) 10.6 9.3 9.9 0.7 0.7 0.6 1.9 2.3 2.3 7.0
PTTEP TB 15,152 119.00 145.00 22% 52.2 23.0 20.8 13.7 11.1 1.3 1.2 1.1 3.6 2.9 3.6 6.4
PTTGC TB 9,749 67.75 73.00 8% nm (41.3) 7.6 7.6 7.6 1.1 1.0 1.0 1.5 5.9 3.5 0.1
SCC TB 17,781 462.00 496.00 7% 35.0 (3.7) 16.2 12.0 12.5 1.7 1.6 1.5 3.0 4.2 4.0 11.4
STGT TB 2,028 44.25 60.50 37% (16.8) (52.1) 4.4 5.3 11.1 2.0 2.9 2.6 7.4 9.4 4.5 79.0
TQM TB 1,159 120.50 137.00 14% 18.9 15.0 51.5 43.3 37.7 15.1 13.6 12.3 1.8 1.6 1.9 29.6
UTP TB 463 22.20 25.00 13% 7.4 17.5 14.3 13.3 11.3 4.2 3.6 3.0 3.6 3.8 4.4 30.6
Source: Company, DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 5
COVID-19 pandemic
Here comes the third wave. The number of new COVID-19
infections in Thailand has continued to soar to a record high of
over 2k cases per day, raising concerns that the number of
hospital beds will not be sufficient to accommodate COVID-19
patients. The situation is quite alarming in Bangkok with new
cases surging exponentially to over 1k cases per day. The
Public Health Ministry has come up with three solutions
including: i) hospitals assigning more ICU beds to COVID-19
patients, ii) setting up more COVID-19 ICU cohort units, and iii)
setting up a field of ICU facilities.
Latest statistics. The total number of COVID-19 infections in
Thailand rose to 72,788 cases (+1,763 cases) as of 4 May 2021.
Of the total, 42,474 have recovered, 30,011 were still being
treated at hospitals, and 303 have died (fatality rate of 0.42%).
Daily new confirmed cases
Source: http://www.ddc.moph.go.th
Ongoing vaccination. Thailand kicked off its vaccination
programme on 1 March 2021. As of 2 May 2021, the number
of people who have received COVID-19 vaccines amounted to
1.49m people. Of the total, 1.10m people have received the
first dose of vaccines, and 0.39m people have received two
doses of vaccines.
Based on data from Ourworldindata website, the current
vaccination progress in Thailand is still low, with only 1.58% of
its total population getting at least one dose of the COVID-19
vaccine. This is lower than Singapore (23.32%), Cambodia
(7.67%), Hong Kong (12.70%), South Korea (6.63%), Indonesia
(4.56%), Malaysia (2.38%), Myanmar (1.84%), and Laos (1.73%).
So far, the country has ordered a total of 64.5m doses of
COVID-19 vaccines (including Sinovac’s 3.5 m doses and
AstraZeneca’s 61m doses). It is in the process of procuring
35.5m more doses from other producers. The country aims to
vaccinate 50m people, which account for 70% of the
population by end-2021, to achieve herd immunity.
Vaccination rate is still low in Thailand
Source: http://www.ourworldindata.org,, DBS
Measures to contain the virus. The Bangkok Metropolitan
Administration (BMA) has ordered the temporary closure of 31
types of venues for 14 days from 26 April 2021 onwards. It
also declared the mandatory use of masks in public areas and
air-conditioned rooms for all Bangkokians. Those who do not
comply will be subject to a hefty fine of up to Bt20,000.
Quarantine period back to 14 days from 1 May 2021. For all
foreigners and Thai travellers arriving in Thailand, the
quarantine period has been raised from 7 and 10 days to 14
days, in order to reduce risks of transmission of new COVID-19
variants in Thailand. Note that the country had earlier
reduced the quarantine period from 14 days to 10 days and 7
days amid the improving COVID-19 situation in the country.
Country designated into three colour-coded zones. Amid
soaring new COVID-19 cases, the Thai government has
designated the country into three colour-coded zones of Dark
Red, Red and Orange to contain the pandemic. The Dark Red
Zone will apply to areas under maximum control and strictest
measures, followed by Red and Orange Zones. Bangkok and
five other provinces are designated as Dark Red Zones, 45
provinces as Red Zones, and 26 provinces as Orange Zones.
The government has also banned selected activities and
limited operating hours in some of these zones, e.g. in Dark
Red Zones, dining in is not allowed and wearing masks is
compulsory at all times in public places. The government has
also recommended the public to stay at home during these
difficult times. The measures are in place from 1 May 2021 for
14 days and can be extended.
We see these new measures as necessary to contain the
virus. The measures will have a negative impact in the near
term for affected businesses, e.g. shopping malls, retailers,
hospitality, etc. We also see downside risks to our 2.9% GDP
growth and 85% corporate earnings growth forecast for this
year.
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Location % of Population As of
Singapore 37.8% 02-May-21
Hong Kong 12.7% 02-May-21
Cambodia 8.5% 02-May-21
South Korea 6.6% 02-May-21
Indonesia 4.6% 02-May-21
Malaysia 2.8% 01-May-21
Laos 1.7% 26-Apr-21
Thailand 1.6% 02-May-21
Philippines 1.5% 01-May-21
Market Focus
COVID resurgence a key risk to
recovery
Page 6
Economy
Inflation surged in April due to low-base effect
Thailand’s consumer price index (CPI) rose 3.4% y-o-y in April
2021, returning to positive territory for the first time in 14
months since March 2020. The growth was the highest rate in
8 years and four months. The main reasons are (i) the surge
in oil prices as compared to the low-base effect last year, (ii)
the end of government’s measures to lower the utilities bills
for households and (iii) the increase in fresh food prices e.g
pork, fresh fruits and vegetables amidst supply shortage.
On a m-o-m basis, headline inflation rose 1.38%. In the first
4M21, headline inflation increased 0.43% y-o-y.
Core inflation rose 0.30% y-o-y in April 2021. Excluding energy
and fresh food, core inflation expanded 0.30% y-o-y in April
2021 and 0.16% y-o-y in 4M21.
Looking forward, inflation could stay elevated near term. We
expect headline inflation to stay elevated in 2Q21 due to the
low base of oil price in 2Q20.
The Ministry of Commerce still expects headline inflation to
grow in the range of 0.7%-1.7% in 2021. Note that we
currently expect inflation to rise 1.0% in 2021 and 1.3% in
2022.
Inflation
Source: Ministry of Commerce, DBSVTH
Inflation returned to positive territory in April 2021
Source: Ministry of Commerce, DBSVTH
More COVID relief measures announced
On 5 May 2021, the Cabinet approved new COVID-19
assistance measures divided into two phases (urgent
assistance measures and the additional measures in later
phases).
1. The budget for urgent assistance measures is c. Bt85.5bn to
increase handout budget in current projects comprising of :
(i) Rao Chana (We Win): an additional Bt1,000 per week for a
period of 2 weeks - for the target group of c.32.9m
people (spending period ended on 30 June 2021)
(ii) Mor33 Rao Rak Kan (Section 33 We love each other): an
additional Bt1,000 per week for a period of 2 weeks - for
the target group of c.9.27m people (spending period
ended on 30 June 2021)
2. The budget for additional assistance measures in later
phases is c. Bt140bn in three main schemes comprising of :
(i) Welfare card: an additional Bt200 per month for a period
of 6 months - for the target group of c.13.65m people
(during July to December 2021) along with an additional
Bt200 per month for a period of 6 months for group of
people who require special care totaling of 2.4m people
(during July to December 2021)
(ii) Khon La Khrueng Phase 3 (Co-payment): an additional
budget of Bt3,000 per person (limit spending of Bt150
per day) - for the target group of c.31m people
(iii) Ying Shai Ying Dee (E-Voucher handouts) – new scheme:
E-Voucher handout with a budget of Bt7,000 per person
(limit spending of Bt5,000 per day) to spend for goods
and services from VAT-registered entrepreneurs during
August to December 2021- with expected target group
of c.31m people
% of 4M21
Total m-o-m y-o-y y-o-y
Headline inflation 100.00 1.38 3.41 0.43
Food & non-alcoholic bev. 40.35 0.73 0.4 0.07
Rice, flour and cereal products 4.09 -0.55 -6.74 -6.07
Meats, poultry and fish 8.93 0.12 2.35 1.62
Eggs and diary products 2.05 -0.87 -4.77 -1.54
Vegetable & fruits 5.47 6.2 3.25 0.45
Seasoning and condiments 2.17 0.08 3.43 3.39
Non-alcoholic beverages 2.21 -0.07 0.33 -0.24
Prepared food at home 8.70 0.08 0.49 0.38
Prepared food out of home 6.20 0.00 0.70 0.65
Non-food and beverages 59.65 1.84 5.34 0.69
Apparel & footwear 2.23 0.03 -0.30 -0.25
Housing and furnishing 23.17 4.82 4.56 -1.48
Medical and personal care 5.68 -0.01 0.11 0.06
Transport & communication 22.67 0.07 10.21 3.54
Recreation and education 4.51 -0.08 0.01 -0.13
Tobacco & alcoholic beverages 1.39 0.00 0.01 0.02
Core inflation 67.06 0.14 0.30 0.16
Raw food and energy 32.94 4.02 12.16 1.3
Raw food 20.55 1.41 0.11 -0.45
Energy 12.39 8.71 36.38 4.38
Apr-21
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
20
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20
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21
% YoY
Headline CPI Core CPI
Market Focus
COVID resurgence a key risk to
recovery
Page 7
The approved assistance measures will help boost domestic
consumption from locals. However, all approved schemes
besides Ying Shai Ying Dee are mainly to be used with
traditional trade retailers and will not directly benefit to the
listed retailers. However, the new scheme (E-Voucher
handouts) is applicable to spend in listed retailer stores. Thus,
this scheme should boost sector same-store sales growth
during August – December 2021.
