Thailand is only moderately attractive in Asia

13
Presented by: Andrew Stotz, CFA 21 August 2015 Thailand is only moderately attractive in Asia

Transcript of Thailand is only moderately attractive in Asia

Page 1: Thailand is only moderately attractive in Asia

Presented by: Andrew Stotz, CFA 21 August 2015

Thailand is only moderately

attractive in Asia

Page 2: Thailand is only moderately attractive in Asia

21 August 2015 2

Taiwan has now moved to 1st from 2nd most attractive in Asia and Thailand is still moderate, but risks falling to unattractive

Thailand

Challenged by slow economic growth versus Asia

GDP: Consumption-driven GDP

Dragged down by weak earnings and moderately expensive

Health Care is the only sector with positive 3mth return

Source: A. Stotz Investment Research

What you will learn

Page 3: Thailand is only moderately attractive in Asia

21 August 2015 3

2014A* Attractive Moderate UnattractiveMSCI indices Taiwan Indo Phils India Sing Thai Korea Malay HK China A

FundamentalsROE (%) 13.1 20.3 13.7 15.0 9.8 13.3 8.1 11.5 8.4 13.3

ValuationPE (x) 12.8 14.4 22.4 22.3 13.1 15.5 11.9 15.5 15.2 23.3

PB (x) 1.7 2.9 3.1 3.4 1.3 2.1 1.0 1.8 1.3 2.8

DY (%) 3.7 2.6 2.0 1.5 3.9 3.1 1.5 3.4 4.0 1.6

MomentumEPS growth (%) 27.1 7.2 5.8 (3.6) 9.1 (6.8) (10.7) (5.7) 16.3 (0.4)

Price (1=best) 9 8 2 1 6 3 5 4 7 10

RiskBeta (x) 0.7 0.6 0.4 0.4 0.5 0.4 0.5 0.4 1.3 2.1

Volatility (1=low) 7 8 1 5 6 4 2 3 9 10

Sources: A. Stotz Investment Research, Thomson Reuters.Note: *Prices as of 20 August 2015

Taiwan has now moved to 1st from 2nd most attractive in Asia and Thailand is still moderate, but risks falling to unattractive

Page 4: Thailand is only moderately attractive in Asia

21 August 2015 4

Four Pillars of GDP: Consumption-driven GDP

A. Stotz Four Elements (4Es) rank relative to Asia

Sector performance

Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$

Thailand: Challenged by slow economic growth versus Asia

Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645

Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9

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(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)

(20) (10)

- 10

Sector performanceMcap-weighted return(%, 3mth)

- 1 2 3 4 5 6 7 8 9 10

Risk

Momentum

Overall

Fundamentals

Valuation

Worst Decile ranking Best

8090100110120130140150160

80 90

100 110 120 130 140 150 160

Aug-12 May-13 Feb-14 Nov-14 Aug-15

MSCI Thailand (LHS)Asia ex-Japan rel performance

Index, rebased to 100 (%)

0.98

0.39

0.47

0.40

2.25

- 0.5 1.0 1.5 2.0 2.5

GDP growth - last 4Qs

Net exports (5.8 x 7%)

Investment (2.0 x 24%)

Gov't cons (2.4 x 16%)

Private cons (1.9 x 53%)

(% chg YoY)

(Chg YoY x % of GDP)

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21 August 2015 5

Overall: SlowDrivers: Primarily driven by private consumptionLaggard: Contribution from all four pillars, but 2Q15 showed weakened exports

Four Pillars of GDP: Consumption-driven GDP

Sources: A. Stotz Investment Research, Thomson Reuters

0.98

0.39

0.47

0.40

2.25

- 0.5 1.0 1.5 2.0 2.5

GDP growth - last 4Qs

Net exports (5.8 x 7%)

Investment (2.0 x 24%)

Gov't cons (2.4 x 16%)

Private cons (1.9 x 53%)

(% chg YoY)

(Chg YoY x % of GDP)

Page 6: Thailand is only moderately attractive in Asia

21 August 2015 6

Four Pillars of GDP: Consumption-driven GDP

A. Stotz Four Elements (4Es) rank relative to Asia

Sector performance

Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$

Thailand: Challenged by slow economic growth versus Asia

Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645

Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9

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(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)

(20) (10)

- 10

Sector performanceMcap-weighted return(%, 3mth)

- 1 2 3 4 5 6 7 8 9 10

Risk

Momentum

Overall

Fundamentals

Valuation

Worst Decile ranking Best

8090100110120130140150160

80 90

100 110 120 130 140 150 160

Aug-12 May-13 Feb-14 Nov-14 Aug-15

MSCI Thailand (LHS)Asia ex-Japan rel performance

Index, rebased to 100 (%)