In addtion, the cabinet also approved
- Bt20bn low interest rate loans through Government
savings Bank (GSB) and The Bank for Agriculture and
Cooperatives (BAAC). The interest charged will be based
on flat rate at no more than 0.35% per month. The loan
term is no more than 3 years. It also approves Specialized
Financial Institutions to extend grace period for principal
repayment to debtors affected by COVID until end of 2021.
- Cuts in electricity and water charges for households and
small businesses for two months during May and June
2021.
Bank of Thailand cut GDP growth forecast
MPC maintained policy rate at 0.50%. The Monetary Policy
Committee (MPC) has maintained the policy rate at 0.50% at
its meeting on 5 May 2021. The key reasons are that the Thai
economy is likely to slow down sharply due to the third wave
of the COVID-19 pandemic which will have negative impact on
domestic consumption and tourism recovery.
The MPC also highlighted three key risks for the economy.
These are (i) the distribution and efficacy of COVID-19
vaccines, (ii) uneven economic recovery, and (iii) the fragile
financial position of SMEs and households.
MPC cut Thai GDP growth to 1-2% in 2021. The MPC has
revised down its 2021 GDP growth from 3% earlier to 1-2%,
and that in 2022 from 4.7% to 1.1-4.7%. The revised forecasts
are based on three scenarios of vaccine distribtion as follows.
Note that we also see downside risk to our 2.9% GDP growth
forecast for this year.
Bank of Thailand’s revised GDP forecasts
Source: Bank of Thailand
The SET will delay the inclusion of free float in index calculation
Following the public hearing, the Stock Exchange of Thailand
(SET) will delay the planned implementation of free float
adjusted market capitalization in SET Index series calculation
indefinitely (from 1 July 2021 planned earlier), as there are
more objections to the change. Note that the SET Index series
are currently based on full market capitalization basis.
Among the key reasons from those who voiced their concerns
are that the change in the SET Index series calculation does
not solve the low free float problem, the change will have a big
impact to stock prices and shareholders, some shareholders
are holding shares via nominees, most Thai corporates are still
family owned, etc.
The announcement has resulted in negative sentiment
towards the banking sector, which were expected to benefit
from the potential increase in weighting in the new SET Index
series given their relatively large free float.
Scenario
Vaccines distributed in 2021 <64.6m doses
Herd Immunity
Year 2021 2022 2021 2022 2021 2022
GDP (%) 2.0 4.7 1.5 2.8 1.0 1.1
Tourist arrivals 1.2 15 1.0 12.0 0.8 8.0
Impact to GDP if vaccination
is slow so that herd immunity
is delayed beyond 1Q22
Unemployed people
at end 20222.7m people 2.8m people 2.9m people
1Q22 3Q22 4Q22
-3% of GDP
(Bt460bn)
5.7% of GDP
(Bt890bn)
1 2 3
64.6m doses100m doses
Market Focus
COVID resurgence a key risk to
recovery
Page 8
Economic Forecasts
Thailand GDP growth forecasts
*refers to fiscal years i.e. 2020 represents FY21 - year ending March 2021 ** new CPI series *** eop for CPI inflation
Source: DBS Bank
Global GDP forecasts
Source: DBS Bank
THA ILA ND
2016 2017 2018 2019 2020 2021f
Re a l output a nd de ma nd
GDP growth (02P) 3.4 4.1 4.2 2.4 -6.1 2.9
Private consumption 2.9 3.1 4.6 4.2 -1.0 2.8
Government consumption 2.2 0.1 2.6 1.9 0.8 2.5
Investment
Private investment 0.6 2.9 4.1 2.8 -8.4 3.2
Public investment 9.6 -1.4 2.9 0.2 5.7 2.0
Exports (G&S) 2.7 5.2 3.3 -4.0 -19.4 10.3
Imports (G&S) -1.0 6.2 8.3 -3.0 -13.3 8.0
Inflation (%y/y) 0.2 0.7 1.1 1.0 -1.0 1.0
Policy rate (%eop) 1.5 1.5 1.5 1.25 0.50 0.50
USD/THB (eop) 35.8 32.6 33.0 30.2 30.1 30.8
Exports (%y/y, USDbn) - BOP basis 0.1 9.7 7.6 -2.5 -6.4 4.0
Imports (%y/y, USDbn) - BOP basis -5.1 13.0 15.0 -5.2 -14.0 7.0
2018 2019 2020 2021f 2022f 2018 2019 2020 2021f 2022f
China 6.7 6.1 2.3 10.5 5.5 2.1 2.9 2.3 2.5 2.5
Hong Kong 2.8 -1.2 -6.1 4.0 2.3 2.4 2.9 0.3 2.0 2.5
India (FY basis)* 6.8 4.0 -7.8 10.5 5.2 3.4 4.8 6.2 4.6 4.0
Indonesia 5.2 5.0 -2.1 4.0 4.5 3.2 2.8 2.0 2.2 2.8
Malaysia 4.7 4.3 -5.6 5.2 4.8 1.0 0.7 -1.1 1.4 2.0
Philippines** 6.2 5.9 -9.5 7.0 6.0 5.2 2.5 2.4 3.0 2.8
Singapore 3.1 0.7 -5.4 6.3 3.2 0.4 0.6 -0.2 1.4 1.5
South Korea 2.9 2.0 -1.0 3.8 2.8 1.5 0.4 0.5 1.7 1.0
Taiwan 2.8 3.0 3.1 5.0 2.8 1.3 0.6 -0.2 1.5 1.0
Thailand 4.2 2.3 -6.1 2.9 2.2 1.1 0.7 -1.0 1.0 1.3
Vietnam 7.1 7.0 2.9 6.7 6.8 3.5 2.8 3.2 3.3 3.6
Eurozone 1.9 0.9 -6.8 3.5 3.5 1.8 1.2 0.3 1.0 1.2
Japan 0.3 0.3 -4.8 2.8 1.5 1.0 0.5 0.0 0.0 0.5
United States*** 2.9 2.2 -3.5 6.0 2.5 1.9 2.3 1.3 2.8 2.1
CPI inflat ion, % YoYGDP growth, % YoY
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Page 9
Policy rates forecasts
* 1-yr lending rate; **3M SOR; ***prime rate
Source: DBS Bank
Exchange rates forecasts
Note: Australia, Eurozone and United Kingdom are direct quotes
Source: DBS Bank
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
China* 3.85 3.85 3.85 3.85 3.85 3.85 3.85 4.05
India 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Indonesia 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50
Malaysia 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75
Philippines 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
Singapore** 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12
Korea 0.50 0.50 0.50 0.50 0.50 0.50 0.75 0.75
Taiwan 1.13 1.13 1.13 1.13 1.13 1.13 1.13 1.25
Thailand 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
Vietnam*** 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Eurozone 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Japan -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10
United States 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25
Policy interest rates, eop
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
China 6.50 6.68 6.64 6.60 6.58 6.56 6.54 6.52
Hong Kong 7.76 7.76 7.77 7.77 7.78 7.79 7.79 7.80
India 73.1 76.8 76.5 76.2 75.9 45.6 75.2 74.9
Indonesia 14500 14600 14500 14400 14350 14300 14250 14200
Malaysia 4.12 4.16 4.14 4.12 4.11 4.10 4.09 4.08
Philippines 48.7 49.5 49.1 48.8 48.4 48.1 47.7 47.3
Singapore 1.35 1.37 1.36 1.35 1.34 1.34 1.33 1.33
Korea 1140 1155 1150 1145 1140 1135 1130 1125
Thailand 30.7 31.2 31.0 30.8 30.7 30.6 30.5 30.4
Vietnam 23090 23060 23030 23010 22970 22940 22900 22870
Australia 0.77 0.75 0.76 0.76 0.77 0.77 0.78 0.78
Eurozone 1.19 1.17 1.18 1.18 1.19 1.19 1.20 1.20
Japan 109 110 109 109 108 108 107 107
United Kingdom 1.39 1.35 1.36 1.38 1.37 1.37 1.38 1.38
Exchange rates, eop
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recovery
Page 10
Market
Eight new listings so far this year. Of the total, three were
new listings on the main board (SET) and five were new
listings on the Market for Alternative Investments (MAI).
These new listings were mostly well accepted by the market,
with their share prices surging on average 73% above their
initial public offering (IPO) prices.
Upcoming IPOs to make their debut soon. The following
table shows the list of potential IPOs in the pipeline on both
the SET and MAI. The two upcoming ones on the SET are
Donmuang Tollway (DMT) and Ngern Tidlor (TIDLOR), both of
which have already sold their IPO shares to the public in late
April and are awaiting to debut on the SET. The two
companies to start their trading on the MAI soon are Ditto
(Thailand) (DITTO) and Winnergy Medical (WINMED).
Potential IPOs during the rest of the year and 2022. We also
list down those potential IPOs whose filing has been
submitted to the SEC.
Eight new IPOs made their debuts on the market YTD
Source: SET, DBSVTH
Upcoming IPOs to make their debut soon (share placement has completed)
Source of all data: SET, DBSVTH
Company Ticker Sector Mkt Cap
(Btm) Total IPO Current
SET-listed
1 PTT Oil and Retail Business OR Transportation 366,000 12,000 18.00 30.50
2 Roju Kiss International KISS Personal Products & Pharmaceuticals8,760 600 9.00 14.60
3 Asset Wise ASW Property 7,496 761 9.82 9.85
382,256
MAI-listed
1 Jakpaisan Estate Plc. JAK Property 576 320 1.45 1.80
2 TQR Plc. TQR Financials 4,531 230 5.10 19.70
3 President Automobile Industries PACO Industrial 3,060 1,000 1.40 3.06
4 Prosper Engineering Plc. PROS Construction 763 240 2.00 3.18
5 Proen Corp. Plc. PROEN Technology 2,338 316 3.25 7.40
11,269
Combined market cap currently (Btm) 393,524
Market cap at IPO (Btm) 226,997
Share prices vs IPO prices 73%
Shares (m) Price (Bt)
Company % of IPO IPO Sector Business
IPO Post IPO to total price Mkt cap
(m) (m) shares (Bt) (Btm)
SET Market
Donmuang Tollway Plc. (DMT) 140 1,181 12% 16.00 18,903 Transportation
& Logistics
DMT constructs and operates the elevated
toll road, Utra Phimuk – Din Daeng to
National Memorial Section (“Don Muang
Tollway”).
Ngern Tidlor Plc. (TIDLOR) 907 2,321 39% 36.50 84,709 Finance Provides auto-title loans, hire purchase
financing services
MAI Market
Ditto (Thailand) (DITTO) 80 440 18% 7.50 3,300 Technology 1) Selling and providing total solution
services for digital document management
systems, photocopiers, and printers
(Document Management Solution).
2) Providing engineering turnkey services
relating to technology for government
projects.
Winnergy Medical (WINMED) 120 400 30% 3.10 1,240 Consumer
Products
Distributor of machines and equipment for
storage, analysis, diagnosis, and medical
treatment and services provider for genetic
and fetus abnormalities testing.
Shares
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recovery
Page 11
Upcoming IPOs on the main board – SET
Source of all data: SET, DBSVTH
Company % of IPO Sector Business
IPO Post IPO to total
(m) (m) shares
Siam Technic Concrete (STECH) 204 725 28% Construction
Materials
Manufacturer of prestressed concrete pile, plank girder, I
girder
Ubon Bio Ethanol (UBE) 1,370 3,914 35% Energy &
Utilities
Distributes processed products from Cassava which are 1)
Ethanol 2) Cassava Flour and Cassava Starch 3) Other
organic products
Srinanaporn Marketing (SNNP) 180 900 20% Foods &
Beverages
Manufacturer and distributor of soft drinks and snacks e.g.
ready to drink jelly, soft drinks, snacks made of squids
and/or fishes, biscuits
Pinthong Industrial Park (PIN) 290 1,160 25% Property
Development
Industrial estate developers. The company also provides
utilites for sales and ready-built warehouses and factories
for rents.
Clover Power PLc. (CV) 320 820 25% Energy &
Utilities
Engages in renewable energy business including 1)
generation and distribution of electricity, 2) engineering
procurement and construction (EPC) services and 3) energy
related businesses.
Chotiwat Manufacturing (CMCF) 188 625 30% Foods &
Beverages
Manufacturer and distributor of processed seafood packed
in cans and pouches, pet food, byproducts from processed
seafood and other products. (EPC) services and 3) energy
related businesses.
Civil Engineering (CIVIL) 200 820 29% Construction
Services
3 mains businesses which are (1) Civil construction services
(2) Construction material trading and (3) Investment and
real estate development.
AMR Asia (AMR) 150 600 25% Information &
Communicatio
n Technology
3 mains businesses which are (1) Civil construction services
(2) Construction material trading and (3) Investment and
real estate development.
NSL Foods (NSL) 75 820 25% Foods &
Beverages
Manufactures and distributes bakery, ready-to-eat
products and snack. The company also provides food
processing service.
Mena Transport (MENA) 184 1,553 12% Transportation
& Logistics
The company provides transportation services using trailer
trucks and concrete mixer trucks, and sales of construction
materials.
Shares
Market Focus
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recovery
Page 12
Upcoming REIT IPOs
Source of all data: SET, DBSVTH
Company Max IPO NLA Acquisition Yield Business
Shares Price Debt Equity Year 1
(m) (Sqm) (Btm) (Btm) (Btm)
B&G Leasehold Real
Estate Investment Trust
(BGREIT)
600.0 49,130 7,135 1,500 5,635 7.0% 25-year leasehold rights of Interchange
21 project which is the office and retail
rental space
KTBST Mixed Leasehold
Real Estate Investment
Trust (KTBSTMR)
301.5 131,905 3,011 0 3,015 7.0% Sublease rights of land and properties of
5 projects which are Rich Asset, ST Bang-
bor, ST Bang-pa-in, The Summer Hub,
and The Summer Hill
Supalai Real Estate
Investment Trust
(SPALIRT)
283.1 45,632 3,200 800 2,831 5.6% Freehold rights of land and properties in
Supalai Grand Tower Office Project
Grande Royal Orchid
Hospitality Real Estate
Investment Trust with
Buy-Back Condition
(GROREIT)
315.0 726 keys 4,500 1,350 3,150 6.1% Freehold right of immovable and
movable asset of the Royal Orchid
Sheraton Hotel and Tower Project,
which have the buy-back condition by
the former owner or group of former
owner. The REIT shall procure benefits
by leasing out the asset.
INET Leasehold Real
Estate Investment Trust
(INETREIT)
283.1 492 racks 4000-4500 1,000 3000-3500 8.47-9.99% Investing in freehold rights of Data
Center Building, Substation Building and
other relevant buildings, equipment and
system work of INET-IDC3 Phase 1
Project and the leasehold rights on the
land which is the location of Substation
Building.
Financing by
Market Focus
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Page 13
Upcoming IPOs on the MAI market
Source of all data: SET, DBSVTH
Company % of IPO Sector Business
IPO Post IPO to total
(m) (m) shares
Siam Technic Concrete (STECH) 204 725 28% Construction
Materials
Manufacturer of prestressed concrete pile, plank
girder, I girder
Addtech Hub (ADD) 40 160 25% Services Provides digital content services Support , Digital
Solution for Mobile operators and Online
Advertising services
Nforce Secure (NFSC) 28 103 27% Technology Distributor of Cybersecurity Solution Products
Business and Other Supporting Service Businses.
Saintmed (SMD) 54 214 25% Consumer
Products
Distributor of medical devices from international
manufacturers which can be categorized into 6
groups; Critical Care Product, Respiration Product,
Cardiology Product, General Medical Device
Blubik (BLU) 25 100 25% Technology Strategic and digital technology consulting services
for various business sectors e.g. management
consulting, strategic program management office,
digital excellence and delivery, big data, advanced
analytics and AI.