0.98

0.39

0.47

0.40

2.25

- 0.5 1.0 1.5 2.0 2.5

GDP growth - last 4Qs

Net exports (5.8 x 7%)

Investment (2.0 x 24%)

Gov't cons (2.4 x 16%)

Private cons (1.9 x 53%)

(% chg YoY)

(Chg YoY x % of GDP)

Page 7: Thailand is only moderately attractive in Asia

21 August 2015 7Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$

Thailand: Dragged down by weak earnings and moderately expensive

Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645

Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9

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Aug-12 May-13 Feb-14 Nov-14 Aug-15

MSCI Thailand (LHS)Asia ex-Japan rel performance

Index, rebased to 100 (%)

Page 8: Thailand is only moderately attractive in Asia

21 August 2015 8

Four Pillars of GDP: Consumption-driven GDP

A. Stotz Four Elements (4Es) rank relative to Asia

Sector performance

Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$

Thailand: Challenged by slow economic growth versus Asia

Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645

Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9

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(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)

(20) (10)

- 10

Sector performanceMcap-weighted return(%, 3mth)

- 1 2 3 4 5 6 7 8 9 10

Risk

Momentum

Overall

Fundamentals

Valuation

Worst Decile ranking Best

8090100110120130140150160

80 90

100 110 120 130 140 150 160

Aug-12 May-13 Feb-14 Nov-14 Aug-15

MSCI Thailand (LHS)Asia ex-Japan rel performance

Index, rebased to 100 (%)

0.98

0.39

0.47

0.40

2.25

- 0.5 1.0 1.5 2.0 2.5

GDP growth - last 4Qs

Net exports (5.8 x 7%)

Investment (2.0 x 24%)

Gov't cons (2.4 x 16%)

Private cons (1.9 x 53%)

(% chg YoY)

(Chg YoY x % of GDP)

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21 August 2015 9

Overall: ModerateFundamentals: Moderate, ROE of 13% is just above the Asia averageValuation: Moderately expensive at 15.5x PEMomentum: Weak, due to poor earnings growthRisk: Low risk due to low beta and moderate volatility

A. Stotz Four Elements (4Es) rank relative to Asia

Sources: A. Stotz Investment Research, Thomson Reuters

- 1 2 3 4 5 6 7 8 9 10

Risk

Momentum

Overall

Fundamentals

Valuation

Worst Decile ranking Best

Page 10: Thailand is only moderately attractive in Asia

21 August 2015 10

Four Pillars of GDP: Consumption-driven GDP

A. Stotz Four Elements (4Es) rank relative to Asia

Sector performance

Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$

Thailand: Challenged by slow economic growth versus Asia

Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645

Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9

1

(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)

(20) (10)

- 10

Sector performanceMcap-weighted return(%, 3mth)

- 1 2 3 4 5 6 7 8 9 10

Risk

Momentum

Overall

Fundamentals

Valuation

Worst Decile ranking Best

8090100110120130140150160

80 90

100 110 120 130 140 150 160

Aug-12 May-13 Feb-14 Nov-14 Aug-15

MSCI Thailand (LHS)Asia ex-Japan rel performance

Index, rebased to 100 (%)

0.98

0.39

0.47

0.40

2.25

- 0.5 1.0 1.5 2.0 2.5

GDP growth - last 4Qs

Net exports (5.8 x 7%)

Investment (2.0 x 24%)

Gov't cons (2.4 x 16%)

Private cons (1.9 x 53%)

(% chg YoY)

(Chg YoY x % of GDP)

Page 11: Thailand is only moderately attractive in Asia

21 August 2015 11

Best sector: Health Care Best performer: Bumrungrad Hospital (+18.4%) Worst sector: EnergyWorst performer: PTT E&P (-31.9%)

Thailand: Health Care is the only sector with positive 3mth return

Sources: A. Stotz Investment Research, Thomson Reuters

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Page 12: Thailand is only moderately attractive in Asia

21 August 2015 12

Taiwan has now moved to 1st from 2nd most attractive in Asia and Thailand is still moderate, but risks falling to unattractive

Thailand

Challenged by slow economic growth versus Asia

GDP: Consumption-driven GDP

Dragged down by weak earnings and moderately expensive

Health Care is the only sector with positive 3mth return

Source: A. Stotz Investment Research

What you learned

Page 13: Thailand is only moderately attractive in Asia

1321 August 2015

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