JSP Pharmaceutical
Manufacturing (JP)
111 426 26% Consumer
Products
Manufacturer of modern medicine, traditional
medicine, herbal products, dietary supplementary
products, medical supplies and cleaning alcohol
under both customers’brands and company’s
brands.
Shares
Market Focus
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recovery
Page 14
Market Overview
April 2021 Recap
SET Index eased 0.3% m-o-m in April 2021, underperforming
its regional peers’ 2.9% gain. This was amid the third wave of
the COVID-19 pandemic which saw the number of new
infections jump exponentially to an alarming 2k+ cases per
day, which is a historical high. For 4M21, the Thai market grew
9.2%, outperforming regional peers’ 5.0% gain.
SET Index performance in Apr 2021 and YTD
April 2021 4M21
NASDAQ 5.4% 8.3%
S&P 500 5.2% 11.3%
FTSE 3.8% 7.9%
Dow Jones 2.7% 10.7%
Dax 0.9% 10.3%
Nikkei -1.3% 5.0%
Taiwan 6.9% 19.2%
Korea 2.8% 9.5%
Malaysia 1.8% -1.6%
Singapore 1.7% 13.2%
HK 1.2% 5.5%
Indonesia 0.2% 0.3%
Shanghai 0.1% -0.8%
SET -0.3% 9.2%
Philippines -1.1% -10.8%
H-shares -1.3% 0.8%
India -1.5% 2.2%
Source: Bloomberg Finance L.P., DBSVTH
Steel, Electronics and Packaging led the market in April 2021.
The top three outperforming sectors were Steel (+45.2%),
Electronics (+16.6%) and Packaging (+15.4%). These sectors
saw their share prices surge amid the upcycle of their
respective industries.
The three underperforming sectors were Media,
Transportation, and Banking sectors. These sectors were
negatively affected by the resurgence of the COVID-10
pandemic.
For 4M21, the top three outperforming sectors were Steel,
Paper, and Agribusiness. The Steel sector jumped 106.1% in
4M21, amid the upcycle of the steel industry.
The top three worst performing sectors were Electronics,
REITs, and Transportation sectors. The Electronics sector
tumbled 16.2% in 4M21, as investors took profit on Delta
Electronics (DELTA) which saw its share price plunge 27.2%
after a strong rally.
Sector performance in Apr 2021 and YTD
Sector Apr 2021 YTD
STEEL 45.2% 106.1%
ETRON 16.6% -16.2%
PKG 16.4% 29.8%
CONMAT 14.4% 24.0%
PAPER 13.3% 70.8%
HOME 10.7% 32.0%
PETRO 7.5% 21.7%
IMM 5.5% 10.0%
PERSON 5.0% 14.8%
AGRI 3.7% 45.9%
HELTH 3.4% 10.6%
AUTO 3.4% 16.9%
ICT 1.6% 4.6%
FASHION 1.5% 10.9%
FIN 0.1% 24.2%
MINE 0.0% 0.0%
SET -0.3% 9.2%
INSUR -0.3% 4.3%
ENERG -1.2% 4.3%
CONS -2.1% 18.2%
FOOD -2.5% 11.7%
PF&REIT -2.6% -2.9%
PROF -3.5% 23.6%
COMM -3.8% 11.7%
PROP -4.0% 10.5%
BANK -5.2% 12.9%
TRANS -7.5% 2.4%
MEDIA -7.6% 8.5%
Source: Bloomberg Finance L.P., DBSVTH
SET’s market capitalisation was Bt18.0tr at end-Apr 2021. The
following chart shows the SET’s breakdown by market
capitalisation.
SET breakdown by market capitalisation
Source: SET, DBSVTH
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Page 15
Foreign investors remained net sellers in April 2021... Foreign
investors remained net sellers, with a net sell position of
Bt3.4bn in April 2021. Local institutional investors and local
brokers’ proprietary ports turned net sellers with net sell
positions of Bt14.1bn and Bt480.6m respectively. Local retail
investors were the only net buyers with a net sell position of
Bt18.0bn.
…and in 4M21. Foreign investors were sellers of Bt29.4bn in
1Q21. Local institutional investors were also net sellers with a
net sell position of Bt22.5bn. Local retail investors and local
brokers’ proprietary ports were net buyers with net buy
positions of Bt48.0bn and Bt29.4bn respectively.
Foreign + non-voting depository receipt (NVDR) holdings in the
Thai market inched down m-o-m to c.26% currently,
compared to its peak of 36% in 2012.
Foreign+NVDR holdings in Thai stock market
Source: Set smart, DBSVTH
Average daily turnover surged 37% y-o-y to Bt93.3bn in April
2021. Total trading value grew 17% y-o-y in April 2021. This
was on the back of the strong jump in trading value from local
retail investors and brokers’ proprietary ports. The number of
trading days decreased to 18 days in April 2021, from 18 days
in April 2020. The average daily turnover was Bt93.3bn, up
37% y-o-y (vs. Bt68.1bn in April 2020).
For 4M21, the average daily turnover jumped 43% y-o-y to
Bt96.1bn (vs. Bt67.2bn in 4M20).
Turnover jumped strongly for stocks listed on the MAI. The
average daily turnover on the main market (SET) surged 38%
y-o-y to Bt92.3bn in 4M21, while that on the Market for
Alternative Investment (MAI) skyrocketed 604% y-o-y to
Bt3.8bn. This can be attributed to (i) increasing participation
of retail investors in the market, and (ii) rising investor appetite
for smaller-cap stocks.
Average daily turnover rose 37% y-o-y in April 2021
Source: Set smart, DBSVTH
Local retail investors made up 52% of the market’s turnover.
Retail investors contributed the biggest share at 52% of the
market turnover in April 2021 (up from 48% in April 2020),
followed by foreign investors at 32%, brokers’ proprietary port
at 9% and local institutional investors at 7%. Showing the
strongest growth in April 2021were brokers’ proprietary ports
whose trading value surged +38%, followed by local retail
investors +27% y-o-y, foreign investors +38% and local
institutional investors -21%,
Trading value by type of investors
Source: Set smart, DBSVTH
Trading activities – breakdown by type of investors
Source: Set smart, DBSVTH
Local Institutes
Proprietary
Trading
Foreign
Investors Local Investors Total
Aprl 20 144,534 114,367 486,685 684,372 1,429,958
Apr-21 114,217 157,858 540,741 866,273 1,679,088
-21% 38% 11% 27% 17%
4M20 657,843 593,426 2,115,594 2,277,882 5,644,745
4M21 567,694 766,765 2,593,524 3,665,114 7,593,097
-14% 29% 23% 61% 35%
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Page 16
Regional: Foreign net buy (sell) positions
US$m India Indonesia Japan Malaysia Philippines S. Korea Taiwan Thailand
2010 29,321 2,345 22,926 1,232 19,657 9,577 2,687
2011 (396) 2,853 (1,069) 1,329 (8,584) (9,076) (167)
2012 24,548 1,703 27,733 2,548 15,069 4,907 2,504
2013 19,986 (1,804) 149,920 678 4,855 9,178 (6,211)
2014 16,162 3,766 22,545 (1,849) 1,287 5,967 13,551 (974)
2015 3,274 (1,580) 3,485 (4,989) (1,194) (3,626) 3,322 (4,372)
2016 2,903 1,259 (38,067) (573) 83 10,480 10,956 2,240
2017 10,095 (2,828) 9,384 2,456 1,140 10,234 8,969 (973)
2018 (4,556) (3,656) (50,284) (2,846) (1,080) (5,672) (12,231) (8,913)
2019 14,234 3,465 (28) (2,647) (240) 924 9,447 (1,496)
2020 23,373 (3,220) (66,087) (5,782) (2,513) (20,082) (15,997) (8,287)
YTD 6,263 603 30,667 (652) (1,225) (8,284) (9,379) (1,094)
Jan-19 (75) 964 (5,322) 253 356 3,658 1,676 214
Feb-19 2,153 (237) (2,675) (196) 178 615 2,471 (106)
Mar-19 6,149 118 (23,264) (379) 88 262 24 (516)
Apr-19 1,541 3,740 30,565 (336) 194 2,252 1,668 107
May-19 1,423 (514) (1,771) (489) (270) (2,548) (3,726) 114
Jun-19 149 776 (4,625) 36 (139) 287 1,091 1,505
Jul-19 (1,934) (20) 232 (18) 81 1,620 (616) 653
Aug-19 (2,199) (651) (9,143) (625) (226) (2,142) (2,785) (1,762)
Sep-19 955 (519) (23,500) (135) (143) (872) 2,532 (381)
Oct-19 2,062 (269) 25,515 (115) 73 (208) 4,094 (258)
Nov-19 3,150 (493) 14,926 (368) (259) (3,025) 1,961 (255)
Dec-19 862 571 (965) (273) (173) 1,024 1,058 (811)
Jan-20 1,373 1 (3,833) (25) (164) (165) (751) (562)
Feb-20 414 (340) (6,895) (473) (179) (3,000) (3,586) (627)
Mar-20 (8,390) (375) (42,686) (1,290) (303) (10,544) (12,077) (2,450)
Apr-20 (31) (560) 56 (609) (325) (3,964) 818 (1,439)
May-20 1,719 552 (2,540) (684) (166) (3,302) (5,051) (984)
Jun-20 2,473 (318) (10,195) (678) (190) (705) 3,269 (737)
Jul-20 1,153 (264) (4,890) (591) (124) 725 269 (323)
Aug 20 6,096 (581) (1,524) (351) (261) (2,295) (2,183) (887)
Sep-20 (767) (1,049) (10,929) (482) (306) (990) (1,425) (738)
Oct-20 2,506 (252) 18,645 (160) (156) (434) (609) (701)
Nov-20 9,559 244 1,644 (250) (169) 5,205 4,507 1,081
Dec-20 7,267 (279) (2,941) (147) (171) (614) 2,285 82
Jan-21 1,978 775 6,621 (213) (273) (5,254) (3,389) (365)
Feb-21 3,016 258 4,160 (214) (191) (1,781) (3,224) (621)
Mar-21 2,333 (186) (1,991) (1) (483) (1,312) (5,523) (1)
Apr-21 (1,064) (244) 21,877 (222) (278) 65 2,758 (107)
1Q19 8,226 845 (31,262) (322) 623 4,535 4,314 (407)
2Q19 3,113 4,002 24,169 (789) (215) (9) (959) 1,725
3Q19 -3,178 (1,190) -32,411 -779 -289 (1,394) -869 (1,491)
4Q19 6,074 (190) 38,371 (782) (523) (2,373) 8,256 (1,885)
1Q20 (6,603) (713) (53,414) (1,788) (646) (13,709) (16,414) (3,639)
2Q20 4,161 (325) (12,678) (1,971) (680) (7,970) (963) (3,161)
3Q20 6,482 (1,895) (17,343) (1,424) (691) (2,560) (3,339) (1,948)
4Q20 19,333 (286) 17,349 (558) (496) 4,158 6,183 461
1Q21 7,326 847 8,790 (427) (947) (8,348) (12,137) (987)
QTD (1,064) (244) 21,877 (222) (278) 65 2,758 (107)
As of 30 Apr 2021 Source: Bloomberg Finance L.P., DBSVTH
Market Focus
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Page 17
Outlook and Strategy
COVID-19 resurgence a key risk to recovery. While we are
positive on the market outlook in the medium to long term,
the resurgence of the COVID-19 pandemic has presented a
key risk to the economic recovery, corporate earnings growth
and market sentiment in the near term.
Earnings growth. We expect corporate earnings to recover by
85% in 2021 and 15% in 2022. Growth should be boosted by
the Chemicals, Energy, Transportation, and Food sectors.
Maintain end-2021 SET Index target at 1650. The Thai market
is now trading at 22x PE in 2021 and 19x PE in 2022. Our end-
2021 SET Index target remains at 1650, based on 20x forward
PE.
SET PE band
Source: Bloomberg Finance L.P., DBSVTH
Our preferred sectors. We prefer Banks, Energy, Food, and
Healthcare sectors, as we see better outlook for these sectors
in 2021.
We have three key themes for the market:
i) Core holdings. Our picks are Kasikornbank (KBANK) and
Siam Cement (SCC). Both are stocks with solid
fundamentals, long track record, while trading at attractive
valuations.
ii) COVID-19 plays. Our top picks are Bangkok Chain Hospital
(BCH), Sri Trang Gloves Thailand (STGT), and TQM
Corporation. These companies should see higher
revenue amidst the COVID-19 pandemic.
iii) Commodity plays. Here, we like PTT Exploration &
Production (PTTEP), PTT Global Chemicals (PTTGC), and
United Paper (UTP). These companies are enjoying the
upcycle of their respective industries and should be less
affected by the resurgence of the COVID-19 pandemic.
Thailand: Corporate earnings
Net profit Growth (%) PE (x)
YE Dec (Btm) FY20A FY21F FY22F FY20A FY21F FY22F
Banking -31% 8% -4% 11.3 10.5 11.0
Finance 19% 10% 10% 22.5 20.7 18.8
Con. Mat. 6% 29% -3% 15.7 12.2 12.5
Chemicals -85% 1541% -22% 220.0 13.4 17.2
Contractors -48% 22% 25% 29.2 24.1 19.2
Property -20% 4% 12% 14.1 13.5 12.1
- Commercial -17% 6% 19% 24.0 22.7 19.1
- Residential -24% 8% 11% 10.7 9.8 8.9
- Industrial -5% -15% 5% 12.6 14.8 14.1
Property
Fund -16% -5% 14%
33.9 35.5 31.1
Energy -64% 161% 13% 44.0 17.5 15.4
Commerce -27% 17% 26% 36.1 30.6 24.5
Transport -111% 38% -666% mn mn 49.8
Tourism -305% -73% -167% mn mn 67.7
Telecom -17% -15% 5% 14.7 17.1 16.3
Electronics 78% 19% 22% 52.2 43.8 35.8
Food -59% 78% 54% 41.6 22.9 14.8
Health Care 14% 45% -26% 24.4 18.5 25.1
Other 11% 48% 18% 32.8 22.2 18.8
DBS Coverage -55% 85% 15% 40.2 21.8 18.9
Source: Bloomberg Finance L.P., DBSVTH
Regional comparison
EPS Gth (%) PE (x)
2020 2021F 2022F 2020 2021F 2022F
Thailand -54.5 84.7 15.4 40.2 21.8 18.9
Indonesia -46.1 120.0 19.9 34.9 15.9 13.3
Philippines -51.3 65.5 26.3 32.4 17.5 13.8
Singapore -71.2 179.2 16.7 38.2 15.5 13.3
Malaysia -9.4 45.6 -5.1 22.9 13.5 14.3
Hong Kong -21.4 15.7 13.2 13.9 12.7 11.2
MSCI China -0.9 23.9 6.5 19.8 16.4 14.1
Taiwan 23.0 36.2 6.4 19.5 17.1 16.1
Korea 16.4 106.8 16.4 25.1 13.3 11.4
Simple Average -23.9 75.3 12.9 27.4 16.0 14.0
Source: Bloomberg Finance L.P., DBSVTH
SET P/BV band
Source: Bloomberg Finance L.P., DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 18
SET: Our sector weightings
Sector Reasons Top buys
Overweight
Banking More positive asset quality outlook; trading at attractive P/BV KBANK, TISCO
Energy Ongoing tight crude supply and strong fuel demand PTTEP
Food Healthy meat prices, with potential benefits from vaccines and hemp CPF
Healthcare Strong earnings recovery for 2021-2022 and will benefit from the vaccine
rollout and hospitel bed programme BDMS, BCH
Tourism Clearer timeline for border reopening with gradual improvement in
performance
MINT, SPA
Neutral
Building
Materials
Mild cement demand recovery from government spending, high value-
added and innovative products
SCC
Commerce Same-store sales growth (SSSG) is on the mend CPALL
Contractor Potentially more projects up for bidding in 2H21 STEC
Finance Strong growth outlook, but more pressure on yields SAWAD ICT Defensive earnings quality with potential average revenue per user (ARPU)
uplift from 5G packages
ADVANC, DIF
Packaging Resilient packaging demand driven by megatrends SCGP, UTP
Petrochemicals Strong demand for single-use plastics for hygiene products and medical
equipment where supply tightness resulted from the delay of plants
resumption
PTTGC
Property
- Residential Earnings recovery, attractive valuation with decent dividend yield AP, SPALI, LH
- Commercial Lower rental discounts expected in 2021 CPN
- Industrial A key beneficiary of potential relocation of facilities from China AMATA
Transportation Better outlook on resumption of economic activities BEM
Underweight
Electronics Unattractive valuation as the sector has re-rated during the COVID-19
pandemic KCE, HANA
PFPOs/REITs Prefer industrial REITs AIMIRT, WHART
Source: DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 19
Sector Update
Our Sector Views Chart/Table Sector: Banking Overweight
Top BUY: KASIKORNBANK (KBANK, BUY, Bt195 TP); TISCO
Financial Group (TISCO, BUY, Bt110 TP) Least preferred stock: -
Regardless of the recent rebound in share prices, Thailand
banks’ valuations remain at their historical lows. We believe
share prices are poised to further re-rate on any positive
newsflow to the market.
Thanks to the Bank of Thailand’s (BOT) series of financial relief
measures and proactive loan restructuring by commercial
banks, we believe that the NPL trend should increase
gradually instead of seeing a sharp spike. Moreover, the BOT’s
newly announced COVID-relief measures for SMEs should
help ease the market’s concerns over banks’ asset quality.
So far, asset quality at most banks have turned out to be
better than they had expected, which should in turn reflect in
lower credit costs in FY21F.
With that, we expect the sector’s earnings to grow 2.4% in
FY21F, vs. a 26.5% contraction in FY20. However, the key
growth driver should be lower credit cost. Operating earnings
(PPOP), however, should be weaker from FY20, due to lower
NIM and lower non-NII.
KBANK is our top pick for its; (i) strong long-term
fundamentals, (ii) strong earnings recovery in FY21F, and (iii)
low valuation at 0.7x P/BV.
TISCO remains our top pick for its effective capital
management that results in high ROE and high dividend yield.
SETBANK: Still trading low
Source: Bloomberg Finance L.P., DBSVTH
Expect strong FY21F earnings recovery for KBANK
Source: Bloomberg Finance L.P., DBSVTH
Sector: Energy Overweight
Top BUY: PTTEP Plc (PTTEP TB, BUY, Bt145 TP) Least preferred stock: Star Petroleum Refining (SPRC, FV,
Bt6.8)
We expect crude oil prices to remain buoyant in 2021F. Our
bullish view is supported by: i) expectations of a global
economic recovery after the rollout of COVID-19 vaccines
worldwide, with GDP growth hitting the trough in 2Q20, ii)
world oil demand is expected to recover by c.6mbd which is on
par with the supply addition from OPEC+ during May-Jul, iii)
improving crude demand-supply balance, and iv) significant
crude inventory drawdown (especially in non-US countries),
PTTEP is our top pick for Thailand Oil and Gas sector. This is
supported by i) strong oil and gas prices, ii) additional revenue
recognition from 20% stake acquisiton of Oman Block 61 in
2Q21F, and iii) long-term catalyst from 600MW integrated gas-
to-power project in Myanmar (FID by end-2022).
Crude oil prices (USD per barrel)
Source: Bloomberg Finance L.P, DBSVTH
0.7
(0.9)
2.8 0.9 3.6
(37.7)
(2.1)
(23.9) (14.4)
(42.9)(32.7)
(16.6)
40.0
(26.5)
13.7 5.6
(17.5)
3.4 2.7
(1.6)
2.4
(60.0)
(40.0)
(20.0)
0.0
20.0
40.0
60.0
KBANK KKP KTB SCB TISCO TMB Sector
%
2019 2020 2021F
Market Focus
COVID resurgence a key risk to
recovery
Page 20
Sector: Food Overweight
Top BUY: Charoen Pokphand Food (CPF; BUY; Bt43 TP) Least preferred stock: n.a.
Upstream operators’ performances in 1Q21F are expected to
be strong on the back of strong meat prices and solid demand
over upstream products. Domestic swine prices remained
strong at Bt80/kg in 1Q21, improving from Bt76 in 4Q20.
Looking forward, we expect swine prices to remain strong,
supported by demand recovery and limited supply in some
areas. Nevertheless, domestic broiler prices remained stable
from 4Q20, given that export sales are still recovering.
The Thai FDA has rolled out the licensing process for the
legalisation of hemp plantation for individuals and private
companies. Additionally, hemp seed oil and hemp seed
extraction were allowed for commercial use in cosmetics in
January 2021, followed by food in February 2021 and other
products in the pipeline. Most of the companies are aiming to
launch hemp products in 2H21 that could bring some
excitement to the market. However, given the more serious
COVID-19 situation at the moment (including the temporary
shutdown of dine-in services in restaurants in key cities), we
might see short-term pressure on the demand for some food
products.
Charoen Pokphand Food (CPF) is our top pick in view of its
strong earnings and solid outlook. Despite the normalising
meat prices with the expansion of farm volume production, CPF
should be able to post solid earnings in 2021.
Swine product prices
Source: CPF, DBSVTH
Broiler product prices
Source: CPF, DBSVTH
Sector: Healthcare Overweight
Top BUY: Bangkok Dusit Medical Services (BDMS, BUY, TP:
Bt25.00), Bangkok Chain Hospital (BCH, BUY, TP:Bt23.00)
Least preferred stock: Bumrungrad Hospital (BH, HOLD,
TP: Bt131.00)
We expect a strong earnings rebound for premium hospitals in
2021, based on our assumption of the return of international
tourists and gradual rollout of vaccines. SSO hospitals’ earnings
should be cushioned by alternative revenue related to COVID-
19 services and the hospitel programme. Chain hospitals –
BDMS, BCH and CHG – will be the largest beneficiaries of the
rollout of vaccines.
We have divided our picks into short to medium term, and long
term. For the short to medium term, we prefer Bangkok Chain
Hospital (BCH) for its low exposure to international patients,
higher proportion of SSS patients to buffer the impact of
COVID-19, and high proportion of COVID-19 services. However,
for the long term, we prefer Bangkok Dusit Medical Services
(BDMS) as a prime beneficiary of the recovery in medical
tourism in FY21F and its readiness to capture in vitro
fertilisation (IVF) treatment opportunities, demand in cross-
border areas, and wellness tourism opportunities.
Core profit 2019-2021
Source: Company data, DBSVTH
30
40
50
60
70
80
90
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 2018 2019 2020 2021
30
32
34
36
38
40
42
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 2018 2019 2020 2021
7,178
1,469 1,390 996
420 117 -
2,000
4,000
6,000
8,000
10,000
12,000
BDMS BH BCH CHG RJH RPH
2019 2020 2021
71% of pre-Covid-19 level in 2019
39% of pre-Covid-19 level in 2019
Market Focus
COVID resurgence a key risk to
recovery
Page 21
Sector: Tourism Overweight
Top BUY: Minor International Group (MINT, BUY, TP: Bt36.0),
Siam Wellness Group (SPA, BUY, TP: Bt10.0)
Least preferred stock: -
Domestic tourism in 2M21 was hit by the second wave of COVID-19 but this was offset by a strong pick-up in March and the long holidays in April 2021. However, from 15 April, the COVID-19 cases in Thailand has spiked to >1,000 cases/day. The government has yet to impose any lockdown measures but is encouraging people to stay home. Thus, we expect the slowdown in domestic tourism to persist in 2Q21. Over the medium term, we believe an improving COVID-19 situation will be positive for the sector, coupled with the Cabinet’s approval of the reopening roadmap. The key timelines include from 1 July, vaccinated tourists will be allowed to travel freely in Phuket under the Phuket Sandbox model, which will later be expanded to the other five top destinations from 1 October 2021. And from 1 January 2022, vaccinated tourists will be able to travel freely in Thailand.
For the hotel sector, occupancy rate (OR) has increased to 30+% since October, and then dropped from January 2021 on the back of a new wave of the pandemic that emerged in late December 2020 before picking up again to 21.5% in March 2021. The southern part of Thailand showed the weakest OR. Discounts on the average daily rate (ADR) are still being offered to draw local tourists (c.-20.4% y-o-y).
MINT and Siam Wellness Group (SPA) are our top picks in the tourism sector. Their share prices are still lagging behind their peers due to the soft tourism outlook. However, in the longer term, we believe both companies will be prime beneficiaries of a global and domestic tourism recovery.
Thailand: International tourist arrivals
Source: BOT, DBSVTH
Thailand: Average occupancy rate
Source: BOT, DBSVTH
Sector: Telecom Neutral
Top BUYs: Advanced Info Service (ADVANC TB; TP: Bt222.00),
and Digital Telecom Infrastructure Fund (DIF TB; TP: Bt15.90)
Least preferred stock: Total Access Communication (DTAC
TB; TP: Bt34.75)
Operators have started to see early signs of a mobile revenue
recovery in 1Q21F, thanks to improving consumer confidence.
Thailand’s consumer confidence index (CCI) bottomed in
January 2021, in the wake of the second wave of COVID-19 that
emerged in late December 2020. We started to see an uptick
in February 2021. Mobile revenue is also improving m-o-m on
the back of industry-wide net subscriber addition trends and a
slower pace of package optimisation. Thanks to the
government’s efforts in boosting consumer spending, vaccine
rollout and a more solid border reopening timeline, we believe
the Telecommunication sector should see less intense price
competition.
Our top pick for the sectors is Advanced Info Service (ADVANC)
(BUY, Bt222) for its strong competitiveness and financial
stability. We also like Digital Telecommunications Infrastructure
Fund (DIF) (BUY, Bt15.90) for its highly stable cashflow.
Thailand: Mobile revenue (market share)
Source: Company data, DBSVTH
Mobile Average Revenue Per User (ARPU) in THB
Source: Company data, DBSVTH
- 400 800
1,200 1,600 2,000 2,400 2,800 3,200 3,600 4,000 4,400
Jan
Feb
Mar
Apr
May Jun Jul
Aug Se
p
Oct
Nov
Dec
'000 People
2017 2018 2019 2020 2021
-
10
20
30
40
50
60
70
80
90
100
Jan
Feb
Mar
Apr
May Jun Jul
Aug Se
p
Oct
Nov
Dec
%
2017 2018 2019 2020 2021
22.0%21.8%
22.4% 22.3% 22.5% 22.2% 22.2% 22.0%
48.1% 48.6% 48.3% 47.8%46.6% 46.2% 46.2% 46.2%
29.9% 29.6%
29.2% 29.9%30.9% 31.6% 31.6% 31.7%
15%
20%
25%
30%
35%
40%
45%
50%
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
DTAC ADVANC TRUE
236
246
254 254251
253255
250246
256
254 252242
239237
234
205
212210 209
213216 217 216
200
210
220
230
240
250
260
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
DTAC ADVANC TRUE
Market Focus
COVID resurgence a key risk to
recovery
Page 22
Sector: Commerce Neutral
Top BUY: CP ALL (CPALL; BUY; Bt78.5) Least preferred stock: n.a.
Thailand's Consumer Confidence Index (CCI) has slumped
again m-o-m in March 2021 on the back of the sluggish
domestic economy, and it is expect to further decrease in April
2021. The retailers’ same-store sales growth (SSSG) has been
affected by the soft consumption and government’s co-
payment programme that might be extended in upcoming
periods. Traditional trade retailers have directly benefited from
the programme, but the listed retailers have been excluded.
Plus, with the more serious COVID-19 situation in Thailand, the
government has encouraged people to stay home, we might
see lower traffic in the stores. This will exert pressure on the
SSSG of the listed retailers in 1H21. In 2021, most of the big
retailers’ full-year SSSG is expected to improve at a clip that is
equal to or slightly higher than the GDP growth rate due to the
lingering uncertainties. The retailers’ store expansion plans are
still in place but some are more cautious and conservative.
However, we note that the share prices of companies with high
exposure to tourists like CPALL and BJC have delivered solid
gains, following the recent approval of the border reopening
roadmap by the Cabinet.
CPALL is our top pick for its pole position in the retail market
and its lower-than-peer valuation despite its dim short-term
outlook. We also believe that the market has yet to price in its
overseas opportunities as well as the potential synergies
arising from the Tesco deal.
Thailand: Consumer Confidence Index (CCI)
Source: UTCC, DBSVTH
Sector: Finance Neutral
Top BUY: Srisawad Corporation (SAWAD, BUY, Bt98 TP) Least preferred stock: -
While the overall retail loan demand has recovered strongly, the sector’s earnings have still been pressured by lower yields, from lower regulated rates and higher competition.
The Bank of Thailand imposed new (lower) ceiling rates on credit card and personal loans (including auto-title loans), effective Aug 2020. Plus, price competition has become more intense, especially in the high-yield segments, after the joint venture (JV) between the Government Saving Bank (GSB) and SAWAD announced the offering of auto-title loans with interest rates not exceeding 18% p.a. on 25 Mar 2021.
Moreover, the JV will offer a promotional low rate of 14.99% for all customers over the first three months of operations, pressuring yields for the sector. With that, we expect the operators to compete on volume, while finding new markets.
Muangthai Capital (MTC), which had previously charged the lowest rate in the auto-title loan market, has gradually cut its interest rates and currently charges c.14.98% for motorcycle-title loans and c.17.89% p.a. for auto-title loans. It has also expanded into the new-motorcycle hire purchase (HP) market. Meanwhile, SAWAD should benefit from customer traffic for the low interest rate at JV that virtually situated in SAWAD’s c.5,000 branches, while SAWAD will not lower its interest rates, currently at 20-24% p.a. It has recently also expanded into unsecured loan and HP markets.
New ceiling rates on credit card and personal loans
New Previous
Credit card 16% 18%
Personal loans
- Revolving loans 25% 28%
- Instalment loans 25% 28%
- Auto-title loans 24% 28%
Source: The Bank of Thailand (BOT), DBSVTH
SAWAD: Premium valuation reflecting superior growth outlook
Source: Bloomberg Finance L.P., DBSVTH
20
30
40
50
60
70
80
90
100
2018
2019
2020
2021
CCI of Overall economy
CCI of employment
CCI of future income
1.5
2.5
3.5
4.5
15 16 17 18 19 20 21
PBV (x)
-2 sd
-1 sd
Mean
+1 sd
+2 sd
Market Focus
COVID resurgence a key risk to
recovery
Page 23
Sector: Petrochemicals Neutral
Top buy: PTT Global Chemical (PTTGC TB, BUY, Bt72)
A few chemical players should benefit from the spike in demand for hygiene and medical products such as personal protective equipment (PPE) which includes safety glasses, nitrile gloves, surgery masks and protective suits. This has boosted the demand for certain chemical materials such as bisphenol A (BPA), polyethylene terephthalate (PET), polypropylene (PP), butadiene and high-density polyethylene (HDPE).
On a YTD basis, these chemical prices moved by +84%/+43%/+26%/-15%/+30% respectively.
However, we remain cautious over the long-term outlook for the chemical sector that could be hit by rising feedstock costs, ample supply (both aromatics and olefins chains), and additional supply coming online by c.6-7mtpa. We think PTT Global Chemical (PTTGC) will be the least impacted by environmental footprint concerns such as the single-use plastic ban, besides benefiting from rising demand for hygiene products and flexible packaging.
Chemical vs. crude prices
Source: Bloomberg Finance L.P, PTTGC, DBSVTH
Sector: Property Development Neutral
Top BUY: Supalai (SPALI: BUY, TP: Bt24.70), AP Thailand (AP:
BUY, TP: Bt9.10), Land & Houses (LH: BUY, TP: Bt9.00)
Least preferred stock: LPN Development (LPN: FV, TP: Bt3.30)
Residential: We expect developers to launch more projects in 2021, but low-rise projects should remain the major contributor. Their presales and financial performance should recover but at a gradual pace in FY21F. Their performance should also improve y-o-y. The sector may still be weighed down by low purchasing power. Nevertheless, the sector’s dividend yield remains at a generous c.5% in FY21F. We maintain our NEUTRAL call on the residential sector.
SPALI, AP and LH remain our favourite companies on the back of their (i) well-balanced portfolios, (ii) strong low-rise residential projects, (iii) attractive valuations, (iv) generous yields, and (v) strong balance sheets. Additionally, SPALI and AP also have high backlog levels relative to peers.
Commercial: Retail rents should improve strongly in 2021 amid lower rental discounts that are in line with improving traffic at shopping malls. The office sector, however, still faces rather cloudy prospects amid sluggish demand and rising supply.
Industrial: The COVID-19 pandemic should accelerate the relocation of manufacturing facilities to Southeast Asian countries, including Thailand and Vietnam, to diversify their risks. This should be positive for all industrial property players, i.e. industrial estate developers, factory and warehouse providers.
Property sector: Earnings growth
Net Profit (Btm) Net Profit Growth
20A 21F 22F 21F 22F
Residential ANAN TB 308 678 977 120% 44%
AP TB 4,227 3,570 4,016 -16% 12%
FPT TB 2,792 1,811 1,822 -35% 1%
LH TB 7,145 7,147 7,913 0% 11%
LPN TB 716 695 758 -3% 9%
ORI TB 2,662 3,019 3,195 13% 6%
PSH TB 2,771 2,944 3,401 6% 16%
QH TB 2,123 2,552 2,888 20% 13%
SIRI TB 1,694 1,403 1,613 -17% 15%
SPALI TB 4,251 5,860 6,073 38% 4%
28,689 29,680 32,657 3% 10%
Commercial CPN TB 9,786 10,340 12,285 6% 19%
Total 9,786 10,340 12,285 6% 19%
Industrial AMATA TB 1,103 1,299 1,418 18% 9%
ROJNA TB 1,282 1,296 1,367 1% 6%
WHA TB 2,524 2,794 3,028 11% 8%
Total 4,909 5,388 5,813 10% 8%
Source: Company, DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 24
Sector: Contractor Underweight
Top BUY: Sino-Thai Engineering (STEC; HOLD; Bt17.20 TP) Least preferred stock:
We expect over Bt400bn infrastructure projects to be up for
bidding in FY21F, as depicted in the following table. As two of
the largest contractors in Thailand, CK and STEC should be
prime beneficiaries of the upcoming projects in FY21F. The
companies have a good track record with 25%-30% success
rate in project bids.
Of late, steel prices have increased sharply. However, the
managements of STEC and CK’s are expecting this to have
little impact on their margins, as their steel prices were
locked in when signing the purchase contracts.
Our top pick is Sino-Thai Engineering. We like STEC for its: i)
huge backlog that secures its revenue stream for two years,
ii) net cash position, iii) strong chances of winning mega
projects, and iv) margin improvement. We expect a brighter
outlook from FY21F onwards.
Trends for backlogs and new projects inked
Projects Project
Value (Bn)
Bidding
process
Fast Track: MRT Orange Line Taling Chan -
Thailand Cultural Centre 90.3
TOR in May
21
Fast Track: MRT Purple Line Tao Poon –
Ratburana (Southern Extension) 100.5 3Q-4Q21
Double Track: Den Chai – Chiang Rai – Chiang
Khong 71.7 2Q21
Double Track: Ban Phai – Nakhon Phanom 54.7 2Q21
Water Transmission Tunnel: Mahasawat Water
Treatment Plant Ratchapruek Road 2.5 1Q21
Water Transmission Tunnel: Mahasawat Canal
Phet Kasem Road 3.7 1Q21
Water Transmission Tunnel: Kalapapruek Road
Bangmod Pumping Station 5.0 1Q21
Water Transmission Tunnel: Bangmod Pumping
Station Samrong Pumping Station 4.6 1Q21
Source: CK, DBSVTH
Sector: Electronics Underweight
Top BUY: KCE Electronics (KCE, BUY, TP:Bt67.00) , HANA
Microelectronics (HANA, BUY, TP:Bt65.50)
Least preferred stock: DELTA Electronics (DELTA: SELL ,
TP:Bt224)
Thailand’s electronic exports increased strongly by 9.8% y-o-y
in Mar 2021 and 10.7% in 1Q21. The strongest growth was
seen in printed circuit board (PCB) and telecommunication
equipment. In 1Q21, PCB and telecommunication equipment
led the overall trend by delivering y-o-y growth of 38% and
33% respectively.
Global semiconductors sales increased 14.7% y-o-y to
US$39.6bn in February 2021. Sales increased across all
markets: China (18.9%), Asia Pacific/All Other (18.2%), the
Americas (9.7%), Japan (7.6%), and Europe (6.8%).
We maintain UNDERWEIGHT on the sector. We see downside
risks for the share price of Delta Electronics (DELTA) that has
the highest weight in the overall SETETRON index. DELTA’s
share price has skyrocketed due to its limited free float and the
speculative trading linked to the SET50 index and other passive
indices.
We have a HOLD rating for SVI PCL (SVI). Despite the rebound
in sales, we believe these two companies are the most
vulnerable to a strong Thai baht (THB) and this could dampen
their potential earnings growth.
Our top picks are KCE Electronics (KCE) and HANA
Microelectronics (HANA). KCE is expected to post strong
growth in FY21F, thanks to the auto demand recovery. Also,
KCE also has plans to build a new production facility. We also
like HANA for its solid demand (thanks to its embrace of 5G
handsets) and its now clear capacity expansion plan.
Thailand: Electronics export sales (in million USD)
Source: Bank of Thailand, DBSVTH
Global semiconductor sales (in billion USD)
Source: WSTS, DBSVTH
2,000
2,200
2,400
2,600
2,800
3,000
3,200
3,400
3,600
3,800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
US$m
2019 2020 2021
Market Focus
COVID resurgence a key risk to
recovery
Page 25
Sector: Property Fund/REIT Underweight
Top BUYs: AIM Industrial Growth REIT (AIMIRT, BUY, TP
Bt15.00)
Least preferred stock: CPN Retail Growth Leasehold REIT
(CPNREIT, FULLY-VALUED, TP Bt17.70)
The sector index dropped 2.6% m-o-m in April 2021,
underperforming the market which eased 0.3%. This was due
the third wave of the COVID-19 pandemic in early April, which
has resulted in a significant jump in the infection rate and
thus semi-lockdown in certain provinces to contain the virus.
The sector’s yield then inched up slightly to 6.1% in 2021 (vs.
6.0% previously). This still offers healthy spread of 4.3% in
2021 vs 10-year treasury yield at 1.84%. Such spread is still
higher than the historical yield spread of 3.2%.
Our most preferred subsector remains industrial. We expect
this subsector to still benefit from the trade diversion theme
in the long term. Our top pick is AIM Industrial Growth REIT
(AIMIRT, BUY, Bt15.00) for its diversified portfolio of quality
assets in prime locations with full occupancy, long-lease
contracts that come with built-in escalation of growth rates
and revenue support schemes. It offers a generous yield of
c.8% with relatively low risks.
PFPO/REIT: Yield-spread over 10-yr govt bond
Source: DBSVTH
Market Focus
COVID resurgence a key risk to
recovery
Page 26
Revisions to recommendations
Company Revision to Rec. Revision Reason
Current Previous Date
Upgrade
DELTA FULLY VALUED SELL 22 Apr 21 Better-than-expected sales prospects but valuation remains lofty.
AOT BUY HOLD 27 Apr 21 Although we keep our current forecasts, we roll over our TP to
FY22F. As a result, our TP based on DCF valuation increases to
Bt73. Given the potential upside, we upgrade our call from HOLD
to BUY. Over the long term, we believe AOT should be a prime
beneficiary of a potential tourism recovery due to the monopolistic
nature of its business. The company still has concrete expansion
plans for both its aeronautical and non-aeronautical businesses.
Thus, we believe the stock is worth accumulating during periods of
share price weakness.
HMPRO BUY HOLD 28 Apr 21 We revised up our TP to Bt15.8 after lifting our earnings forecast
by assuming lower SGA to sales on better-than-expected cost
controls following the company’s strong 1Q21 earnings. Given
potential upside to our new TP and positive earnings growth
momentum in upcoming quarters, we upgrade our call from
HOLD to BUY.
Downgrade
None
Source: DBSVTH
Initiating coverage and equity explorer
Company Rec. TP Price Date Reason
Initiating Coverage
MICRO BUY 13.00 8 Apr 21 MICRO is a growth company that has yet to unleash its full
potential, as limited funding capped its growth in the past.
Management targets to double its loan outstanding to
Bt5bn by FY22F, while our loan growth assumptions are
more conservative at 30% p.a. for FY21F and FY22F. With
that, we expect MICRO’s earnings to expand 62.8% y-o-y in
FY21F and 39.7% y-o-y in FY22F. EKH BUY 7.00 8 Apr 21 We expect EKH to report high earnings growth in the next
three years, with FY21F -FY23F earnings growth of 41%,
23% and 17%, respectively. The high growth is expected to
come from: i) double- digit growth in cash patients from
strong growth for paediatric centres, ii) margin
improvement from ongoing cost savings and operating
leverage, and iii) return of Chinese patients in 2H21F for IVF
services. NRF BUY 12.00 9 Apr 21 NR Instant Produce (NRF) is an ethnic food producer with
over 30 years of experience and c. 2,000 SKUs of c.200
under OEM and its own brands. We expect NRF to post a
strong 2-year earnings compound annual growth rate
(CAGR) of 59.3% over 2020-2022F. Growth should come
from diversifying into plant-based and functional food
segments, which have faster growth and better margins.
Source: DBSVTH
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DBSVTH recommendations are based on an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return, i.e., > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable share price catalysts within this time frame)
*Share price appreciation + dividends
Completed Date: 5 May 2021 20:19:32 (THA)
Dissemination Date: 6 May 2021 05:47:13 (THA)
Sources for all charts and tables are DBSVTH unless otherwise specified.
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This report is prepared by DBS Vickers Securities (Thailand) Co Ltd (''DBSVTH''). This report is solely intended for the clients of DBS Bank Ltd,
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The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to
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(collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into
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risk assessments stated therein.
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Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets.
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proprietary position in ADVANC ,AOT ,BANPU ,BAY ,BBL ,BCP ,BDMS ,BEC ,BEM ,BTS ,CBG ,CPALL ,CPF ,CPN ,DTAC ,EGCO ,ESSO
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,TCAP ,THAI ,TISCOTMB ,TOP ,TOP ,TTW ,TU ,TRUE recommended in this report as of 31 Mar 2021
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Market Focus
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Disclosure of previous investment recommendation produced:
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Wong Ming Tek, Executive Director, ADBSR
Market Focus
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